Inside
What Will Be
Big Instore
Driving Sales
This Year?
PLUS Convenient Delivery Clicks Into Place
influencing AT THE SHELF
ISSUE
Insight
THE POINT OF SALE HAS NEVER BEEN SO MOBILE By Matthew Valentine
02 2013
INNOVATE TO DIFFERENTIATE
Inside
Issue 02 2013
CONTENTS
Momentum Instore Makes History with a double gold win
2013
IS LUCKY FOR SOME
L
ast year was full of challenges but also major opportunities thanks to London 2012, the Paralympic Games and Euro 2012. In addition the Queen’s Diamond Jubilee gave consumers cause for celebration and therefore helped to boost sales for retailers and brands. The calendar events scheduled for 2013 do not compare to the last 12 months, so the focus for retailers will be on working hard to maximise all available channels and opportunities to maintain sales and ensure their business is as strong as possible. It is likely that while spending will recover, the pace at which this happens will be sluggish to say the least, as consumer confidence remains fragile and households
Contents We are delighted to announce that Momentum Instore scooped two gold awards at the 2012 POPAI Awards within the Installation category. This amazing double achievement was for work completed on L’Oreal’s General Tester Units and Boots Beauty Discovery Project.
Double Gold Award Winners!
06
Welcome to the second edition of the Momentum Instore magazine, in which we aim to once again provide you with an insight into current issues and trends in the retail industry. continue to concentrate their efforts on saving rather than spending. Looking specifically at the high street we anticipate that specialist retailers will continue to reduce their square footage. Shorter commercial leases will more than likely become the norm in an effort to reduce the number of empty shops, by encouraging retailers to move into these spaces. In stores themselves there will be further growth in the use of new technology to enhance the shopping experience and influence purchases. Two major areas of growth will be online and convenience retailing. These will experience expansion separately but also come together to offer
busy shoppers an alternative to home delivery with Click & Collect. Due to their location in the heart of the community and with convenient opening hours, independent stores are perfectly placed to act as a hub for online purchases. Customers can simply pop in and collect their parcels when they have time, rather than risking missing a delivery while they are at work. With more people now shopping online and our lives simultaneously getting busier, Click & Collect as a channel has the potential to add as much growth to online retail as home delivery. Whatever retail sector you operate in, the signs are that this will be another tough year. But I am sure that you will once again rise to the challenge to make 2013 a busy and profitable year.
05
THE POINT OF SALE HAS NEVER BEEN SO MOBILE
Field Marketing expert Zena Aris-Sutton
12 influencing
AT THE SHELF
CONVENIENT DELIVERY CLICKS INTO PLACE
13
08
INNOVATE TO DIFFERENTIATE
How product innovation drives consumer sales Martin Kingdon of POPAI UK & Ireland shares his views on the challenges ahead
We look at developing new channels to facilitate sales
momentuminstore.com
Managing Director Momentum Instore
Marketing journalist Matthew Valentine discusses recent changes in POS
07
A DAY IN THE LIFE
Rob Gleave
Momentum Instore Stanley Court, Earl Road, Stanley Green Business Park, Handforth Dean, Cheshire SK9 3RL W: momentuminstore.com T: 0161 486 7878
Inside
15
What Will Be
Big Instore This Year?
Contacts Steph Gleave, Sales & Marketing Director E: Steph.gleave@momentuminstore.com Tim Ellis, New Business Manager E: Tim.ellis@momentuminstore.com Issue 02 2013
3
NEWS
FEATURE
Targeting Compliance
With Superdrug Store Audits
We recently completed an audit of 900 Superdrug stores nationwide for marketing solutions provider APS Group.
T
he audits were undertaken to provide Superdrug with an accurate understanding of its retail estate, improving compliance and facilitating targeted promotional activity. APS Group developed a tablet app specifically for the audit. Momentum Instore aided APS in testing the questions being included in the audit to ensure that they were in a logical order, therefore improving the time efficiency of the audit, which allowed the client to receive the desired information sooner. Our Regional Managers trained
each auditor instore to give them an understanding of the different types of POS and furniture involved before the project started. Training took place in standard stores and Superdrug’s ‘stores of the future’, which each had different requirements. While instore the auditors were required to review all fixtures, fittings and promotional materials. To complete the project our audit team provided over 24,104 photographs and answered a massive 176,923 questions. On average, 224 pieces of data were collected per store.
