The consumer definition of value is a moving target. The widespread acceptance of online, mobile and social media marketing has gone a long way to shape the impressions of shoppers before they enter the store. Has this made traditional methods of at-retail merchandising obsolete? The January issue of Times & Trends by SymphonyIRI takes a look at current and emerging trends being embraced by CPG marketers in the ongoing battle to meet consumer needs.
This report defines merchandising activity as those employing feature ads, feature plus display, display only and price only tactics. According to the report, more than one-third of volume is sold with merchandising support across 39 percent of categories. Here are some other key findings:
-The pace of merchandising activity has been mixed during the past year, with 53 percent of categories seeing increased support. Within the drug channel, merchandising activity declined across 60 percent of categories, but support across key health and beauty care categories has risen more quickly versus the grocery channel.
-Growth in display only and price-only tactics has escalated, while combined feature/display activity has slowed.
-Merchandising activity is intensifying across many meal ingredient and meal component categories, particularly in frozen foods and fresh/perishable categories.
-In general, private brands receive less merchandising support versus their name-brand competitors.
-Merchandising programs that begin to impact the shopper in the home are having a powerful impact on sales lift.
-CPG marketers are adopting new strategies aimed at capitalizing on new technologies and building more targeted, impactful relationships with consumers.
Certainly, the merchandising tactics employed by CPG manufacturers and retailers have a direct effect on the members of the at-retail merchandising and marketing service industry who often act as their outsourced execution arm in stores. Times & Trends dives much more deeply into these trends than we can share here, so you should download your copy here.
Staying on top of trends that shape the industry is an important mission of NARMS. This commitment will be on full display at The 2013 Retail Merchandising and Marketing Conference (RMMC) to be held on April 27-30 in Scottsdale, Arizona. Visit the official conference website for more information and to register.
CPG manufacturers in all categories and channels are always looking for ways to differentiate their products to gain additional sales and market share. There was a time when this drive to draw attention lead many to concentrate their promotional activity to the perimeter of the store. The center store was seen as a place to stack it high and let it fly, but not a place to truly innovate. But according to the latest issue of Times & Trends by SymphonyIRI, there is a new emphasis on promoting center store categories.
According to Times & Trends, center store has outperformed industry averages for two years garnering two-thirds of CPG spending and 70 percent of unit sales. In spite of this fact, promotional activity is declining in 58 percent of center store categories and 6 of the top 10.
The report says that center store has rebounded due to changing consumer rituals like preparing meals at home and using home based health and beauty products. The center store is the focal point for trip missions and the basis for popular shopper loyalty programs. Advanced analytics and shopper marketing data have made it possible to promote and differentiate in the center store. It all revolves around understanding the needs of key shopper groups and merchandising to meet those needs.
SymphonyIRI suggests three courses of action for trading partners: Continue to assess new growth opportunities and threats. Explore the feasibility of collaborative marketing and merchandising plans. Closely measure and monitor strategy execution.
The members of the at-retail merchandising and marketing service industry provide services that directly support these strategies. NARMS members can quickly execute shelf-level initiatives that support shopper needs such as new product cut-ins, category resets, store remodels, product sampling and demo programs and mystery shopping/audit services.
For a deeper understanding of the SymphonyIRI Times & Trends report, download your free copy by clicking here. Another opportunity for deeper understanding and insight is coming up on April 27-30 at The 2013 Retail Merchandising and Marketing Conference (RMMC) presented by NARMS. Click here to find out more and register today.
Learn, Change, Grow. Those are three powerful words and they accurately describe what awaits the attendees of the 2013 Retail Merchandising and Marketing Conference (RMMC). The annual NARMS event is slated for April 27-30 at the Scottsdale Plaza Resort in Scottsdale, Arizona. A big and exciting milestone took place yesterday as registration went live on the official RMMC website. The 2013 RMMC will offer retailers, retail service providers, manufacturers, members of NARMS and non-members the opportunity to learn, collaborate, network and gain insight into the future of retail.
