P&G Sales Director, Ian Morely talks to Asian Trader about its iconic brands, innovation and how the company is working in the convenience channel.
Ian, thank you for taking the time to talk to Asian Trader magazine. Can you tell me what your job title is at P&G and what that involves on a daily basis?
My role is Sales Director for Northern Europe, covering the UK, Ireland, and our Nordic markets Sweden, Denmark, Finland and Norway. This specific role is new for me, however I have been with P&G for 9.5 years. Prior to this position, I spent about eight years working for Gillette, and before that I spent about ten years at Duracell. So I’ve been around three different companies, but effectively only one because of the mergers and acquisitions along the way.
In my time at P&G I’ve been managing brands such as Pringles, Gillette, Braun, Oral Care, and our household business. In April this year I moved to the role of Sales Director, which is in many ways a return to my roots. I spent my career in sales during the early years with Duracell, which meant a lot of time in the convenience sector calling on many Asian businesses and Cash & Carries.
Essentially, my job is to service our consumers via our retailers and to ensure that we have our range of products in distribution and on display in Northern Europe outlets and help retailers grow categories. I run the individual customer channel teams, and my time is probably split fifty-fifty between being out with customers and working with the organisation on developing business plans and investing in our people. That’s a very important part of what we do.
P&G has a great heritage in the UK with some iconic household brands. Can you tell me a bit about the history and some of those brands?
As a business, our aim is to provide superior brands to the consumer which deliver great value. We want our consumers to love using our superior products and they come back again and again to buy more. That has been our model since time immemorial and will continue to be our model in the future.
We have developed a world-class set of brands; one of our most famous is the very iconic Fairy brand. At P&G we absolutely love Fairy, it has a fascinating history. The brand started in 1898, and we acquired the business in 1927. Fairy started as a thick block of good quality soap. People used this bar of Fairy for washing their hands, but they would also dilute it to wash their dishes. In 1950, this changed as we brought in the white bottle Fairy washing up liquid. And what an iconic piece of packaging that was!
We all grew up with the white bottle on the kitchen shelf, so this just goes to show where you can take a business: From a bar soap to a white bottle, to super-concentrated Fairy that we have today. As well as the standard iconic dark green Fairy, we have sensorial lines of Fairy too. Around 2005, we extended the domain of the brand in the UK by moving into auto-dishwashing. Fairy is a business that has grown consistently for us and our retail partners year in, year out.
Also, I think iconic advertising means that we have a very simple message that we’ve never really veered away from, which is that Fairy lasts longer. That is as true now as it was in the past.
Consumers are increasingly using the convenience channel to meet their shopping needs. How important is convenience to P&G?
Convenience is important because of the huge shifts we’re seeing in shopper behaviour at the moment, which is driving rapid growth in this sector. Our primary job as a manufacturer is to serve our consumers, and that means we have to be in all channels and widely distributed. That development has different facets: there’s the demographic with older consumers wanting smaller pack sizes and more regular top-up shopping; also people’s general lifestyles are changing, as now they want more on the go and are happy to pop to the stores two to three times a week.
There certainly is a trend to move away from the once-a-week trip to the out of town supermarket. Manufacturers such as P&G should be seeing what is going on at the heart of the convenience business operation. It isn’t a luxury, it’s a prerequisite for any business because of the way the demographics and people’s shopping habits are changing in the UK.
PMP work very well in convenience. Is that something that P&G looks at to increase sales or does it depend on the brand?
We are guided by what our consumers and our retailers tell us, and the overwhelming feedback from retailers in the convenience channel is that they like the choice of having price-marked packs (PMP). It’s for that reason that we provide price-marked pack offerings across our portfolio, be it laundry, Femcare, fabric enhancers or Gillette. Retailers like it because it gives a clarity of pricing and a message of good value for their shoppers. We’ve recently extended the range by adding Always Ultra to our range of PMP, and I know we’re looking to add elements of our hair-care range. In summary our job is to serve our retailers, so for that reason we will continue to support them in the future with PMP.
What brand plans do you have for this year?
One of the most important areas in driving category value is the need to ensure we drive penetration of our brands that help to drive the value of categories. For that reason, driving trial and penetration is at the heart of everything we do. Every business that we have will have base plans with strong media investment in order to raise awareness and drive trial of our products. We launched an enormous amount of new products over the course of the last year.
We have had amazing success with some of the innovation that we’ve introduced, like Lenor Unstoppables, a scent booster product for the washing machine, or Gillette Fusion ProGlide Flexball. What you can expect to see from P&G is a continued strong media push and in-store executions to drive trial. Of course we’ve got more exciting innovations in the pipeline, and I’ll make sure you’ll be the first to know about them!
What plans do you have for ShelfHelp? How has it evolved over the years to help retailers with category management?
ShelfHelp has been around for many years and I think we’ve lead the way in helping independent retailers understand the best ways to lay out and manage categories that give optimal sales results. It has evolved with the times: It started as a paper-based booklet, and then we moved it online. But we recognise that we need to move that on to the next stage: Today’s shop owners are working with tablets, iPads and mobile phones.
So we are currently looking at revamping ShelfHelp to make it mobile-friendly, which will be fantastic. This means retailers will be able to stand in front of a fixture while looking at ShelfHelp, which makes it easier for them to make decisions.
What are the core P&G brands that our readers should be stocking to meet their customer needs?
