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Sunday, May 19, 2024

Differentiate or be delisted

Shoppers need good reason to switch from default. Could your brands be doing more, asks Danielle Pinnington?

Danielle Pinnington



The news in May that Tesco plans to shed up to 20 percent of its 40,000 SKUs will have come as a blow to suppliers. For Tesco, however, it makes commercial sense to look to cut costs by consolidating its supplier base and remove duplication, whilst also allowing its own label ranges to get more visibility.

And there is plenty of evidence that reducing ranges can actually make a category easier for consumers to navigate, as well as leading to increased purchasing because a more manageable choice allows people to see attractive products outside their default behaviour.

Yet there is a bigger lesson to be learnt here. One which is often stated but rarely tackled by brands: when brands lack differentiation, there’s a risk that shoppers’ purchase decisions default to price or promotion.

All too often products are shoved on shelf with only a cursory thought as to how well the brand sells itself or fits the needs of those people who shop the category. This leaves the brand at risk of being chosen simply from habit, or shoppers defaulting to a choice that is dictated by price or promotion because there is simply no other feature prompting consideration.

Think of all those aisles in supermarkets where you pick a product off the shelf with hardly a thought as to why?

Think of all those aisles in supermarkets where you pick a product off the shelf with hardly a thought as to ‘why’? I’ve literally just come back from a top up shop in Waitrose. I had honey on my list, so I knew which aisle I needed – it’s opposite soft drinks (of course?!), and next to tea/coffee (marginally more logical). I could see jars after the boxes of tea, so was clearly getting close, but once in front of the 2-3 bays of glass it’s then the product colour which gets me to honey. At no point was the fixture helping me to navigate, let alone actively think about all the different honey options. So, no great surprise that I reached for one that is familiar, whilst also checking the price. I hardly noticed the alternatives, as there was no prompt to do so and therefore no value to me in spending any more time at the fixture.

Now you could argue my choice was loyalty driven – certainly it might look that way from the data on MyWaitrose! But loyalty suggests an active decision whereas the reality is that much as I like honey, mine is a passive decision as it makes my life easy to stick to what I know. It’s a safe option. Did the honey in my basket sell itself to me? Absolutely not! Do the other brands attempt to persuade me to switch? Nope. Does the fixture do anything to encourage me to trade up (I buy the cheapest by the way)? I’m afraid not. The only aspect of the fixture that briefly caught my eye was an adjacent honey…which had money off.

Compare this to the new gondola end in the chiller that Waitrose have introduced, where they create a meal solution in one bay. Now you’re talking active selling. Suddenly the retailer is showcasing products that I might not normally see, in a way that gets me thinking about the benefit to me, but also allowing me to pick and choose the elements I need or want.

In these days of slowing growth, reducing margins and culling of ranges, we need to be creative. Look at where you can differentiate your brand or range, or even work with the retailer to create a more interesting category, so that it not only catches shoppers’ attention, it also gives them a reason to behave differently. That way your brand or range is far more likely to survive any cull.

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