Impulse Sales and Merchandising at the POS

While shopping lists are an essential part of any major food & grocery purchase, a significant part of the purchase decisions take place in-store. These are unplanned purchases often termed as impulse buys. The number of impulse buys looks even better for a brick and motor retailer, compared to ecommerce sites. According to a research by A.T. Kearney, 40 percent of consumers spend more money than they had planned in-stores, while only 25 percent reported online impulse shopping. To influence impulse buys retail stores wish to increase visibility for products. However, the traditional retail store owners feel challenged to implement such PoS visibility owing to space constraints.

The traditional retail formats have higher incidences of impulse purchases. However, impulse purchases at kirana stores function under different dynamics. Purely, because of lack of space and inability to customize by store/ consumer profile. It’s costly to print material, send a merchandiser and sometimes an auditor to cross check if the visibility indeed happened at store.


About 80% of FMCG retails sales takes place at the kirana stores. Adding more strength to PoS visibility at kirana stores is important to FMCG brands. A digitized PoS serves just that. It puts the traditional retailers at par with bigger stores and e-tail chains. An LED screen, audio visually showcasing product promotions can significantly impact the way products are promoted at PoS. It creates a digital real estate (shelf) and solves a space crunch problem. Placed at a strategic location within the kirana store, these screens can manage to instantly grab shopper attention and retain it for a considerable time period. The promotions carried out on these LED screens can be controlled by the kirana store owner, who can decide based on consumer insights and brand promotion compliance. Such screens have shown to be significantly impactful for low-priced products which are a good choice for impulse buys.

“Jo Dikhta hai woh bikhta hai” goes the saying and it is the ultimate sanctimonious truth for the FMCG retail industry. Adding the technology platform to a brand’s PoS merchandising can take its impact a notch higher up.The impact further bears an incremental advantage for kirana stores which accounts for the largest chunk of FMCG retail sales.

Brands and traditional retailers now need to include digital PoS marketing as an integral part of merchandising strategy and store sales. With the PoS merchandising going the digital route, marketing innovation is set to take a different route. The next level of evolution will perhaps be seen in-store, on-screen.

The Future of Traditional Retail is Digital


The retail stores we know today are undergoing significant transformation. With a spike in the use of tablets and mobile phones among consumers in the developed economies, the rules of the game are changing rapidly. Brands are on a look out for newer ways to implement a digital strategy that helps bridge shopper engagement with product/service fulfillment. Moreover, new technologies are enabling retailers change brick and mortar store operations, giving the store greater flexibility and efficiency.

By utilizing digital technology, traditional retailers can now offer value-added services, transforming shopping into a comprehensive, enjoyable experience. The in-store technologies keep track of items purchased along with other relevant details, helping the store owner with real time inventory management. It also can help brands perform a inventory status on these stores and their relative performance vs competition.

Technology with added value

So how does embracing technology help traditional retailers engage better with consumers? To understand it better, its crucial to grasp significance of digital transformation. It revolves around the needs of the shopper, far exceeding mere digitization of the sales process.

Technology not only enhances the shopping experience it helps collect actionable shopper data and also serves as an extension of the brand. Once entering the store, advanced technology might be at work in ways most shoppers may not even realize. Mentioned below are a few examples of it precisely works:

  • Point-of-Sale (PoS): With a powerful contextual PoS display, brands can directly engage with end consumers reaching out to them with latest schemes/ consumer offers.Furthermore, it helps the brands track its performance and penetration in the real time getting a hang of consumer’s basket data and buying behavior in turn suggesting and promoting relevant products.


  • Display Technology: Digital displays helps get shopper attention. Digital signage’s enhances shopper experience because it informs them of assortment and promos and drives impulse purchase. In a dark and poorly lit traditional store environment, the bright screen serves a brilliant purpose of visual disruption. Its also low on energy consumption and makes a great choice to display brand’s message.


  • Mobile Application: A mobile app is an excellent way to improve the shopper experience and it also acts as an extension of a retailer’s brand and offering features. The various possibilities of a having an mobile application include in-store engagement and special offers via push notifications; customized shopping experiences; and mobile payments from shopper devices.It has been widely observed that retailers with mobile-friendly sites have a greater brand visibility, more sales, and higher website traffic.

