THE TOP 100 RACE FOR SPACE

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1 THE TOP 100 and the RACE FOR SPACE There are thousands of products fighting in the race for space on your shelves! The only way they get there and the position they occupy is by YOUR decision. Are you betting on the right contenders? Always remember: When merchandising, there is a need for SENSIBLE DISCRIMINATION! The top products in the race for shelf-space (from 500th to 150th place): 500 th place 450 th place 400 th place 350 th place 300 th place 250 th place 200 th place 150 th place 5 kg Snowflake Cake flower 2 Litre Tropica Pineapple Juice Blend 9 Twinsaver Luxury White Toilet rolls A Carton of Peter Stuyvesant Blue Cigarettes 2 Litre Coke Zero Braaiwors 50 g Packet Knorr Brown Onion Soup 300 g Bull Brand Corned Meat Did you know? A smaller convenience store carries around lines, and a bigger OK store carries around basic lines. 1

2 The current top selling categories: % (total sales) Chicken 7.08% Carbonated drinks 3.52% Soap powders 2.71% Milk Products 2.43% Breakfast cereals 2.41% Disposable nappies 1.96% Baby Foods 1.96% Chicken Frozen Chicken accounts for 5.84% of total sales and Fresh chicken accounts for 1.24%. This is the biggest draw card for any retailer and if you are not pricing your chicken correctly, you are losing out on sales and customers. The margins made on chicken are very small and the total category cannot make more than 5% GP. IQF Chicken is the biggest seller in this category. (7.08%) Carbonated drinks (3.52%) Dominated by Coke 2L which has 22% of the total category. The OKFD pricing structure with Coke drives this category very well. Soap powders Unilever dominates this category with 78% of the market. 2 (2.71%)

3 Milk products Because of the shelf life there are multiple weekly purchases. Milk is very price-sensitive. (2.43%) (2.41%) Breakfast cereals This is the 5th biggest category and is considered an underperforming category in OK supermarkets and needs more attention. Disposable nappies Huggies dominates with 38% of the share with Pampers at 24.7% and Cuddlers 14.4%. The top seller is Huggies Dry Comfort; it s the larger packs that pull in the feet. Known as a grudge purpose it is no wonder that it is a very price sensitive category and promotions play a big role. Quality is also important. (1.96%) Baby foods Dominated by Nan with 44% of the sales with Infacare in second place with 17%. The number one seller is Nido No. 1, 1.8 kg followed by Nan No. 2, 1.8 kg and Nan No. 1, 1.8 kg. The 1.8 kg dominates this category with 63% of the sales. (1.96%) 3

4 The top 100 products in the race for shelf-space: 100 th place 1 kg Rama Spread for Bread Tub 80 th place 60 th place 40 th place 20 th place 10 th place 750 g Kellogg s Cornflakes 1 kg Ellis Brown Coffee Creamer 750 ml Sunlight Regular Dishwashing Liquid 2,5 kg Huletts White Sugar 2 kg Omo Multiactive Washing Powder Before we get to the top 10 most important lines for your store, take note of the following: Coffee creamer The Cremora brand enjoys 46% of the creamer category. Cremora 1 kg accounts for 92% of the total Cremora sales and should enjoy 46% of the shelf space afforded to coffee creamers. The Ellis Brown brand represents 38% of the category. The Ellis Brown 1 kg accounts for 70% of the brand s sales and should enjoy 30% of the shelf space. The balance of the range should occupy the balance of the space. Coffee Dominated by Ricoffy 750 g, the number one seller at 15%. As a brand, Ricoffy demands 32% of coffee sales and should occupy 53% of the coffee space. Nescafe sales contribute up to 14% of the top 1000 SKU s. Frisco achieves sales of 8% with Frisco 750 g accounting for 44% of the sales within the brand. Frisco should be allocated 6% of the space. Nescafe Cappuccino Sticks account for 3% of category sales. Jacobs Krönung enjoys 5% category sales of which the 200 g contributes 84% within the brand s sales and should get 8% of the space. 4

5 Tea This is the 50th biggest category and is a very competitive category dominated by Five Roses. Tagless teabags 100 s accounts for 31% of the tea category sales, Rooibos Tagless 80 s make up 15% of total sales and loose tea only 1%. Five Roses 100 s teabags should be allocated 17% of shelf space for tea; Freshpack Rooibos Tagless, 16%; and loose tea 2%. The top four brands are Five Roses, Freshpack, Joko and Glen. Ready-to-eat cereal Weet-Bix makes up 17% of this category, of which the 900 g contributes 49% of the brand s sales. Kellogg s Cornflakes demands 11.3% of the total category s sales, of which the 750 g is the best seller and should be granted 9% of space. Bokomo Cornflakes contributes 4.1% of sales. The 1 kg is the best seller and should occupy 5% of space. Hot cereal Jungle Oats accounts for 39% of this category s sales. Jungle 1 kg does 82% of the brand s sales and should be given 7% of the space. The OK House Brand Oats contributes 8% of sales. The OK House brand is actually lacking in space and should accordingly be afforded more. Soap powder The hi foam washing powders should get 80% of the space and the auto washing powders 20%. Hi Foam Within the hi foam category it is Sunlight that should get 57% of the space, Omo 25% and the rest sharing the spoils. The 2 kg pack dominates this category with 66% and 1 kg 19%. 5 Auto Within the auto category Omo gets the bulk of the space with 49%, Ariel 20% and Skip 14%. The 2 kg size dominates this market with a 58% share. The interesting fact on the washing powders is that other brands do not really feature here at all.

