Will this be a great year for FMCG brands? The most recent Kantar grocery sales data shows that the UK market grew at a healthy 3.1% in the last quarter of 2017. All of the Big Four supermarkets are back in sales growth with Tesco leading the pack and the discounters flying. So whilst technological change, retail consolidation and the turbulence of Brexit continue to impact shopper behaviour, opportunities for growth are abundant. For those agile brands that are differentiated and in sync with shoppers needs, I think you can be optimistic about the year ahead. If you are still undecided, here are some thoughts on how to make 2018 a year of shopportunity.
Be new & improved
It is customary at the start of the New Year to make some positive changes. A chance to tackle a few bad habits, change your diet or get fit. I would encourage food and drink brands to do the same and to take a long hard look at their recipe and nutritional content. In the desire to mitigate ingredient cost inflation and meet round pound pricing, many FMCG products are now pale imitations of their former selves. Ingredients have been substituted. Recipes changed. Packs shrunk.
But tastes are changing. There is a groundswell of shoppers looking for indulgence and health for their families and willing to pay a premium for both. Many major brands are already reformulating to help shoppers make healthier choices. It is great to see Kellogg’s committing to reduce sugar by up to 40% in its core family cereals whilst still delivering on great taste. Seize the moment to benchmark your brand for satisfaction. Research and improve your recipe. It is time to get fit for 2018!
Focus on value, not just price.
Food price inflation is expected to outstrip wage increases throughout 2018. With household budgets squeezed, shoppers will remain hungry for great value. However the obsession with EDLP may diminish as retailers and brands embrace a wider range of promotional techniques to get stand out. There can only be one lowest price big supermarket (it was ASDA according to recent Grocer 33 basket analysis) and the race to the bottom has been wrecking margins and diminishing categories for years.
Value is a function of price and quality. Do you know what shoppers really value in your brand? The tacit needs, rather than what they are able to express. A mobile ethnographic approach to research can uncover the unknown and help tip the balance in the seconds that matter at the point of purchase. I want to see more brands improving the quality of their products and also their promotions in 2018. Embrace added value techniques like free gifts, cash back and on pack promotions to get the trial and repeat purchase you need.
New product development is the lifeblood of any healthy FMCG brand. But the days of creating a standard product that is ubiquitously listed by all the big supermarkets may be over. Store loyalty is at historic lows. Tools like MySupermarket make shopping around, price comparing and substituting stores increasingly easy.
Your brand can help them differentiate more by creating exclusive formats of NPD, unique packaging, bespoke sizes or even limited edition flavours. Developing a retailer dimension to your NPD concept approach helps your brand innovate with more confidence. The benefits can be reciprocal, with exclusive NPD often enjoying better listings, improved display and more targeted communication as part of a joint business plan. Expect to see even closer collaboration between FMCG brands and supermarkets in 2018.
Create a brand experience.
The gulf between a brand’s glossy advertised consumer image and the actual shopping experience remains vast. On TV, tablet or mobile screen, we see £millions invested in clever creative, emotional content and thought provoking brand stories. In-store at the point of purchase, most brands are piled on pallets or dumped in fridges and rarely promote anything other than price.
It is time to bridge the gap. Join up your brand and shopper marketing! The shopper may not be your final consumer, so identify their mindset and mission and tailor accordingly. See the supermarket as the final path to brand purchase and utilise all the relevant marketing levers to convert. From impactful front of store experiences to brand ambassadors, shopper companion apps, premium display, augmented reality PoS and personalised promotions.
I’d be really interested to hear your thoughts on how to make it a year of shopportunity.
If you want help on getting your brand fit for 2018, from innovative shopper research to brand experience and in-store activation, do please get in touch.