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Opportunities exist for FMCG suppliers if they focus on the retailer and the shopper

| Supplier news

Even though the retail landscape is in a state of almost constant change at the present time, opportunities do still exist for FMCG suppliers if they have a compelling proposition and place the retailer and the shopper at the centre of their thinking.

That was the message from Nick Kirby, eCommerce, Shopper and Analytics director at category and shopper management specialist Bridgethorne, when he spoke at last week’s 2018 UK Bottled Water Industry conference in London.

Kirby set his comments in the context of a sector in which growth is being driven by inflation and influenced by the increasing power of the discounters. He also cited evidence that shoppers are trading down from brand to private label and from private label to value or discounter brands, especially when brands are not offering sufficient differentiation to command higher retail prices.

“Retailers are keeping prices low to get closer to discounter prices and managing their cost base by reducing stockholding, de-listing products with unjustified price increases and attempting to make online more profitable by also using it as a way to drive customers into stores,” he explained.

“As part of this process retailers are reducing their supply base, decreasing the number of promotions, reducing range review frequency and range sizes. They are also striving for differentiation by leveraging their offer through private label and exclusive branded activity.”

But, Kirby told delegates, the multiples can’t do this alone and need support from progressive suppliers.

“The most successful suppliers will be those that form open, trusted and collaborative relationships with retailers, agreeing shared targets and goals and working together on planned activities and NPD. They will have a strong understanding of their retailers and will be fully aligned with their strategies. But that demands a well-resourced, multi-functional team of the right calibre, a strong understanding of the market, category, customer and shopper, and an ability to work collaboratively to develop and tailor plans.”

Kirby explained that this required suppliers to cultivate a strong understanding of the retailers’ business, customers, priorities and requirements, and align their own business with the retailers’ distinctive strategies and goals to aid the retailers in achieving their objectives. Suppliers, he said, should think more long-term, and not just twelve months ahead.

“Suppliers need to simplify their approach, improve their communications and ensure cost prices are competitive.  They need to differentiate their offer and provide some exclusivity or first to market opportunity to help a retailer be competitive versus other retailers and the discounters.”

“They also need to demonstrate a long-term vision for category growth. That means adopting an unbiased category approach rather than simply pushing their own agenda or product range, and sharing shopper insights and trends with clear recommendations.”

Kirby also urged delegates to look differently at the shopper themselves:

“We believe there are no such people as just online shoppers, just convenience store shoppers or just supermarket shoppers,” he explained.

“There are simply shoppers, choosing to buy from different stores depending on their shopping mission, the consumption occasion, their lifestyle, their previous experiences and the ability of a retailer to meet their needs and expectations. People are consuming media in a different way, so there is a chance to shorten the path to purchase by sending shoppers direct into retailers. The result is a fragmented path to purchase with a greater number of points at which shoppers can be influenced by a greater number of messages and purchase choices. Suppliers need to understand that and factor it into their approaches.”

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