Monthly Archives: March 2007

Channel shift – where ELSE should you be? Smart companies are riding the consumer wave with forward-thinking channel strategy

Topics: Channel / Retail, FMCG

Media Release March 2007

Consumers are starting to shift out of traditional channels (such as grocery) and into alternative channels due to social and lifestyle changes in Australia, particularly the need for convenience. Concurrently, top tier and second tier suppliers’ profit margins are being increasingly queezed in grocery, resulting in the need to fill profit gaps from other channels.In response to these two meta-trends, blue-chip companies are putting their distribution strategies under the microscope.Norrelle Goldring, Principal of ShopAbility, says the big guns such as Coca-Cola and Nestle are well ahead of the game.‘We’ve been working with Coca-Cola for three years now, looking at how to optimise their non-grocery channels to increase sales,’ Norrelle said.

‘Coke worked out a long time ago the game is changing. This has driven their move in to healthier categories like juice, tea and natural energy drinks – but the question is how does this play out in different retail channels?

‘One thing many companies overlook is that shopper behaviour differs significantly depending on the ‘where’. Channels have segments, and shoppers behave differently in them.

‘For example, in the liquor channel demographics and behaviour are very different in stand-alone bottleshops versus drive thrus. Therefore, would you execute the same way in them? Not if you want to increase sales.

‘Companies also need to look at where the feet are pointing. With single-person households now around 20% of total Australian households, and households with people in their 20s still living at home a further 20% of total households, we are starting to see a shift out of grocery and into convenience and other channels. So the question is which ones to play in, where, and what it’s worth.’
Norrelle says there are many factors to consider in channel strategy, including:

  • Who is shopping for your product, what is their occasion and where are they likely to go to fulfill it? This requires mapping categories to shopper occasions to distribution channels.
  • What are the most important non-grocery channels for your category? Determining the size and potential value of each opportunity versus cost and ease of execution, competitive intensity and brand fit.
  • What is the role of your categories in each channel and channel segment, and how might you need to change your execution accordingly?
  • How much market share can you realistically get in each channel? Setting retail goals and establishing measures beyond sales alone – such as frequency of purchase and incidence in shopper baskets.

‘More and more, one of the biggest questions is where should we be? And it’s only going to get bigger as the market keeps changing,’ she said.

For media enquiries please call Norrelle Goldring 0411 735 190 / Lee McAllistair 0414 941 585 or email enquiries@shop-ability.com

Marketers losing brand control where it counts: why marketers are entering the channel debate

Topics: Channel / Retail, FMCG, Segmentation / Clustering

Media Release March 2007

More and more marketers are cottoning on: distribution channels are not just sales turf, according to Norrelle Goldring, Principal of ShopAbility.
‘Traditionally channel strategy has been seen as a function of sales because it is distribution based. However, as a marketer, do you want to relinquish control of your brand where it counts – at the coalface?’ Norrelle says.‘Brands, not just products, are in channels. More and more marketers are realising they need to be in control of how their brand is represented at every consumer touchpoint.’Norrelle, who has worked with global and national brands including Coca Cola, Nestle, Bundaberg Rum, Vodafone, Volvo and Keno, says the big brands are stepping up channel-specific brand execution.

‘It’s just not a one size fits all. Would you execute your brand the same way in a supermarket as you would in a pharmacy despite the fact that people are shopping them very differently? Smart companies are tailoring according to shopper behaviour.

‘Look around you; you’ll start to see coffee and cold beverage companies are offering cafes and bistros more subtle in-store branding than what is in supermarkets or convenience stores – to fit in with the ambience of their venue and the fact that their patrons don’t want to be beaten over the head with a brand while they are dining.

‘It’s about putting yourself in the shoes of your shoppers, and also your trading partners or retailers, and really thinking about how to be most relevant to their needs.’

According to Norrelle, some of the factors for consideration include:

  • Consumers versus shoppers (not necessarily the same) – who is interacting with your brand in which channel? How are they interacting with your brand?
  • How are the channels you are in segmented? Channels have segments, and often different target markets shop them differently. Brand execution needs to be tailored accordingly to stay relevant.
  • How the consumer purchase drivers differ by channel (how shoppers shop cafes is vastly different from how they shop department stores, for instance)
  • The role of marketing versus sales people in the channel debate, and the need to work collaboratively to ensure that ‘on brand’ execution is meaningful and effective at every consumer touchpoint.
  • The case for ‘channel brand identity’ where appropriate to increase relevance to shoppers in specific channels.

‘Ultimately, channel branding strategy will play an increasing role in marketing in the future, as marketers take a more proactive approach to how their brand is perceived (or not) at the coalface, where the shopper is.’

What do they REALLY think of you? – the case for trade research

Topics: Channel / Retail, FMCG

Media Release March 2007

Traditional market research has overlooked the importance of trading partners and the supply chain, according to Norrelle Goldring, Principal of ShopAbility.

‘In recent times there has been a huge focus on consumer and shopper research, which is a good thing, but in the last 12 months more companies have been ramping up their focus on trade, ’ Norrelle says. ‘The thing is, if you don’t know how your staff, trading partners and supply chain experience working with you, or your competitors, you’re missing a big opportunity to optimise sales.‘Companies are also seeking route to market intelligence – who is who in the zoo and how they operate – to ensure they are not behind the 8-ball.’Norrelle has worked with major global and national companies including Coca Cola, Nestle, Goodman Fielder, Selleys, Orica Mining and Diageo.

‘Trade research results in some of the most profound “A-HA” moments. One company we worked with came to the realisation that their trading partners saw them as monopolistic bullies, and they would switch alliance if they had another option.

‘That kind of insight is priceless – because defining the problem enables us to implement the improvements that can protect a company when the monopoly ends and a second player enters the market,’ she says.

‘Another company we worked with discovered that their biggest trading issues were centred around delivery in full and on time (DIFOT), rather than trading terms, price points or consumer promotions.’

‘Sometimes the simplest initiatives can improve relations dramatically, and have a significant impact on bottom line sales.’

Norrelle says good trade research should result in recommendations about:

  • The biggest ‘fix now’ areas for your business that, if solved, will increase sales the fastest and most dramatically
  • Supply chain: best practice warehousing, distribution, delivery and sales service arrangements according to what your trading partners say they want
  • Sales team structures and servicing improvements: frequency, territories, what the other guys are offering that you aren’t
  • How to optimise your category’s sales within its role to the retailer
  • Incentive schemes – retailers, sales staff
  • Internal and retail training requirements
  • Incremental shopper behaviour insights.

‘I think we will see an increasing focus on trade research in the future – if you don’t know what they think of you, then you may not only miss the problem but the solution as well.’