Retailers urged to do more to drive category growth
growth across every product category, be it through innovation,
promotion or refurbishment. But a recent survey suggests that their
best efforts are being let down at the final stage - in the store
itself.
The survey of 165 companies, carried out by food and grocery think tank IGD, shows that category management is a core business strategy for two-thirds of those questioned, but also that poor levels of implementation and compliance are leading to potential lost sales worth hundreds of thousands of pounds.
A significant number of the companies questioned by IGD "do not measure the implementation of category range reviews, planograms, signage and promotions, and of those that do, many experience poor compliance levels in-store", the report said.
Some 63 per cent of retailers do not measure the implementation of category signage in-store, while 37 per cent do not measure the implementation of category promotions in-store and 27 per cent do not measure the implementation of category range reviews in-store.
Promotions are just one aspect of most retailers' category plans, but the IGD survey showed that they are particularly critical in the successful launch of new products. Some categories are heavily driven by promotions, with 40 per cent of volume sold in this way, but despite this, 37 per cent of retailers and 21 per cent of suppliers said they did not measure the implementation of promotions.
When looking at levels of compliance in promotions, IGD's survey found that only 21 per cent of retailers and 30 per cent of suppliers achieved between 81 per cent and 100 per cent compliance. Just over half of retailers said they were satisfied with these levels of compliance, while 65 per cent of suppliers would like to see improvements. Even so, higher levels of compliance are achieved for promotions than in other parts of the process, such as signage and planograms, the study showed.
Even with the high costs of running promotions, 40 per cent of companies were found to achieve less than 60 per cent compliance in-store, a worryingly low level. But the respondents also suggested ways of improving this figure, including making implementation of promotions a key performance indicator for stores, introducing tighter controls on promotional stock and seeking better communication all along the chain from supplier to buyer to store staff.
Some respondents also said that using a dedicated resource, such as a supplier's field sales team or an external agency, could ensure a greater degree of compliance for promotions.
