What are the right tail products in your category?
How many of you have stood in the supermarket queue and had a sneaky look at the trollies or baskets around you? What is the person in front of you buying and what does that say about the type of person they are? Healthy or unhealthy? Kids or No Kids? Affluent or less affluent? We are all the sum of the choices we make. And the supermarket trolley can reveal a lot about us.
The reality is that a lot of shopping baskets look pretty similar each week. Most of us buy things like milk, bread, bananas, soft drinks and biscuits week in, week out. It is often not the categories we buy, but the type of products that we buy, that provide the clues about us.
Most of us have a few ‘must have’ products. These are the products that we would go somewhere else to buy if our regular store stopped selling them or products that you specifically go to a store for. They are the ones we can’t, or won’t, substitute. They are often not brand leaders, but smaller, sometimes more niche, products. They may only be 2 of the 50 products in a trolley, but they can be a deal breaker for the shopper.
So, why are we talking about this? The Top 4 retailers are looking to reduce range. We think reducing range is the right thing to do, but we think you have to be careful about how you do it.
Every category and sub category has a tail. A number of products that contribute relatively little to total sales and, at first glance, look ripe for the cut. In some cases cutting these products would have minimal impact on shopper behaviour. They buy a different product and everything is OK. However, cutting some products is not OK. There can be a sting in the tail.
These are the products that a small proportion of shoppers buy, but those products really matter to the people who buy them. It annoys shoppers if they are not there anymore. And risks them going to another store to find them. And once they go to another store, it may be difficult to get them back.
So, how do you simplify range, but avoid the sting in the tail…?
Fundamentally it is about identifying the products in a category or sub category that, whilst not the biggest sellers, are bought by a unique group of buyers or which have higher levels of loyalty.
This could be;
Products that serve a particular shopper need. For instance Gluten free foods or specialist skincare products.
Product formats that serve specific usage occasions. For instance, products that can be bought and used on the go.
Pack Sizes that are bought by a particular group of shoppers. For instance packs of 20 or 40 tea bags may be bought by older, single person households. Forcing them to buy a minimum of 80 each time may be a problem.
Key ‘Non Core’ Flavours or Variants. For instance outside vanilla, chocolate and strawberry ice cream are all flavours created equal or do certain flavours, say mint choc chip, have a smaller, loyal buyer base? If so, you need to keep them.
There are 2 types of tail products. The first are duplicative – they serve the same shopper need or group of shoppers. They add to complexity. The second are differentiated. They serve a unique shopper need or group of shoppers.
These are the ones with the sting in the tail. Take them out and you may wish you hadn’t. Do you know which ones they are in your category?
By the way, if you said you don’t look at what is in other people’s trolleys… We don’t believe you!
Feel free to forward. Have a great Easter and speak to you next week.