On average, 224 pieces of data were collected per store
Going for Double Gold
at the POPAI Awards 2012
Y
ou probably know that we pride ourselves on our experience, standards and service offering but did you know that at last year’s POPAI Awards we received not one but two Gold awards in the Installation category? We won the accolades for our Boots Beauty Discovery and L’Oreal General Tester Unit projects. The Boots campaign involved installing 10 cosmetic brands into flagship and large health & beauty stores as part of the retailer’s re-launch of its Fashion Brand category. In total over 518 units were installed into 108 Boots stores, if all units were lined up together they would measure a staggering 1,945 feet and would weigh in at a whopping 25,900kg. For L’Oreal we updated the General Tester Units for luxury brand Lancôme in 120 stores, which included installing 7 different types of units, 11,489 parts and re-merchandising 85,236 products. In 2011’s POPAI Awards we scooped Gold and Silver in the Installation category and in 2010 we won Silver and Bronze awards. Needless to say everyone at Momentum Instore was absolutely delighted to top these achievements in 2012. To have won two awards for the last three years is exciting enough, but being awarded two Golds by a trade association that is as respected as POPAI was definitely cause for a celebration! 4
Issue 02 2013
Going Local
For Sainsbury’s
W
e have been providing store development support to Sainsbury’s for 14 years now and were delighted when one of our more recent projects for Sainsbury’s gave us the opportunity to work on one of the retailer’s stores almost on our own doorstep, just along the road in Cheadle, Greater Manchester. The Cheadle store was being extended from 42,000 sq ft to 62,000 sq ft and we provided all aspects of merchandising support for the project. Our dedicated merchandising team worked 294 hours around the clock over a six-day period to launch the extension on time. The great thing about working on a local store is that those who have been directly involved in implementing the campaign, or who have even just heard about it around Momentum Instore HQ, can visit whenever they like to see the results first hand and be reminded of what a fantastic job our experienced merchandisers do. Inside
The point of sale
Has Never Been So Mobile By Matthew Valentine Matthew Valentine is a marketing journalist who has specialised in covering the POS sector. A former editor of In-Store, he has been a contributor to Marketing Week, Retail Week and Design Week as well as various other titles and websites.
W
ith the alarming roll call of high street retailers exiting the market, and with rapid developments in online retail changing the demands placed on physical retail spaces, it is easy to side with those who think a massive contraction of retail square footage is due. And fearing a subsequent reduction in the point-of-sale sector would only be natural. The argument is logical enough: less space means fewer point-of-sale displays. Those that remain will have to be better and work harder, but the total number will fall and POS companies will go out of business. Fortunately, the argument misses a key point. Yes, the overall physical footprint of retailers might well fall. Online sales, along with click and collect services, could free up a lot of space for other uses. But the same new technology that is driving this change means that the point of sale can, literally, be anywhere. I have written recently about virtual stores, accessed by mobile phone, fixed to the hoardings of shops under renovation; about temporary stores set up in busy bus stops; about interactive instore displays that let shoppers take photographs of themselves with celebrities while downloading unique video content through an app. And in China, networks of virtual stores that are shopped entirely via
virtual reality software are being planned. These empty spaces contain no physical products at all – they are delivered to customers at home later – but they let people engage in the social and mobile elements of shopping, while removing a whole stage of the retail supply chain. The products can go straight from the regional distribution centre to the customer. And the truth is that in these new situations, POS communication is more valuable to shoppers than ever before. When the future of retail was predicted, it is fair to say that very few people guessed features as common as walls and doors could be become optional. But that is the world in which we find ourselves: many of the traditional customer touchpoints are vanishing. POS displays, in whatever form they take, are fast becoming an essential means of communicating with customers. The knowledge that the POS industry has of consumers and how to talk to them puts POS agencies in an enviable position: that knowledge is as valuable when consumers are browsing a mobile device while they walk along the high street as it is when they are standing in a traditional store. The retail world may be changing before our eyes, but no matter how much it evolves there will always be a point of sale. It is just its location that changes.
the new technology that is driving this change means that the point of sale can, literally, be anywhere
Inside
Issue 02 2013
5
FEATURE SECTION
NEWS
A
Have We Passed The
DAY
Premium PEAK?
