Execute at Point of Sale to win !! Or don't at your own peril !
According to Nielsen, *60% of shoppers* make decisions in-store, and 50% of consumers have purchased products on impulse simply because they were well-placed and visible.
The Indian Fast-Moving Consumer Goods (FMCG) sector, one of the largest industries in the country, relies heavily on Point of Sales (POS) execution to ensure product visibility, availability, and optimal consumer engagement. With a diverse and vast retail landscape, ranging from urban supermarkets to rural Kirana (mom-and-pop) stores, FMCG brands face unique challenges in POS execution across India. Effective POS strategies can make a significant difference in driving sales, boosting market share, and maintaining brand loyalty in such a dynamic market. Below are some key reasons why POS execution is critical for FMCG companies in India, supported by local examples and insights.
1. Maximizing Visibility in Traditional Retail (Kirana Stores)
India's retail landscape is dominated by traditional retail, with Kirana Stores accounting for nearly 88% of the total FMCG sales, according to a Nielsen India report. In such fragmented retail environments, POS execution ensures that products are placed prominently, especially since many purchasing decisions are made based on availability and visibility.
Since 2020, Hindustan Unilever (HUL), India’s largest FMCG company, launched its Shikhar program, which provided digital tools to small Kirana store owners. By using data-driven insights from HUL, Kirana stores could manage their inventories better and display HUL products more effectively.
Quoting ET Brand Equity article, on Shikhar:? “Currently around 1.1 million retail stores around the country have downloaded the app. Company executives point out that 60 per cent of these retailers order using the app every month, in an industry that otherwise is estimated to have an average of 25-30 per cent repeat purchases. “Our repeat customers are amongst the best in the industry,” says Kedar Lele ( Ex Executive Director at HUL who was leading this initiative). Shikhar also contributes to over 25 per cent of the company’s revenue from its traditional retail trade. “That's where the fun begins. You are able to not just give a great service to your retailers, but also create a moat. And you get incremental revenue.” Lele however believes that the best is yet to come.”
2. Influencing Consumer Behaviour in Modern Retail and cementing trust
India's modern retail (supermarkets and hypermarkets) is growing steadily, with increasing foot traffic in urban areas. In these stores, POS execution plays a pivotal role in influencing consumers, especially in the organized retail sector, where shoppers are more likely to make impulse purchases.
In the Ashirwad Atta zones at various Modern Trade stores, ITC rolled out a “Likh Ke Le Lo” campaign, with large QR Codes besides the Atta stacks in the store. Quoting an article in FT on the campaign: “ For a food category like atta, where a significant proportion of households are still using the unbranded formats, Ashirwaad has come out with an industry first initiative to instil confidence in the minds of the consumers and allay any fears they might be harbouring; right from concerns related to the quality of the wheat being used, how clean it is, how it is ground to whether it has any maida added.
Aashirvaad brings personalised ‘Quality Certificate’ to foster transparency and trust. Each pack of Aashirvaad Shudh Chakki atta comes with a QR code that will allow consumers to get information pertaining their own atta pack, reinforcing the brands’ pledge to unmatched quality.
“Aashirvaad’s legacy of quality and purity takes a giant leap with the ‘Likh ke Le Lo’ campaign. This symbolises our commitment to delivering whole wheat atta of the highest standards. The certificate not only assures consumers of our quality standards at every step but also empowers them with information to evaluate current choices,” Anuj Kumar Rustagi, COO, staples and adjacencies,?ITC?Foods said.
4. POS Execution is a key variable in driving loyalty. Colgate Palmolive has integrated its Loyalty Programs and leveraged technology to track execution effectiveness
In India, brand loyalty is a significant driver of FMCG sales, especially in categories like personal care and food & beverages. Effective POS execution, such as in-store displays, promotions, and loyalty programs, can enhance consumer connection with a brand.
