Espresso: Giles Brook ONE Proven Way to Drive Rate of Sale

0:06There's something about this simplicity which we've touched upon with rate of sale and cutting away 70 % and just focusing on that 30%, a bit like the 80-20 rule. So many people ask me this, they're like, ask about rate of sale, how do you drive the rate of sale? And again, with all of this today, it's been case by case. But if we were to look at the sort of the 30 % that actually moves the needle, whether it's like driving the rate of sale in any retailer, and again, it's case by case, what would you say is that 30 %? Because I think people listening to this are like, right, just get rid of that.

0:44So we've tried, I remember trying so many stupid things that just don't move the needle. Yeah. I mean, just to rewind a bit on that, I think the biggest thing is, is that people get excited about revenue growth, but quite overlooked sometimes that that is often built by distribution, not rate of sale. And it's what I call hollow revenue, because at some point in time, if you're ready... Sorry, go back on that. So you see all these businesses scaling, right? So I've had people put business plans in front of me, which is, they've gone half a million, 1.3 million, 2.5, 6 million. Oh, look at us, a flying guy.

1:15And I'll look at it all, and I'm like, right, can you just show me how your store counts? i.e. number of stores you've gone how many stores you've been across those time periods okay right i can see that now can you just show me the rate of sale oh right okay so actually i can see you got the revenue growth and you're now gone from 200 stores in one to now being 4 000 stores but you're telling me in the main supermarket your average unit rate of sales only three units per store per week yeah that's not going to stay so that's the first thing i say when I look at businesses why I don't I'm sorry but so so because it's a dish so if you build if you're building your revenue and growth of distribution i.e the number of stores you're in yeah and that's obviously also it's called stocking points as well so like if you've got three lines in 3 000 stores you've got 9 000 stocking points that makes sense yes yeah yeah that's all very well that's building scale but if the product in those stores isn't turning i.e your rate of sale isn't turning well enough that will start going backwards at some point and i've seen it time again where we've seen some brands and everybody's going look at their turnover but all of a sudden it's not the rate of sale isn't where it needs to be d-list d-list d-list and all of a sudden the rate of sale sorry the revenue starts dropping back and back and back and that's because they say that first 200 waitress stores the weight the rate of sale was really high because it's in the right stores yeah but they've also rolled out more they've probably rolled out more but they've also just been obsessed with rolling out without actually thinking which is exactly why your question is spot on right i need to obsess about rate of sale so whether you're in tuna stores whether you're in 5 000 stores what is the best way to drive rate of sale is what your question is right and i think fundamentally it's you know it comes down to me which is i don't care what anybody says trying to influence as much as possible at closest proximity to where your product is is is merchandise or stocked is the most important thing right and you know i don't care what anybody says even from a marketing perspective promotions the right promotions i.e if you're not half pricing bog offing but buy one getting free etc etc promotions is the best way to drive trial on your product okay and i still maintain that and that's really important i also say to say to entrepreneurs and startups retails will push very heavily on everyday low price edlp be careful because i can tell you now Now, if you invest all your money in EDLP, you'll make less return than you will by having the right level of RSP or MSSP, whatever you want to call it, which is obviously a recommended selling price.

3:43But then having your promotions alongside it. Because in the UK in particular, we have an ingrained culture which is not going to change, which is people, a lot of people, particularly on secondary brands, will shop wherever there's a red or yellow sticker, right? Because we're all deal junkies, right? and it's very unique to have a brand that there are obviously exceptions but they're very unique to have brands that can maintain and grow a rate of sale without having to promote um and it's all very well saying well drop my everyday price one pound 50 to one pound 20 because that's what the retailer strategy is as part of them fighting things like discounters and stuff you won't get payback on that versus putting that same into that same amount of funding into a promotional plan that gets you down to the same average price quick one guys espresso's got a brand new sponsor unleashed unleashes inventory management software that talks directly to your finance and econ software we use unleashed daily islands i bloody love it we've got our admin time in half saving approximately 30k a year why use it save money save headaches save stress get granular clarity on your margins no way stock is don't miss availability look your favorite brands literally use unleashed as their backbone candy kittens tiny rebel trick always it religiously look there's a link in the show notes please feel free to book a call with josh and his wonderful sales team at unleashed they're amazing even nothing comes of it and even better news you'll get your first month free if you reference hungry thank you how much is too much promo because i think again that can go well depends on the category depends on the category juice soft drinks 68 volume sold on deal right it's frightening ice cream is 90 volume sold on deal but then you can go into a category um you know in like household for example toilet roll or something like that and actually that's probably more like 30 40 percent so i think interesting yeah changes by changes by category it's not just the amount sold on deal it's also the average discount you have to give so if you look at um this certain categories where actually they just heavily discount because that's what they have to do it's always on like a half price or bob a good example is it's like christ toothbrushes and stuff like that you always see you know the big pngs in this world and stuff like that and and you know you'll see the whole time again lots of those items on half price no different than obviously things like you know razor blades and stuff are quite often you know the actual the razors are on massive discounts because guess what you get somebody to buy the razor and then the blades is where the money you know the margin comes in yeah so i think it varies by um by category but this is where you also this where the data can help you because when vitacoco fall and took on innocent and naked and etc and zico which was another pepsi brand um we actually went too low on average price we went head to head with innocent and with those other brands and just promote it over promote it we then had to over a period of time nudge that back up to what we realized was that because we basically were buying volume we didn't need to buy we're discounting more than we needed to because the data was showing us we didn't need to go to that low which was actually quite humbling because you know we were very respectful of innocent etc but we then use our own analysis and again in this way this is where insights comes in and we then worked out what's the right average price for us to be successful going forward so promotions is a key way obviously sampling and stuff in store so particularly where you've got a product where you know you'd really need somebody to taste it because that's one of the biggest things which is it's costly but some products you don't consumers don't get how good they are until they actually taste it right yeah and it's already all talking on a billboard or whatever on a shelf bar coming out how good it is.

7:12It's like, you know, when we had Bear, we were just sampling everything. I mean, we did consumer shows 46 out of the first 52 weekends of the year because that was the only way we could basically get them to taste it. But also importantly, explain to them what the difference was between this versus the fact everything else they were already buying was more like sweets, you know, confectionery because it was gloop coming out of an extruded line. It wasn't softly baked fruit. And then I think the other big tool you've got these days as well is that a number of retailers obviously have their loyalty cards but also have their you know tesco.com sainsbury's.com it's you know buying search terms that are key key for you so you know for example with buy with me whether it's granola or cereal or gut health or you know digestive whatever digestive health whatever buying those search terms and finding ways you can actually specifically target your consumer or else knowing what i've talked about earlier what else is in your basket basket and doing partnerships or else making your brand pop up with a promotion next to something that somebody already puts in their basket all those things about big precision drill that's what i advise and where i get nervous is when i see brands which are still in early days but maybe let's say they're broken into a thousand or five hundred supermarket stores yet they're doing advertising on the uh on the on the tube or on the underground you're like how much does that cost you and okay you're only available in a thousand stores across across the uk how are you going to get payback on that because nobody knows where to buy your product just spend that money where you are because you know then if you can influence a purchase then you've got a good chance that person will come back and repurchase because they know where to buy it from thank you so so much for listening it honestly means the world to me i hope you enjoyed your morning coffee and go and have an amazing day let's be having ya if you want the full episode it will be in the show notes and it will be in the show notes the full episode thank you so much please leave friends as well it means the world to me You