In-store promotions come with their own success story; they address visitors and convert interest into business propositions. Given that in modern trade formats majority of purchase decisions are made in the store itself, this becomes an important means for driving product and brand sales. “Retail stores are not merely points of distribution, but important communication points too. In-store promotions are effective marketing tools that enable brands to stand out and retailers to offer an enriching and enticing shopping experience,” says Pragya Singh, Associate Vice President at Technopak Advisors.
Making a point
In-store promos of FMCG products and F&B products can serve several purposes for retailers and brands. “They help retailers to liquidate slow moving stock/near-expiry stocks. In the process, they drive higher footfalls and boosts sales,” reasons Singh.
Clever retailers go beyond the in-store promo to create an enriching and differentiated shopping experience. “Our agreement with the brand is based on the time duration and the space we provide to the brand in our store. The brand may also send their representative to explain about the product to the customers, which is a very helpful tool to increase sales of the brand because it directly deals with customers,” says Hitesh Arora, Managing Director, Kipps Mart, a reputed gourmet food store in Ludhiana.
There are several ways through which brands and retailers engage in store promotions, most popular being product displays in strategic locations, and through signs and banners. Coupons are an indispensible tool, which consumers trade for money at the cash counter and which are redeemed against the products purchased. Though coupon redemption volumes scale up in times of economic crisis, such programmes are beneficial to retailers for several reasons: they help move a slow-selling product and increase the volume of customers. With certain coupon programmes, smart retailers win customers by rewarding them with gifts.
Displays, usually made of cardboard (and disposable), also help to draw customers into the fold. Neon-lit non-disposable displays create an impact too. Attractive schemes linked to discounts, bundling and freebies are other promotional schemes, but these are usually for a limited period or on a limited stock. The objective is to create trials and put forth the right message. For brands, they create increased awareness, enhance sales, and sometimes, even result in brand switch. “While the timing of promos varies for brands and retailers, typically, most common promotions can be seen around festive occasions or seasonal changes, and during launch of new brands/new products, or new marketing campaigns. In all, they help in boosting slowdown in projected sales,” observes Singh.
How a chicken set wings to a new campaign
The message was about Real Good Chicken – a 400 gm pack priced Rs 48 – launched by Godrej Tyson Foods Ltd (GTFL). The product’s winning factor was its affordability (the price point was arrived at through brainstorming sessions backed by R&D). The campaign ran in Bangalore, Chennai, Hyderabad, Mumbai and Pune from November 2013 to January 2014. Reveals Sushil Sawant, Associate VP – Marketing, R&D and Business Development, Godrej Tyson, “The campaign was created keeping the protein requirements of the consumer, and we hit upon the idea of packaging chicken into an affordable price point.” The company cooked up a formula for an ideal situation, where protein needs of various sections of society were probably being addressed for the first time. It led to a major shift in consumption. From the high-end SEC A, the brand won over consumers belonging to SEC D. Consumers were led in by the fact that a branded player had retailed chicken in an affordable, small family size packet.
The promotion rolled out with GTFL entering market places near railway stations. “Our products were sold in mobile vans and this gave it more visibility. Also, more retail chains came forward to sell our range, and the number of retail stores increased by 15 percent, and retailers managed to expand their consumer base,” adds Sawant. After successfully whetting the market’s appetite with the campaign, GTFL made the product available on retail shelves at the same price, on a regular basis. “Chicken as a commodity has a volatile price structure. Here was a product that carried the promise of a fixed price and came from a trusted brand,” explains Sawant. Encouraged by the response, the company is now further improving the product and reaching out to more consumers.
New chip on the block
Agreeably, we live in a price sensitive market, yet Kipps Mart kicked in the New Year with a promo for a rather high-end wafers brand called Opera (a Cremica product) that offers chips fried in olive oil. A 60 gm pack costs Rs 50. “It’s priced higher than the regular pack of chips because the chips are cottage-style hand-made potato crisps fried in small quantities in olive oil,” explains Arora. Cremica personnel were present at the store to guide consumers through the tasting experience of different flavours. In this age of hard sell, the guided tasting tour became a formula for success. “Around 100 people tasted the flavours everyday and we sold over 50 packs in a day. In addition, we also gave away free samples to people. The campaign gave the brand great visibility,” he recalls.