6 All purpose cleaners This is the 51st biggest category out of 117 categories with Handy Andy being by far the dominant brand. Handy Andy 750 ml accounts for 20% of the sales, (Lavender 7%, Potpourri 5%, Lemon 5% and Spring 3%). Of the 20 they should occupy Lavender 35%, Potpourri 25%, Lemon 23% and Spring 17%, respectively. Make sure that Handy Andy has the most space at eye level. Dish wash This is the 49th biggest category and is dominated by Sunlight. Sunlight rules the roost with 83% and we do not need to clutter our shelves with many other brands. 3 brands in this category is adequate. Make sure that Sunlight 750 ml Bottle and Pouch has the most shelf space at eye level, and make sure you do not run out of stock. Although these facts are clearly showing you the most popular products and that you should give them maximum exposure, there are some other basics you need to follow in order to assist your customers to make the buying decision easier: Use your point of sale materials and apply them effectively. Actively participate in all promotions they are there to boost your sales and profit. Use your PA system. Have practice sessions with the person making the announcements. Ensure that the text is planned and prepared. Involve your staff. Get them excited about promotions and let them contribute their ideas. Constantly introduce new items in your supermarket. Pay special attention to your gondola ends. Make extensive use of sampling and wet demos. People love to taste and smell! Food demos move product because they provide a chance for people to taste something they might not buy. Catch your customers eye through repetition: According to John Stanley, author of Just About Everything a Retail Manager Needs To Know, displaying an item or sign in a repetitive way attracts the customer s eye. To create this impact through repetition you must keep heights, shapes, colours, direction and sizes identical. John Stanley: Customers believe they know the exact price of KVI s. If price is a major motivator for customers then the KVI s should be placed in primary sight lines. If price is not a major draw card, then place these products in secondary sight lines. 6

7 THE TOP 10 in the RACE FOR SPACE Remember, they are your best friends. You should nurture them. They need YOUR help in order to help YOU! 2 kg Omo Multiactive Washing Powder 410 g Koo Baked Beans in Tomato Sauce 500 g Sunlight Laundry Soap 125 g Simba Chips 2 kg Sunlight Regular Washing Powder 7

8 2 L Sunflower Pure Cooking Oil 400 g Lucky Star Pilchards 6 X 100 g NutriDay Smooth Yoghurt Multipack 2 L Coca-Cola IQF Mixed Chicken Portions! 8

9 In closing, some food for thought... When you ve allocated the appropriate space to these top sellers and added value to the merchandising, you need to pay attention to the following: Identify opportunities to further promote sales, such as cross merchandising. o For example: placing wedges of cheese in a display of ripe red tomatoes rouses the interest of grocery shoppers to buy something unplanned. In retail grocery, such cross selling combines inter-department products for two main reasons: it s easier for shoppers to find related items, and it facilitates larger basket transactions. o While people are spending more money on weekly household groceries, competition for market share is more fierce, so a creative mix of cross selling techniques can give traditional grocery stores a competitive advantage. o Theoretically, you can build displays that cross sell products anywhere in your store; however, remember your shopper is looking for convenience and combinations that make her trip easier and exciting. She doesn t want a roadblock. To test your best placements, walk through your store with a shopping trolley as though you were a shopper. Intersperse your ticketing. Be innovative with your off-shelf displays. Be diligent with your pricing. This is one of the top priorities in your business. Your customer, who is your life-blood, is on the receiving end and is always aware of it! Did you know? The shopping cart was invented in Sample stations and other displays slow customers down while exposing them to new products. The most profitable area of the store is the checkout line. This is where, after a few minutes in the line, you ll succumb to the temptation of the candy rack and a magazine you ve been paging through. Visual merchandising: Visual merchandising is the art and science of presenting the products you sell in the most attractive way possible, in order to generate traffic, create interest and buzz and of course, generate sales! Many retailers struggle with visual merchandising. After all, we re retailers, not artists or designers! Luckily, this is one area where you can improve quickly without having to spend a ton of time or money. 9

10 Here are 5 very useful tips you can use to improve your store s visual merchandising today. These range from the simple and obvious because the simple and obvious are often also overlooked. 1. Take It Outside If the weather s good and you re allowed to do so, set up a display of merchandise outside your store. This can create a sense of excitement and buzz: consider a Street Fair environment, with flags and balloons. 2. Identify Everything Customers are always in a hurry. Use signage to identify not only departments, but categories as well. This will help customers pinpoint what they need and inspire additional purchases. 3. Embrace All the Senses Great merchandising appeals to more than just the eyes. Consider how your store sounds, smells and even feels. Are all of these "messages" you re sending with music, scents, and other environmental factors in keeping with the displays you create? You can evoke senses without addressing them directly. For example, putting a pair of red bowls and spoons with a display of tomato soup can get mouths watering. 4. Use the Spotlight Lighting attracts customers, much like moths to the flame. Dramatic lighting doesn t have to be expensive: well-placed spotlights or even a simple table lamp can draw attention to key pieces of merchandise. 5. Change Your Displays Often! A great display is a great display... The first time the customer sees it, that is. But if the customer sees that same display the following week, and the week after that, it becomes less powerful, boring even... And customers don t come back to boring stores! Try to change your displays at least once a week. In conclusion, virtual merchandising is both an art and a science. Approach it with an open mind. If something doesn t work the first time round, CHANGE IT! Try something else. We recommend that you keep a record of displays you ve tried. After a while, you might start to notice a pattern: particular types of displays might work well with your customers. Obviously, use those types of displays more often. And if something doesn t work? Change it! Your merchandise is still good, your store is still great: the stores that thrive are the stores that adapt and change to changing customer behaviour. Just keep track of results and try new things often! FA OKFD