With retail multiples looking to downsize their ranges, especially in the context of cost price negotiations prompted by recent currency fluctuations, FMCG suppliers need to become master storytellers to remain competitive.
Category and shopper management specialist Bridgethorne is urging suppliers to create more compelling selling propositions that better demonstrate the category opportunity for a product based on consumer and shopper insights.
“Research published in the summer of 2016* reported the number of new grocery products being launched by manufacturers into retail multiples in the UK falling significantly,” explains Caryn Gillan, director of category & insights at Bridgethorne.
“Retailers removing slower selling items had resulted in a 6% drop in the number of products on shelves and 13% fewer new branded items launched in 2015 compared to two years previously.”
The reality, of course, Gillan adds, is that the market needs product innovation. Shoppers demand it for variety, retailers need it for category growth and opportunities remain for those who approach the dialogue correctly. Larger organisations like Unilever have introduced dedicated NPD teams specifically to facilitate the faster launch of new products from concept to final product, all other suppliers need to do what they can to keep pace.
“Not every supplier is a Unilever,” continues Gillan, “which is why all FMCG manufacturers need to create stronger selling propositions not only for new product development and new listings, but also as a defence against delists or distribution losses. Having a great selling story is vital if you are going to persuade retailers, you need to win both hearts and minds with a proposition that is grounded in genuine insight and delivers a positive change for the retailer, category, shopper or consumer – preferably all of them!
Bridgethorne is working with suppliers to identify why products are relevant to retailers and shoppers, and the category challenges they address.
“Critically, insight is the real currency when it comes to building great selling stories, being able to demonstrate the category opportunity that will drive a call to action,” adds Gillan.
* Source: IRI Worldwide