Don't Get (Easter) Egg on your face - Your customers are revolting.
There has been a great deal of publicity about the fact that all of the major fmcg retailers ran out of Easter eggs at Easter, while there were plenty to be had at Christmas.
Of course, from a retail point of view, selling out of seasonal lines is just what should happen.
Unfortunately, shoppers believe that the duty of retailers is to have in stock what they need, when they need it. There is the sense that they see retailers as being there to actually sell. As opposed to being there to make money. They get really upset when they can`t buy what they set out to get.
How do we know how badly consumers feel about this?
In the current climate people are addicted to continuous online communication. Twitter feeds, Facebook and Google searches all addup to an instant research poll of the health of the Nation. Spectruminsight trawl through all of these to reveal what people are saying,and the emotion underlying this.
This reveals a huge emotional reaction to not being able to find what they really needed in their local of choice. Sainsbury proved to be the retailer that got it most wrong (adjusted for market share), and 17% of shoppers attached emotions to thsir comments. However, the position is not quite as clearcut as this. While Sainsbury was the biggest offender, Waitrose - which was only beaten by Tesco in being the best performer, had the greatest percentage (20%) of emotive comments. Moreover, whereas the rest were a mix of mailny anger surprise and sorrow, for Waitrose, there was no surprise, but a very considerable (25%) of people expressed disgust.
If you set yourself up to be the best, you need to be so much better than the rest.
On the other hand, Tesco and Asda shoppers were not disgusted, nor were they surprised, they were angry. In Tesco and Asda Head Office, I am sure surprise would have been what they wanted to hear. However, availability has been so poor in these outlets that it would be futile to expect better. At least Morrisons and Sainsbury can be pleased that their customers expressed a healthy measure of surprise.
The position is an outcome of the current focus on discounted product, which makes holding excess product after an event extremely expensive. When you combine this with inadequate space in store to keep discounted product in stock, you have a recipe for disloyalty that increasingly forces retailers to spend more to attract new customers than satisfy their existing ones.
What can be done about this?
Increasingly retailers need to turn to brands to help retailers managing the localised demand patterns for core customers. Promotion demand add significantly greater strain to standard shelf space, in core areas. These areas already have increased demand per sq foot of shelf than the average. Category management initiatives need to include promotion space - even though the promotion might be handled notionally from existing shelf space.
Category intelligence needs to be delivered by store, and as an ongoing initiative to manage the impact that promotions bring.
Why is this important? The IGD found in research that, for an average product 37% of shoppers would go to another store and 6% would not buy at all, if the product they wanted was out of stock. This would lead to a loss of 43% of intended purchases for retailers. 19% of shoppers would switch to a rival brand, which, when added to the 6% who would not buy at all, would lead to a loss of 25% of intended purchases for manufacturers.
Fortunately, the use of current analytics allows brands to work very closely with retailers building demand, and supply, in tandem.
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