P&G focus on shopping experience
Sales growth in supermarkets depends on improving shopper experiences and growing categories, says the new managing director of Procter & Gamble New Zealand and Australia, Antoine Brun.
Price competition alone will not deliver lasting results, he says. “If you don’t bring innovation to the market you don’t get sustainable growth.” Adding promotions simply saw the competition do the same, whereas driving category growth involved convincing customers to spend more and delivering something they wanted to re-purchase.
The FMCG industry spoke too much about price only, he maintained. Retailers, distributors and brands needed to work together, with a more “consumer-centric” focus. Shoppers expected efficient, uncluttered and more experiential offerings if they were not to take their dollar elsewhere.
“Retailers here have strong positions, but it is just a matter of time before others arrive,” he told the Herald.
The P&G veteran moved to Sydney from Europe four months ago and spent last week familiarising himself with the company’s $100 million New Zealand business. The set-up here differs markedly from Australia, where the once cosy landscape dominated by rival supermarket companies has been disrupted by the arrival of cost-cutters Aldi from Europe and Costco from the United States and the strong presence of discount pharmacy chains Priceline and Chemist Warehouse.
Online incursions are another issue, with Brun saying brands needed to ensure they were well represented across all channels. Within the supermarket sector, it was vital to better align media, in-store and online promotions to maximise their impact.
Brun said New Zealand shoppers were sophisticated, with strong environmental awareness, as expressed in an interest in naturals.
Supermarkets which recognised these trends would merchandise ac- cordingly. The days of brands claiming blocks of shelf space for a big range of their products, were counter-productive to delivering what consumers wanted, being the convenience of shopping by categories, with, for instance, all natural shampoos grouped together for ease of selection.
After decades of presence, with brands including Gilette, Vicks, Olay, Ambi-Pur, Braun, Head & Shoulders and Pantene, P&G had decided 18 months ago to step up its investment here, he said.
Media spend had been doubled, mostly in television, and it had also brought in a new partner distributor, Diplomat NZ. This supply-chain specialist out of Israel, would bring a greater focus and long-term commitment to the local market, than having distribution overseen in-house.
Brun said P&G was committed to a high global research and development spend, because it believed innovation was the way forward.
Internationally, online sales now accounted for over half of P&G’s total business, he said, providing connections to new consumers. But Brun isn’t one if those predicting the end to bricks and mortar retailing. He reckons the psychology of shopping is such that consumers will still go into stores — if the environment is right.
Retailers here have strong positions, but it is just a matter of time before others arrive. Antoine Brun Procter & Gamble managing director Australia and New Zealand