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11 Top Retail Marketing Strategies Webinar - Transcript


Title slide – 11 Top Retail Marketing Strategies
Hugh: Good morning. This is Hugh Holman from Observa. I want to thank you for joining us today for the 11 Top Retail Marketing Strategies. This is a webinar in our series and we really appreciate you tuning in today.

Hugh: So, a little bit about Observa: we help consumer product goods brands and retailers measure store execution and improve the consumer experience there to drive increased sales. And we have a crowd of observers across North America and parts of Europe that help with this and we collect real-time information and retail for them.

Your Speakers
Hugh: I’m joined today with Emma Rhoads who works here at Observa. She focuses on marketing and research. And her research plays into the presentation today.

CPG Manufacturers & Marketing
Hugh: So, I’m going to start out by talking about marketing spend in general before we go into the 11 top retail marketing strategies. So, for consumer goods companies…you know, a lot of the spend, as you can see from this pie chart, is in the store. So, trade promotion and shopper marketing comprise spend of things like paying to get on the shelves – so slotting fees; paying for promotions – such as temporary price reductions; endcaps; secondary displays; you know, other things that happen there at the store and often this is because they’re parting with their dollars, giving them up to the retailer to engage in the promotion for them, whether it’s a display advertisement, or maybe getting an ad in the search bar.
So, I just want to point out that it’s as huge percentage of the spend. The fastest growing spend right now is actually digital marketing. So, what happens online, and it’s been really consuming traditionally advertising has been – it has been taking away from the traditional advertising as it has grown. It represents, you know along with traditional advertising, a pretty big chunk there. You know, 33% of the overall spend. So, when you’re looking at the shopper marketing and the trade promotion it’s not quite double, but it’s pretty darn close. And so, for consumer goods companies this is just a huge amount of spending and most of it is going directly to the retailer. So, you know, what can you expect out of this spend?

Marketing Smart and Effectively
Hugh: So, with the digital marketing this chart here really shows effectiveness. So, you know, how is it driving that purchase decision? You know, what is it doing for the shopper? How is it influencing them in making a choice and choosing which products to buy, which brand to buy? With digital, it’s really easy to measure. And a lot of the spend is transition there or you’re seeing the fastest growth at least. And it makes sense, you know. You take an action and you’re able to measure reaction, especially if you’re doing e-commerce and it’s driving an immediate purchase.

So, for online, if you’re directing the consumer or you have the ability to do that, it’s a fantastic way to not only raise brand awareness, as all brands can do online is raise awareness of their company and their products, but to drive that sale for e-commerce. But besides that, you’re going to be way more effective with every dollar if you actually influence the consumer at the retail store which is where, you know, 90% of products are still sold.

So, which of your dollars are being effectively used at trade promotion and shopper marketing in front of that consumer, in the store, where 70% of the purchase decisions are made and is your best place to spend the dollars. You just need to make sure that you are able to measure there and actually our company helps with that which I mentioned earlier. And so, it’s just something to think about as you’re deciding where to put those dollars.

Research, Evaluate, Innovate
Hugh: So now, I’ll hand it over to Emma and she can run through the 11 top retail marketing strategies.

Emma: Alright, hello everyone. I’m going to jump right in to the first one here. So, research, evaluate and innovate. It’s arguably the most important and really the jumping point for a lot of the other tips that we’re going to go over. Really, you need to be researching. You need to know what’s going on whether it’s in your industry, whether it’s the competition, whether it’s the trends going on, you need to know what is happening and you need to evaluate where your product stands within the whole context of that. And then from there, you innovate your product whether it’s a new product, an old product, whatever it might be, you need to keep innovating as the markets are changing and consumers are changing.
So, we have a prime example right here: Old Spice, a popular brand many people know. I’m sure many people might be wearing it right now. Back in the 40’s and 50’s they were very popular. They had these advertisements as you can see here right in the middle of the screen. Fast forward 50 years later and they still had the same kind of look going on. They had the same consumers, but 50 years older. And it was known as the smell of grandpas. One of those things that I saw online. So, they researched into it and figured out that they probably should change their branding.

So, they completely rebranded. Researched who they wanted to go after. Decided on a younger audience. They figured out what those people liked. Figured out his humor, the advertisements and now – also the product design you can see that all along the side there – they changed the product design. Went for some funny commercials. If you’ve ever watched the Super Bowl, you probably noticed those before. And saw truly positive results. Their sales went up and people enjoyed it. They got a whole new audience of consumers.

