Quri Reveals Keys to Merchandising Success for Big Brands Ahead of Labor Day

 ​Quri revealed critical lessons learned from its "Summer of Merchandising" data, giving brands the keys to drive ROI ahead of Labor Day. Quri has been tracking merchandising performance both on- and off-shelf for 45 brands in 14 categories at Walmart and Target stores for 16 weeks from Memorial Day to Labor Day. Results show that by making key adjustments, merchandisers could see up to a 5 percent sales gain and close out the summer strong.

The lessons outlined by the company are as follows: 

Lesson 1: Close That Gap On In-Store, On-Shelf Availability! Brands Need High Margin Sales Growth In Today's Challenging Macroeconomic Environment

Properly defining and measuring on-shelf availability (OSA) by capturing a true shopper view of the shelf is vital to maintaining sales. Quri found OSA levels dropped as much as 50 percentage points immediately after the Memorial Day and Fourth of July in-store promotional periods. Furthermore, data indicates OSA levels are consistently between 2 and 20 points lower than the 98 percent OSA rate reported by the industry when using inadequate monitoring strategies.

Quri's data indicates that nearly every brand in the study had significant gaps in OSA during key summer weeks. For example:

•          Banana Boat Sunscreen averaged only 89 percent in Walmart for the past 10 weeks ending July 24th

•          Aquafina Water maintained only 74 percent in Walmart for the 2 weeks ending July 17th

•          Hershey Bars dropped to 77 percent in Target the week ending July 24th 

•          Breyers Ice Cream averaged only 87 percent in Walmart for the 3 weeks ending June 19th

•          Repel Insect Repellant bottomed out at 43 percent in Target for the week ending June 19th

A two-percent drop in OSA typically results in a one percent loss in sales, according to company officials. For highly seasonal categories, it is imperative to maintain strong levels of OSA in order to capture full ROI during this critical period.

"In an industry challenged for growth, uncovering a significant and highly achievable growth opportunity is welcome news," says Justin Behar, CEO and co-founder of Quri. "Through routine reporting based on what shoppers actually see on-shelf, leading brands are increasing OSA levels on a store-by-store basis by both fixing routine execution problems and diagnosing more systemic forecasting issues."

Lesson 2: Keep It Fresh! Maintain Summer Displays Routinely For Incremental Sales and Share Gains

There is a tendency to "set and forget" summer displays when in reality these need to be maintained routinely. Quri found that from Memorial Day through July 4th display coverage dropped 41 percent to 21 percent overall. For seasonal brands under time restraints to maximize ROI, coverage fell from 61 percent to 30 percent. This highlights missed opportunities to capitalize on promotional spending for increased incremental sales throughout the summer.

Sunscreen brands included in the data (Neutrogena, Coppertone, and Banana Boat) saw a 43 percentage point decrease in display coverage in Walmart from Memorial Day through July 24th. These same brands saw a 36 percentage point decrease in display coverage at participating Target stores.

Every three points of display compliance lost, typically results in a one percent loss in sales, making it imperative to maintain strong display execution throughout the summer promotion period.

If armed with a real-time, quantified shopper view of stores, innovative manufacturers can instruct retail execution teams on where to go and what to do routinely at the store-level and avoid sales loss. Additionally, these CPG brands are not only maximizing return on spend from trade promotion, but also gaining share relative to competitors who fail to keep pace.

Lesson 3: Get Those Displays Out of the Home Aisle! Your CFO Will Appreciate the Profitability Increase

Quri's data indicates displays are placed in the home aisle 42 percent of the time, on average, across all categories. Yet, displays outside the home aisle are up to three times more effective at driving incremental sales. Examples of brands frequently displayed in the home aisle include: Carbonated Beverages 52 percent, Condiments 52 percent, Bottled Water 45 percent, Personal Care 64 percent, and Beer 39 percent.

Displays that are interesting, appealing, and clearly communicate the product are far more profitable when they disrupt shoppers outside the brands' home aisle.

"Customers like Target and Walmart are more likely to execute on a brands' promotion plan, as intended, if they understand the ROI that's in it for them," comments Behar. "Brands who consistently show customer's the benefits of a quality location see much better results from their promotional spend."