Demand for Groceries is through the roof
After years of predictable and quite slowly evolving shopping patterns, current demand means we rapidly need to develop a new understanding of how to best serve shoppers over the coming months, with huge potential implications for Suppliers.
Whether its panic buying or pantry stocking demand is through the roof. UK consumers continue to stockpile goods, decimating the supply chain and fuelling a vicious circle of increased concern and increased demand.
And poor availability means the vulnerable are losing out...
Supermarkets are now looking to cull range
Whilst in the short term this means shorter trading hours, redeployment of cafe & counters staff , and limits to the number of any one item Shoppers can buy, the focus is moving to range and space.
Implications for Suppliers
1. Range Rationalisation
New demand patterns mean every SKU will be questioned. Volume may be concentrated into a smaller number of SKUs, creating a longer tail which could be culled by Retailers to protect on-shelf availability. However, real choice & unique Shopper needs must be protected and smaller brands will be under even more pressure to use consumer, shopper & category insights to really prove the true value they bring to the category.
2. Reduced Promotions
Promotions cause spikes in demand Supply Chain could well currently do without, especially those which only run on shelf with no increased capacity. Added to this, the total amount of secondary feature space may also be reduced causing a double whammy as retailers redeploy some plinth ends to increase shelf capacity for core SKUs, and also look to re-engineer the promotional programme to better reflect current Shopper needs. For example they may feature less packed lunch items and more in home meal solutions, and with reduced opportunity to promote, some brands may want to re-consider their overall pricing strategy.
Major changes always create new opportunities. Some concepts in the NPD pipeline may need to be shelved as no longer appropriate, but new ideas should be explored to take advantage of new shopping & consumption patterns. Which products will increase and which will decline? Clearly some on the go products may suffer mid-term declines, but fresh foods, ready meals & treats may all increase as Shoppers spend more time at home and less in restaurants & food service outlets.
4. Online & Convenience
Increased demand was enough to force Ocado to close their website temporarily this week, and the other Grocers will be feeling the same pressure. Whilst capacity for online deliveries is limited, retailers will do what they can to ramp this up over coming months, driving up channel growth. Increased demand is also sending more shoppers into convenience Stores, and may be sustained as Shoppers working from home do more top up shopping at neighbourhood stores which may be within walking distance. Brands need an effective strategy for both channels to ensure they have the right presence and visibility with the right products to maximise conversion at point of purchase.
Lean in - Buyers are fighting fires day by day at the moment, without time to consider anything strategic or longer term. They will make tough decisions in the interests of their shoppers and their business, potentially also without discussion with Suppliers. Be proactive, and be understanding. Think 1, 2, 3 months down the line to help them. What does your future demand curve look like? What can you share about new shopping patterns and consumer needs in your category which will help retailers adjust their offer?
The market is evolving quickly, and we are operating in a very different world to just 4 weeks ago. Timely insights & rapid learning about how the coronavirus outbreak has changed consumer & shopper needs in your category, and what this means for future category and brand strategies are crucial to driving growth over the next few months. Suppliers who can help Supermarkets develop this new understanding will be the ones to win.
Thank you for reading this article. If you need any help understanding how recent changes in shopper behaviour are impacting your brand, and what you need to do about it to thrive and grow then please get in touch for a free initial chat.
Optima Retail is an agile, independent category management consultancy who works with scaling and established businesses to accelerate category and brand growth.
Exclusive listings are near the top of most Buyers' shopping lists when they are looking for new products as they help to differentiate their range, offer the chance to drive lasting growth in their market share, as well as some degree of profit protection. But does it work both ways? Are there similar benefits for new brands in return for shutting down other sales avenues, or is it a one way street?
In this article we answer that question by looking at it from both sides and the benefit of 20 years experience in the trade...
So you’ve spent months perfecting you pitch, explaining how all the latest trends and consumer insights point to your product becoming the next big thing, and your Buyer is still sitting there with a poker face, showing no intent of actually listing your brand? Then here’s 4 tips to seal the deal…
Compelling insight-driven stories about real consumers are the best way to inspire your Buyer and persuade them that your brand will grow their total category. This article explains how...
Growing the Category
As UK supermarkets continue to simplify their ranges & reduce sku count, its becoming ever harder to get the listing you need. As a small or scaling business, getting the meeting you need can be a skill in itself, but once you are there, what is it that will set you apart from all the other products the Buyer sees?
Put yourself in the Buyer’s shoes and you will soon see that they are pretty agnostic about brands, and what any individual SKU will sell – its all about the category. Will your brand drive INCREMENTAL sales, rather than stealing from the competition, and what proof do you have when you pitch?
Any Buyer listing a new brand is taking a leap of faith, and the thing that is going to set you apart from the many other hopefuls is not your brand, its not some whizz-bang technology and its not a load of charts and data. Its your story.
Stories are more persuasive
Stories are consistently found to be more persuasive than more data-led approaches (e.g. Martin & Power 1982*) because they engage the listener in a different way.
Stories can be up to 7 times** more memorable than facts alone because they act as mnemonic devices for facts. Mnemonics work by organizing abstract material into a meaningful structure – just think back to primary school and the rhymes you were taught to remember points on a compass or the colours of the rainbow for proof of this.
Engaging Our Emotions
When listening to straight information, the audience evaluates each individual message, actively analyzing each point they are hearing. When our emotions are engaged, however, and we feel personally connected in some way to an authentic narrative, we often absorb it entirely, without pausing to challenge or deconstruct what we’re hearing.
Swept away by a compelling story, we are more likely to embrace the ideals and messages it is promoting. Even though there may be no facts or data, we can still be deeply moved – and when we do have the facts, the story becomes even stronger. In the end it comes down to the audience being able to relate to what you are saying:
“Data are just summaries of thousands of stories – tell a few of those stories to help make the data meaningful.”
Chip & Dan Heath, from the book Made to Stick
What makes a good story
All stories need a start, a middle, and an end. By setting the scene, showing you understand market conditions and consumer trends you are making your product relevant to the retailer and showing it addresses a shared opportunity. Only then should you go into solution mode.
Start with the most interesting bit of the story. For a retailer this is normally the size of prize, as every Buyer wants to know ‘whats in it for me?’ so make sure you make this as clear and credible as you can.
As well as this, though, think about using additional hooks which grab the attention eg something contrarian (challenging the majority view) or counterintuitive – (going against our own gut instincts). This is where the real insight you are sharing starts to become the competitive advantage the Buyer is really looking for.
5 themes which consistently drive the most engagement in the audience are …
Make it a real story - If your story does not take people on a journey where there is a some sort of transformation or awakening between the beginning and the end, it’s not a story.
Say something new - If your story does not reveal something new or unexpected about the brand, it’s going to be boring.
Keep it simple - “If you can’t explain it simply, you don’t understand it well enough.” Albert Einstein, Physicist
End on a high – finish on your best point. The last thing in your story is what people will remember most!
Finally, deliver it with passion
Make them believe in you and remember you are not just selling the product. You are selling you, your vision, and a commitment to grow their category.
Remember you get what you give. If you present with passion, belief & humour then you will inspire passion and action in your listener. It’s that simple.
About Optima Retail
We work with scaling businesses and have a proven track record of driving commercial performance by speaking the Retailer's language - identifying new or unmet consumer & shopper needs and providing solutions which drive brand AND category performance. For a free informal chat about how we may be able to grow your business please contact us here.
* Martin J. & Power M.E. (1982). “Organizational stories: More vivid and persuasive than quantitative data.”
** Bower, G. H. and M. C. Clark (1969). “Narrative stories as mediators for serial learning.”