Merchandising and FMCG Sales Boosting in Sale Outlet (E)
What is the Impulse Purchase? Why to boost FMCG sales? How to boost it? What is necessary for continuous growth in the sale outlet?
Posted: Sep 2008
During my career I had the opportunity to work for non-profit as well as for profit-oriented company. I must say that the difference is huge. Non-profit organization does not have to earn the budget. Their goal is to spend it. Of course, there are some rules and guidelines that should be respected. In such organization reporting and expenditure justification to donors is crucial part, in order to make an organization eligible for future funding.
On the other side, working in a profit oriented is something completely different. Still you have the funding. But in this case your stakeholder is also a shareholder, who expect profitable operation, with certain return on investment. Further more, goal of every successful company is to have continuous growth in all directions; expanding the portfolio, market share, increasing of sales, revenue and profit, while driving the business at the optimal cost.
But for how long you can have continuous growth? Are there any limitations for market need? Of course that there are limitations, but they are imaginary, since the market demand is not something that is firm. It changes, as it evolves through time. But also it is changed by the influence of supplier, i.e. Company is creating a new demand of their potential consumer, by offering them a new and better offer of products and services. If succeeds, company provides itself the continuous growth. This offer is done through development of a new products and services, as well of suitable ATL campaign.
On the other hand BTL campaign is something that is also very important for sustainable continuous growth. BTL marketing is very important, especially the companies that deal primarily with Fast Moving Consumer Goods ( FMCG ). While capital expenditures as real estates or vehicles are on the one side of demand scale, FMCG commodities like food, soft drinks, alcohol drinks, cosmetics, etc are on the other side.
FMCG products are subject of planned purchase, but are very often subject of impulse purchase.
Impulse for purchase can be triggered by clever positioning and merchandising of product within the shopping area of the sale outlet. There are several basic rules for successful positioning in the sales outlet that will initiate the shopping need of consumers, even when they didn't even thought about buying some item, therefore providing continuous growth of sales. So, how to develop your FMCG sales?
Corporate Block is the section on shelf or separate rack in sale outlet that is dedicated for product of one manufacturer or brands owner. Corporate block gives strength from brands synergy, it creates visual impact and increase brands value. Shopper is more likely to be attracted by impressive, well arranged section dedicated to one producer, than by the bunch of products scattered around on different shelves.
Corporate Block in Sale Outlet
Positioning Before Competition in sale outlet is very important. Who is the winner on 100 m race? That is the one who first gets to the finish, even if the second one is only 0,01 sec behind. This is why is important to have position before competition.
Eye Level Rule say that whatever is in the eye level and slightly below is at the reach of the hand. What ever is at the reach of the hand is likely to be grabbed. People like easy and effortless shopping, without stretching up or leaning down. This is why you should avoid too low or to high positioning in the sale outlet.
Multiple Shopping Points; more selling points in the sale outlet means more shopping opportunities for continuous growth. For small size sale outlet we apply triangle rule, while for the large sale outlets quadrant rule is more applicable.
Triangle Rule says that the best positioning in the small sale outlet is capturing the golden triangle - hot spots: entrance, the most frequent area and the cashier.
This is obvious, since, whoever comes to the outlets is coming through all mentioned spots, and therefore purchasing possibility is the highest from perspective of horizontal positioning.
Quadrant Rule says that product positioning is recommended in all zones of sale outlet, but their strength from entrance to the cashier is in decreasing trend. Simply, at the entrance ot the sales outlet the shopper's basket is empty while wallet is full, shopper is eager to shop.
While moving to the exit of the sale outlet the basket becomes full, money already allocated and the shopper is less enthusiastic, since he is starting to think about the rest of a day, rather than about shopping. Therefore early positioning in the sale outlet is important for impulse purchase based products.
Merchandising of FMCG products is the process of effective arranging of product at the selling point. Merchandising of FMCG products covers activities like stocking up, arranging according the corporate merchandising standards, placing the price tags, cleaning and rotating products according the expiry date ( FEFO ). Merchandising of FMCG products is the most effective method for continuous growth in the sale outlet.
X-Merchandising of FMCG product ( or Cross-Merchandisng of FMCG ) is positioning the product next to the other product in the sale outlet that is complementary to your products. Examples: soft drinks next to snacks, or spices next to the meat.
These are basics of successful positioning in the shopping zone of the sale outlet. These are the guidelines of how to develop your FMCG product sales. This should be accompanied with an optimal inventory stock, changes in portfolio, smart price policy and fresh advertising material. If the sale outlet is worthwhile investing, then special promotions, presence of sales animators, surprises for shoppers and other add-ons can be used.
Impulse purchase is the moment that must be used in the FMCG industry for the continuous growth. Just to be available in the sale outlet is not enough. It is necessary to be active and visible at same time. There are many similar products that can easily substitute your. Sometimes only the small difference in position in the sale outlet can make the judgment of shopper about which product to buy. For shopper that may not present a big difference. But what about your product?