In The Life
Zena will call on preselected stores within 24 hours of the CDA’s visit to check on the quality of their work and recommendations to the store manager or owner
Zena Aris-Sutton Momentum Instore’ s Field Marketing Regional Team Manager for the North
A
Field Marketing expert with seven years experience, Zena joined Momentum Instore in September last year. As Field Marketing Regional Team Manager for the North, Zena covers an area reaching from the south of Nottingham up through the North West of England and into Scotland. Zena manages a team of 11 Convenience Development Advisors (CDA’S) who each manage a territory of 290 Convenience Stores.
A Typical Day? There’s No Such Thing!
With such a varied job and a large region to cover it is difficult for Zena to describe what a ‘typical’ day consists of. Four out of five days she aims to be in the field, coaching her team to improve performance. This includes accompanying the team on some of their calls, which could be to independently owned convenience stores as well those affiliated to one of the Symbol groups. Quality Control is also another important part of Zena’s role conducting regular ‘back check audits’ – Principally these are a part of the quality control process ensuring our clients get a consistent high quality service. Zena will call on preselected stores within 24 hours of the CDA’s visit to check on the quality of their work and recommendations to the store manager 6
Issue 02 2013
or owner. Geography permitting, the back check audits will be carried out prior to Zena meeting with the CDA, so that she can discuss her feedback and make suggestions for how service can be enhanced. As Zena says, a huge focus for her is on coaching and developing her team to ensure clients are getting the best service possible. Training happens on an ongoing basis and she is responsible for ensuring that key performance indicators, whether they have been set by the client or Momentum Instore itself, are being met.
The Devil’s In The Detail
It’s not just about managing people, collating and organising information is also a significant part of Zena’s day-to-day work. “You need to have very good organisational skills for this job”, says Zena “and be able to process significant amounts of information accurately.” The field marketing web based reporting system needs to be checked regularly for results, photos and to ensure that coverage targets are being met. Zena also monitors the Cash Loss process keeping track of inventory levels and ensuring that each CDA reconciles on a weekly basis. Every week a cash loss report is produced to ascertain how much stock is sold or is given away as part of the retailer reward scheme – as well as documenting Inside
how much POS has been sited by each CDA. All of this data is then used to make sure that the client has detailed, up to date reports about the activity being undertaken on their account. Zena adds insight to this reporting to make it as tangible as possible for the client.
Being Flexible
“Sometimes I’ll start the week with a plan of everything I want to achieve and then it will all change depending on what’s happening in the field. So I have to be flexible and ready to respond at the drop of a hat!” said Zena. However, this is one of the things she loves about her job. She continued: “I deal with different types of people, clients, campaigns and stores on a daily basis and this is what is challenging about my job but what also keeps it interesting. Within my own team no two people are the same so I also need to adapt my approach to each and every one to make sure I am able to give them the best direction and support.” The other aspect of her work that Zena enjoys is providing business advice to the store managers her team works with. She said: “By working closely with the stores and making recommendations for ways in which they can grow their business we are able to build strong relationships with them, which also benefits our clients.”
B
urberry’s profit warning late last year caused a shockwave among those with a vested interest in the luxury goods market and retail analysts alike. For the past few years luxury goods have been flying high. Despite the beleaguered global economy and widespread fears over job security many premium brands – from cosmetics to clothing and technology to cars – have reported healthy sales and profits year after year. With much of Burberry’s success in recent years being led by buoyant sales in China, its move to issue a profit warning prompted fears over an imminent slowdown in this lucrative market for luxury goods. Many luxury brands can attribute their recent sales success to demand from affluent fans in the Far East, so the potential decline in interest from this sector could have far reaching consequences for goods at the premium end of the scale. Following the profit warning, Burberry gave an update to the market blaming both the impact of the Olympic Games and a decline in gift giving in China ahead of a handover of presidential power for September’s profit warning. Revenue was still up by 8% in the six months to September 30th 2012 and with January’s updated figures showing a 9% rise in revenue in the three months to the end of December it is clear that the brand is still performing well. But even so, should recent events serve as a warning that the market for luxury items is not indestructible? Premium brands need to explore ways in which they can further open up their potential audience, while mid range retailers and brands that have introduced products aimed at the luxury market should reassess whether this tactic is sustainable long term. Perhaps this is one of the reasons behind the growing trend for ‘high – low’ retailing, where a prestigious brand links up with a more mainstream brand or retailer to form a mutually beneficial partnership. If the tide is indeed turning away from luxury goods with their lavish price tags, the implications will be far reaching. Now really is the time for brand owners to start emphasising exactly what makes their premium products and ranges worth paying more for.