Since 2021, Colgate-Palmolive India launched its Smile Store initiative, where participating stores prominently display Colgate products and provided consumers with information about oral health. Quoting the 2023 CPI Annual Report “Our unique ‘Smile Stores’ project resulted in successfully optimizing store-level assortment in our indirect channels by the use of bespoke data-driven analytics. We use predictive analytics to recommend and fulfil the demand for the right variety of products in right set of retail stores across the country. We have received encouraging responses with continued double-digit growth in total distribution points (TDPs) across our 1.6 Mn stores.”
Fully understanding the importance of Superior Execution, CPI launched AmaZing, a digital app to track in store execution. As per CPI annual report of 2023 ; “Another leap in digital transformation is our image recognition-based AI/ML tool to drive every day in-store excellence for elevated shopper experience.
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AmaZing (Assisted Merchandising with AI for Zero In-store Gaps) is a revolutionary in-store app which enables us to move away from manual recording to one click photo led actions. The application has led to significant time saving, live tracking of comprehensive in-store parameters & on the go corrective actions - All with one single click!
The widespread adoption with the mammoth scale of stakeholders, and encouraging outcomes is a testimony to the meticulous and proactive planning by our team.”
5. Adapting to the Rise of E-Commerce and Omnichannel Strategies
With the rapid growth of e-commerce in India, especially accelerated by the COVID-19 pandemic, FMCG companies need to integrate online and offline POS execution. Consumers expect seamless transitions between their online and in-store experiences, with consistent promotions and brand visibility across both platforms.
Marico, the FMCG company behind popular brands like Parachute and Saffola, used a combined online and offline strategy to enhance its Saffola Honey product launch. The company ensured that its POS materials, such as promotional banners and product displays in stores, mirrored its online promotions on platforms like Amazon and Flipkart. This omnichannel approach led to a 25% increase in sales of Saffola Honey within the first three months of launch.
Per an ET article quoting Sougato Gupta, CEO of Marico India, Marico is investing in building an omni-channel, agile, and data-driven distribution strategy. The company aims to strengthen its presence in alternate channels through strategic partnerships, channel-focused product strategies, and customer engagement. Despite the vast potential of the Indian market, Marico believes traditional and alternate channels can coexist and grow harmoniously.
Effective POS execution is vital for FMCG companies to maintain shelf availability, improve brand visibility, and drive impulse purchases. Companies that prioritize strong POS strategies see increased sales, greater customer loyalty, and a competitive edge. Real-world examples showcase how a focus on efficient POS execution, supported by technology and data, can lead to significant performance improvements and long-term success in the highly competitive FMCG market. By continually optimizing product placement, stock management, and in-store promotions, FMCG companies can ensure they capture every sales opportunity available at the point of sale.
Views expressed are personal !!
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Market Researcher by passion. Sales and Marketing Specialist.
5 个月Urban and rural consumers may have different product preferences and shopping behaviors, necessitating region-specific POS execution strategies, which adds complexity to maintaining uniform standards.
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5 个月How does online retail play a part. Is it a challenge for impulse buys considering that people who shop online only look for things they need at the time.
FMCG GT Sales, National Sales, Sales Strategy, Leadership, P&L Management, Customer Marketing, Distribution Excellence, Business Development, Market Development, Team Handling, Creating Leaders!
5 个月India resides in the Rural! The Online commerce, which also definitely needs visibility in a different capacity, is a function of the smartphone users in the country! This will take some more time to completely preside over the Retail Canvas. The 11mn to 12mn stores still will decide a large portion of the consumerism of our vast country! POS definitely is supremely critical. Unfortunately, the innovation is stunted in this Visibility space. The existing ones are short lived, not optimally priced and not attractive too! A lot of scope to come out with something spectacular in this space!!
Sales Manager ( Modern Trade & Ecom) - PepsiCo Franchise - Bahrain
5 个月The trend is shifting away from in-store purchases and towards online ones. So POS does not play a significant part in the current time frame.
Eid Parry Pvt Ltd / X Waycool Foods Ltd/X Cavinkare Srilanka /X Bharti Airtel / X HLL
5 个月Very Well articulated….Good take away….