Know Your Consumer
Emma: So, talking about research, one of the main ways to research is really just to listen to your consumers. Anyone that has ever worked in consumer goods or retail know that consumers like to be vocal sometimes. And it’s actually really important to listen to that feedback. They will tell you what they don’t like about the product and what they do like. And listening to that can get you really far when it comes to innovating your product. So, they are the ultimate end buyers. They’re dictating whether your sales are good. They are the ones buying the product. You need to know: do they like it?

An example of this is High Brew coffee. They are a cold brew coffee company that’s been around for about 4 years now and last year they were receiving numerous people giving them feedback about how they didn’t like the sugar and how it tasted funny. So, they researched into it and found out that 1 in 3 coffee consumers don’t like Stevia. It tastes different to their taste buds. So, High Brew took this into consideration, changed their recipe, and overall it was a really positive result. They found an increase in sales and really positive responses from consumers across all media channels.

Keep up with trends, not fads
Emma: Another great thing to look at with research is trends. And that’s not to be confused with fads that you want to distinguish here. An example of a fad might be the current fad you’ve been seeing maybe in the news: raw water, where people are drinking water from creeks and lakes and not filtering it. That’s a fad, probably only be around for a little bit of time. Meanwhile a trend that’s similar would be health-conscious food choices. As you can see on the graph at the bottom there, over the last 9 years organic food sales have doubled from 20 billion to 40 billion dollars. It’s clearly going to be around for a while. People are sticking to it. So, when you’re innovating your brand and evaluating where your product stands it’s really important to be looking at something like this. Like, how does it stand within the idea of health-conscious food choices? Can you make any changes to your ingredients that would draw more people in? Or are there ingredients that people wouldn’t want in that product?

Look local
Emma: So, moving more towards actually marketing. First of all, when getting a brand out there it’s important to look local. This is one of my favorite tips to look at and talk about. It’s really taking the idea that when you start out your small brand, it’s really hard to get into a big store, but if you just do it step-by-step it can be really helpful to look local. So, there’s three different ways to do this.
You can position your product with a local story. Something that appeals to the people in the area. If you’re products made three blocks down, that’s going to sell to people in that area. People are excited about that. So, you can talk to people, tell its story, vocalize that to the area. Another way is to embrace local channels. We’ll talk about this is in a little bit and how this relates to Bartell Drugs. But yeah, just local stores that want to support you. And then also, partnerships with other local businesses that are probably more established, have a little bit more of a following, they already have consumers that come back. Maybe those people are willing to help you. They started out small too and they want to help.
So, an example that we have on here is a Seattle Brand: Joe Chocolates. And they started out making it in a little kitchen nearby in Seattle in a small house and they moved their product into Bartell Drugs which is a Seattle drugstore. They have about 65 locations in the Punchestown area. Sales went well, they helped each other out, next thing you know, they’re able to go to REI. A little bit bigger of a company, it’s nation-wide, but they’re based in Seattle and that’s where the headquarters are. Their positioning with their story had to do with a lot of outdoors…making it had to do with having an awesome outdoor story. So that really lined up with where REI was at. So, REI was willing to help them. They got their product into REI. Next thing you know, they have established great sales patterns and they’re selling their products. So, they were able to go to Nordstrom, another Seattle company and get their products there by telling the same story which improved sales this time. And after all that, they managed to go to a national grocery store, Whole Foods, and get their product in the store. And a large part of this is because Whole Foods is one of the many grocery stores that will actually have regional, local programs that look for products in the area to incorporate into the store at a regional level, and if it goes well, the national level. So, the last opportunity is to start local and build it.

Look Good Online
Emma: As Hugh was mentioning, digital is growing, so it’s important to talk about. If executed well, it is really effective, and it can impact the consumers. So, really when we’re looking at online and marketing online, you look at three things. That’s going to be who your consumer is – really important to get that down, who is it that you’re going after? Because then you decide where are they online? Online is a large place and you need to know where you can find these people that you’re targeting.

And next is how to integrate ads into wherever they are online. And there’s many ways to do this, but you need to figure that out and it shouldn’t be disruptive to the point where people are annoyed by looking at the ads. It should spark interest and generate brand awareness. Quip did this really really well with their electric toothbrush. You can see how they were targeting a younger audience, millennials, and used big words like “your iPhone” and “Warby Parker glasses”, “trends” and showed the competition next to it and it was slick, clean, showed up all over Facebook and Instagram where their audience was. And it worked out really well for them, they were very successful.

Emma: Influencers is a new topic on media. And really, it’s the fastest growing online customer acquisition method right now with most companies wanting to increase their budget. You have 59% of companies wanting to increase or influence their budget. And influencers are people who have a following whether it’s on the media or even in person. This could be anywhere from a very targeted blog about mom bloggers that have 5,000 people that read their articles every week or watch their cooking channels every single week. And using someone like that to get a very specific targeted group, or a larger one since there’s the Kardashians or someone that a lot of people follow. It’s not very specific but a lot of people follow them. And just simply having them use your product whether you send it to them for free and hope that they will or pay them. There are a lot of ways to use influencers. And right now, companies are making $6.50 for every $1 spent on influencer marketing, so this is a big thing people are looking at right now.

