For years, SKU counts and product ranging have been key performance indicators (KPIs) for major retailers. However, a significant shift is underway. Coles recently announced plans to reduce its product range by at least 10%, and while other retailers haven’t made similar public declarations, it’s likely only a matter of time.
All brands will likely be challenged to justify why their SKUs must be retained within a retailer’s range. However, small or niche brands may struggle more due to limited marketing budgets and inability to purchase scan data.
Retailers must strike a balance between offering shoppers sufficient choice and maximising profitability. As a result, brands will need data-led strategies, not only to justify why their products should remain on shelves but also to demonstrate the potential sales and customer loss retailers may face if they delist those SKUs.
The Challenge of Retail Media for FMCG Brands
For FMCG brands that rely entirely on major retailers such as Coles, Woolworths and Bunnings for distribution, direct-to-shopper marketing has always been a complex undertaking. Retail media platforms offer an opportunity to engage shoppers at the point of purchase, but these channels often come with significant challenges – high costs and the requirement of long-term planning.
While retail media can be an effective tool for driving sales, its short campaign durations (typically 2-4 weeks) and budgetary demands make it difficult for brands to establish long-term customer relationships. Without the ability to nurture loyalty through continuous engagement, brands risk losing shoppers once competitor discounts or rival campaigns take precedence. In many cases, retail media serves as a temporary solution rather than a sustainable strategy for customer retention.
Another major challenge is data transparency. Performance metrics are controlled entirely by retail media teams, leaving brands with limited visibility into campaign effectiveness. To measure impact, brands must rely on third-party sales data and attempt to reconcile it with retail media reports, an often time-consuming and imperfect process.
The combination of high costs, short-lived campaigns and the inability to foster long-term customer relationships makes it difficult for many FMCG brands to justify an ongoing reliance on retail media.
A Smarter Approach: Leveraging First-Party Data with Shping
An innovative solution for brands facing these challenges is Shping, Australia’s #1 Universal Rewards Program. Shping not only incentivises shoppers with engagement rewards for uploading receipts from any retailer or service provider, but also creates a direct communication channel between brands and their actual shoppers. This allows brands to engage shoppers in real-time, build stronger relationships and drive loyalty beyond the point of purchase.
Shping enables brands to plan, execute and launch campaigns within days, while providing real-time performance insights through their own reporting dashboards. Powered by receipt data, Shping delivers comprehensive reporting, giving brands a clear view of campaign effectiveness and its direct impact on sales across every retailer.
Beyond promotionally-driven campaigns, Shping allows brands to run strategic campaigns that introduce them to new category buyers, strengthen brand awareness and enhance brand salience. By empowering brands to foster deeper consumer engagement, Shping helps drive repeat purchases, increase brand loyalty and maximise customer lifetime value.
Retaining Ranging and Increasing Distribution with Data-Driven Insights
Shping empowers brands with data-driven insights that strengthen their position as category leaders within each retailer. By leveraging real purchase data, brands can demonstrate sales performance, repeat purchase rates and basket analysis, proving their products contribute to store traffic, category growth and customer loyalty.
Additionally, with the ability to showcase the effectiveness of their marketing and shopper engagement strategies with Shping, brands can reinforce the importance of not only keeping their products ranged, but at a higher distribution rate.