• by Jack Loechner , Staff Writer @mp_research, August 18, 2016

According to new data from Quri, the "Summer of Merchandising" with keys to drive ROI ahead of Labor Day, merchandisers could see up to a 5% sales gain and close out the summer strong by making key adjustments. The study found that on-shelf availability (OSA), capturing a true shopper view of the shelf, is vital to maintaining sales. OSA levels dropped as much as 50 percentage points immediately after the Memorial Day and Fourth of July in-store promotional periods.

The report shows that OSA levels are consistently between 2 and 20 points lower than the 98% OSA rate reported by the industry when using inadequate monitoring strategies. A two-percent drop in OSA typically results in a one percent loss in sales. For highly seasonal categories, it is imperative to maintain strong levels of OSA in order to capture full ROI during this critical period, according to the study.

Every brand in the study had significant gaps in OSA during key summer weeks. For example:

• Banana Boat Sunscreen averaged only 89% in Walmart for the past 10 weeks ending July 24th
• Aquafina Water maintained only 74% in Walmart for the 2 weeks ending July 17th
• Hershey Bars dropped to 77% in Target the week ending July 24th  
• Breyers Ice Cream averaged only 87% in Walmart for the 3 weeks ending June 19th
• Repel Insect Repellant bottomed out at 43% in Target for the week ending June 19^th

Justin Behar, CEO and co-founder of Quri, says "… uncovering a significant and highly achievable growth opportunity is welcome news… routine reporting based on what shoppers actually see on-shelf…  brands are increasing OSA levels on a store-by-store basis… fixing routine execution problems and diagnosing more systemic forecasting issues… "

There is a tendency to "set and forget" summer displays when in reality these need to be maintained routinely, notes the report, finding that from Memorial Day through July 4th display coverage dropped 41% to 21% overall. For seasonal brands under time restraints to maximize ROI, coverage fell from 61% to 30%. This highlights missed opportunities to capitalize on promotional spending for increased incremental sales throughout the summer.

If armed with a real-time, quantified shopper view of stores, innovative manufacturers can instruct retail execution teams on where to go and what to do routinely at the store-level and avoid sales loss, concludes the report. Additionally, these CPG brands are not only maximizing return on spend from trade promotion, but also gaining share relative to competitors who fail to keep pace.

The study indicates displays are placed in the home aisle 42% of the time, on average, across all categories. Yet, displays outside the home aisle are up to three times more effective at driving incremental sales. Examples of brands frequently displayed in the home aisle include: Carbonated Beverages 52%, Condiments 52%, Bottled Water 45%, Personal Care 64%, and Beer 39%. Displays that are interesting, appealing, and clearly communicate the product, are far more profitable when they disrupt shoppers outside the brands' home aisle.

Behar concludes that "… customers… are more likely to execute on a brands' promotion plan… if they understand the ROI that's in it… brands who consistently show customer's the benefits of a quality location see much better results… (and ROI)… from their promotional spend… "

For additional information from Quri and the study, please visit here.