Riding on the crest of the marketing campaign (which ended in January 2014), Kipps managed to convert many walk-ins into clients, and now sells over 80 packs of Opera chips everyday. “Promos can boost sales when the company sponsors them. For our customers, it’s an added advantage as we have a dedicated staff who give consumers personalised attention. During this period, sales of a promoted product can increase by 10 to 20 percent,” says Arora.
Generally, promos at Kipps Mart include posters depicting new launches or schemes. “We put special display counters of products which are either hot selling or very slow moving in order to boost sales,” he admits, and adds, “The retailer leverages his brand value through the product. A well-known brand or an internationally acclaimed brand would mean more mileage for the store.” As for the brands, they benefit due to enhanced visibility and brand recall. Kipps Mart showcases high-end brands like Hagen Daz, London Dairy, and Lindt, etc, which according to the retailer have added brand value to the store because they represent a premium segment and are not easily available at most stores.
On the other hand, the ubiquitous Coke and Pepsi, seen even in remote corners of the country, are branding through their company refrigerators, which makes them extremely visible. ‘Buy one, get one free’ offers work in case of established brands. As a thumb rule, it’s also successful with utility products that have a long shelf life. Typical examples are brands like Harpic, Vim Bar, Dove and Lux.
Taking the herbal route
Lotus Herbals, a leading natural cosmetics company, positions its promos around seasons: summer promos in April-May, monsoon promos are slated for August-September, and winter promos around November-December. Last summer, the company conceptualised and executed a campaign to highlight the importance of using a strong sunscreen. This was done using a sun shade structure (like a parasol) at the end caps of modern trade outlets like Health & Glow and New-U. The structure caught the eye of shoppers and the clear communication on it was very effective, informs Nitin Passi, Director, Lotus Herbals.
In-store promos have opened a window of opportunity for brands. “Effectiveness of in-store promotions depends upon the objective and method of executing them. If it is a visibility promotion, it definitely helps to build brand awareness. If the objective is to encourage impulse purchase, then discounts/promo packs are very effective, but it is advisable to do them for short periods else they could harm the brand image,” explains Passi.
Promos from Lotus Herbals range from thematic displays and price busters to gift with purchases. Everything depends on the campaign’s objectives. “Like any other skin care brand, we also want to increase our share in modern trade by focussing on multiple strategies. We execute some tactical store campaigns particularly during the wedding season,” says Passi and adds, “Our thrust is on thematic displays during season- focus months. This enables us to cross-sell multiple products for a particular season to the same consumer.”
No doubt, campaigns enable retailers to highlight emerging categories to shoppers. Consumers also look forward to festive offers and promotions, and the wedding season, which, in particular, is very critical for sales of beauty products.
A slow moving women’s apparel (in this case, leggings) kick-started a successful in-store promo. “We are a friendly neighbourhood store that retails food products. We had a small section of leggings which was difficult to market,” reveals Manoj Satia, of Direct2U, a Mumbai-based hypermarket, which offers gourmet food and grocery. Like any smart retailer, Satia knew that any product needs to ensure footfalls and grab a large number of eyeballs to become saleable. “We put the leggings in a bin and placed it in the centre of the aisle for everyone to see. We managed to clear the entire stock!” This attention grabber in the aisle came to be known as Jo Dikhta Hai Voh Bikta Hai (simply put, what’s visible, sells).
From then on, Satia has been promoting slow-moving stocks or new FMCG entries and F&B products using the same strategy. In February 2014, when the retailer decided to promote McVitie’s biscuits, he saw an increase of 30 to 40 percent sales in one month. The store regularly conducts trials and sampling of products from reputed brands like Knorr soup and Soul’s ready-to-eat products. According to Satia, established brands do well in the trial and sampling programmes because they deliver trust and quality, along with taste.
“All retailers want to work with good brands, but the challenge lies in differential margins in all channels. For example, the general trade stores get 10 percent margin, standalone stores get 12 percent, while modern trade chains earn 16 percent margins,” says Satia. Differential margins bring other challenges. Many well-known brands restrict TOT (Terms of Trade to Organised Trade only). “This is why Organised Trade gets offers good schemes, discounts, and Shopper’s Programme across brands. Unfortunately, mostly standalone and general stores do not get the same offers,” says Satia.