You can visit the official conference website by clicking here or following the tabs on www.narms.com. The website features everything you need to plan your trip to Scottsdale in April. You will find a welcome from Conference Chair Ron Apel, general RMMC information, conference registration, hotel reservations, sponsorship opportunities and how your company can participate as an exhibitor at the trade show.
The site also features the conference agenda tab already filled with engaging keynote speakers, networking opportunities and informative educational breakout sessions. The breakout sessions offer four tracks discussing trends and important issues relating to Operations, Sales and Marketing, Human Resources and The Changing World.
All retailers, manufacturers, retail service providers, support service companies and anyone whose company has an interest in expanding their knowledge about retail services are encouraged to bring their departmental staff and executives and take advantage of this opportunity to learn and network with well-established industry leaders.
It is time to mark the date and register. Although the site and registration is an exciting development, the real magic happens when you attend and bring your voice, viewpoint and energy to our annual at-retail merchandising and marketing forum.
Raise your hand if you have heard this one before: if it is not on the shelf, it is not for sale. This simple statement is a universal truth of retailing and yet the issue of out-of-stocks (OOS) continues to vex manufacturers and retailers. The problem was brought to light once again in a recent Chain Store Age story reporting on a study by The Retail Feedback Group.
According to the story, The 2012 U.S. Supermarket Experience Study called OOS the number one element that negatively effects shopper satisfaction. On a five point scale, shoppers who found all the items on their shopping list rated their in-store experience at a 4.54 compared with those who did not at 3.97. Keeping a clean in-store environment is also very important, rating a 4.53 on the scale.
It is not just shopper satisfaction that is impacted by OOS. The lack of satisfaction leads directly to lost sales and lost market share. Fifty percent of those shoppers go to a different store to buy the missing item, but 38 percent forego the item all together. Only fourteen percent buy a replacement item at the store and 12 percent buy a different brand or size.
There are many reasons for the problem of out-of-stocks. If it were just one or two things, it would have been fixed by now. Lack of human resources, missing shelf tags, inability to cut-in new items and distribution voids are just a few of the factors.
At-retail merchandising and marketing service companies provide services that tackle a significant amount of the issues that result in OOS conditions. Association studies of its members and independent surveys of their clients agree that well executed at-retail merchandising activities can help achieve incremental sales gains of around 10-15 percent.
Even though much attention has been placed on the issue, the battle against OOS is still raging. The members of NARMS are on the front line for manufacturer and retail trading partners fighting that battle.
In an article for Supermarket News and expanded into a conversation on bricks meet clicks, longtime industry analyst and consultant Bill Bishop examines the grocery market and looks at ways to grow business when the marketplace is actually shrinking. As always, there is a tie-in to at-retail activities to accomplish some of the prescribed tactics. The suggestions were gathered from a recent Supermarket News roundtable of industry analysts. Here are some of the pointers:
Find the price sensitive shoppers. Bishop tells us that price sensitive shoppers make up 25 percent of the market, but limited assortment and dollar stores serve less of a percentage of the marketplace. The suggestion is that supermarkets include a limited assortment or dollar section to capture the segment of price sensitive shoppers that are not being served by hard discounters.
Mimic what successful upscale chains are doing. Chains like Whole Foods and Fresh Market are finding growth while others struggle. These guys must be doing something right so it makes sense to try some of their techniques to capture increased sales. One idea is to mix in some high quality products to create larger trade areas. The point is to find those items that make your store a destination for a special product, and market them aggressively.
Fresh is Fresh. It is no secret that there is a renewed interest among shoppers in fresh produce. Retailers are encouraged to expand produce sections to include more local producers. Within that strategy, price lines can be created by offering a range of quality options such as good, better and best.
Strengthen the Value Proposition. Retailers do not need to be all things to all people. The suggestion is to find one element or dimension and make that your strong point. Using shopper data can help identify criteria valued by shoppers. It can also help find areas of weakness in the competition that can be exploited.
