Retail is an increasingly competitive environment and shelf location can be everything when it comes to the sales success of your products. As such, shopper research can provide a powerful rationale to achieve and maintain ranging at shelf, as well as identify any complexities that may be affecting sales including out of stocks.
Strikeforce demonstrate their expertise in shopper insights through recent studies undertaken – helping clients in a multitude of categories and retail environments. This next example is of the Chilled Beverages Category within the Independent Supermarket channel.
The Strikeforce Category and Insights team were presented with a challenge to better understand the landscape for the evolving category and where it was physically located in independent supermarket stores across Australia. Strikeforce were uniquely positioned to conduct a variety of shopper research methodologies that help uncover the core issues. The Strikeforce Field Activation Team conducted a store audit analysis of nearly 450 stores across the IGA, Super IGA, Foodland, Drakes and other independent chains. Through this research, it was identified:
That we, as shoppers, are creatures of habit and consistency plus uniformity are required to ease the selection process to achieve highest possible sales.
Access to the focus category is limited with 87.5% of product situated at either the back left-hand side or back right-hand side of stores. Whilst there is the physical problem of the category requiring chilling, this analysis identified an opportunity for standalone chillers to be strategically located at the front of the store, or to negotiate space within existing standalone chillers available in some stores.
43.2% of the focus category was in mixed locations, limiting presence and making it harder for the shopper selection process. With locations differing from store to store, this can make the process difficult, it can be a turn off and result in potential loss of sales.
Proximity to the core category is critical to promote awareness of the focus category and brand, and only 68.6% of the focus category was positioned to leverage off the core either above or adjacent to the core category ‘bulls eye zone’.
In more than half of instances (57.6%) the focus category was located on the top shelf which is considered as the best positioning for the category. It is important however that the top shelf is well lit, uncluttered by ticketing and well stocked. From a price perspective, shoppers often perceive products positioned on the top shelf as ‘more expensive’ than products on the middle-lower shelves. The focus category in-turn attracts a premium price per litre than the core category.
Availability through ranging fluctuated between banners and states, with the overall average facings per store of the focus category being 16.9.
37.8% of stores in South Australia had greater than 20 facings, while only 13.1% of stores in Queensland did.
Replenishment and supply chain appeared adequate with on average only 6.8% of facings out of stock. The independent banner Carlos had the highest with 11.1% of stores between 16-20 facings out of stock. Whilst Ritchies, Romeos, Peries and Spanos all recorded between 0-5 facings out of stock demonstrating a well managed and tight supply chain.
A challenge for the focus brand was the rate of out-of-stock specific to its products. Whilst the focus category had low level out of stocks, the rate for the focus brand was 11.6% of facings were out of stock, which is above the focus category average.
Another challenge for the focus brand was the low level presence with only 10.9% Brand share of shelf, or on average 1.8 facings per store of the focus category.
The focus category has been increasing in popularity due the rising consumer awareness of the health benefits. It has been predicted to experience a Category Average Growth Rate (CAGR) of 12.3% globally for the period 2021-2026.
The opportunities identified for the focus brand include improving the out of stock rate, increasing ranging of the brand across its 3 available skus, and contribute to the improvement in location of the focus category within store. This will make the focus category and brand easier to shop and reduce potential loss of sales.
The analysis has provided valuable insights for the clients to guide their focus on activities that will address brand opportunities and secure survival in what is predicted to become an increasingly competitive and cluttered category.
Read part 1 of ‘We are creatures of habit’ to learn what insights were identified in the Commodity Snacking Category.
Are you facing challenges in retail but not quite sure what and where to focus? Let the Strikeforce team help uncover what the key challenges and opportunities are. Contact them today at https://strikeforce.com.au/contact