Knowledge Bank Blog, Pricing & Promotions, Range & Portfolio

Pressing Reset

Are all days created equal?

At the moment, probably yes. After ten weeks of lockdown, weekdays, weekends, bank holidays all seem to roll into one, right?

But ordinarily, different days have different meanings. Your birthday feels different to every other day in the year. The 1st of January feels different to the 15th of January.

Psychologists call dates that have more significance “temporal landmarks”.

There are actually quite a lot of them across a year. The first of each month is one (first of a quarter or year even more so). Your birthday is another. The first day back from a holiday is another. Even each Monday – the start of each week – can be one.

They work in two ways. Firstly, they get us to slow down and pay attention to what we are doing. Secondly, they change our mental accounting. They allow us to put things behind us so that we can focus on what is in front of us.

They are why google searches for “diet” increase significantly at the start of a month and steadily drop across the rest of the month. They are why it’s called “Dry January” not “Dry second half of January, first half of February”.

These dates act as markers. We use them to change behaviours. To press reset.

Why are we talking about this? Well, Covid 19 didn’t land with a neat start date. It certainly won’t leave with a neat end date. But it is a period of real change and it offers an opportunity to reset. To look at what you have been doing. To look at what you should be doing.

So, how can you do this? Here are 2 examples…

Promotions. Most categories and brands sell a high % of volume on deal. Most of that money is moving between brands. You win this week because you are on deal. Your competitor wins next week because they are. Promotions became so regular that shoppers would be foolish to pay £2 for something this week when it was likely to be £1 next week. But things are changing. Now, for more shoppers, being able to buy what you want to buy is more important than buying at a discount. Now, for more retailers, consistent pricing (& demand) is more important than high-low pricing. Given this, will brands ever have a better chance of getting off the promotional drug?

Getting off the drug means looking at 3 things. Firstly, WHY are you promoting? The answer shouldn’t be “to drive sales & share”. It should be based on the shopper behaviour you are trying to drive – e.g. trial, repeat, trade up. Secondly, WHAT promotional mechanics should you be using? The mechanics should align with the shopper behaviour you are trying to drive. Want to drive volume? Do volume based deals. Want to drive penetration? Do price cuts. Thirdly, HOW are you promoting? Varying frequency and depth of discount. Framing value to shoppers in the most effective way – the same discount communicated in 2 different ways can lead to 2 different outcomes.

Ask yourself…if you pressed reset on promotions, what would that look like?

Portfolio. There are lots of ways to look at your portfolio. Here is a suggestion – split your portfolio into 3 buckets. Bucket 1 = Winning Products. These are the big selling SKUs. It’s ketchup if you are Heinz. It’s peas if you are Birds Eye. These are products that you always want to have an advantage on. That you want to be available wherever shoppers shop. They are important now. They will be important in the future.

Bucket 2 = Growth Products. These are products that will grow over time. They might be hygiene driven products in home and personal care. They might be meal kits in food. They are segments you want to innovate in. They will grow as a % of range over time. They are products that will be important in the future.

Bucket 3 = Tail Products. These are products that don’t sell much at the moment. They are products that you probably spend too much resource on. They are products that get in the way of you focusing on Winning Products and Growth Products. They are products you should take out of your portfolio. They are not important now. They will not be important in the future.

Ask yourself…if you pressed reset on your portfolio, what would it look like?

You can press reset on many of the things you do. The way you launch innovation. The way you do shopper marketing. The channels that you sell in.

The best time to change is in moments of change.

If not now, then when…?

Feel free to forward. Have a good weekend. Speak to you in a fortnight.