By Kim Bruce, Chief Customer Officer at Premise
Jan. 22, 2024
Inflation. It makes consumers more price-conscious and prone to bargain shopping, seeking promotions, or switching to cheaper brands.
Meanwhile, during times of inflation, the cost of goods sold (COGS) also increases. Oil prices make transportation more costly. With such a tight squeeze on the supply end and consumers also tightening their belts, it’s more important than ever to have eyes (and data) on every aspect of the supply chain. Battling inflation requires a holistic approach.
One place where we see our customers make substantive changes is at the in-store level. Let’s take a look at how retailers are leveraging brick-and-mortar merchandising as a key way to combat inflation.
Up-to-Date Price Tracking
As the adage goes, “Mind your pennies and nickels, and the dollars will follow.” During a time of inflation, it’s vital to track how your products are being priced in-store.
But this is easier said than done. This data can be slow. By the time it reaches the computers at corporate, trends may have moved on, and some areas have traditionally been data “black boxes,” especially in rural areas or developing countries. Data can also be challenging to parse. It often arrives in aggregate rather than at the city or store level, which is unhelpful in precision tuning your in-store merchandising.CPG brands need to understand whether merchants are following pricing guidelines—or not. A common finding is that rather than just discounting a particular brand, shopkeepers discount the entire category, rendering a brand’s competitive pricing useless. With store-level data, brands can hold retailers—down to the individual store—accountable.
CPG brands also need rapid and up-to-date regular price tracking for SKUs sold within mom-and-pop stores across global markets, including pantry staples, competitor products, and a company’s key portfolio items—eliminating the guesswork of what action needs to be taken and increasing sales efficiency.
Offering In-Store Insights on Asset Compliance
Is your merchandising strategy actually working? You need to know, not just guess.
On a sweltering hot day, a cool drink hits the spot. This is especially true in rural areas in countries such as Pakistan, where refrigeration isn’t always available. Upon learning that 64% of sales come from powered coolers, a major soft drink brand banked on this by installing branded coolers in traditional trade stores. However, because these stores are independent, they couldn’t simply ask HQ for a report on whether and how the trade stores utilized those assets.
Working with a solution provider, the soft drink brand determined that storekeepers were not always using the company-branded coolers for the soft drink brand’s products. Furthermore, sometimes the coolers weren’t even turned on, negating the effort. Equipped with these insights, they were able to take back their assets, reinvent their strategy at the store level, and increase sales.
Closely Monitoring In-Store Activations
During inflation, buyers seek discounts and promotions, such as those on end caps. But as of now, brands that spend billions of dollars a year on promotions often don’t receive the results until the promotion has ended. In fact, more than 50% of promotions fail to impact sales, leaving two-thirds of brands in the red after their promotional campaigns end.
One pantry item brand, new to their category, made the considerable investment to display their product on end caps in mid-range retailers across the U.S. With so much upfront capital on the line, it was vital they show a return on investment. With research, they found that only 14% of the stores lived up to the agreed-upon service level agreement, and 73% were not even carrying the product! Armed with this intelligence, they could ensure compliance while the promotion ran.
How Does Rapid, Store-Level Execution Intelligence Combat Inflation?
In the fast-moving CPG pricing and promotion space, legacy data is stale before reaching your inbox. As inflation’s grip tightens, CPG brands need more and more granular and actionable analytics. Dynamic decisions require these up-to-date insights to act quickly.
CPG companies need access to Execution Intelligence and real-time data to gain a competitive edge in local stores. With real-time visibility into how retailers price, promote, and merchandise products, sales teams can take appropriate action. The unprecedented speed and scale help CPGs identify gaps versus category norms, inform trade spending, monitor key competitors, optimize price elasticities, and promptly react when needed.
For CPG brands, rapid retail intelligence at scale is now a reality.
About Premise: Premise is a revolutionary insights company that provides the world’s largest consumer brands with in-store execution intelligence in near real-time. Our innovative platform, combined with a network of 6 million Contributors in over 140 countries, enables our customers to obtain real-time insights.