Convenient Delivery
Clicks Into Place
W
hile browsing and buying on the internet has become a normal part of most people’s lives, its popularity has in some ways grown in fits and starts. Firstly, as such a new concept, people had concerns over security – for example they wanted guarantees that their personal banking details would not fall into the wrong hands. Then came the great Christmas delivery debacle, where weather conditions and lack of preparation logistically left many online shoppers receiving their Christmas shopping after the big day had come and gone. Most recently one of the main factors that puts consumers off purchasing products on the internet is also delivery related. Now though the concern is not “will it arrive”, but rather “will I be at home when it does”? Ironically, the more that people take advantage of the convenience offered by shopping online, the greater inconvenience it potentially causes them.
Most of us work full time, and therefore cannot be at home every day waiting for the postman to bring our parcels. This is why solutions like Click & Collect are not just good to have; they are becoming an essential part of any online retail offering if that retailer wants to be successful long term. Click & Collect ensures that the delivery element of online shopping fits around the customer, not the other way around. They can simply drop into their local participating corner shop after work or whenever they have time to collect their purchases. There are already Click & Collect style lockers appearing in shopping centres around the UK that offer an alternative means of collecting online purchases. We predict that this trend is set to grow, and over the next few years a network of petrol station style forecourts will be developed where customers can pick up purchases from a range of online retailers in one location.
Our prediction
CLICK & COLLECT is set to grow, and over the next few years a network of petrol station style forecourts will be developed where customers can pick up purchases from a range of online retailers in one location Inside
Issue 02 2013
7
FEATURE
Innovate
to
Product Innovation is a major driver of consumer excitement and sales.
Differentiate G
o into any supermarket or large retailer in the UK and you will invariably be presented with three main choices within many of the categories they stock – premium brands, tertiary brands and own label products. What we have seen in recent years however, is the rapid expansion of own label offerings, with those especially in the food retail sector now being split into distinct tiers – basic, mid range and something that little bit more special. Basically retailers have come to understand that own label products boost profits and also enable them to more easily offer exclusive products and ranges that customers cannot find elsewhere. With product innovation being a major driver of consumer excitement and means of boosting sales, taking greater control over new launches provides retailers with a way of increasing footfall, staying ahead of the competition and harnessing the profit potential they offer. Take Boots as an example. It’s No7 skincare and cosmetics range is well established and hugely popular. The most
popular products within the range such as Perfect & Protect, as well as seasonal make up collections, have made it a key reason for shoppers to visit Boots stores and has undoubtedly helped the retailer to build its base of loyal customers. No7 is also the perfect example of how own label and private label products can help a retailer to target different types of shoppers. It’s range of No7 Poppy
King lipsticks and lip glosses have given visitors to its stores the kind of access to an exclusive selection of products from a top name in the cosmetics industry that they may not normally have and opened up the potential audience for No7 overall. Another area of growth is in the private label sector. Retailers such as Debenhams have been busy developing their private label offering with well-known names such as Henry Holland and Matthew Williamson designing home furniture and clothing as part of its Designers at Debenhams concept. Some retailers are not only developing their own label ranges but also fiercely defending them in a number of ways to make sure they secure maximum profit potential. They can be given preferential space on shelf – much of the time for example they will be positioned at eye level so that they grab the attention of shoppers more than other options within the same category. Packaging is kept fresh and up to date to demonstrate to consumers how the products meet their needs. On this theme Tesco has of late rebranded its own label range as ‘Everyday Value’, in a clear effort to strike a chord with shoppers in these difficult times.
Inside
Issue 02 2013
own label products CAN boost profits and enable RETAILERS to offer exclusive ranges that customers cannot find elsewhere
8
Issue 02 2013
Inside
9
SECTION
SECTION
Case Study
B&Q
Project: Building Project
Background
Leading DIY retailer B&Q wished to implement a range change within the building category. The ranges that were invested in through the use of new equipment and introduction of new products were Powertools, Fire Protection & Mechanical Security. Ashley Snow, Retail Services Procurement & Contracts Manager at B&Q, said:
“When rolling out any instore campaign efficiency is vital, to ensure that timings are met, excellent results are achieved and also to help control costs. Momentum Instore delivered across all of these vital elements. Its commitment to its clients is evident in the amount of planning and preparation its teams do before implementing a campaign, and in the standard of service they provide from beginning to end.” 10
Issue 02 2013
The Challenge
Momentum Instore was chosen to manage this project on behalf of B&Q in 118 stores. The project was implemented over an eight-week period. Each store was completed within a two-day time frame by teams of between four and six merchandisers. As part of the project Momentum Instore were required to refresh and remerchandise the Power Tool, Mechanical Security and Fire Protection areas in each of the 118 stores. Along with new equipment there was also updated POS to install.
