Visual merchandising for your brand products is great but it can be damaging if your company lacks store audit. Rival brands can market their product for the same set of consumers and sometimes this competition can get ugly and unfair. To get your business going, you have to be aware of the competitor’s move in every territory and store. If you fail to do that, your sales can drastically go down and your competitor will rise above the brim. That’s what happened with Hydrox in the US. Let’s dive into the story of the war on shelves.
Story of shelf war between Oreo and Hydrox
In the year 1908, a unique creme-filled chocolate sandwich cookie was launched under the brand name ‘Hydrox’ by Sunrise Biscuits. A few years later, in 1912 to be precise, Mondelez launched a similar product with the brand name Oreo. This product grew in stature to get the title of top-seller chocolate cookie filled with creme even today. It has reached sales of 34 billion in 2019, indeed the world’s favorite biscuit. But little did we know that it was not the first of its kind.
So how did Hydrox cookies crumble and lost the market? How was it pushed back even when the product was the same?
According to the daily mail article, Hydrox files a complaint against Oreo, alleging it has been Hiding the rival brand’s cookies in supermarkets. In other words, it was noticed that the products of Hydrox have been moved from their designated spot, and in that space, Oreo was placed. When the sales of Hydrox drastically dropped, they analyzed the reasons behind it. There was the number of images where their products were found pushed back on shelves, or placed on top shelves and in some stores, the products were blocked by hanging tags.
This scenario reveals two things, firstly, the placement of products or planogram compliance plays an important role. Secondly, accurate and frequent visual merchandising audits are crucial.
What was lacking in the story is the visual merchandising audit by Hydrox and Oreo took advantage of the gap. Maybe, that time was too early for new technologies to aid Store Audit but now it’s not. This is the age where digitization, automation, machine learning and AI is penetrating the FMCG industry.
What value can Visual Merchandising Audit bring to you?
In different trade channels, visual merchandising has been an advantage for the companies as nothing appeals to the customers more than visual ads. Displaying your products rightly is one thing and auditing them frequently is another. If you are not keen on ensuring your planogram compliance, it could give the gap for your competitor to take advantage of. As in the story of two rival companies above. It gives accurate visual feedback directly from retail counters through sales reps or store managers rather than external resources and uses AI-assist in auditing and rating of VM execution quality. It significantly adds value to your business in fast moving consumer goods.
Value Visual Merchandising audit adds to your business:
i) Ensures that your products are placed and displayed rightly
ii) It makes every store count and increases ROI per store
iii) Makes you aware of competitor’s visual merchandising moves
iv) Gives you the edge to plan better VM campaigns
Challenges in conducting VM audits for FMCG brands
The story is from the early 1900s yet the challenges are real for companies of this age too. In various trading channels brands lose millions of customers to their competition because they are flying blind in-stores everyday.
1. Lost Sales due to Poor Shelf Display
We saw the same challenge in the story you read. Sometimes, retailers might place your products in the top shelves or hide behind other products, where customers do not notice. That doesn’t appeal to walk-in customers to pick it up, hence, loss of sales.
2. Unscalable Auditor Agency or Backend Image Audit Model
Operational overhead and cost per store are prohibitive to scale beyond a small no of outlets when your agency is sending an individual specially for store audit. Obviously, it means you can afford to run it at select stores only.
If you are getting your sales reps themselves to send picture of proof and combining that with backend image audits by human auditors, it becomes impossible to scale beyond a certain segment of stores.
3. Wasted Budgets on Wrong Campaigns
For established brands, the problem is more about consistent execution. However, for growing brands, it is first about discovering which campaign works and which does not. The ability to run quick experiments of different campaigns on a selective target customer segment allows in-store marketers to conclude what to double down on and what to kill. With the agency-lead model, this is too much of a dynamism to handle.
4. Month End Scoresheet Means Irreversible losses
Generally, the VM audit scorecard is shared monthly by the agency. If that is the case, there will be a delay in feedback to area managers, which means they cannot act immediately. After all the idea is not to save money on VM performance payouts to the store but to actually get more footfall conversion by ensuring a good display on each day of the month.
Our Solution for increasing your ROI per store
1. Campaign Setup and Targeting by Customer Segment within minutes
Create targeted campaigns for different classes of stores. The VM campaigns are designed according to the consumers the company is trying to reach. An easy-to-use interface on the App that requires zero training to sales reps to audit as per new campaign forms. Doing this in an agency-led model could typically take 2-3 months to roll out a new campaign to a new segment of stores.
2. Easy Capturing of Picture of Proof by visiting Sales Rep, Merchandiser
Your sales reps or merchandisers can easily capture pictures of shelves as pictures of proof to audit VM campaigns. Even if the aisle is narrow and it’s difficult for reps to correct capture, there is a solution for it. The app will stitch multiple images to cover the shelf.
Have you wondered if clicking a picture could speak out the share of shelf with no manual audit and calculations! It’s possible for most packaging profiles with our AI Machine Learning technology. Let’s explore it in the next section.
4. Automate display scheme payouts to stores
If the company has hired shelf spaces, they need to give rent for it. It could be tricky to create a reliable trustworthy basis for fair and timely payouts to retail stores on a month-to-month basis. A consolidated VM Score based on audits and contractual guidelines with full instant visibility of shelf-score for each retail outlet goes a long way. A transparent and instant method to covert VM score into direct payouts or redeemable gifts can nail it completely.
Shelf-Eye: BeatRoute’s Unique Solution for Retail Audits at Scale
Shelf-Eye technology uses machine learning at the heart of it to detect face counts even with regular environmental noise that exits in audit pictures that are sent from stores. Environmental noise could be low light, bright light, tilted position of the merchandise, or even camera picture quality. Machine learning is able to cut through all these noises and detect face counts within minutes with 80% plus the accuracy with most packaging profiles. This machine learning-based Image Recognition technology also runs the face count of your competitor’s products. Hence, you will get an accurate VM score for each store, that’s what companies spend for, isn’t it?
Using our AI/ML-powered Shelf-eye technology you can scale your VM program to a large no of outlets and increase your sales using good displays at those instead of being able to control it only at a select few.
Read More: Retail Audit: Detailed Guide
As Publilius Syrus says, “From the errors of others a wise man corrects his own.” Visual merchandising is really helpful for making your brand for customers. What plays an even more important role is to ensure the VM campaigns bring you more sales and visibility and not get in vain. That’s the reason you deserve goal-driven store audits packed with new technologies. We hope your per-store ROI will increase with this solution.
You are just one step away from deploying this solution for your Store audits. Start your pilot today.