All of them! Seriously, we trade across a variety of different categories, and I struggle to think of any categories we have that shouldn’t be in a convenience store. What’s more important for convenience retailers is that the range they have within the category meets both the category dynamics and the way people shop, as well as being aligned with the mission that people are on when they are visiting the store. That’s why ShelfHelp is so important. It is about covering bases, which is why retailers need to know the segmentation for any given category and understand which products are the top sellers. For instance if you stock laundry, are you covering a bio product, a non-bio product and a product that delivers great scent? Also, shelves are not elastic, so it’s important that you stock the best and most popular sellers.
What is the biggest challenge for P&G in the year ahead?
I think that the industry is changing at a pace that we haven’t seen for generations. There are so many dynamics that are changing at the moment; the development of the discounters in the UK or the way people changed their shopping habits post-2008. How are things going to evolve as we see delicate signs of the economy picking back up? Are shoppers going to continue to use such a wide array of channels? The days of the one-stop shop seem to have gone away, but is that going to continue? Development of online and direct-to-home deliveries and of course the rise of convenience are dynamics of the changing way in which consumers are shopping, which means that we have to adapt. Our job as a leading manufacturer is to give retailers advice, whatever business they run, about how they best tap into that changing shopper dynamic. I see this as a challenge for us and for the whole industry.
Innovation has always been key to P&G ideas. Is there any NPD that you can share with our readers?
Conventional wisdom has been that these outlets are not the place for NPD, but I would challenge that. There are brand owners such as P&G spending millions to make people aware of brands and innovation, and then you’ve then got retailers with huge traffic flow – so these two sides need to come together. I think that that is not something that we have always done in the past. NPD can increase the basket spend within a convenience outlet and help set retailers apart.
Now, everything needs to be in proportion and I’m not suggesting that convenience retailers create huge front store displays, but I think making selected big-brand launches available for impulse purchase is critical. Let me give you an example of one that we’ve done this year that in hindsight would have done brilliantly within the convenience channel. Lenor Unstoppables is an in-wash scent booster: You add these scent beads to the drum before the wash, and they give an amazing fragrance. This initiative has delivered about four times more than we had anticipated, in fact it’s managed to get to a 6.7% share of the Fabric Enhancers category in only ten months in a very established category it has driven category sales in the millions. Most critically, over 30% of people that buy it are coming back to buy it again, on something that is completely new. In retrospect I can’t think of a better opportunity for a convenience outlet to grow its sales on something this new and disruptive in-store.
Another example would be Gillette. When you run a shaving business and men start growing beards it gets a bit challenging ! There is undoubtedly a fashion-based trend of men growing anything from designer-stubble to big full beards. For the last two to three years, the male shaving blades and razor market has been in decline driven by changes in habits and practice.
But then we’ve launched Gillette Fusion ProGlide Flexball which has been extensively TV-advertised, and it’s really worked. What we’ve seen in the course of the last three to four months since we’ve launched Flexball in February is that for the first time in a number of years the category has actually gone back to growth. So the role of innovation is significant.
Some of the P&G brands are not the cheapest in their category yet customers still buy them. Why is that?
I think it’s about how you define value. Our aim is not to be the cheapest in the category, it is to provide superior performing products that people get a noticeable benefit from. They like it that so much that they come back and buy it again. The definition of value is a mixture of the price and the benefit the person gets from using that product. We think it is the superior benefit of using our products that allows us to command a premium price within the categories which we trade in.
What ambitions do P&G have for the convenience channel?
I think the only thing to say is we will be aiming to get disproportionate growth out of the channel as we see a disproportionate number of shoppers buying there. We aim to help support retailers to fully capitalise on the kind of shopper footfall numbers that they are seeing.
Female grooming and hygiene products have sold well according to our readers. Is that down to consumers shopping more in convenience or retailers getting their fixtures right?
I think it is a multitude of different things. Both of the categories that you called out are good strong growth businesses for us, driven predominantly by innovation. Look at the female grooming market. In 2001, Gillette revolutionised the female shaving market by changing it from a product that looked like a man’s handle that was pink to bringing in a product that was specifically designed for women: the Venus brand. Here we are, 14 years on, and we continue to drive more female shoppers into superior products within the female shaving category. It’s back to the classic P&G model again. The vast majority of women still use male disposable products to shave with. But we know that if we can get women to try Venus, chances are that they will stay.
Now, why is Femcare doing well? One of the key elements which is actually driving the Femcare category at the moment has been us taking the Always brand into the area of adult incontinence. We know that this is a major area of concern for consumers, and we’ve sought to bring a better quality product to the market. We’ve seen already that this has delivered fantastic results for retailers. Of course this is very well suited to the convenience market because of the distress nature of the purchase.
As ever, the journey is not complete and we will be continuing to drive those businesses across 2015 and 2016.
What advice would you give to retailers with limited space to get their category correct?
I think the first thing to say is that having too much range on-shelf leads to enormous shopper confusion. Probably that’s as relevant in a convenience store as it is within a grocery multiple. This is a very broad-brush comment, but I believe that there are too many SKUs across the majority of categories that we play in. Very much part of what we are going to be doing as a business is working with retailers to look at ways of radically simplifying the offering to make sure that we give the correct amount of SKUs.
More and more retailers are having to meet the needs of top-up shoppers or mission shoppers. What advice would you give to make the most of this opportunity?
I think it’s about getting the optimal pack-size right, which means more medium and small-size packs. I also think the question with top-up shoppers and mission shoppers is how retailers can disrupt their time in store. That increases their propensity to trade into different categories. It goes back to what I said earlier about NPD: How can you create that disruption or clever promotions in order to disrupt the top-up mission, which is very defined, in order to increase the overall basket spend?