It seems that every retailer and CPG manufacturer we interact with asks the question, "Where is the real growth?" The retailers are being increasingly challenged to increase both traffic and shopping basket sizes. Manufacturers are challenged by both understanding and acting upon rapidly evolving consumer consumption as well as radically improving go-to-market innovation. Will spending and consumption change? How will brands and categories grow? Where is the real profitability?
The retail and CPG industries are undergoing significant stress today as consumer consumption has flattened, and the growth, for about the last 5 years, has come primarily from promoting products for people to consume. The average American pantry has dropped from about 450 to 350 unique products per year in that time, and is projected with the new Millennials to drop even further. So, where is the real growth?
The answer becomes more obvious when we look in areas of new ethnic populations, such as Hispanics and Asians. Real growth occurs among those consumers who are changing their current status, meaning they have emerging needs and usage states, such as Health and Wellness, Better Living, Better Family Living, Taking Care of the Home, On the Go, Food for Now, Food for Later, and so on. All of these are growth platforms that are available to both CPG manufacturers and retailers going forward. But the secret is not in simply pushing products, but in offering the consumer the ability not only to buy, but to think about what they're buying in a way they have never done before. And we help them get there by employing in-store merchandising and marketing, digital marketing, omni-channel engagement, and transforming the shopping experience.
The types of services Dialogic offers in this area center on helping both retailers and CPG manufacturers understand how to recognize new opportunities to create growth and then take prioritized actions to make it happen.
At the CPG level, that means learning how to enhance the capabilities of their current categories, how to think about merchandise bundling, product bundling, category bundling, redefining how consumers use products, and actually helping to create a whole new series of needs and usage states platforms that they can bring to the retail community.
On the retailer side, we help organizations understand where advanced merchandising techniques like platform-based merchandising or needs and usage merchandising techniques make sense in their stores... not across the full store, but in certain parts of the store. We help retailers understand how to improve not only the perimeter of the store but also the center store, helping them to improve the profitability of every square foot.
Growth advisory is not simple – it demands working together not only to understand opportunity but also to create the right operating model to capitalize on that opportunity.
“Winners will redefine the size of the pie itself”
