srcg wake-up: changing times, changing needs

Monday, 02 March 2009

A little bit of sunshine can raise flagging spirits, reports srcg director Scott Annan.

It was heartening this weekend in West London to see the pavement cafés crowded with people laughing and enjoying the sunshine. Saturday felt like a turning point from our gloomy winter to the spring warmth.

The shops were busy, the cherry blossom is out and the morning chorus is back. Gordon's big mess, Fred's pension and the end of capitalism were a long way away! Sunshine is brilliant at raising the spirits.

Now I am not degrading the tough times many are experiencing; here at srcg we are a long way off this time last year, but we are here and still working.

Many of our consumer packaged goods (CPG) and retailer clients needs have changed; here are some of our experiences:

1. Back to basics: The keenest conversations revolve around the continual need to challenge all investments; a renewed focus is being placed on basics such as: what is the right range and space, and are our promotions effective?

2. Use of data: Retailers are increasing their investment in the use of their data to retain customers and transactions, drive footfall, acquire new customers, improve promotions and enhance supplier performance.

3. Retail Price and price perception have replaced convenience and quality for the majority of shoppers in selecting where to shop. Andy Bond's comment that Asda wants to see more value investment and less NPD supports this. Many CPGs with a history of retailer partnerships - category management, supply chain, joint business planning - are quietly retiring these this year to protect volume.

4. Partnerships for growth: Innovative and ‘smaller' suppliers are investing in their priority retailers to grow share and goodwill.

5. Convenience trips are growing: Convenience retailers are reporting higher shopper trips and forecast this to continue through 2010.

6. Differentiation: Convenience and fuel retailers are investing in getting the basics right and chasing innovation. Most are using food service to differentiate from competitors and drive shopper conversion from fuel to store and store to food service. Sales of food service plus coffee equals tobacco sales in Canada, Japan & US, at a higher profit.

7. Unique for me: Suppliers are providing unique programmes that support retailers' differentiation - packages, promotions, limited editions, NPD, consumer insights, micro marketing - to significantly increase sales and goodwill.

8. Trading down: Over 75% of consumers will trade down during 2009 and 2010 because of lower disposable income and job uncertainty.

9. Outsourcing: Can I reduce costs by outsourcing functions without harming my product proposition? Can category and space management join for example IT development, payroll and supply chain?

10. Supply Chain: What is the right supply chain for me?

These are not universal and some appear to contradict others, for example ‘price' and ‘unique for me'. Some CPG's such as BAT and Cadbury are showing strong growth without crashing prices, albeit from a different sales mix with less premium brands. Good retailers are growing as recent results from Poundland, Sainsbury and Spar show.

Two of the bustling cafés near me, Darcau and Kitchen & Pantry, open long hours, deliver personal service and provide great fresh food at a value price. We all eat and drink; the winners look, listen and then adjust their offers very fast. A little bit of sunshine always helps us work that little bit harder.

Bookmark

Email This

Comments (0) add comment