The Solution
In preparation for the roll out, tests were carried out in four B&Q stores. This enabled Momentum Instore to confirm both the timings for the project and the size of the team needed to complete each store visit. Momentum Instore’s Field Managers attended each trial store to collate key learnings and provide feedback to B&Q. The feedback was used by the Team Leaders at Engagement Days held in the test stores, where ‘store walks’ were completed in the Fire Protection, Mechanical Security, Power Décor and Power Tools bays. The level of preparation work completed Inside
by Momentum Instore enabled it to provide the merchandisers and installers working on the project with detailed guidelines regarding both the tasks that needed to be accomplished in each store and exactly how they should be completed. Throughout the project our team completed electronic sign offs to give instant clarity to B&Q regarding the progress and completion of each store. They also assisted stores with stock uplift to ensure the stock file was accurate.
The Results
Not only did we deliver an impressive standard of results from this project for B&Q, we also managed the roll out in such a way as to help control and reduce costs for the retailer in the short and long term. Accurate surveys of power tool display equipment were provided to B&Q for all stores so that the retailer could catalogue equipment availability and costs to stores. Excess equipment was also removed from stores, which was then carried with the teams as a ‘hospital kit’ to be used when needed to complete an installation on site, reducing equipment supply and associated delivery costs. Equipment transfers were organised between Momentum Instore’s teams for future reviews and snagging. They also liaised directly with the stores to arrange re-visit dates and took any missing equipment needed with them from the ‘hospital kits’, further reducing costs to B&Q. In some instances existing equipment was adapted to complete the reviews and maximise use of existing resources.
Case Study
McCORMICK (UK) Ltd Project: New Herbs & Spices Fixture
Background
McCormick (UK) Ltd wished to introduce new fixtures for its Schwartz range of herbs and spices. Momentum Instore was tasked with installing the new fixtures in 879 Tesco Extra stores and 1,090 Tesco Express stores across the UK.
The Challenge
The project had to be completed in all 1,969 stores over a period of eight weeks and as well as installing the new fixtures, Momentum Instore’s installation team was also required to de-install and dispose of the existing displays.
normal trading hours to avoid causing disruption to customers and store staff.
The Results
Momentum Instore completed all 1,969 installations within the eight-week timeframe, implementing the project effectively and efficiently to deliver an exceptional standard of results for McCormick. All old fixtures were disposed of as requested and by undertaking the work outside of trading hours Momentum Instore’s team ensured that shoppers were not negatively affected.
Martel Lawson, EMEA Category Display Manager at McCormick commented:
“We were delighted with the delivery. Momentum Instore’s level of accuracy was excellent considering the demanding timeframe.”
The Solution
To prepare for the project, Momentum Instore’s Regional Managers underwent detailed training at Tesco’s Stockport store to learn about the new fixture, gain an insight into the time it would take to complete each store visit and assess how many installers would be needed for each installation. Each installation team then received training direct from a Regional Manager. Teams of two installers were allocated for each store visit to carry out the building and merchandising of the new fixtures. All work was completed outside Inside
Issue 02 2013
11
TRENDS
INSIGHT
influencing
At The Shelf Martin Kingdon, POPAI UK & Ireland
In recent years developing new channels through which to facilitate sales has been a major priority for many retailers and brands.
