Digital Marketing & eCommerce Innovation Blog

Digital Marketing & eCommerce Innovation Blog

The Importance of External Influencers in Supermarket Merchandising

The way a shop is laid out is no accident. Whether it’s online or on the high street, supermarkets pour millions every year into crafting a floor plan/user experience that drives customers through the store/website seamlessly and exposes them to as many relevant products as possible. It’s why personalisation has become such a critical part of online marketing in recent years, and why high importance areas of stores are constantly changing their appearance. But many factors affect our buying behaviour and therefore how shops and websites are laid out. So, what are they?

Why do shops change layout?

If you visit a shop or that shop’s website, the chances are you’ll immediately see something exciting to capture your attention. Those first few steps you take in Sainsbury’s are the equivalent of the first few seconds you spend on a website after clicking on it: you’re looking to be wowed and so the business has to do what it can to engage you. The method of access may be different for online marketing and offline marketing, but the end result is the same: in both cases, you’ll get new arrivals, some exciting discounts or some cool offer. Whatever it is, it’s designed to reel you in.

Of course, new arrivals won’t always be new and discounts and offers can’t be in place forever; those things will change as part of a strategy the business has carefully mapped out and executed. What about influences that can’t be so easily predicted? The weather, seasonality, what’s in the news and what’s on TV are among some of the most significant external factors that can influence online and offline store marketing, and a thriving supermarket will need to identify and react to them to maximise profit.

The Great British Bake-Off has been one of the most significant drivers of Fast Moving Consumer Goods (FMCG) product in recent years. The show’s devoted following and sizeable media coverage have combined to make it as much an advert for various baking ingredients and items as a piece of entertainment in its own right. In 2015, for example, Waitrose reported a 33 per cent increase in sales of its Homebaking Salted Caramel Flavouring after contestants on the show used salted caramel in their creations.

It’s not just ingredients that feel the benefit either. During the same series of Great British Bake-Off, Hobbycraft saw sales of ribbons and frills explode, rising by an incredible 3,514%. Meanwhile, Ocado witnessed a 200% increase in its general bakewear category during the course of the 2015 series. “The Great British Bake Off has always inspired our customers to don their aprons and get in the kitchen,” Waitrose baking buyer Tim Shaw told The Telegraph. “We are seeing it on a bigger scale than ever before.”

How can stores take advantage?

With so many external factors influencing our purchasing decisions and so much data available to help businesses take advantage of it, zeroing in on the best way to take advantage is difficult. Products like mporium IMPACT can help from a digital perspective, identifying spikes in searches based on TV content and serving digital adverts relevant to those spikes in real-time. This works for even relatively common phrases, such as ‘ketchup’, which was mentioned during a recent episode of ‘James Martin: Home Comforts’ and inspired a significant spike on Search.

The Importance of External Influencers in Supermarket Merchandising | mporium

For physical stores, the process is a little harder. Reacting to spikes encouraged by TV content can’t be done automatically outside of digital, so there’s a need to work in broader trends, just as the big supermarkets did during The Great British Bake-Off. Of course, technology can still be used to analyse and anticipate those trends and, more significantly, it can also be used to anticipate changes in the weather, which is a similarly important influencer of supermarket merchandising.

This is something that Tesco has been working on for a number of years. In conjunction with German retailer Otto, the supermarket has been using big data to understand how the weather can influence sales and what can be done to take advantage of it. It’s much more complicated than simply stuffing barbeques and sunglasses in key areas. Proving itself as an innovator in the industry, a Retail Week report dating back to 2013 revealed: “One strand of the scheme combines data from weather records with detailed sales data, broken down by store and products, to build computer models that predict future demand for product lines according to weather forecasts.”

The result has been a greater understanding of the amount of stock the company needs to bring in, a reduction of waste, and ultimately an increase in revenue. According to Tesco’s Supply Chain Development Programme Manager Duncan Apthorp, it’s all about simplicity. “One of the most important things is boiling down something very complicated to show how it affects a product, in a store, on a particular day,” he explained. “It’s about having [the message] so that a store manager can understand it quite simply. He will know nothing about big data or analytics, but knows an awful lot about retail.”

Conclusion

Such large-scale solutions aren’t available to all, but that doesn’t mean that even the smallest businesses can’t find ways to take advantage of key external influencers on buying behaviour. In a fast-moving, reactive society, it’s all about understanding they key factors that mean the most to your business and finding a way to take advantage. In the cases where this can be done, the potential for raising profits and winning new customers are huge.

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