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The Future of Category Analytics – Win with Shoppers.

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Presentation on theme: "The Future of Category Analytics – Win with Shoppers."— Presentation transcript:

1 The Future of Category Analytics – Win with Shoppers

2 ACOSTA SALES Headquarter Selling Sales Customer Relationship Management Joint Business Planning AMG Strategic Advisors Strategic Consulting Shopper Insights Market Research Advanced Analytics Business Insights Category Management Space Management Business & Retail Analysis Loyalty Analytics The Agency at AMG Integrated Marketing Solutions Shopper Marketing Retail Merchandising Continuity Sets Projects AMG Activation In-store Media, promotion and Communication Business Process Outsourcing Order to Invoice Invoice to Cash Mosaic Assisted Selling Training Experiential Marketing Interactive 2 Who is Acosta

3 Discussion Topics A quick look at the evolution of category analytics The need to focus on the shopper New skills and methods needed Bret Thurston Sr. Manager Category Development – Hillshire Brands

4 Shopper Based Offers Neighborhood/ Precision Marketing Neighborhood/ Precision Marketing Assortment customization Private Brands as a Point of Difference Neighborhood Stores- Multi Formats - Everything Old is New Again(with a twist) Past Future 1980’s Local Store Control National Strategies Local Market Advertising One Plan for the Entire Chain Limited Assortment Assortment as a Differentiator Private Brands as a Point of Difference Private Brands as a Margin Play Small Neighborhood Stores Larger Super Stores The industry is evolving back to a local shopper focus Customer focusEfficiency focus “Shopper "focus

5 Category Management Process-Driven Multiple Templates 5 New Metrics like GMROI, DOS, Opp Gap, Market Coverage, etc

6 Cut the store into Micro units versus looking at how Shoppers were buying across the store Refrigerated Juice Shelf Stable Juice

7 7 Loyalty programs introduced New metrics like top shopper, trips, frequency, basket affinity, conversion, etc

8 8 Most do not align loyalty analytics to the category management process Who are my Shoppers? Segment Loyalty Other What are their purchase Behaviors? Trips Frequency Basket Programs Loyalty offers Category Priority, Roles and Strategies and Tactics. Assessment Assortment, Pricing, Merchandising, Shelf Placement, and Scorecards Promotions Price reductions Features Displays Loyalty AnalyticsCategory Management

9 Need to move analytics from just a category focus to shopper focus

10 Our process is to continue the transition from traditional category management as retailers place more focus on their shoppers Driven by shopper insights along the path to purchase, and is more holistic to include the aisle, department, and store. TODAY YESTERDAY CATEGORY TA CATEGORY ROM Consumer Store Category Store Category Store Category Path to Purchase Convenient, easy to shop, good variety. Low prices, especially on HBC and Paper Products. High quality products, fun to shop, low prices. Convenient, easy to shop, good variety, low prices. Home Delivery

11 11 New shopper based analytical approach Discovery Phase Understand the macro- environmental trends impacting Shoppers Identify Shopper traits of the Category & Brand Identify Shopper traits of the Retailer and their position in the marketplace Opportunity Phase Measure the retailer on the basis of Shopper KPI’s Evaluate the size of the opportunity based on favorable changes Define a strategic purpose Diagnostic Phase Measure the Retailer and Category on Shopper KPI’s Measure the Category and Brand on Sales KPI’s Dive deeper on the levers truly impacting the business Execution Phase Outline the key insights from each phase Establish importance & implications of each insight Provide recommendations to achieve a positive return Report Progress & Adjust As Needed StrategicTactical

12 12 Discovery Phase Objective: Better understand who the shopper is at the Product and Retailer level, how they purchase the Product and shop the Retailer, and identify environmental issues that are affecting purchasing decisions. Product Shopper DNA Retailer Shopper DNA Environmental Influence Who does my product appeal to? What need do I fulfill? How am I purchased? How/when am I consumed? Who does my store appeal to? What is my position in the marketplace? How is my store shopped? What external factors are affecting households? What is important to the shopper? What does the path to purchase look like? What Discoveries can be made:

13 4/18/2015 Slide 13 Key Trends Impacting Our Industry 1.Shopper Landscape is Changing 2.Digital is Here and Growing Quickly 3.Retail Landscape is Changing 4.Marketing Spend is Shifting 5.Success is Driven by Innovative Growth Strategies

14 Tale of Two Shoppers Millennial Generation Boomer Generation Multi- Cultural General Population Generational Multi-cultural <$45k per year >$100k per year Economic Source:AMGSA WBTB

15 “Older consumers tend to use the new technology to do old things. Younger consumers use the new technology to do new things.” -Antone Gonsalves, “Gen Y Taking Technology to New Level” Shoppers

16 4/18/2015 Slide 16 Digital is Here and Growing Quickly The typical consumer spent 4% of their grocery budget over the internet 52% of shoppers are using digital tools on the path to obtaining grocery goods 32% of shoppers said they reclaimed online coupons 31% used mobile phones for making lists, searching for recipes, and similar activities 23% checked prices at multiple stores on the web before buying Shoppers are buying online mainly for convenience (both shopping and delivery) and lower prices The Web Has “Quietly Encroached” on the Grocery Sector

17 Many changes in how shoppers view the shopping landscape Value Stores Online Replenishment Grab & Go at CVS Dollar General (*Prototype) Walgreens Expands Fresh Target pFresh Increased Food Offerings Urban / multiple formats Source: Kantar Retail, Nielsen

18 18 Opportunity Phase Objective: Establish consistent measures to benchmark Retailer store performance And identify areas of opportunity. Define a strategic purpose and quantify the value potential for the retailer. Buyer ConversionShare of WalletLeakage Is the Retailer converting Shoppers into buyers? What is the value of increasing conversion rates? How much of the Shoppers’ spend is captured by the Retailer? If the sale is not captured at the Retailer, where is it going? How does the competition treat the category?