A
few clicks of a mouse or the tap of an app can, these days, be all it takes to make a purchase, and consumers of all backgrounds and ages are now more than au fait with these convenient shopping options. This focus on internet and mobile retail has meant that sometimes a brand’s instore presence has not been given quite as much attention as usual. The realisation has dawned however that instore, internet and mobile are intrinsically linked, and to offer the very best customer experience all three must deliver. The more modern sales channels compliment, rather than replace physical stores, and with customer service being of paramount importance the instore environment is actually becoming more, not less, important to consumers. Therefore we believe that forward thinking retailers and brands will this year start seeing brand ambassadors instore as the next big thing, in their drive to provide shoppers with the best experience possible. Brand ambassadors are not a new concept, far from it in fact. For many
Our prediction
activity. The truth is though, that most brands can benefit from being betterrepresented instore if brand ambassador activity is given focus and structure. A commitment to training your team of brand ambassadors is vital, especially in a fast paced industry where new launches are a brand’s lifeblood. Your representatives instore need to be kept fully up to date with the information that customers will need to know to be able to choose the product that best suits their needs. Just as point of purchase has to be in place ready for a new launch, brand ambassadors need to be informed of a product’s USPs and benefits, so that they are ready to answer any questions shoppers have and facilitate sales. While sales are important, especially in these pressured times, so is a brand’s relationship with its customers. You need to consider if you want your brand ambassadors to concentrate on selling products or enhancing your customer service provision. Often their role will be a combination of both of these things – as we know from experience, educating the customer at the shelf is not only effective for building strong relationships with your audience, it also influences sales. It’s important though that as a brand you are clear about what you want your brand ambassadors to achieve and also how their performance will be measured. As well as enhancing your customer service provision and helping to boost sales, trained field sales representatives can action immediate feedback from customers and store staff based on their experience instore. This enables you to make changes to your campaign quickly and maximise its effectiveness. They can also identify further opportunities within stores to up weight activity. Essentially they will act as your eyes and ears on the frontline so to speak, giving you a valuable insight into how customers react to your brand in the retail environment.
2013 will see forward thinking brands and retailers introducing brand ambassadors instore, as the next big thing years they have played an important role in providing customers with product information at the point of purchase to enable them to make an informed decision about which best meets their needs. While in some sectors, such as electricals and premium beauty, brand ambassadors play a vital role in the sales process, others have been less enthusiastic about using such techniques. Perhaps they believe that their sector does not lend itself well to the use of brand ambassadors, or they have concerns over how to implement such 12
Issue 02 2013
Inside
In this issue, Martin Kingdon, Director General of POPAI UK & Ireland, shares his views on the challenges faced by brands and retailers instore this year and outlines what he believes will be the next big thing in retail marketing. Q&A: How long have you worked in the instore marketing industry? MK: I originally started in a shopper
insight company 20 years ago. Through this I became involved with POPAI’s research working group and then the industry as a whole. I was then a director of a display company before starting my role at POPAI in 2000.
Q&A: What’ s the most enjoyable part of your job? MK: The variety of things that we do and
the diverse issues we get involved in. POPAI does so many different things, and I think punches well above its weight compared to the resources that it has. The work that has happened over the last four years in sustainability has been truly
extraordinary. Offering our own research and consultancy service has met a need that has been there for years but we have only recently decided to take the plunge with. It also must be mentioned that through the Advertising Association POPAI is involved in lobbying relating to the freedom of advertising responsibly, and whilst a lot of this is very dull, it does touch on fundamentals for our industry.
Q&A: If you had to recommend one instore marketing tool to brands and retailers, what would it be? MK: I am going to be cowardly and answer
the question in a slightly different way. The tool I would recommend is the one that is appropriate, that the retailer or brand has thought through, researched, invested in, understood has resonance with their shoppers, is practical to implement instore and delivers results, however they measure this. A great deal of instore work happens through expediency not expertise and it is my greatest frustration that the same level of thought does not go into display that tends to go into other media. How many major brands launch ATL campaigns that are not pre-researched? Has a display campaign ever been pre-researched?
The concept of “show rooming” has recently been proposed, where shoppers really are only using the store as a showroom and may well buy elsewhere for whom the added value instore provides has to be tangible. One hears about shoppers being “delighted” and “enjoying the experience”, for the most part this is hyperbole; retailers have to make sure relevant information is presented in a way that shoppers may easily assimilate in a timescale that makes them feel comfortable.
Q&A: What do you think the next big thing in instore marketing is going to be? MK: I would hope that it will be brands and
it relates to engaging shoppers who have access to a number of different ways of purchasing an item. The concept of “show rooming” has recently been proposed, where shoppers really are only using the store as a showroom and may well buy elsewhere. Pure commodity items will struggle here, the challenge for brands is to somehow have their brand seen as one where information and expertise is required and a store purchase makes sense, without making the process seem off-putting. This then becomes a challenge for the retailer
retailers investing in insight work that will allow them to understand the shoppers multi-channel path to purchase in a practical manner, which then allows them to assess where their marketing investment should be made based on the impact each really makes. Given the experience I have had over the last 20 years I am sorry to say that I expect to be disappointed. My concern is that without this work marketeers will be overly impressed with the latest shiny marketing toy that becomes available – such as social media – and over index on both their monetary and intellectual investment in something that promises much, while still not truly understanding instore display, which has of course consistently delivered over many years.
