In-store Asia 2011

HUL with Big Bazaar made the aisles of the store green, sampled inside the store, undertook trolley branding, created visibility at the checkout tills. Took up premium space and using POP displays and other elements increased its prominence in the store.

The impact of a strong partnership and effective campaign was seen in the results. Within first four days of the campaign the value share of HUL grew leaps and bounds as indicated in the chart.

Value Share:

24-Mar – 0

25-Mar – 17

26•Mar – 31

27-Mar – 38

Summarizing and sharing the formula of powerful partnerships, Stephen shared the important parameters which included:

• First ascertaining the granularity of growth — what accounts, which stores, which retailers, which shoppers, once you clear about where you want to play then get clear about

• Where to play

• 4 Conversion points

• Insight — ask you customer for insight too

• Customer objectives

• Growth driver for category

And finally he concluded on the 22nd minute by sharing one thing you (as the audiences and brands like HUL) need to know about successful partnering with modern trade to deliver joint marketing plans based on customer and shopper insight is…

“The customer must be keener to do it than the manufacturer!”

And with this personal observation and tip Stephen signed off.

Highly Spirited! Highly Intuitive!

Day 2 of In-Store Asia 2011 had yet another best practitioner who left the audience in high spirits literally, as he said ‘There is alcohol on every slide, so you better take it easy!’ Shubhranshu Singh, National Head — Customer Marketing & Key Accounts, Diageo India, enlightened the audience on `The Wine & Spirits retail in India and the shopper marketing opportunity for brands’.

He chose to use this opportunity to share the possibilities, challenges and nuances of practicing shopper marketing in the Liquor category. In his view while India is shining, shoppers are getting huge experiences, but when it comes to Liquor as a category its retail environment is at the most primitive stage compared to any other product market. With this he shared a glimpse of what the Indian wine and spirit industry is like:

• Regulated & Restricted — State Subject.

• Affects Price, Distribution, Route to Market

• Varying degrees of freedom in sales & marketing

• Strong Demographic Dividend (Young India) — India is the youngest country in the world and is one of the most populous countries in the world.

• A Brown Spirits Market —Predominantly Whisky, Rum & Beer

• Whisky – 120 Mln Cases of growing at 19% (60% of total IMFL)

• Beer -140 Mln cases growing at 7%

• Rum – 42 Mln cases growing at 12%

• Vodka – 5.8 Mln cases growing at 29.8%.

• Scotch 1.5 Mln cases growing at 21 %

• Semi Dark Market for Liquor Advertising — Although there are opportunities to publicize, there are opportunities to ride on surrogate and
bring the brand in front of the consumer, but with all these there are constraints even at the point-of-sale. A lot cannot be used, depicted and said. This affects the category.

• Showing product, consumption situations even alluding to it is not permitted Further on he gave an outline of Liquor Retail in India.

• Alcohol retailing is controlled -license or state ownership

• Limited channel – High stakes

• Nature of trade – Sellers market

• High throughput

• Steady & growing catchment

Counter shops is pretty much the face of Liquor retailing environment in India, the so called conventional over the counter shops rule as a channel and represent close to 90% of the volume and a very high value across the industry. And the counter sales person is the only point of interaction. People come to these shops with a pre-meditated choice, having a consideration set of at the most one, two or three brands that too laddered by preference. This scenario has changed a bit with the development of walk-in shops which are surprisingly mushrooming more so at tier two cities rapidly.

And finally there is the emerging Modern and On-trade space that have a hybrid license, which allow them to create a tasting room, and sampling opportunities. The catchment for these MOT stores is largely young, twin income consumers who are coming in because they are interested in Wine and premium spirits.

While the retail space is evolving, the challenges in the space are plenty Shubhranshu brought to light some shopper issues that are practical challenges, which make implementing any shopper science difficult. The challenges include:

• No planograming or category grouping — When it comes to shelf stocking category view or planograming standards are completely absent. Explaining this further Shubhranshu says “You will see a brand retailing at Rs. 5,000 standing shoulder to shoulder, with something that sells at Rs. 550 and if you wonder why so, the answer is that section has been brought over by a particular manufacturer and so they have the legitimacy to stay there even though the adjacencies are different.

• Price points irrelevant in finalizing the layout — A very expensive brand because its sells few units could be sitting at the bottom, while cheap brand and a smaller SKU could be placed right there in the front because it sells many. The logic of eye-level refuses to exist.

• Very little science to allocations of ‘hot-spots’ — If you have bought the space you can create what you like on it. Very often you will find shelving kind of displays and shelf kind of placement in interruptions. With all these challenges present, what do Diageo and any other bran in the premium spirits space want?

• Impactful Visibility • Right Range • Shopper Engagement

• Higher Pick up / Selection rate -Explaining the difference Shubranshu says “Assume that you are a regular consumer of Smirnoff Vodka, and visit the store and realize a new flavor is launched by the brand. Your taste palette is suited to a certain brand. But you will still because you are a vodka consumer, pick up the bottle, check the price, and ask questions about it. So the pickup is important to us because a fraction of those who are engaged with the brand will ultimately select it.”