Get millennials in the game. Bishop says this is a challenging segment to reach, but those who can do it can find growth. They want shopping to be easy and fast so areas such as quick pick-up of on-line and mobile orders, and strong prepared foods offerings can make a difference.
As providers of at-retail merchandising services, the members of NARMS win when we help our retailer and manufacturer clients win. Most of the pointers brought forward by Bishop would go unrealized without execution on the sales floor. It is up to us to keep a finger on the pulse of our customers, so they can find those areas of opportunity on the edges.
The last few weeks in retail news have seen some troubling developments for iconic retail chains in various channels. Best Buy, JCPenney, Supervalu and the Tesco Fresh & Easy concept are among a group that is struggling to maintain market share and profitability as shoppers exercise a dramatic shift in behavior. Two reports released this week by Capgemini and ShopAtHome.com underscore some trends that drive the behavior. The big picture is that consumers no longer differentiate between the at-retail and online experience and are attracted by retailers and manufacturers who are seamless in integrating a multi-channel approach.
The Capgemini report surveyed 16,000 digital shoppers worldwide. More than half of the respondents expect physical stores to take on more of a showroom role as shoppers use them to see and feel the product, but then buy online. But it does work the other way. More than half also said they are more likely to spend more money in the physical store if they used digital channels to research products prior to the trip.
According to the ShopAtHome.com study, consumers are becoming increasingly more dependent on the retailer to carry the promotional message online. The report says that 62 percent of shoppers who use their site search online for store-centric deals, 24 percent for product specific promotions and 14 percent for brand name product discounts.
These two pieces of research suggest that the retailers and manufacturers who successfully remove the gap between physical, digital and mobile retailing will emerge as the big winners. Shoppers are telling us that they want complete integration in the way that they now shop.
For members of the at-retail merchandising and marketing services industry, it is important to stay on top of these trends so you can hear the challenges faced by your retail and manufacturer customers and act as a conduit to a seamless merchandising approach.
It is an understatement to say that a primary success factor for retailers and CPG manufacturers is to understand key buying groups and shopper behavior. The latest Times & Trends report from SymphonyIRI takes a look at Millennial Shoppers using data derived from their quarterly Market Pulse survey. Millennial Shoppers are defined in this report as those between the ages of 18 and 34. In reading through the report, some opportunities to reach this challenging segment come shining through.
SymphonyIRI research shows that the Millennial segment is more cautious and frugal than the generation of 35 to 54 year olds. They are much more likely to use at home beauty treatments or spend time cooking meals that, in the past, would have been reserved for restaurants. They are also 200 times more likely to be influenced by smart phone apps and depend greatly on the opinions of others and social media when making buying decisions.
The report urges trading partners to determine and understand group shopping patterns, such as preferred channels, retailers and trip missions. It also stresses the importance of exploring the potential of new products and extensions within existing lines.
There is not enough space here to share all of the key findings and we invite you to download the free report and read it for yourself. For members of the at-retail merchandising and marketing community, there is a chance to positively impact retailer and manufacturer efforts in multiple areas of the go-to-market process.
Mystery shopping services can greatly enhance trading partner understanding of key demographics. New products need to be rolled out and cut-in to existing plan-o-grams quickly and efficiently to bring return on product development dollars sooner. Reducing out-of-stocks through regular coverage calls can not only increase sales, but it can build brand image by not allowing a bad customer experience to go viral. The members of NARMS are uniquely qualified to help trading partners reach and keep the Millennial shopping segment.
The members of NARMS, professional at-retail merchandising and marketing companies, are adept at helping retailers and manufacturers fill their shelf space at various channels around the world. The advent and widespread use of e-commerce and social media has provided another challenge for trading partners. There is a now a digital shelf space that needs to be filled and monitored. The June issue of Competitive Edge by Willard Bishop does a nice job of breaking it all down and provides and analysis of who is doing this well among top 25 food retailers.
