Across categories and countries, increasing penetration is the primary way to build big brands.Our analysis proves that the connection between increased household penetration and category share gains holds just as true in markets we have observed.
Our work with clients on growth strategies has shown that the best companies spur penetration increases and outperform their competitors by thoughtfully investing in three key areas: assortment effectiveness, brand memorability and shopper visibility.
Our latest research on brand winners has reinforced this observation. Even more striking is the finding that winners stand out from the rest of the pack not necessarily by outspending their competitors in these areas, but by spending more effectively. Here are three important lessons from the brand winners on how to improve penetration and outpace competitors without outspending them.
- Innovate less but more effectively to improve penetration
- Spend better, not necessarily more, to build brand memorability
- Ensure broad and effective in-store presence to optimize shopper visibility
Shoppers make 50% to 60% of their purchase decisions in the store. Brands that ensure core products are readily available in various sizes, formats and price points, in as many stores as possible, with prominent visibility on shelves and at other key consideration points in the store, increase their chances of landing in consumers’ baskets.
Winning brands stress the importance of perfect sales execution. They start by creating a picture of success: a vision of which brands and SKUs to place in each store, where to place them, how many facings, the type of layout and what promotions to activate in a way that will best convince shoppers to buy. They measure execution of that vision and clearly link results to incentive plans. Based on our experience, companies that rediscover the potential inside each store can watch sales grow by an additional 5% to 15% each year, depending on category and market dynamics.
These shifts require new ways of thinking about resources and capabilities. As an initial step, companies should ask five key questions:
- Are we measuring penetration as a key performance indicator across all functions?
- Have we designed the product range and innovation plan to maximize incremental penetration?
- Will our advertising and promotions strategies affordably build lasting memorability?
- Do we have effective processes and routines to ensure perfect sales execution?
- Are we saddled with excess cost or complexity that inhibits our ability to support scale investments in the growth of hero products?