19 19 Starting with a more holistic view shows shoppers are buying different categories more often at competitive retailers These are important categories that drive trips and larger baskets

20 20 Source: IRI Reviews Latest 52 WE 1/22/12 Comparison of top 25 categories Retailer

21 21 Source: Nielsen Channel Facts L52 WE 7/2/2011, Nielsen Planners 52 Weeks Ending 12/24/2011 If Retailer could convert Pet Food buyers at the same rate as competitors, sales would increase by $4.5MM. Retailer buyer conversion = 33.7% Avg conversion for other similar retailers= 40.2% $693,025 x 6.5= $4.5MM

22 22 Stores less than three miles Stores more than three miles Correlation between Pet sales to Supercenter proximity Sales 24% higher Opportunity to drive additional sales in stores within three miles of Supercenter Source: ACNielsen: Spectra

23 23 Diagnostic Phase Objective: Evaluate category performance on the basis of Shopper and traditional sales metrics to identify the levers of sales results.

24 24 Execution Phase Objective: Articulate the key insights driving the business, the opportunity if addressed, and provide a clear and actionable recommendation that can be followed to close the gaps. Discovery Opportunity Diagnostic WHAT do we know? WHY is it important? NOW WHAT do we do? What is the cost?

25 Bret Thurston Category Leadership

26 Hillshire Brands Customer Development Focus Shopper Insights oShopper Integration into Category Leadership Platform oPromotional Shopper Insights Category Leadership Shopper Marketing oShopper ROI’s via Shopper Marketing Development oLink Insights to Solutions Capability oChange Management oImproved Communication oSpecific KPI improvement o Shopper Informed o Pricing and Promotion Expertise o KPI’s Against Shopper and Category

27 Advantaged Process for Shopper Development Shopper Insights Category Leadership Precision Merch. Shopper Marketing Consumer Needs o Market Structure o Custom Shopper & Trip Segmentation o Proprietary Insight into Shopper Barriers o Enhanced Platforms o Infused by Shopper Insight o Adv. Insight into Value & Promotion o Level Up customer loyalty o Shopper/Demand Based Assortment o Shelf Optimization and Theater Driven by Barriers o Merge Shopper, Category, and Retailer Needs with Insight o Supported by Well-developed Marketing and Advertising Support

28 The Shopper’s Journey o The journey is where we learn about consumer & shopper’s emotional and rational dynamics and identify the shopper’s triggers, barriers and opportunities Influence of occasions and cultural assumptions about the category Occasion, category and brand implications Importance of promotion which drives channel and store choice Understanding of the trip mission How the store frames the choice and directs behavior Store layout Assortment modeling, Planograms Fixture design Shopper Marketing Programs How consumption, storage, packaging delights or frustrates Promotional ROI Product developments Packaging development Pre-Shop Shop Post Shop

29 Hillshire Brands’ Commitment to Shopper Focused Category Leadership -Shopper Capabilities enable our strategies -Customer Focused engagement strategies enable our partnerships -Shopper Focused activation enables our success

30 Hillshire Brands Category Leadership Guiding Principles Strong Category Leadership platforms informed with shopper/category/customer insights Clear understanding of and alignment to the customers’ category planning cycles, operational requirements, and category goals Investment in customer-facing category teams charged with driving retail partnerships and customizing our category leadership platforms to create unique activation plans for customers Disciplined approach to measuring results in order to ensure success

31 Hillshire Brands Building Capability to Ensure reaches all customers Integrate & Manage Data Develop Insights & Recommendations Customize. Present. Win. POSACNielsen IRIPanelShipments Data Analysts Business Support, IT Acosta Partners Key Customers Presentation Updates Data Updates

32 Enable customization and ensure ROI -Align with the customer to a level we are able to support well -Fully engage in the areas where it makes sense to invest -Ensure that we have a point of view on each of the customer’s strategies and tactics -Become experts in areas that drive our business model forward with our customers


34 Closing thoughts

35 35 Industry needs to focus on delivering new analytics to drive business insights Multiple sources, store level upc to total store, syndicated, panel, third party observation, etc. Common when possible, automated, national and local Basic analysis, tell what the data says, Smart text when possible, getting to the who, what, when, and where Rich Diagnostics driving hypothesis and begin understanding the why and prescribing what next

36 Need to develop new metrics and common language Item ranking retailer vs market Item ranking retailer productivity by point of distribution * High ACV is>=50%, High Velocity is SPPD > Ctgry avg. WATCH OUT High ACV/Low Velocity CONTTO GROW High ACV/High Velocity ATRISK Low ACV/Low Velocity GROW LowACV/High Velocity ACV Velocity ACV Old New

37 A learning environment is critical for consistency and to deliver the insights to participate as an “advisor” 37

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