Now considered an absolute must for retailers across almost every category, the PMP phenomenon shows no sign of stopping. PMPs attract shoppers and provide an improved rate of sale and price perception.
by Émer O’Toole
Since the recession, shoppers have become increasingly conscious of assessing prices and promotions when choosing their groceries. PMPs allow convenience retailers to maximize on impulse sales. This is especially true when they appear on well-known reputable brands that instil consumer confidence.
Shoppers are finding it difficult to weigh up the relative value of the options available at the fixture, which is serving to exaggerate PMP shopping behaviour. Shoppers are increasingly asking retailers to make pricing and promotional information clearer and more transparent. PMPs are seen as key to helping shoppers find value due to its transparency, which in turn allows them to stick to their budgets. PMPs are a growing trend and consumers are increasingly looking out for them in convenience stores.
- They are key to driving sales.
- They sell faster than standard packs.
- They save time on having to price products.
- They improve their price image and act as a signpost that they want to compete on price.
Having a range of PMPs available in your store establishes a sense of confidence and trust between you and your shopper, and creates a perception of value. According to him! research, 53% of consumers are more likely to try a new product if it’s sold in a PMP. That research also reveals one third of shoppers say that knowing a c-store sells PMPs positively influences their decision to visit that particular store.
PMP spirits have more than tripled in value in the past year, and Diageo’s 70cl PMP SKUs have performed on average 31% ahead of the standard SKUs. Gordon’s and Captain Morgan Spiced PMPs both saw great success when they launched in 2014, and now consumer-favourite Johnnie Walker Red Label is joining the Diageo PMP range in 70cl and 35cl.
Follow these simple steps to capitalise on PMP sales:
- Stock a wide range of PMP spirits and consider the mission your shoppers are on – ‘something for tonight.’
- Include a variety of fractional spirits (50cl, 35cl, 20cl).
- Stock PMP premix in the chiller.
With price-marked packs being used more frequently as manufacturers across all categories realise their importance, there is a need to continually innovate to maintain impact and continue to deliver great value to shoppers. AG Barr has done so with its next generation of price-marked packs, incorporating an additional multi-buy element. This benefits retailers as it encourages additional purchase while still delivering profit and consumers feel like they are getting even better value. This was trialled on Rubicon one litre cartons which were offered with a £1.29/two for £2 flash on pack. All of AG Barr’s popular brands, including Irn-Bru, KA, Rubicon, Barr and Rockstar, are available in great-value price marked packs in all pack sizes (from impulse packs 330ml cans, 500ml PET to take-home packs, one litre cartons and two litre PET) throughout the year.
However, not all categories benefit equally from PMP treatment. Shoppers are most receptive to price-marked products such as biscuits, snacks and soft drinks, but premium products like wine and spirits are less likely to be bought by shoppers if they have a PMP. Ruth Cousins from him! says some shoppers feel PMPs cheapen the image of certain products, and this opinion is likely to be more relevant for items shoppers may buy as gifts. The profit margin from PMPs may not be as high as one would hope, but the shopper demand is there so it is an area worth exploring.
Price-marked biscuits in the convenience and impulse channels are worth £37m, according to Nielsen data, with value sales up 12% year-on-year and now accounting for a third of all year round biscuit sales in the sector, their highest ever share.
In recent years, Burton’s has doubled its sales of PMPs across market-leading brands such as Maryland, Jammie Dodgers and Wagon Wheels.
“As one of the first FMCG companies to introduce price-marked packs, we know how important they are to shopkeepers keen to offer their customers Britain’s best-loved brands at competitive prices” says David Costello, Head of Category & Shopper Management at Burton’s Biscuit Company.
“That’s why our price-marked packs are available at accessible price points that will help to attract new customers and encourage purchase from brand loyalists and impulse shoppers.”
In the alcohol sector, Nielsen data reveals that PMPs sell three times the volume of standard bottles — PMP sales per point of distribution is on average three times greater than standard bottles — so ensure they are highly visible at all times. Shoppers are more likely to trust PMPs, according to him! so capitalise on this by stocking a full range that is clearly visible to the consumer. Additionally, it is worth providing a wide range of PMPs in your store to create a perception of value and, by extension, trust between you and your customers. Maximise spirits purchase in your store by stocking the right range, in an ‘easy to shop’ layout, and offering price marked packs to reassure shoppers they are getting a fair value. Site all category brands together, e.g. all Vodka brands together. This helps shoppers absorb and filter what a store has to offer quickly and easily. Ideally, faster selling categories and products should be at eye level. Place top sellers in the centre of the category as they act as ‘anchor’ brands to help shoppers identify a category. Visible pricing is a key factor in the decision to purchase.
The convenience channel now accounts for the largest single share of the UK’s £150 million micro-snacking market, according to Kepak. Price marked packs are set to be given more prominence in-store as 50% of retailers say they intend to stock more price-marked packs in the next 12 months and three quarters of them are more likely to stock a new product if it’s price-marked, compared to 63% in 2013 – another key indicator on the need for the cash and carry and wholesale trade not to overlook their importance to retailers. Kepak’s Rustlers Super 6 range has accelerated demand for its price-marked products, by offering Rustlers top-selling SKUs all price-marked at £1.99. The introduction of price-marking across the range strengthens the offer, providing price-conscious consumers with the reassurance they’re looking for. “The price sensitivity shown by shoppers is not set to change and the cash and carry trade will continue to benefit by offering price-marked packs. Those products like Rustlers that are backed by sustained, heavyweight marketing support will have even stronger appeal,” says Angela Daulby, Channel Director of Kepak.