Inside
Issue 02 2013
Q&A: In terms of the instore
environment what is the biggest challenge brands and retailers face at the moment?
MK: Understanding the role of display as
13
GROWTH
INSIGHT
The
Convenience Truth
T
he convenience retail sector has been very much in the spotlight over the last couple of years. With most of the major multiples having growth strategies that clearly embrace the potential offered by expanding into the convenience arena, competition in this market is becoming fiercer by the week. Towards the end of last year Sainsbury’s opened its 500th convenience store and at the time, its convenience business had grown a massive 20% year on year. Industry commentators predict that the biggest growth in the retail sector overall over the next five years will come from convenience, with sales expected to increase by around 29% to £44 billion. It is of little surprise then, that this sector is a hive of activity for those fighting to increase their market share, especially at a time when the UK’s economy is still in a weak position and growth is patchy with some regions being harder hit than others. But for smaller operators and independents, the already big problem of building up a loyal customer base is exacerbated by the growing presence of
Tesco, ASDA and Sainsbury’s in the sector. These big names already have a loyal following, shoppers know what to expect from them and understand that they will get the same deals, quality and services in their convenience outlets as they will in their main stores. With Morrisons also planning to open 70 M-Local stores by the end of this year, the independents need to ensure that their own offerings are clearly defined and in tune with the needs of their local customer base. This is exactly what we have seen local shops do in recent times. As well as opening for long hours to make it easier for 9-5 workers to shop before and after work, local shops now invariably offer a range of services alongside selling essential goods. They often have cash machines on site and offer grocery delivery and bill payment services. More recently we have seen them take their place in the mail order delivery chain – customers can have their orders delivered to their local shop and collect them at a time convenient for them. There are some key areas that c-store
Industry commentators predict that the biggest growth in the retail sector overall over the next five years will come from convenience, with sales expected to increase by around 29% to £44 billion
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Issue 02 2013
Inside
operators need to get right to be able to take advantage of the expected growth in the sector over the next five years. With the larger multiples coming into the market customers’ expectations regarding the fabric of c-stores will rise. Therefore attention needs to be given to the fabric, layout and design of the interior and exterior of stores. Consumers are shopping based on price but also on quality, and unappealing looking stores unfortunately do not project a quality image. With choice within the sector set to grow, being competitive on price will help to secure success. Shoppers have a preexisting perception that convenience stores are more expensive than supermarkets, as they do not have the same buying power. They need to be consistently proven wrong to dispel this myth long term. Understanding shopper behaviour is important. Just over 50% of c-store customers only buy what they need, there is significantly less browsing than in the supermarket setting. Almost a quarter of shoppers are also preparing smaller portions, with 48% looking to reduce food wastage. Being small in size c-stores have the opportunity to design their layout in a way that makes it easy for customers to find the products they are looking for quickly and identify offers relevant to them. Food sales will remain key to the convenience sector but this does not mean that the non-food offering can be overlooked. It does however need to compliment the food category rather than detract from it. Staples such as household cleaning products, washing up liquid, toilet rolls and even pet food and cat litter will all provide additional reasons for your customers to visit. C-stores are also well placed to build relationships with suppliers that will help them to move their business forward. For example instore demonstrations work well in this setting, despite the more restricted space in store, as shoppers feel less in the spotlight and therefore more willing to engage with the promotion. In addition managers and staff are open to being educated by suppliers, understanding that by building their own knowledge of the products they offer will in turn lead to increased sales as customers look for advice about what best suits their needs. The fact that the c-store sector is in a period of rapid growth has not escaped brand owners, and therefore it is the perfect time for c-stores to work with brands to devise innovative ideas to drive sales. This may be based on brand ambassador activity or POS for example. Either way, working together can increase basket spend and have a positive impact on sales, benefiting both the brand and the retailer.
What Will Be
Big Instore This Year?