Creating the ‘wow’ factor
Ever since its inception in 1971, Modern Bazaar has understood that it’s not enough to be good, but that it needs to constantly upgrade itself. “The name of the survival game is to constantly innovate and strategise new ways to create the wow factor in the walk-in customer’s life,” reveals Kunal Kumar of Delhi’s well-known chain of Modern Bazaar stores. According to him, traditional methods of selling don’t work at his store, that stocks more than 40,000 products, each waiting to grab consumer’s attention. The store innovates and reinvents itself from time to time to reach out to the consumer. The strategy is decoded in the form of display changes, signage, and decorations during festivals and special occasions. “We believe in improving the sense of smell by infusing live bakery, chocolate and coffee smells at different zones. We use music and TV displays for information, pop up displays that catch the customer’s attention as soon as he/she walks into the store,” says Kumar, and adds, “We try and change every week the look and feel of some of the displays so as to retain a sense of newness.
However, profit percentages due to these innovative ideas are very difficult to define and measure.” Discount deals and sample tasting are also on the agenda. Different products have different demand patterns during the year. “Frozen yogurts and ice creams sell more during summer, so winter is a good time to offer promotions on these products. Similarly, February is a great month for cakes and chocolates and attractive packaging because of Valentine’s. Diwali is a great time for hampers and corporate orders.”
Kumar has created a boutique-like shopping experience across his four outlets that cater largely to upscale clients. “These are the times of Internet and online shopping, yet, in India, we continue to be touch-and-feel shoppers. We like to go supermarkets and malls, see, taste, touch and feel a product before making the purchase. So, modern retailers like us have to offer an optimum shopping experience.” In-store promos happen across all the outlets. “Modern Bazaar has over 20,000 skus in its 4,500 sqft store, which amounts to five SKU per sqft. A human mind and eye cannot comprehend this much of data simultaneously, and therefore, it is important to create pop ups, tasting events, posters, promotions and large digital displays.”
Discounts and promos are simple tools to attract walk-ins and keep them in the store a little longer. A customer sometimes walks in looking for a discount, and ends up buying products that are not on a discount. Product trial packs encourage consumers to check them out before making a purchase decision. Brands that push for in-store promos need regular feedback to improve their product and count of people who tried their products and were converted into buyers. “Such feedback is critical for a brand. Though there is no such agreement between the brand and the retailer, but generally, brands expect to be given prime space in the store, and support from the staff to ensure trial run of their product,” says Kumar.
Products that get wide acceptance means that the retailer needs to consider more shelf space for them, while products that fail to garner consumer interest during the trial period are removed from shelves. “Promos are a very important part of the growth strategy for brands and for our store to create a new feeling inside. There is not much we can do to the interiors of an overloaded supermarket where products occupy 75 percent space, and the only thing that creates an attraction is the enhanced activity around a promotion,” adds Kumar.
Reaping what was sowed
“In-store promos are our backbone through which we promote farmers, who are producers of organic products,” says Mukesh Gupta, Director Operations, Morarka Organic Foods. With this mandate, Gupta conducts sampling in their retail stores that target the upper middle class shoppers. The company’s portfolio of 350 organic products under the Down to Earth brand includes organic grains, pulses, masala mixes, ready to eat, cookies, roasted snacks, cow ghee and edible oils, which are available in 1,500 stores across the country, of which, five are company owned, and 50 franchise units.
“Sampling helps us because organic products are expensive and taste different from conventional products. So, consumers need to be made aware of the difference. After all, we are dealing with unadulterated certified organic products,” says Gupta. Generally, product sampling works more positively during festive seasons, and samplings are done at the point of purchase (POP), which are usually provided by the manufacturers to capitalise on new products, special offers and special events. This is a favourable paradigm shift in marketing. “Once consumers are convinced, they end up buying an organic basket,” he adds.
Till last year, Morarka Organic held 6 to 8 campaigns in a year, which they want to increase to three times more. The company is also planning a Food Park in Jaipur for manufacturing, distribution and food processing. “The Food Park is expected to increase brand awareness, so we need to scale up production and increase our annual turnover (Rs 70 crore in 2013-14),” informs Gupta. While the Food Park is expected to increase the turnover, the company continues to scout around for options to provide market linkages for farmers.
