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04 May 2016
posted by: Amanda

Understand Why [RetailWorld article 3]

 

Getting maximum ROI from shoppers
Last time we talked about getting started when it comes to shopper execution. In this third article in the series we will cover Understanding Why, i.e., finding out what is working & why in order to continually increase impact with shoppers. There are three key areas that explain this:

  •  What you should measure & why
  •  What to do with it once you know
  •  WATCHOUT: Case study example of how it can go wrong & why

Series Overview

Getting Maximum ROI from Shopper

I don’t know a single FMCG business in Australia today that isn’t under more pressure than ever before to reduce spend and yet is expected to achieve even more in terms of shopper & consumer execution.

This series of articles is designed to help you in this endeavour by showing you exactly how to get more ROI from your shopper team, insights & execution.

In this series of six articles I’ll cover:

  • Picture of success; what does successful shopper execution look like, who’s doing it well & why.
  • Step 1; getting started. Sometimes it can seem like everything needs doing at once. This article will help you prioritise the deliverables.
  • Step 2; understand why. Unless you know why your shopper execution is working well – or not - you won’t know how to increase your impact with shoppers. This article will help you get to the why factor without breaking the bank.
  • Step 3; proper planning. Prevents poor performance as has been drummed into us all. This article takes you through the 3 essential elements of any successful shopper execution plan.
  • Step 4; execute, measure & learn. You’re unlikely to get it right first time. Learn here how to measure the essentials and how to take it forward,
  • Step 5; start again. Going to the next level in your shopper execution & ROI. 

3.    Understand Why

Last time we talked about getting started when it comes to shopper execution. In this third article in the series we will cover Understanding Why, i.e., finding out what is working & why in order to continually increase impact with shoppers. There are three key areas that explain this:

  •  What you should measure & why
  •  What to do with it once you know
  •  WATCHOUT: Case study example of how it can go wrong & why


What you should measure & why

It always amazes me that for all the $ Millions and sometimes $ Billions that FMCG spends on in-store promotions & activations; how little is actually known about what works for shoppers in a category, how & where in-store it works best and critically…why.
We’d recommend 3 key sources of data to ensure you drive maximum ROI from activations:

1.    Step 1 = Scan Data

Knowing the % impact on sales for the category, the segment, your brand and other brands is step one to ROI success.

Figure 1 shows that Gondolas are better than Off locations because they grow the category more, have a bigger impact on brand sales for the total category and have less impact on after activation baseline sales. So the conclusion here (from this dummy data) is that wherever possible, promote using Gondolas over Off locations.
 


As with all activations, this then needs to be balanced with what these cost, overall profit & strategic long term goals but purely viewing this through the lens of impact with shoppers, Gondolas are better.
Therefore the 1st thing to measure for any shopper marketing team is % uplift & downturn in sales for category, segment, brand and other brands.

2.    Step 2 = Panel / Loyalty Data

Scan data is only the first layer of insight as it tells you what has been sold but not by whom and whether this has impacted the category growth metrics of household penetration, AWOP or Frequency.



Again a simplistic Figure 2 using dummy data, shows how the activation in both locations drove AWOP but nothing else. This is where panel / loyalty data comes into its own as it adds an insightful layer onto scan data to show which lever is being pulled; new target users into the category, target users buying more or target users to buying more often.

In an ideal world, a strong activation would drive all 3 of these metrics; utopia as far as shopper marketing ROI goes.

3.    Step 3 = In-store shopper research

So from scan data we know what has been sold, from panel or loyalty we know whether this is down to new users, increased usage or more frequent usage but we don’t know how, where or why this is happening. For example although the above two data sources point to Gondola being the way forward, it could well be that in-store research shows the following:
 

In this scenario we can see that the only reason why Off Locations are not performing is because they are in a cold location; only 10% of shopper traffic actually walks past the display compared to 75% with Gondolas. Every other step in the conversion funnel shows a better ROI from Off locations than Gondolas. The research will also tell you why, e.g., the Off location was at the back of the store where only 30% of shoppers visit, it was located next to pest control which is one of the lowest shopper traffic categories in the supermarket and it was out of stock 50% of the time.

Therefore in order to drive maximum ROI from shopper activation, all 3 are key sources of everyday shopper marketing insight.

What to do with it once you know

We spoke last time about engaging key stakeholders and running a 45-min presentation where you have a 1-pager (5-mins each) of the opportunities. I’d encourage that you do the same again here as this is your opportunity to feedback to the business what is or isn’t working and why, with your recommendations as to what to do next. It’s unlikely that you’ll get it right first time every time and therefore it’s about tweaking the dial constantly in order to build up a bank of knowledge that drives activation success, e.g.,

  • Trial price over multi-buys = +30%
  • Gondolas 1-5 over 6-12 = +15%
  • Aisles 4-7 over 1-3 = +20%
  • Display next to Cereal, Fruit juice or Coffee = +35%
  • Display position before the main shelf = +25%
  • Displays using brands X, Y & Z = +40%

In this way you can feed the sales team and the buyers with an everyday cheat sheet for activation ROI & category growth in order to help them make better decisions about their category activation programmes.

WATCHOUT: Case study example of how it can go wrong & why

Sometimes you can learn just as much - if not more - from failure than success. Without mentioning brand names I’ll outline what happened to one of our clients last year. Using our quantitative data we’d identified that a big barrier to purchase was shopper confusion at shelf leading to high levels of browsing rejection; i.e., shoppers were browsing the category but walking away empty handed due to them not being able to find what they were looking for. From here the client brainstormed internally and came up with a fixture idea to test with shoppers.

All good so far.

The testing of the idea was done via out of store qualitative groups & simulated fixtures. The feedback was overwhelmingly positive for one of the options & this was put into trial in ~10 stores with a view to it being rolled out.

Sales bombed in these stores.

When we went back in to find out why, the fixture itself was a gravity feed unit which meant a couple of things that frustrated shoppers and led to them giving up:

  • They couldn’t read the flavor on the pack due to the front of the gravity feed obscuring their view
  • As such, they had to pick product up to see what flavor it was and then stuggled to put it back in the gravity feed unit
  • This led to tins of scattered product not in the unit as shoppers put them back wherever they could
  • This then led to OOS and further dissatisfied shoppers who came after facing the same problems as above but also augmented by not finding what they were looking for thanks to the shoppers who came before them

All of this was tidied up by store staff each night and never resulted in real OOS, but meant that sales through the day were impacted.
So I guess the moral of the story is that if you are going to go to all the trouble to get to a point of new activation, especially when it comes to fixture changes, testing in-store is worth its weight in gold.

Hope this helps for your next activity!

Good luck!