The Realities Of Egypt's Retail Landscape
A sales strategy starts from the minute a price is placed on a product and can only be counted as successful when the consumer completes the purchase. As shopper influences keep changing, consumers are continuously updating their process for making purchase decisions, and Egyptian consumers are no exception.
Over the last few years, Egyptian consumers have made many purchase decision changes since the currency devaluation in late 2016. And manufacturers and retailers have tried to keep up with a mix of innovation strategies, price and promotional offers across the fast-moving consumer goods (FMCG) industry.
“The FMCG market spend in Egypt continued to grow throughout 2018, with value increases in the double digits due to high inflation. Volume growth has started to recover from the significant earlier losses, as inflation, whilst still high, has eased from more than 30% two years ago, providing some relief to Egyptian consumers,” said Nihal El Koussi, Managing Director, Nielsen Egypt & Levant.
But while consumer spending is on the rise, are manufacturers and retailers using their sales strategies to effectively reach these shoppers? In a recent event in Egypt attended by clients across several categories, Nielsen leaders from around the world showcased where sales strategies in the Egyptian market need attention.
“Egypt’s FMCG market is growing at the rate of 17% on a weighted average for the high selling categories in market. But we see manufacturers losing so much in wasted opportunities—be it in distribution, pricing and promotion, on shelf—and essentially diverting from their sales strategy,” noted Rasha Sultan, Sales Effectiveness Execution Leader, Nielsen North Africa & Levant.
The reality of the Egyptian retail landscape is one that’s still traditional trade heavy, with some districts accounting for significantly more sales than others. These factors present several challenges with in-store sales strategies for products. At the event, the speakers shared a few facts on what really happens in the Egyptian market.
While distribution, assortment and shelving, and inventory account for a lot of wasted effort and lost opportunities, pricing is the only element of the marketing mix that produces revenue. In fact, 67% of promotions globally do not break even. In fact, there are a number of common yet costly mistakes that can be avoided.
SO, WHAT IS THE PERFECT SALES STRATEGY?
The right sales strategy depends on each category and product, we’ve discovered that the process to determine that strategy is largely the same for all.
FMCG companies want to be on target to reach the right stores in the ‘golden districts’ that bring about the majority of sales. Retailers aim to be on the shelf and on price, so that customers find what they want at enticing prices and promotions. Trade marketing and channel sales directors are driven by being on the mark in ensuring in-store execution bring up lots of sales, and not letting out-of-stocks or poor execution ruin performance. Sales leaders strive to be on strategy using all the levers to drive incremental sales.
Whether the key is in price, display, assortment, distribution or availability; the answer is in the numbers.