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Feature-only’s contribution to sales now lags that of display. Here’s why, and what IRI says retailers and manufacturers can do to improve merchandising results.

With declining feature-only lifts, ensuring adequate display allocation on feature items is a priority, according to IRI, the Chicago-based market research firm. Since pre-COVID days, feature-only contribution to sales has dropped from 10.0% to 7.3%.

COVID CHANGING DEMAND CURVE

In Part 9 of its COVID-19 series on The Changing Shape of the CPG Demand Curve, released on Sept. 28, IRI says frozen and refrigerated food departments are among those challenged with diminished assortment, as items available on display show dramatically weaker trends. The report, entitled Reignite In-Store Merchandising Effectiveness in the Grocery Channel, provides extensive data on key measures, including feature and display activity.

“Sales with features have softened, not keeping pace with display despite no significant reduction in activity,” according to IRI, which notes that contribution to sales from display has held steady.

In looking at contribution to sales for the seven weeks ended Sept. 6, 2020 versus the eight weeks ended Feb. 23, 2020, feature and display fell from 4.1% to 3.2%. As mentioned, feature-only dropped from 10.0% to 7.3%; display-only rose slightly from 7.8% to 7.9%; and temporary- price-reduction- only dipped from 13.5% to 12.2%. Social distancing requirements and store layout changes have been factors affecting display space.

“Continual evaluation will be required to ensure the right categories get display space. Merchandising strategies that worked during peak stockpiling of mid-March and subsequent stock-up periods may no longer work as behavior evolves. Ensuring all off-shelf merchandising efforts are in sync with weekly feature ad support will continue to be both a key goal and challenge,” the report says.

Here are some of the implications and recommendations IRI sets forth for retailers:

–Social distancing measures are creating new pressures on sales and profit per square foot. Driving productivity of remaining display locations and space will be key moving forward.

–Checking store compliance on display during feature weeks will be critical, considering the decline in feature-only lifts.

–It is important to allocate display holding power to categories and items that can maintain supply and drive incremental sales.

–Consider extra drive period execution of traditional snack and beverage categories to maximize display productivity overall. IRI also offers recommendations for manufacturers:

–Understand the shifting role of display and determine the display metrics that matter to help drive performance and maximize ROI of trade and merchandising labor investments.

–Partner with retailers to identify relative lift of key categories on display to determine optimal-focus areas as shopping patterns shift.

–Explore opportunities to increase variety on display as COVID-19-related streamlining eases.

–Temporary Price Reduction and Feature remain important activities. But to continue to move merchandising up the “lift ladder,” shift TPR to display, and ensure display compliance to features.

–As display space shrinks and categories such as cleaning take center stage, work with retailers to drive more incremental opportunity via displays while balancing the need to highlight

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