This summer is set to provide retailers with a once in a lifetime opportunity to boost sales, so we’ve teamed up with AG Barr and three top retailers to highlight how to make the most of the events that are set to change shopper attitudes.
When the 2014 Commonwealth Games begin in Glasgow on 23rd July, Scotland will be the focus of the world’s attention. With the Ryder Cup and independence referendum set to follow it, that attention won’t waver until winter. Even domestically the sheer scale of events this year – which begin with the World Cup in Brazil in June – is providing Scotland’s local retailers with a once in a lifetime opportunity to build their sales in the wake of the positivity that will be generated over the next six months.
To help, SLR has teamed up with one of Scotland’s biggest FMCG companies, AG Barr, and three top retailers, to provide a guide to how you can make the most of the opportunity. Fittingly, we gathered at the Sir Chris Hoy Velodrome to discuss this very matter. Present were Ian Johnstone, Direct Sales Controller Scotland, for AG Barr, along with Spar retailers Billy Kay and Saleem Sadiq (both previous winner of the Scottish Local Retailer of the Year accolade) and Nisa retailer Abdul Magid, who is currently Vice President of the Scottish Grocers’ Federation. Our conversation revolved around five key areas that every retailer must get right if they are to hit gold medal standards this summer: Range, Availability, Promotions, Customer Service and In-store Theatre. So, for any retailers out there who doubt the scale of the opportunity this summer, our first point of order was generating debate on that very subject.
Is there an increased opportunity this summer?
Abdul Magid: Most definitely. Think of it as an extended summer, which starts with the World Cup. That follows into the Commonwealth Games, the Ryder Cup and then the referendum. It’s an opportunity we’ve never had in retail.
Ian Johnstone: You won’t see a year like this in Scotland ever again; it’s a once in a lifetime opportunity.
What are you basing this prediction on?
Saleem Sadiq: It doesn’t matter if it’s a Euro Championship, a World Cup, it makes a difference; there’s a feel good factor. It doesn’t even need to be hot and sunny, if there’s something to look forward to then people tend to spend more money.
AM: There’s the in-store banter too. When the Olympics began everyone became an expert on gymnastics and all these other sports. It got people talking. We’d be mobbed after work, dead from 7-9pm when people were watching TV, then busy again at 9pm. And now it’s in Scotland, it’s in our own back yard. It doesn’t come along every day so as retailers we need to ensure we’re prepared.
IJ: People will be glued to the telly so retailers have this huge take-home opportunity. There will be soft drinks, beer and snacks in their hands as they watch so it’s about preparing for take home as well as impulse. The take home is something you can rely on. The sunshine sales are a bonus.
And presumably some sunshine would help?
Billy Kay: Unquestionably. Everyone keeps saying recession this and recession that but as soon as the sun comes out, people come in and you wonder where the money came from. AM: Let’s face it, the sun doesn’t come out very often so when it does people make the most of it.
BK: You sell things that you wouldn’t normally expect to sell along with barbecues, soft drinks, beers, it’s amazing how much. We can only hope the weather does a turn for us and that sun shines all summer.
How do retailers get their range right?
AM: Everyone needs to get their entire range right, especially soft drinks, beer, ready meals, snacks. Whoever offers that full range and promotions from it will do the best. We know when the events will take place, so unlike hot weather we can prepare. On something like soft drinks the shelf life is there and you can order soft drinks 24-48 hours in advance. There’s no excuse for being out of stock.
BK: That’s how a lot of shops get caught out. They buy what they always buy, which in a lot of cases is all they can afford to buy, and when the sun comes out or there’s a major event they get caught out and don’t have any soft drinks. Availability takes on even more importance then?
BK: It can be hard in terms of cash flow, but the message is to be full for the weekend and get the money in to then make sure you’re stocked up for the following weekend, not the other way about. If you get caught out of stock at the weekend it can be very awkward.
AM: A lot of retailers have come into the industry without a retail background so they don’t have that experience and their own ideas of what retail is. I think there’s room for a retail academy where people new to the industry can learn more about the basics. When you join a symbol group they have that support network but the indies that don’t have that, so how do they learn?
BK: If smaller shops were taught more they’d maybe be able to focus on getting their range and availability right. They can do well without being in a buying group because so much stuff is price marked. If gives customers so much confidence in them. Get the shelves full with price marked stock, and customers will come for the convenience and the value.
AM: Retail for many is something they do during the day and the passion is elsewhere, so they need help. But more companies are investing in a sales force so we’re coming back to a place where we know the reps, where there are more people out there.