Smart Product Placement
Emma: Smart Product Placement. This is moving into in-store execution which is really really important as Hugh’s already mentioned. 70% of people are making those decisions at the shelf of what they want to buy. They are impulse purchases being made, it’s really important to make sure your shelves look good and your products in the store. Four things that we’re going to talk about now right here is eye-level is buy-level. It’s the whole idea you can see down in the picture with the kid with the cereal, you’ve got kids cereal at kid’s eye level while adult cereal typically would be at a higher shelf level. And that is really important.
Displays and features, we’ll get into trade promotion a little bit more later, but it’s really important to have put your product in places in the store that it typically wouldn’t be in.

Secondary placement, we see two examples on here, Mentos and Coke, for those of you who don’t know this little science experiment, throw a Mento in, it explodes. For those things that you might not go to the store thinking that you want to buy that, but once you see them next to each other in a non-traditional placement, you might be like “oh, that’s a good idea. Let’s do that.” Strawberry jam is a great example of that, it can be next to the peanut butter, next to the waffles, and it could also be next to the cheese. And it’s frequently bought with all of those items, but they are in different parts of the store. So, really placing it anywhere can stimulate those impulse purchases.
And the final one is the check-out area. We’ve all stood there. You’ve looked at the candy and you’ve bought it, because it works. You’ve got nothing better to do than look at it and it triggers that impulse buy.

Hugh: Yeah, this is something that we love to see for our customers where they’re able to put their product in multiple places in the store whether it’s getting their product into more than one section of the store on the shelf or if they’re just creating points of disruption with additional displays for instance. It’s fantastic if you’re able to get the product out from the central isle in front of different sets of consumers. And make them aware of your product. And I think as Emma pointed out, the association with other purchases that they’re making is a beautiful way for you to get them to try your product again, right?

Look Good, Stand Out
Emma: Alright. Big one, simply: Look Good, Stand Out. As we’re talking about here, people are making these decisions at the shelf. If you have the option of a hundred items, your eyes are going to go somewhere, and your packaging better look good. A great example of this is RxBar. On the left there, you can see their original packaging when they weren’t as well-known of a company, but they did a complete package redesign to the one on the right and jumped to the third bestselling wellness bar after changing it to follow those five tips you can see on the side there. To help you remember it’s SHAPE acronym. It’s just really important to tune into all of those and make sure that you are looking good and that you are standing out on the shelf and that people will try your product.
Hugh: I want to point out here, I think they did an excellent job of really understanding their consumer. You look at the package on the right, the redesign. It’s just like what is in the product. It’s a clean ingredient deck, they are showing it’s a simple recipe, there’s nothing bad in there for you, it says “No B.S.”, kind of funny. And I just think this was just so successful and it obviously resulted in a $600 million exit for RxBar as they were acquired by Kellogg. So.

Lead by a Sample
Emma: Lead by a Sample. I’ll say it again if you guys didn’t catch it, Lead by a Sample. It’s a little joke in there for everyone. Samples are very impactful. 81% of consumers are more likely to buy if a free sample is offered. We’ve all been there, you try a sample, you want to buy it. It triggers something in your head, you like it you want to buy it. And what’s really interesting is how that can be applied across beyond consumer goods to tech companies, any company. if you provide a sample and people can see it and try it themselves, they are way more likely to buy that product.

Hugh: Absolutely, and this is something that we’ve been working on here at Observa as well. Sampling is the most effective form of marketing and if you make it easy for someone to try your product they’re more likely to – I know in my household if there’s a company sampling at the store we’re way more likely to buy it. We try lots of new things because of sampling.

Trade Promotions
Emma: Trade Promotions. I promised you guys we’d come back to this and we did. If you haven’t caught on this is a pretty important thing to be working with. People spend a lot of money on it. A lot of companies are really dropping a lot of money on it and it’s really effective as we saw at the beginning when Hugh mentioned that. Using displays and features or putting that draw-back in places that maybe people wouldn’t have gone originally, and also it just draws in that attention and is triggering that impulse buy. We can see in the graph from Nielsen over here that sales for food specifically are increasing 26% when it’s featured and 38% when a product is displayed. And those are major sales lifts. You know, that’s having a huge impact in the store when executed correctly. But it needs to be executed correctly and you need to make sure it’s actually happening because a lot of times it isn’t.

