The best ways to improve your sales- by tweaking a poster here or a moving a product shelf there- can seem intuitive, and yet the delicate art of changing a shopper into a customer hinges upon subtle actions.
One company that knows this well is iLevel, a Dubai-based marketing solutions company hat works throughout the Middle East to help retailers improve their sales and customer experience.
Founder Antoine Karkour created iLevel in 2005, after gaining experience in the FMCG (fast moving consumer goods) sector by working with ad agency Le Burnett on Proctor and Gamble in Saudi Arabia, and later working with international conglomerate Nestlé. He launched out on his own with iLevel to provide a range of clients, mostly in FMCG, with marketing advice based on shopper behavior.
The most difficult decisions he made, he recounted, involved determining how quickly to grow, he says, especially as it’s not easy to find talent. While Karkour founded iLevel alone, the company quickly grew to 6 employees in six months, and then reached 12 after a year. Determining when to add employees can be tricky, he noted, as employees can always either take the company up a level, or become a liability if business falters. Yet twelve employees turned out to be the magic number; once it reached that size, iLevel was able to develop steadily for several years.
As it grew, Karkour was faced with offers by communication giants who wanted to take over iLevel’s concept. Yet, he decided to hold out. He had generated $100K in seed capital himself, by selling a contract on a lease-to-own house in Dubai, and moving in with his parents to cut costs.
He grew iLevel simply by reinvesting his profits, until 2009, when he finally decided to approach venture capital firm Middle East Venture Partners (MEVP). Karkour chose MEVP not just for funding but because he knew iLevel would benefit from their advice and internal services. Thus far, they’ve helped iLevel restructure its finances and introduced it to new clients, he says, growing the company in ways that it likely would not have under an investor aiming to micromanage the process.
A careful approach to growth has paid off. Now, iLevel operates throughout the Middle East and North Africa, generating most of its business in the largest regional FMCG markets: United Arab Emirates, Saudi, and Turkey.
The Gulf especially seems to be the perfect market for shopper marketing services. Marcus Evans, chairman of Integer TBWA/Raad’s shopper marketing division, notes that, when it comes to shopper marketing, "The Middle East has some distance to go to catch up to global best practice," yet, according to Business Monitor International, consumption is set to boom in brand-conscious Saudi Arabia over the next four years.
To take advantage of this growing consumption, you may want to follow iLevel’s marketing advice. Here Karkour offers a sample of four ways that retailers can improve sales.
1) Enhance product visibility.
If shoppers can't see it, they won’t buy it. Placing a product at the shopper’s eye level is crucial, especially if it's a new product. Always have the shelves dynamically changing to add new products.
It’s also important to place certain items appropriately in a hot zone or a cold zone. Especially in the Middle East, shoppers don't like to stand in front of everyone to choose very personal items. So you will often put very personal items in a cold zone at the end of the store instead of a high-footfall area. Or, you can put them next to the cashier so that people can just grab them.
Chocolates, on the other hand, are high-impulse items- if people see it, they will be tempted to buy it. So the more you place them around the store, the more chances you give people to buy them.
2) Tailor your communications.
If you go to hang a poster, you have to consider the amount of text on it to place it in your space appropriately. For instance, a poster for an art gallery that is supposed to explain a painting might have a lot of text. If you place it by the door, it won't be effective because people don't have time to read anything as they are coming and going. Every communcation has to be tailored to the timestamp and shopper behavior at that contact point.
It’s also important not to overwhelm shoppers. If you walk into a store, and it's called "iLevel," and on every wall you see something written saying "iLevel", shoppers can get overwhelmed by duplicate branding. Yet if you don’t create a strong enough store brand, the brand of the products will dominate. It’s important to create a balance.
3) Allocate promotions correctly.
Promotions are designed to increase sales. Yet it’s important to think strategically about which goods to apply them to. Say a customer often buys a six-pack of soda. If a retailer releases a promotion on soda, often customers will not buy more if they only consume a certain amount. It's a bad idea to put promotions on high-volume items, because shoppers have a set limit to their consumption. Retailers don't get any real increase in sales. Maybe consumers will shift to momentarily buying twelve sodas, but consumption will go back below normal once the promotion is over.
It’s also a bad idea to offer a high-volume gift as a promotion. For instance if you place a promotion on six liters of water instead of one, you're asking the shopper to buy too much. This is especially true if you are a large shopping market and the product in question is available at small neighborhood stores. It doesn’t make sense for a customer to buy a six liter pack if they can buy a smaller amount more conveniently.
4) Improve your pricing.
Finally, you can also increase your sales value by increasing your pricing. If price is not the central deciding factor for products in a certain category, for instance in the case of some luxury goods, then demand will be less elastic, and you will not lose sales by raising the price slightly. You can look to competitors to determine pricing- if 80% of them are selling at 2JDs, and you are selling at 1.5JD, you will not lose the customer if you raise the price.
What advice would you add?
Related articles on Wamda: How to Price Your Products and Services