March 2016

Who should I focus on instore? Win Both Shoppers and Retailers Through Execution Excellence

SHOPPERS VERSUS RETAILERS

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WHY BOTHER?

Source: Retailer Sentiment Study Q1, 2015

1.3 M GROCERY STORES ACCOUNT FOR

>85%

TT FMCG SALES

US$ 9.9 Billion

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ENCOURAGING PROSPECTS

Source: RMS Data Nationwide MAT

30% Fragmented – Cigarettes – 50% Concentrated – Home/ Personal Care – 15-20%

There is so much value in a single % point reduction of OOS

Cigarettes 3% to 2% US $54+K / day

CSD 4% to 3% US $180+K / day

turnover 80%

store

No need to turn every store to get the opportunities

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HOWEVER, IT ALSO COMES WITH CHALLENGES

Source: Retailer Sentiment Study Q1/2, 2015

DAUNTING TASK 1.3 mil stores can look overwhelming for manufacturers

WAIT AND SEE MODE RCI 71 pts vs CCI 106 pts – Retailers are not yet fully confident about state of business

LIMITED CATEGORIES Cannot handle more than 15 SKUs in the space available

LIMITED SPACE Average store size is only 19 SQM

RETAILERS NEED MONITORING Just 40% of retail stores comply with manufacturer programs if not monitored

F&B DOMINATE SPACE

60% of limited space is occupied by food and beverage categories

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HOW TO BEAT THESE CHALLENGES

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5 INSIGHTS TO WIN IN TRADITIONAL TRADE

IN VIETNAM

WIN THE SHOP, SHOPPER & SHOPKEEPER

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1. STORE FRONT IS THE GOLDEN GATE

Source: Traditional Trade Thought Leadership Q4, 2015

Any brand exposure (product display or POSM) should aim to land at store-front to maximize visibility.

55% Image on Sign-board

53% Image on fridge/ Visicooler

32% Image of Shelf

% Who noticed POSM

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Transactions happen outside the store with the golden gate in full view.

97% Shoppers stand outside of the store

98% Shoppers ask store’s owners to get the products

Source: Traditional Trade Thought Leadership Q4, 2015

1. CAPTURE THE GOLDEN GATE

Shoppers are running auto-pilot on their transactions. The challenge is how to get them engaged to open up more purchase opportunities

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2. SHOPPERS ARE GONE IN 90 SECONDS

Source: Traditional Trade Thought Leadership Q4, 2015

ORDERING

FIRST 10 SECONDS

NEXT 60 SECONDS

LAST 20 SECONDS

MAKING PAYMENT WAITING FOR RETAILER TO GET THE ITEM

IDLE TIME = OPPORTUNITY TO INTERVENE

…

Stores get an average 404 customers visiting every day. 3 out 4 transactions are less than 2 minutes. Things happen fast but there’s a whole minute to capture the shopper while he/she is idle.

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ENGAGEMENT OPPORTUNITIES TO CAPTURE IDLE TIME

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3. SHOUT OUT YOUR PROMOTIONS

98% of the

shoppers are not

aware of

1% of the

shopkeepers actively talk

about

PROMOTION

The best way to shout about it is through the retailer. Unfortunately, it is not a very common practice currently.

retailers made a recommendation to shopper

3% 2 out of the 3 shoppers will follow the retailer’s recommendation.

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4. EDUCATE RETAILERS WHERE THE MONEY IS

SHOPKEEPERS

10% Recommend to shoppers

when product is out-of-stock

10% Engage shoppers in

conversation about product feedback, price, new

launches

Source: Retailer Sentiment Study Q2, 2015; Traditional Trade Thought Leadership Q4, 2015

Consumer Off-take

Competition from other retailers

Revenue/Margin

Stock quantity/ stock price/ sufficient stock

Supporting store management (inventory, space planning, shopper engagement) are vital needs raised – opportunities to engage retailers. Concepts such as upselling & cross-selling will be valued as it can drive growth for their business.

RETAILER CONCERNS

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4. SHOW RETAILERS WHERE THE MONEY IS Create a WIN – WIN opportunity for manufacturers and retailers to drive growth and at the same time addressing issues such as out-of-stocks

AVERAGE RATE OUT-OF-STOCK FOR CIGARETTE

3% = US $2 mil/day TOP 3 BRANDS THAT ARE OUT-OF-STOCK

JET (7%) CRAVEN A (6%)

HERO (6%)

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5. DISRUPT THE TRANSACTION Not all is lost with most transactions being planned. There are opportunities to intervene and create opportunities for unplanned purchases and build your brand.

95% planned

purchases 60

seconds you can…

SHOPPERS

SHOPKEEPERS

IN-STORE COMMS

SMS promo exclusive in TT

Mention there’s a new product or a promo item

Play a 15 sec TVC 4x via LCD display

PG Hand out a product sample

Source: Traditional Trade Thought Leadership Q4, 2015

In

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5. DISRUPT THE TRANSACTION Opportunities to increase basket size can be explored by partnering with often bought categories. On the other hand, if your product is part of the destination categories - protect your stock levels and ensure compliance from retailers.

Source: Trade Thought Leadership Q4, 2015

Cigarette

Food (Instant noodles,

Snack)

Beverage (CSD, Beer, Liquid

milk)

Personal care (shampoo)

48%

36%

31%

6%

Food (Instant noodles,

Fish/soy sauce) 60%

38%

17%

12%

Beverage (Liquid milk, RTD Tea)

Personal care (Sanitary napkin,

shampoo)

Household care (Dish washing liquid,

washing powder)

46% 54%

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WHERE TO FROM HERE

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WINNING CAN LOOK LIKE THIS

Product assortment identified and in

stock Branded store

sign secured

Retailer standard response after getting

shopper order: “Brand X is on promo today”

Dynamic POSM (LCD, product

samples for sniffing, touching, etc.)

located in front of store,

Disruptions created like a

promo Girl handing out

product samples

All possible front of store surface

area is maximized for branding.

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RETAILER VOICE NEEDS TO BE HEARD

Listen to retailers’ voice to help

manufacturers to innovate and elevate

the relationship

Question: To sell more in Tet, which activities would you like manufacturers to support?

Source: Retailer Sentiment Study Q3, 2015

76%

Product Quality

65%

Promo for consumers

42%

Stock return/ Money-back

38%

Delay payment

34%

Incentive scheme for stores achieving Tet

sales target

31%

POSM/Display

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Space Planning and Management

POS and Inventory Management

Community of Entrepreneurs

Business Training

Microfinancing

Engaging retailers of traditional trade and taking the business to the next level is very much possible

TRADITIONAL TRADE EVOLUTION

Source: hapinoy.com

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PARTING WORDS…

Have them

shout out your PROMOTIONS and watch the conversion grow.

Maximize branding opportunities in the

Golden Gate

Capture shoppers while they are idle. You have

60 seconds to make this happen

WIN-WIN opportunities in retailer engagement – help grow each other’s businesses

WIN RETAILERS To

Win Shoppers

BE DISRUPTIVE use interactive marketing activities that could shake up the shopper’s idle time.

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THANK YOU