There’s no question that every recession is different and forecasts for the Australian economy range widely in 2021. There are key levers that brands need to pull to unlock their growth potential. As we work to manage costs and adjust to changing consumer demand and revenue mixes; investment in capital expenditure, marketing, research and innovation wanes. Yet, those that viewed a recession as an opportunity were able to successfully gain a competitive advantage and outperform those that didn’t. This underpins the IRI’s blueprint to growth so brands can truly realise growth in 2021.
Prioritise pricing, promotions, assortment and innovation
The right range matters
No matter whether physical or digital, pre-store customer touchpoints are ineffective if products aren’t available – support your shoppers to quickly find what they want or need. This increases the opportunity to add additional items through the process of de-selection and allows for collaboration to maximise physical availability, deliver the right range and optimise ‘findability’ at shelf. Agile retailers and suppliers will drive value growth by meeting different shopper needs through innovation and premiumisation; and larger, value packs or smaller, lower-priced offerings for budget-conscious shoppers.
Put your shopper at the centre
Retailers and suppliers must collaborate to mine and leverage complementary datasets to improve the shopping experience as single sources alone will not suffice in tailoring category ranges and optimising shelf layouts to meet shopper expectations in store or online. Leveraging Robust POS datasets combined with rich product level attributes can put the shopper at the centre of your strategy.
Leverage price and promotion to activate shoppers at shelf
Australians are more value conscious and price sensitive than ever but also highly loyal; yet three in four are actively looking for promotions to make additional and planned purchases. It is critical to formulate the right trade strategy to reinforce marketing and ranging strategies, support shared objectives and enhance the value proposition. While some decisions are unconscious, those about brand and price generally are not. Value-seeking behaviours will likely increase as will the temptation to discount more frequently and at lower price points. The right price and promotion strategy should benefit the shopper, retailer, supplier and the category.
Know shopper reactions
Planning for 2021 requires intimate and detailed understanding of shopper reactions to price to drive brand and category growth through:
- the right price points on key value items
- effectively managing price gaps and discount depths to drive trade-up and trade-down
- the right offer of premium-priced products for shoppers willing to redirect discretionary income.
With the right trade plan in place, consistent ongoing tracking of promotional execution and effectiveness will enable retailer and supplier agility to adapt better direct investments and revenue management as the market continues to shift and change to meet evolving shopper needs.
Amplify your brand with increased marketing investment
Keep the lights on
It is critical to resist the temptation to go dark in this period of uncertainty. To authentically communicate with shoppers, leverage your understanding of the product attributes that are most important to key shopper groups. Remember, what’s important to potential new brand buyers might not be the same as what’s important to those who recently stopped buying.
Get to really know your customers
The most successful brands and retailers invest in understanding their customers to segment and prioritise initiatives. Utilising granular POS information, shopper panel and retailer customer data provides multiple ways to segment shoppers, understand what’s most important to them for effective communication and deliver the right product, in the right place, at the right price and at the right time.
Balance short-term sales activation messaging with longer-term brand building
Although a challenge, its critical to provide shoppers with relevant information and tone the appropriate reassurance. But remember, the impact of media investments will continue to change across channels as we saw at the height of the pandemic, but don’t always translate into greater media effectiveness.
Have clear insight on media spend optimisation
Marketing mix models deliver clear guidance on campaign effectiveness, channel ROIs and media saturation, but granular store level datasets provide quick and cost-effective ways to test the impact of smaller targeted campaigns prior to a broader launch. Bolstering mental availability will continue to be a marathon throughout the economic crisis. Uncovering how and where along the path to purchase to engage with shoppers is an ongoing effort that must continue through periods of uncertainty. Different shopper groups will continue to evolve the way they engage with media, just as they continue to leverage and adopt new and emerging social media platforms in different ways.
MOVE AT MARKET SPEED WITH IRI
Whether it’s analysing how to make your assortment, pricing and promotions more profitable, tailoring your shopper engagement strategies to target likely purchasers of your brand, or guiding you through new product or market planning, we ensure that your business can better leverage data and insights to help you grow.
IRI are the leading market intelligence firm for FMCG retailers and manufacturers. We partner with our clients unlock insights using data and our industry leading technology, to access deeper shopper insights and identify opportunities to support business growth.
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