Know Your Shelves
Emma: So right on the topic of that, while you’re trade promotions look good, so do your shelves. You need to make sure that your product is there and that it has many facings and that it’s SKUs are there. It’s so frequent that we’re seeing product voids where somehow that shelf tag is knocked off, there’s no product there, it’s gone. And it’s supposed to be there. You don’t want that. No missing SKUs. Or even a lack of facing.

Let’s say a company agrees to have three facings in a store, if they only have one or they only have two that’s not getting restocked as frequently as some items, it’s so easy to run out of stock that way. So, you need to make sure that all the facings are there. And then out of stocks, as we mentioned, if you’re out of stock you’re not selling your product. It’s not being put on the shelf. You need to make sure you know that’s happening. It’s a must-win grab battle. Everyone is right there picking their impulse buys, making their decisions on the shelf. Your product better be there, and it better look good.

Hugh: Yeah, you really don’t want to disappoint your consumer. So, if a consumer is going in to buy your specific product and you’re not there, they really have two choices, their choice is to leave the store and try to go somewhere else to buy it, or purchase one of your competitors, and neither is good for you. So, you’re the only one that’s going to manage the shelf, and so it’s something that you need to take on as your responsibility if you’re in CPG.

Emma: I’m going to hand over the summary to Hugh here to cover what we just went over.

Hugh: Thanks Emma. So, the first point here is manage your marketing spend. You know, we looked at the pie chart at the beginning. You’re probably spending some money on advertising. Maybe more of it’s going toward digital these days as you’re increasing your brand awareness which is awesome. Maybe you’re doing e-commerce and you’re able to drive immediate purchase and that’s fantastic if you can. If you’re mostly in brick-and-mortar and most brands with their products are, managing your trade promotion and shopper’s market is very very important. You can’t expect the store with their distributed execution and so many locations to get it right. They just can’t. We know that all the big brands manage it at the store level. I mean if you have your own field workforce doing direct store delivery, you’re touching the shelf every day, maybe twice a day, some stores maybe just a couple times a week, but you’re out there. The rest of the brands leave it up to somebody else and it just doesn’t get done. You have to manage that marketing spend and making sure that you’re actually getting results out of it, that it’s effective and that it’s getting executed. Know that you’re getting your self space, know that your promotions are happening.

And second, really know the consumer. You know, don’t let your product get stale because you aren’t listening. Make sure that you have that feedback look going and you’re listening to the consumer, you understand how they are making purchase decisions, and you’re finding out are there other segments that you’re maybe not tapping into. So, it’s not only the people that are purchasing your product today but the other people that might purchase your product. You need to make sure that you understand the consumer community and that you are able to target them effectively with the right messaging, packaging, etc. And innovate, right?

Once you have that information, understand it, try things with your products, try things with your marketing. And you’re not going to get different results, you’re not going to improve results without trying new things, right? You can’t expect things to change if you keep repeating the same actions. And really drive that purchase decision. It’s about influencing the consumer where they make the decision, whether you’re doing it online with e-commerce or whether it’s in the store, right? You need to not only make sure that your shelf placement is effective and that your packaging is popping through to the consumers, you’re catching their attention and that your promotions are drawing their attention and having them choose your product over a competitor’s and put it into their cart. Also, finding placement in other parts of the store where maybe a consumer that doesn’t walk center isle down the path where your product is on the shelf, you know, catching their attention. So, it’s really important to influence them where they make their purchase decision.

Get ahead with Observa!
Hugh: So, a little more about Observa again. We help our clients ensure that their displays are done correctly. That their shelf placement is as expected, that all their SKUs are present, they have all the facings that they should, that their priced competitively by the work retail. And that their promotions are happening. And we do this real-time across North America and parts of Europe. And let us know how we can help you, but you can’t manage what you don’t measure. And then the other thing is competitive analysis. We help lots of our clients, you know, understand markets that they’re not in and markets that they are in, right?
So, if you’re going after a new chain and you want to understand how your product would fit into their set, how are their stores different from rural areas to urban areas or between markets. We can help you understand the product mixes and what the competition is there, or in the markets that you are in: do you really get out to the stores? Do the other people in your distribution chain get out there? Do you have a feedback loop from those people? We often hear that our brokers take care of that or our distributors will. We find out that most of the time that’s not actually true and that the feedback loop isn’t working and we’re able to help with that. So, let us know if we can help you, your broker and your distributor.

Observa information
Hugh: So, thanks again for joining us today to cover the 11 top retail marketing strategies. I want to thank Emma for joining me today with this presentation and we really appreciate your reaching out if you feel we can help or even if you just want to engage in conversation about what you’re doing with your marketing and how it’s going with your placement in stores. Thanks again.