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Friday, April 19, 2024

Going for growth

Joint Business Planning is bringing brands and retailers together to unlock the growth so many have failed to find this year, writes Danielle Pinnington

There’s no denying that 2019 has been yet another tough period for the UK retail sector. Big names like Mothercare and Links of London were among the casualties; M&S continued to battle strong headwinds and John Lewis proved to be less immune that we thought. Even the online retailers felt the strain, with ASOS issuing profit warnings for 2019. The key challenges that impacted on these previously successful businesses are familiar to us all – retailers and manufacturers alike: the search for growth; increasing complexity of choice; increasing pace of change; the shift from mass marketing to personalisation; and the need to connect with shoppers at the first moment of truth.

These are all big issues but the search for growth is one of the most fundamental. For many companies it is a basic search for sales – stability would be a godsend, let alone growth. Without sales a business is nothing, without growth a business is going nowhere, and yet growth is hard to come by these days. But growth is out there. Every time a shopper fails to put a product in their basket, or fails to click through to the checkout online, a growth opportunity is missed. We know from the basic metrics of conversion data that 100 per cent conversion is rare, particularly in these days of almost limitless choice. The point is, that ‘per cent’ of lost sales is the growth opportunity available. Every category has at least a modicum of growing space if brand, category or store managers can understand why a shopper has not turned into a buyer. Accessing this growth takes analysis and action. The reasons behind lost sales need to be correctly identified and understood in order for a solution to be found. It’s not enough to speculate, or to assume that what worked in the past will work again. Shoppers and consumers habits are changing, so understanding lost sales now requires up to the moment insight and a degree of looking ahead.

Attempting to do that in isolation is going to be difficult when suppliers need strong retailers to sell their products, and retailers need proactive suppliers to provide the right ranges. This is where the developing idea of Joint Business Planning (JBP) comes in. The long in the tooth cynics among us might see this as a re-branding of category management, but in fact it has the potential to be much better. JBP encourages retailers and brands to work together from the start in the search for the consumer/shopper drivers that will unlock growth.

To make the most of a JBP opportunity, and really go for growth you need insight at your fingertips. Panel data will give you some category trends, and your marketing team might well have up-to-date consumption data that enables you to understand broader usage trends. Both of these sources give you a good grounding in the trends that affect your sales, but not necessarily how they relate to purchasing and specifically to those lost sales opportunities you want and need to target. This is where shopper insights come into their own – those nuggets about the triggers and barriers in the purchase journey that you and your customers or suppliers can use to unlock lost sales.

When times are tough, it takes great thinking to find the solutions. Times are certainly tough at the moment, so why not pool your great thinking with that of your customers or your suppliers to achieve a win-win solution? With the right mindset, and right understanding, you really can go for growth.

Danielle Pinnington
Managing Director, Shoppercentric
Danielle founded shopper research agency Shoppercentric in 2004.
Its clients include Cadbury, Lego, Coca Cola, ASDA and Unilever. She’s a recognised name and face nationally, providing regular commentary and expert analysis across the media.

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