A quarter of the way through 2014 and the retail landscape is as turbulent as ever. Price discounting continues across grocery, petrol and convenience and challenges to traditional Australian retailers building from online shopping (as seen by Amazon’s soft launch) have caused a seismic change in department store ownership. With change the only constant, Neil Johnson shares three strategies that work.
Distracted by this turbulence, retailers and their suppliers risk losing sight of their common goal of category growth. To maximise growth opportunities, they must maintain focus on generating value supported by smart and engaging in-store shopper experiences whilst delivering on inevitable price demands.
Samsung’s research revealed shoppers find buying washing machines often confusing and unsatisfying. The retail environment did not deliver what they wanted and available sources of information were not useful. As a result the category often defaulted to running price promotions and selling machines for less than shoppers were willing to pay.
Samsung used these insights to build value back in to the category by working with retailers to create a more engaging and informative experience – increasing the type and availability of information with ‘silent salesmen’ (interactive tablets) and ensuring a less cluttered floor environment (as seen in these images at Bing Lee).
Smart brands not only talk to their shoppers, they listen. Insights gleaned from shopper behaviours can form strategies that are easily executed in the retail environment.
Like many FMCG categories, oral care is driven by price and promotion. This consumer staple with historically limited differentiation between brands and skus first saw category value built through manufacturer diversification – special care toothpastes (i.e. sensitive teeth), accessories (i.e. floss and portable toothbrushes) and incremental devices (i.e. electric toothbrushes).
Colgate identified that a significant proportion of consumers view oral care in their health and beauty routine rather than personal care. This created an opportunity to introduce premium products proven to improve physical appearance as well as oral health. Their Optic White range was launched with above-the-line investment and in-store merchandising, and limited price driven activity. Standout in-store presence was achieved through impactful packaging, clear brand blocking and powerful off-location displays featuring cross-regime solutions to encourage trade-up.
Start with a consumer insight that is consistently reflected at every consumer and shopper touchpoint to create additional category value.
Even in price competitive environments shoppers will pay a premium to customise, a trend long followed by the auto industry. But it presented challenges at the ‘point of decision’ with infinite possible variations in new cars, from engine specifications and wheel options to paint colour and internal inclusions. A showroom can only carry a fraction of the full product range. This means that shoppers must ‘imagine’ their final purchase whilst being expected to part with thousands of dollars.
Audi UK responded to this consumer concern with their next generation ‘Audi Experience Centres’. Using cutting edge interactive technology they created a platform for shoppers to design their own ‘package’ on a giant screen. Those unwilling or unable to purchase on the day can download their finished design on their computer or mobile device. For Audi, this solution addressed two challenges: space to carry multiple SKUs and the consumer desire to personalise. Smart use of technology shifted the focus from price towards satisfying consumer and shopper needs.
Engaging shoppers whilst remaining price competitive is achievable if you listen to your shoppers to understand and overcome their barriers to purchase and deliver on their needs.
Neil Johnson is a Director at Kantar Retail, a global management consultancy supporting manufacturers and retailers by turning insight in to strategy and activation. email@example.com - www.kantarretail.com
Contact Dana O'Neill
+61 2 9563 4200