It is important to understand how trading partners are engaging in digital and social media sites. According to Competitive Edge, trading partner uses and consumer interest in these sites are in very close alignment. Of course manufacturers and retailers use e-commerce, but here are their reasons beyond selling: advertising and promotion, public relations, customer service, market research and product development. For consumers it is much the same: search for coupons and deals, seek advice, identify with brand, feel connected and seek customer service.
There are two very important and equal components to most digital and social media approaches. The first is the obvious outbound marketing and advertising campaigns. The not-so-obvious, but opportunity rich component is in a social media monitoring campaign. An active monitoring campaign can provide many customer service opportunities and shopper data information.
What is the tie-in with at-retail? With trading partners being so engaged in digital and social media, it is even more important that their physical spaces be in compliance with their on-line position. Many of the initiatives that you are performing for clients right now may be in direct connection with social media monitoring observations or patterns. Not to mention the ramifications of bad on-line reviews from customers.
How is your company helping its customers fill and merchandise the digital and social media shelves? It is an analogy worth thinking about.
Both the National Retail Federation (NRF) and the U.S. Department of Commerce came out with May retail sales figures this week. The results are not overwhelmingly positive, but according to a story in DSN Retailing Today, it all depends on how you look at it. As the story points out, retail is the first industry that truly experiences how consumers are feeling about the economy and there seems to be signs of hope.
At first blush, it seems consumers have slowed their spending. The NRF reports that May retail sales have dropped 0.3 percent seasonally adjusted from April. However, they have increased 4.8 percent unadjusted year-over-year making 23 months of consecutive growth. The Commerce Department tells the same story reporting May retail sales down 0.2 percent adjusted compared to April, but up 7.1 percent unadjusted year-over year. The NRF number excludes automobile, gas and restaurants while the Commerce numbers include these things.
The NRF says that they are encouraged by the numbers and that consumers are taking a breather from strong first quarter spending. They expect retailers to be cautious with inventory and promotions ushering in a huge back to school season. Back to school is traditionally the second biggest time of the year for retail.
Here are some others highlights from these economic reports. Clothing and clothing accessories sales increased 7.3 percent year-over-year. Electronics and appliance sales increased 1.2 percent. Furniture and home furnishing sales increased 11.4 percent. Health and personal care sales increased 3.1 percent.
It is always helpful for members of the at-retail merchandising and marketing industry to keep our fingers on the pulse of economy as our customers, retailers and CPG manufacturers, are on the front line and feel the impact first. It is the best way to anticipate and plan for their ongoing service needs. You can read the DSN Retailing Today story by clicking here.
As the members of NARMS execute highly targeted and specific at-retail merchandising and marketing programs in-store, it is sometimes easy to forget who the ultimate customer is in the transaction. After all, they are being hired by either a retailer or a manufacturer to carry out necessary promotional or operational shelf-level activities. The trading partners are certainly the clients and they pay the bills, but it is important to remember that none of it works without the shopper.
In the May issue of Times & Trends by SymphonyIRI, the author examines the fact that the shopper is in control at retail. The marketplace has changed from a product focused business to a shopper focused business driven by a couple of key developments. The availability of multi-channel options gives the consumer many more choices on where to go and that is enhanced by social and mobile communications platforms.
By understanding the way that our clients are starting to look at the consumer, we can better understand and meet those needs. The shopping experience is becoming a highly personalized and intimate relationship. SymphonyIRI has some advice for trading partners on how to approach this shift. These strategies revolve around Shopper Marketing, Product Marketing and In-Store Marketing.
The In-Store Marketing component depends heavily on an inventory management system that reflects best shopper trip missions and reducing out-of-stocks in those key areas. That is just one specific example of how just about every decision made in the board room directly impacts operations at the shelf, and ultimately the relationship with the consumer. Keeping the customer relationship out front in your conversations with trading partners can help you demonstrate why they need to work with you to carry their shopper marketing initiatives all the way to its intended target. You can download the SymphonyIRI report here.