Why footfall is an important metric for FMCG brands

Posted on: Thursday 18 July 2019 | Nathan Lawson - Insight Manager, Blis

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As an FMCG brand, you live and die by your distribution, if you aren’t available you can’t be sold and you risk losing a prospective consumer to a competitor. Whilst the online revolution is continuing to reshape the retail landscape and new technologies, if used effectively, can provide a wide array of opportunities for connecting with your audience. It’s important to not lose perspective of the here and now. In spite of the prevailing doom and gloom on the high street, physical stores still provide an overwhelming opportunity within the UK Grocery category.

This is where 94% of total sales occur and it is estimated that 98% of grocery shoppers can be reached in some way if you are purely available within brick and mortar stores. But not all distribution points are created equally and footfall provides a new perspective to help retailers and brands understand their current reach and the headroom opportunity left on the table. In this way examining offline behaviours can provide insights that power your digital activation.

Footfall bridges the gap between distribution and revenue

Footfall is derived from distribution but the two do not have a perfect correlation and we observed a trend of diminishing returns as retailers attain a greater physical scale. For example, a retailer may have 30% of stores but are only targeting 25% of the footfall opportunity within a category meaning that their stores are inefficient. By examining footfall it can help you understand the efficiency of traffic coming to stores where you are available, the number of shoppers you can target, and to understand effectiveness when combined with your internal revenue.

Distribution is fixed availability is fluid

Whilst the number of stores you are in is fixed and dictated by agreements with retailers, when we examine the share of footfall by meal time and by day of the week we can see that footfall share is far more fluid. Whilst a Grocer may be #1 for footfall overall, they may face challenges to their hegemony around a particular mealtime or on a given day. This reflects the fact that consumers interact with retailers in different ways as a result of many factors including product range, marketing, and the physical location of a store.

These footfall patterns have significant ramifications for the FMCG brands stocked within these outlets. As the share of footfall going to each retailer changes so does your opportunity to sell your product - and this challenge is masked by standard numeric distribution. This is particularly acute for impulse products. For example, if you are a cereal bar or vitamin drink with an emphasis on breakfast consumption you need to ensure you are present and utilising in-store activation in the outlets which see a higher share of footfall in the morning rather than the evening where your opportunity is more limited. Whilst we all have visions of a 24/7 opportunity for our products we recognise that brands have distinct strengths and soft points and therefore maximising reach around your key consumption occasions will enable you to more effectively drive revenue and close the gap on the competition.

Leverage footfall to inform your digital media strategy

Whilst I have emphasised the benefit that footfall data provides by giving you a greater understanding of the present reach of your distribution, this data is particularly valuable as it enables you to assess the present reach of your competitors’ distribution. This allows you to scope the size of the prize that is left on the table where you are not physically distributed and the intel provides a blueprint that an FMCG brand can apply within the media planning process. If your distribution is not enabling you to target the same proportion of shoppers as your competitor you risk losing the battle for share of voice, but through an effective digital strategy you can work to create the illusion of universal availability.

If you focus upon a particular audience it can help you to understand the greatest pressure points for shopper acquisition and defection. By examining an audience’s pattern of interaction with retailers you can identify when they will come into physical contact with your product as well as the level of exposure they have to competitor offerings around the respective consumption occasions. For example, if your target audience visits an outlet where you are stocked in the morning on the way to work, but a competitor outlet in the afternoon you can adapt your mobile advertising strategy to intervene at the critical point in the consumer journey. By targeting the right audience with the right message at the right time you can influence a change in destination, as well as pre-empt or postpone the planned purchase to when your product is in reach.

Written by

Nathan Lawson

Insight Manager, Blis

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