The Cup that cheers
Typhoo India recently re-launched its Spring of Life campaign. The initial campaign centered around the product range and was conducted for over one and half years. This year, Typhoo changed its communication and visuals and brought the focus on the consumer.
“Typhoo Spring of Life conveys its youthful feel and exuberance akin to Moods of Spring. Vibrant hues of orange, red, green, yellow and purple spring up as Typhoo tea bags are dipped into cups,” says Sukanta Samal, Marketing Manager at Typhoo India. “The campaign aims to bring to the fore the vibrant, pulsating appearance of the tea, and its rejuvenating properties,” he adds.
Retail stores have enhanced consumer awareness about new offerings through mailers. The effort from the brand and retailer end has helped popularise the campaign. Looking back, Typhoo teas were introduced to the Indian tea connoisseur in 2008 by the Apeejay Tea Group. Typhoo, an iconic British tea, has built its community of loyalists through retail outlets. “Customer engagement at retail stores and out-of-the-pot journeys outside stores are important features for Typhoo’s brand promotion, and together these have led to enhanced brand experience and brand loyalty,” shares Samal.
Last year, the brand was reinforced through gourmet food shows and lucky draw schemes. Brand visibility happened when customer engagement activities introduced innovative point-of-sale items at retail shops. “Displays are offered to Typhoo on the best visible spots inside retail spaces. These arrangements are closed for quarterly/half year agreement between the store and Typhoo. The Typhoo team customises visibility with these arrangements,” adds Samal.
Besides brand promos, Typhoo has cashed in on special events such as Republic Day, festive season and Independence Day. “Typhoo sales definitely go up by at least 50 percent during the campaign period across all the retail stores where it’s available,” he reveals. According to him, sales-driven activities impact shows up right away, while brand-driven activities are mostly based on demand creation models like trial generation, visibility through innovative POSM, and retail/customer engagement programmes.
Given the fact that Typhoo tea is premium, the company counts on modern trade as a preferred channel. “In modern trade, customers have option to choose or enjoy a shelf shopping experience as it exposes them to multiple brands. Customers are perceptive and do their own research before buying a product. In traditional stores, customers rely on the retailer’s recommendations and don’t get the opportunity to explore,” explains Samal.
For 2014, the company has planned specialised events that will become a platform to interact and engage consumers through trials, thereby strengthening the brand and improving sales.
Every grain matters
Best Foods is an integrated basmati rice player, with a portfolio of offerings across three verticals, viz, rice, ready-to-eat convenience food and sauces, and personal wellness. Though it has a presence across value chains, rice is its signature offering, which is sourced from the foothills of Himalayas and other prime rice growing areas in India.
“Over the last two years, we have spent Rs 45 to Rs 50 crore towards marketing, establishing a 360 degree communication, and setting up stand-alone retail outlets in Delhi-NCR,” informs Dr Aayushman Gupta, CEO, Best Foods. Consumer connect happens through ground level sampling every week in different locations. Usually, consumers get to try rice products and the ready-to-eat range. This has boosted sales of a product by 30-35 percent and has enabled the company to understand its clients’ preferences.
Online activities have been in full swing through a Facebook page. “Each medium has its plus and minus. Let’s say, we want to promote white rice so it would be better to do an in-store activity. On the other hand, Facebook is better suited to air the benefits of brown rice,” highlights Gupta. In short, a niche product gets better mileage through a Facebook campaign, while mass media is better for mainstream products. Best Foods’ sampling sessions encourage consumers to try out its range. However, depending on the consumer response on Facebook, the company sends out its products to retail outlets.
Likewise, return on investment differs from medium to medium. According to Gupta, television informs the consumer about the product. Print campaigns have established the product, while the online medium has been an engaging exercise with the consumer.
In-store promotions are effective tools provided they are planned and executed well. There should be a focussed approach, whereby products move fast, and the store ambience should be clutter-free and not resemble a ‘flea market’ environment. Retailers and brands have to understand and address their customers well so as to target them with effective promotions. In-store promotions will continue to remain important for brands and retailers, with more innovation around the same to achieve more effectiveness and differentiation. “More and more hypermarkets are coming in and around metros; Delhi and Mumbai are the fastest growing modern trade hubs. Many super markets and standalone self-help convenience stores are also coming up in key metros. This will surely change the landscape of shopping trends in India in the coming years,” concludes Passi. Follow this and you won’t be disappointed.