Omnichannel presence

In today’s environment, it’s not enough to deliver a great online experience; one has to strive to give the shopper a reason to come to the store too. It is important to blend the physical and digital worlds to create personalized, ongoing dialogues with consumers. Leveraging every other opportunity, be it in-store or online- helps in nurturing the relationship. Regardless of what products retailers offer, the standard expectation of every traditional retail experience is to deliver personalized experience catering to consumer tastes. The aim always is to use amenities found in the digital world to enhance the experience of shopping in a traditional retail outlet. This harmonious blend of the physical and digital world helps nurture the relationship between brands, retailers and consumers.


It is a truly exciting time to be a traditional retailer as they seek to capitalize on the massive changes in consumer behavior driven by mobile devices and digital technology.Traditional retailers infusing digital features into the store environment compete more effectively with their online counterparts. They can deliver better, more complete, shopping experience. The brands, on the other hand, that offer cohesive, personalized experiences with every interaction will be rewarded.

Reinventing Distribution

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Indian retail market is expected to become world’s fastest growing developing market in the world, in a few years. As per 2015 Global Retail Development Index shared by AT Kearney, India’s retail market is expected to expand to USD 1.3 trillion by 2020. The estimated retail sale in India, in 2015, was about 925 billion USD. According to retail pundits, India’s retailing sector is at an inflexion point. However, the country’s retail growth story would be incomplete without the inclusion of the huge unorganized retail sector.

The number of Kirana stores in India is estimated to be around 10 million. It essentially translates into about 1 store for every 120 consumers. The penetration and reach these stores enjoy is huge and is giving the bigger e-tail brands a significant competition. However, since the traditional retail sector in India is highly fragmented, with over 90% of from unorganised retailers, the connect between the brand, consumer and the retailer is negligible. Furthermore, 90% of the products have no visibility in store. Most current media only build brand equity with no call to action in store. But most purchases need a call to action, hence the value of “Jo Dikhta Hai, Woh Biktha Hai”. Brand’s connect to retailer too is layered with many distributors / intermediaries, which make the distribution and supply chain network a complicated system.

The existing retail distribution networks in India are often forced to work with several small and often unreliable players. With layers of distributors and wholesalers, problems around control on credit and distribution are endemic. As thousands of small vendors handle the last mile of the delivery chain, most entrepreneurs find it hard to reach Indian consumers making distribution a crippling bottleneck.

There is an urgent need to update existing distribution models to keep pace with today’s competitive, connected market. As many organisations, manufacturers and channel partners are vying for better returns and faster growth, revamping the distribution model could well be the ticket for improved sales and growth in market share. Technology can here help bridge the wide gap between retailers, distributors and consumers, while adding value to individual stakeholders.

A typical distribution model in the FMCG space includes manufacturers, sales-distribution-17-728bigger distributors, sub distributors, wholesalers and finally the retailers. The distribution channel offers a system to push the sale, in form of promotions, schemes or offers. However, often this sales communication gets lost mid-way and may not reach as effectively as wanted, to the end consumer. Moreover, there is very limited and often delayed feedback on the product or promotion that a manufacturer can expect from a wholesaler or distributor. A retailer, on the other hand, has a finger on the pulse of the consumer. Conveying the promotions, offers and schemes to the consumer is also in his own direct interest. Consequently, it is quite prudent for brands to have direct relationship with these traditional retailers instead of relying solely on the long and tedious distribution channel.  Technology can provide the much needed connect.

Ironically, the technology interface usually ends almost as soon as the product enters the market. From channel partners to larger distributors, then to smaller distributors, wholesaler, the product finally lands at a retail shop physically closest to the consumer. The entire distribution chain runs almost in a silo, for a segment that accounts for the maximum sales for FMCG retail sector. The irony doesn’t end here. The two most important and crucial connects for a brand – viz. the shopkeeper and his shoppers are farthest away from the brand or the manufacturer. The bigger the brand, the larger the distance.

What happens when technology is placed at the center of this ecosystem? Consider this – A shopper makes a purchase at a local kirana store. The items purchased and other relevant details get clocked into a digitized system. A database of numerous such purchases can be accessed directly by the brands on a real time basis. It would give the manufacturer an on-ground reality check on how his products, promotions and offers and converting into sales, at the point of sale. While technology has always known to create transparent communication mechanism, this one will also change the dynamics of traditional retail. Though the distribution chain and process will remain the same, the real time insights can make the entire process proactive and data driven.  From minute to minute details of out-of-stock data to best performing promotional offers, the entire distribution network soon becomes an active participant of the sales process instead of operating in a silo.

The Indian FMCG sector operates with a complex distribution network. To increase the market penetration and leverage the existing network, brands need to reach out to consumers at lower end of the economic pyramid, without increasing the logistics cost. Technology is a perfect answer to this puzzle.