THE CHALLENGE
Fighting for limited shelf space within Retailers has always been an issue for food and drink manufacturers. The recent trend for rapid development of new – particularly premium products, means that the business of fighting for limited shelf space presents ever greater headaches for manufacturers, retailers and ultimately for shoppers.
Retailers are usually responsible for developing merchandising plans – and shelf space is often dependent on marketing funds, historic sales or outdated decision trees. These factors often result in plans that make finding products then trading across and up the category difficult for shoppers. Working with The Capability Bridge (TCB), our client – a Global drinks manufacturer – took a radically different approach.
THE PROCESS
TCB’s methodology was selected by the Client because of its extensive experience in both shopper behavioural analysis and in the Drinks sector – and because of TCB’s emphasis on ensuring its strategies are actionable and measurable.
As context for its proposal, TCB was able to present insight to evidence:
- Category structure is based on brand dominance or retail preference
- The shelf merchandising plan is not designed to reflect how shoppers actually shop
- Product and brand owners tend to seek to grow only their brands and do not have an overall category perspective
- Lack of strategic importance with partners allows Retailers to construct the category the way they internally structure it
Manufacturers also mistakenly believe that merchandising all of their products together provides an effective method of promotion.
TCB was able to prove that this ‘brand block’ created instead a confusing and non-intuitive situation for the shopper actively preventing them from seeking similar, alternative products.
Through previous work and thorough testing TCB asserted that re-structuring and designing the total category for the benefit of the shopper first, also benefits the Retailer and Brand owners.
These focus group outputs were validated live instore, by studying actual shopper behaviour.
Working with the Client, TCB developed a merchandising plan – that used the products’ semiotic attributes to create segments that made more sense to shoppers and indicated logical structure and shelf position.
For instance, products with similar colour, ingredients, taste and other attributes would be merchandised together. Thus shoppers wishing to choose alternatives to their usual products, could now find them next to each other, together with some product information and tasting notes – similar to those employed in wine merchandising.
THE RESULTS
Implementing the new plan instore resulted in a range of measurable benefits including:
- Double digit uplift in the overall numbers of browsers to a purchase
- a 12 % decrease in ‘walkaways’
- Double digit growth in overall category performance
- an increase in the sale of the premium products within the category and sub-categories
- an increase in female purchasers
- reduced overall browsing time
The Client and the Retailer were so impressed with the results that the structural design system was rolled out across over 100 stores making a significant impact upon revenue and profit.
TCB continues to innovate, question and to help their clients create more engaging and effective category structures that improve conversion, delight shoppers and grow categories.