• High Average Bill Value — “Now shopper research tells us that most people because of their pre-determined choice come with just that much money in their pocket. So even if you like something there is a new brand of tequila and you want to purchase it, you have come thinking you will buy a bottle of mid-priced scotch at 1800 Rs. no that is pretty much the money that you have and for the most part transactions are preferred to be in Cash, unless you are in the new emerging modern trade environment.” Shubhranshu indicates

• One Stop Shopping — “If I am having a party, I will have some munchies along with it I will have some soft drinks too. I may even need just equipment to get my party started. But in the liquor shop you conventionally go to you won’t find it.” With clarity on what has to be achieved through shopper marketing, it is also essential for brands in this category, to know what the reality is of their shoppers, what behavior and traits they sport while shopping for liquor. Shubhranshu etched out some interesting shopper realities and thus highlighted the peculiarities of the Indian liquor shopper:

• Limited Knowledge — Most of them who drink Vodka, no nothing of Whisky.

• Intermediation — The one who can afford to explore and drive a higher bill value, very often order on phone or order their staff to pick up their preferred brand. So disruption is very difficult as many times you are not meeting the consumer.

• Influenced by peer group/friends — They are also influenced by peers and friends. Elucidating further Shubhranshu says “We meet customers and ask them when did they make their first alcohol purchase, and the answer usually is first job or senior year of college. Probing further on how they made their choice, the answer is XYZ friends told me he is an ace when it comes to liquor, he suggested to buy a vodka. And ever since this person sticks to vodka.” Here exploration is not only through word of mouth but relevant word of mouth.

• Majority Pre-decided — shoppers largely come in pre-decision zone to the shop and it is difficult to move them away.

Too woo your shopper and to practice shopper marketing in this category Shubhranshu says there are three imperatives that need to be followed:

• Right range — In other words as a manufacturer and a brand owner what range what SKU size what width are you willing to put out in front of the shopper.

• Clear merchandising — how do you merchandise it impact fully, how do people engage it with just right

• Efficient promotions — and can you put a rider of promotions on top it so that people are motivated to upgrade.

Thus with these imperatives it is essential to execute:

• In Store Communication = Shopper Top of Mind.

• Speak to Shopper with singular focus — do one thing at a time. If you do too much, you tend to be lost

• Information & Education Change Behaviour — is welcomed. Through in-store communication it should happen in three simple aspects, help navigate and find (where it is), share information and advice and finally persuasive communication that inspires to buy.

• Logical Adjacencies Increase Billing Spend — because the one who buys vodka will also buy a mixer.

The current retail visibility scenario is cluttered, in cramped co-existence, temporary and bill board centric to change the status quo Diageo is undertaking interesting initiatives that are based on parameters like:

• Brand impact focused

• Large canvas, static

• Tenured/contracted

• Consistent

“We use new spaces like table tops, glow sign boards inside the shop, free ceiling space, all this we do to garner visibility at conventional stores. At MOT the shopper marketing initiatives we call as ease to shop.”

Ease of shop is a three part process, which includes navigation, information and activation. “We make it easier for the shopper to find, choose and buy the category. And we don’t sell products but sell drinking solutions. Ease of shop as a model is spread at four levels depending upon the kind of format, all outlets gets category navigation solutions, core outlets get category events and shopper interruptions and only some strategic outlets get full fledged spirits zones which are shop in shops.” Says Shubhranshu

After sharing the approach of shopper marketing programs and visibility solutions at retail, Shubranshu shares the merchandising principles of Diageo

• The Merchandising layout works left to right and top to bottom on the principle of GOOD, BETTER, BEST

• Vodkas are separated into Flavoured VS Standard Vodka

• Whiskeys are grouped by Origin (Scotch VS American etc)

• Others are grouped by each segment

“We also heavily focus on efficient promotions. We at Diageo conduct more event-led and value added promotions aligned to shopping behavior and less pure price. For instance party packs where we had vodka and a mixer pack on special rates, complete gifting solutions a very successful promotion conducted by us on Diwali.”

With this Shubranshu touches upon each and every aspect of Shopper marketing in the liquor category and concludes with some important takeaways for the audience:

• Liquor Retail in India is evolving steadily

• Shoppers are changing much faster

• Standardization is the key

• Miniaturization is a requirement

• Information & Education., create preference

• Do less but do well

The a highly intuitive session, left the audience highly spirited and questions brewed Rob D’Souza from Future Group probed into knowing how Diageo converts a brand loyalist to a new launch at the counter shop?

Shubhranshu appreciating the question, shared the unique approach of Diageo and said “We do a lot of sampling or what we call liquid on lips at On-trade premises and to close the conversion loop re-emphasize the same product at conventional stores so as to remind the shoppers the experience they had and encourage them to buy. Also giving something extra helps, like mixers, snacks, glasses giving out utilities that will be helpful at the point of consumption really help.”

With this the best practitioners each belonging to a different category lead the insights to implementation.

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