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Out-of-Stock Battle Rages On

Two recent news items underline the need for exceptional execution at shelf level and the value of at-retail merchandising and marketing service providers who are on the front lines of retail every day. The industry will be getting together in one short month for The Retail Merchandising & Marketing Conference (RMMC). The event will be held on April 14-17, 2012 at Saddlebrook Resort, north of Tampa.

In mid-February, the chief merchandising officer of Wal-Mart told a group of suppliers that the retail giant could boost U.S. sales by $5 billion per year by keeping store shelves fully stocked. The company later said the amount was a rough estimate designed to motivate employees and suppliers, but the point was delivered loud and clear. Wal-Mart does currently work with a NARMS member to walk the aisles and monitor for out-of-stocks.

Another news item reported on an AisleBuyer study that said 75 percent of consumers would switch brands if offered real-time mobile promotions by a competitive product delivered to their smartphones while shopping in a store aisle. The promotion and the medium are more important to smartphone owners than brand loyalty. With these factors making a major difference, it is not hard to imagine what would happen if the consumer encountered an out-of-stock after getting the promotion. A major opportunity missed.

The issue with out-of-stocks is simple: if it is not on the shelf, it is not for sale. Even the largest retailer and the most savvy brand marketer are a prisoner to that simple truth. Luckily, the members of NARMS are experts at providing merchandising services in-store that can greatly reduce out-of-stocks, boost the bottom line and enhance brand loyalty and market share.

The members of NARMS are getting together at the RMMC to discuss these and many other important topics. A voice from every member of the association is crucial to the future of the association and the industry. If you have not already registered, the only thing missing is you! The agenda and conference registration, as well as sponsorship and exhibitor opportunities for the 2012 RMMC are available now at the Conference Center on www.narms.com. #RMMC561

Symphony/IRI Studies Brand Loyalty

September 8, 2011 by Newsfeed Editor  
Filed under Friday Focus, What's in store

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The knee jerk reaction to retaining brand loyalty and market share during the newly discovered consumer frugality is to compete based on price. According to Symphony/IRI in the August edition of Times & Trends, that is exactly what not to do. The report says that leading with price has a significant negative impact on brand loyalty. Here are some more highlights of the report:

Brand loyalty has actually increased across 45 of the top 100 CPG categories. Product innovation is a key driver in that growth. However, the task of bringing new products to the market has been made tougher due to conservative shoppers, SKU rationalization practices and shrinking pantries. Of course, this means that brand loyalty has fallen in 55 of the top 100. Private label has been identified as a key factor in these categories.

Other key drivers of loyalty are price, promotion and assortment. In terms of price, it really depends on the category. Some categories are negatively impacted by price increases while others seem insulated. When it comes to promotion, the four categories that have seen the largest jump in promotional support have also experienced increased brand loyalty. The promotions in these areas tend to focus on value rather than low price. Assortment is somewhat a double edged sword. Consumers have seemed to cast their vote for increased assortment by rejecting SKU rationalization. More choices make it more difficult to establish and maintain flagship brands.

Although not significantly mentioned in the Times & Trends report, at-retail merchandising and marketing support certainly play a huge role in the battle for brand loyalty. Remember, if it is not on the shelf, it is not for sale. New product launches need to be cut in on-time and on-budget to coincide with advertising and promotion. In-store displays and shelf material are of little use sitting in the back room. Out-of-stocks and distribution voids are a sure fire way to drive a loyal shopper to another brand. Perhaps that is straight into the arms of a product who is conducting a professional product sample or demonstration in the store. Mystery shopping and at-retail intelligence gathering is needed to ensure frequent and granular assessments of what shoppers perceive to be their real needs.

Could it be that brand loyalty is ultimately achieved by keeping promises? The members of NARMS, through professional at-retail merchandising, event marketing and installation help keep the brand promise every day. You can download your copy of Times & Trends by clicking here.

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