SS: Things like trade websites, trade magazines like SLR, trade shows; the people who use them most are the ones in the know. It’s the group of local retailers who never leave their shops that need to use these tools, and they can be very effective. How important will price be this summer?
BK: Price is very important. There’s no brand loyalty now, whether it’s bread, cigarettes or cola. Customers have only got a certain amount of money and they want to get five items at a pound each. The pound price point is huge now.
AM: A lot is about how we sell that value to customers.
BK: As an example I’ve taken in one-litre bottles of Irn-Bru price marked at pound. We sell about 12 dozen a week and since I took them in I’ve not sold any 500ml price marked at 95p. The 500ml is there at eye level, but people are going for the pound. How important is soft drinks within this?
SS: It’s our biggest money earner. Soft drinks, crips, confectionery, that’s what we pride ourselves on.
BK: Sales are coming from volume. You sell more product so make more money. We have to push volume to make margin. That, and deals. We’re doing hot dogs now so we have a deal where you can buy a hot dog and can for £2. The hot dog is £1.89, so as a meal deal that’s unbeatable. So how can retailers increase basket spend this summer?
SS: By having a reasonable price on products. That’s how we keep our customers and how we get them to spend more. Reducing price doesn’t mean basket spend goes down, it hopefully means they’ll buy more products.
BK: We’re selling more products for less money, but you can make more money and cash value depending on how you do things. Take something that’s on promotion, you buy more so that when the promo is finished you don’t put it straight back up to the top line price. It’s still a good deal for the customer and we make enough per case to make up the difference. That’s where we can make our money. It’s about being savvy.
AM: That’s the message we need to get across to other retailers. Buying and selling is not black and white. There are opportunities – put the promotion on, then put the price up a little. There’s a middle point where you’ll still sell and recoup the margins you lose elsewhere. Where does customer service fit into all this?
IJ: If I’m a shopper, I will spend more money if I have a nice experience in that shop and the retailer wants my business. The amount of times I’ve been in a shop and the retailer is on their phone, or not interested. If it’s not worth looking me in the eye then why should I give you my money?
SS: I hate it if a staff member does acknowledge that you’re there.
BK: Everyone should look at the simple things like saying good morning. It’s not difficult.
AM: In good stores, it’s fed down. I make sure my staff meet my expectations. It’s down to the retailer’s thinking. You get to know your customers, their families, when they are in trouble or if someone passes away. It’s about being that part of the community. You need to know the area, what’s happening schools, what the community is fighting against. I’ve got to support the community and their feelings. People can latch on that. Moving onto theatre, how can retailers inspire customers to spend?
SS: An easy starting point is to do tastings in-store. It lets people try new products that they might not have bought and creates a bit of a buzz. When that happens around an event like the Commonwealth Games, it can be fantastic.
IJ: It’s about that feel good factor this year. People will spend more because they’re feeling good and exciting. When they walk in, if there are displays that stand out, that are interactive it makes that shopper experience about more than just picking up items. It’s about creating interaction. Even having one feature display with good bulk stock and good point of sale is enough to generate more sales. Stick to the take-home lines if you’re doing something like that; two litres, multi-packs of cans. Having 500ml bottles outside the chiller isn’t going to help. In-store theatre where you can do it, is absolutely vital this year, with so much going on.
SS: Have a medal table showing customers how well Scotland is doing. And World Cup tables always do well. We’ve got in-store TVs so we’ll be showing football and the Commonwealth in-store. That’s not something everyone can do, but it’s there are lot of basics that can be done. Retailers need to push harder when events are on. Should retailers stock up on products sponsoring these events, and therefore getting huge coverage on TV and other media?
BK: Definitely. When you see things popping up everywhere, it’s in your mind so you buy it.
AM: There’s a link between the TV ad or sponsorship, the in-store theatre, and the sale. It’s down to retailers to take advantage of that. If something’s on TV you need to have it on the shelf.
IJ: Well in that case you’ll be pleased to know we’ve got a fantastic advert coming up for the Commonwealth Games. For Scots, it’ll really tug at the heartstrings, a real Proud To Be… advert. So, the brief and encouraging summary from our discussion is that there is undoubtedly a huge opportunity this year, beginning when that first World Cup game kicks off on 12th June, through to the final on 13th July and onto the opening ceremony of the Commonwealth Games on 23rd July and the 12 days during which the Games will present retailers with one of the biggest sales opportunities in a generation. Good luck, and we’ll be catching up with our retailer panel later on the year to see how their own summers went.