T
here’s always a new instore marketing trend being talked about in the retail press. From digital displays to wireless charging for battery-powered products, brands and retailers are regularly bombarded with differing opinions about what tools they should be using to achieve maximum sales. At Momentum Instore we have our own opinions about what the top three instore marketing campaign tools will be for the year ahead, based on our expertise and experience of working with brands and retailers at the coalface, or should we say the shelf. For the last five years instore marketing experts, POP designers and manufacturers have worked hard to bring innovative solutions to market whilst at the same time focusing on achieving maximum return from the available budget. Permanent, durable and re-usable POP products and display solutions that offered longevity came to be favoured over temporary merchandising units and signage. However this approach is now being re-assessed. Product launches are huge sales and awareness drivers and therefore are well worth the investment in temporary and bespoke POP support. We therefore predict that 2013 will see investment in creative, one off campaigns around key new products, that will stand out and bring a sense of theatre instore. We also believe that in many ways 2013 will be the year of the Brand Ambassador. There is a real need among consumers for a greater level of information at the point of purchase, and one of the most effective ways of providing this is to have staff on hand who have an in depth knowledge of the products they are selling. New technology will continue to be adopted in stores throughout the UK. The way POS technology is being used by retailers and brands is constantly evolving. Take digital screens as an example; these are now much more commonplace in the retail environment but when we first started seeing them appearing instore it was clear that they were there mainly for the novelty factor. Today digital displays are used more strategically, as retailers and brands have come to realise that everything from their size, location, content and quality can affect the return they provide. Experience has also shown that using digital screens alongside traditional POS maximises a campaign’s impact. We anticipate that technology will continue to be adopted as a valuable means of interacting with customers and improving their shopping experience. For example if items are out of stock it is more convenient for shoppers to be able to order it online within the store, rather than waiting until they get home, by which time they might have changed their mind altogether about purchasing it. Customers have also become more accustomed to looking up products instore on big screens and having access to TV screens promoting other services the retailer provides while they’re browsing the aisles. Last but not least we anticipate that more retailers will continue investing in Retail Audits next year, with those who have already undertaken thorough audits revisiting this activity to ensure profitable decisions can be made about how future retail marketing strategies are best implemented. Inside
Reporting
With Added Real Time Value
R
etail has always been a competitive arena in which to operate, and one in which every penny counts, but with marketing budgets now also stretched to the limit, it is more important than ever for brands and retailers to achieve maximum return on investment from their instore campaigns. This very often hinges on being able to respond quickly to change and having quality information on which to base effective decisions. A high standard of real time reporting is therefore a key part of any instore marketing project. What truly effective real time reporting does is provide valuable insight 24/7 into all marketing campaigns being implemented instore, giving brands and retailers the opportunity to closely monitor their campaign at the touch of a button and enabling them to make changes and amends as it progresses. Our real time reporting solution provides clients with features such as instant online reporting, signature and live photo capture as well as detailed information about their estate, providing them with relevant and reliable real time information as soon as the project has been completed. We are able to extrapolate data from our industry leading Estate Management System into manageable, meaningful marketing information to demonstrate how a campaign has or is performing. We also offer bespoke management reporting depending on a client’s specific requirements and our flexible reporting technology provides quick and up to date information. We can even filter data by store type, project, geography, format and refit type. The broad range of live reporting functions we are able to provide include reports on store compliance and retail execution, inventory management, audits and surveys. At each stage of a project, progress reports and visuals can be uploaded so that the client can see the results achieved so far and as a team any potential issues that might impact on costs and timescales can be identified. Estate Management Systems are particularly useful when a retailer operates on a national level, as it is difficult for them to keep track of the environment in each of their stores. This means that they can gain a truly national perspective while having details at their fingertips about each individual store, including the display and POP kit used and the wider instore environment. This information is then used to devise even more effective future instore marketing campaigns and drive sales. Photos are integral to all projects where a client wants to gain an understanding of their current display and POP materials in all of their stores. When individual installations and merchandising tasks are completed smartphones or tablets can be used to take photos of each finished display and immediately upload them onto a bespoke Estate Management System. With new technology being developed regularly with even more advanced capabilities, we anticipate that real time reporting will become ever more sophisticated. This will enable instore marketing experts to provide retailers and brands with the ultimate efficiency and maximum return on investment from their instore campaigns. Issue 02 2013
15
DELIVERING ALL YOUR INSTORE MARKETING NEEDS
We pride ourselves on managing every stage of the instore journey with a level of service and attention to detail that is unsurpassed in our industry. If you think your campaigns might benefit from a complete service, you should talk to us.
momentuminstore.com
For further information, please contact: Tim Ellis tim.ellis@momentuminstore.com | 07957 175 406