Presentation on theme: "The Future of Category Analytics – Win with Shoppers"— Presentation transcript:
1 The Future of Category Analytics – Win with Shoppers
2 Who is Acosta ACOSTA SALES Headquarter Selling AMG Strategic Advisors Customer RelationshipManagementJoint Business PlanningAMG Strategic AdvisorsStrategic ConsultingShopper InsightsMarket ResearchAdvanced AnalyticsBusiness InsightsCategory ManagementSpace ManagementBusiness & Retail AnalysisLoyalty AnalyticsThe Agency at AMGIntegrated Marketing SolutionsShopper MarketingRetail MerchandisingContinuitySetsProjectsAMG ActivationIn-store Media, promotionand CommunicationBusiness ProcessOutsourcingOrder to InvoiceInvoice to CashMosaicAssisted SellingTrainingExperiential MarketingInteractive
3 Discussion Topics A quick look at the evolution of category analytics The need to focus on the shopperNew skills and methods neededBret ThurstonSr. Manager Category Development – Hillshire Brands
4 - Everything Old is New Again(with a twist) The industry is evolving back to a local shopper focusPast1980’s2012+FutureLocal Store ControlNational StrategiesShopper Based OffersLocal Market AdvertisingOne Plan for the Entire ChainNeighborhood/Precision MarketingLimited AssortmentAssortment as a DifferentiatorAssortment customizationPrivate Brands as a Point of DifferencePrivate Brands as a Margin PlayPrivate Brands as a Point of DifferenceThere has been an interesting dynamic in the business cycle - the business has evolved with technology and gone almost full cycle over the past 15 yearsMoving from no data – to data- lead to centralization which left a gap in the local markets for the larger retailers. We saw several retailers make mistakes by not understanding the differences from one state to another and casing shopper flightBetter technology and date have allowed a centralized control with a localized offeringThis has lead us full circle with strategies, adverting and assortment.This new understanding and thought process is also leading to new neighborhood clusters, banners, and formats.Small Neighborhood StoresLarger Super StoresNeighborhood Stores-Multi FormatsCustomer focusEfficiency focus“Shopper "focus- Everything Old is New Again(with a twist)
5 Category Management Process-Driven Multiple Templates 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 JuiceShelf Stable Juice
7 Loyalty programs introduced New metrics like top shopper, trips, frequency, basket affinity, conversion, etc
8 Most do not align loyalty analytics to the category management process Who are my Shoppers?SegmentLoyaltyOtherWhat are their purchase Behaviors?TripsFrequencyBasketProgramsLoyalty offersCategory Priority, Roles and Strategies and Tactics.AssessmentAssortment, Pricing, Merchandising, Shelf Placement, and ScorecardsPromotionsPrice reductionsFeaturesDisplays
9 Need to move analytics from just a category focus to shopper focus 4
10 Our process is to continue the transition from traditional category management as retailers place more focus on their shoppersStoreCategoryTODAYYESTERDAYPath to PurchaseCATEGORY TACATEGORY ROMConvenient, easy to shop, good variety.ConsumerStoreCategoryHigh quality products, fun to shop, low prices.Home DeliveryStoreCategoryConvenient, easy to shop, good variety, low prices.Low prices, especially on HBC and Paper Products.Driven by shopper insights along the path to purchase, and is more holistic to include the aisle, department, and store.
11 New shopper based analytical approach StrategicTacticalDiscovery PhaseUnderstand the macro-environmental trends impacting ShoppersIdentify Shopper traits of the Category & BrandIdentify Shopper traits of the Retailer and their position in the marketplaceOpportunity PhaseMeasure the retailer on the basis of Shopper KPI’sEvaluate the size of the opportunity based on favorable changesDefine a strategic purposeDiagnostic PhaseMeasure the Retailer and Category on Shopper KPI’sMeasure the Category and Brand on Sales KPI’sDive deeper on the levers truly impacting the businessExecution PhaseOutline the key insights from each phaseEstablish importance & implications of each insightProvide recommendations to achieve a positive returnReport Progress & Adjust As Needed
12 Environmental Influence Discovery PhaseProduct Shopper DNARetailer Shopper DNAEnvironmental InfluenceWhat Discoveries can be made: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?Objective:Better understand who the shopper is at the Product and Retailerlevel, how they purchase the Product and shop the Retailer, andidentify environmental issues that are affecting purchasing decisions.
13 Key Trends Impacting Our Industry Shopper Landscape is ChangingDigital is Here and Growing QuicklyRetail Landscape is ChangingMarketing Spend is ShiftingSuccess is Driven by Innovative Growth Strategies4/12/2017Slide 13
14 Tale of Two Shoppers Generational Economic Multi-cultural MillennialBoomer GenerationGenerational<$45k per year>$100k per yearEconomicOne of the major themes of our recent publication is the “tale of 2 shoppers”We looked at this from 3 different segments of the population to better understandTheir attitudes and behaviors toward shopping, technology and a number of other things.Multi-CulturalGeneral PopulationMulti-culturalSource:AMGSA WBTB
15 Shoppers“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 Digital is Here and Growing Quickly The typical consumer spent 4% of their grocery budget over the internet52% of shoppers are using digital tools on the path to obtaining grocery goods32% of shoppers said they reclaimed online coupons31% used mobile phones for making lists, searching for recipes, and similar activities23% checked prices at multiple stores on the web before buyingShoppers are buying online mainly for convenience (both shopping and delivery) and lower pricesThe Web Has “Quietly Encroached” on the Grocery Sector4/12/2017Slide 16
17 Many changes in how shoppers view the shopping landscape Grab & Go at CVSDollar General (*Prototype)Walgreens Expands FreshTarget pFreshIncreased Food OfferingsValue StoresOnline ReplenishmentUrban / multiple formatsChanges in the Competitive Landscape. In the years 2008‐2011, capital expenditure allocations dropped because of economic uncertainty. Retailers delayed, altered, or dropped major retail development projects. In 2012, all indications point to a flurry of new, high profile development projects. In nearly every corner of the country, new stores or remodeled stores will pop up presenting new challenges in understanding the local competitive landscape.Value Stores. Value stores such as Dollar General, Family Dollar, and Aldi have seen remarkable performances over the last few years. They have consistently turned this growth into larger and larger investments in stores could see the largest number of values stores opened of any year – even better than the pace set in the early period of growth (1997‐2004).Increased Food Offerings. Drug, Dollar, and Mass continue to evolve to offer more assortment in food in order to drive trips (away from Grocery and Mass Supercenters, and even Club).Dollar General prototypeCVS Grab and GoWalgreens expanded freshTarget pFreshOnline Replenishment Models. A large number of retailers are investing a greater share of their capital in online replenishment programs that are connected either directly to distribution centers or to stores. Amazon.com opened 17 fulfillment centers in They are increasing spend for Target re‐launched their website in 2011.Urban / Small Box. Retailers such as Walmart and Target are investing heavily in “urban food /mass merch convenience” – at an experimental level. The first ‘CityTargets’ will open in National chain drugstores – Walgreens and CVS – continue to roll out urban convenience at a fast rate. Fresh and Easy launched a new format in LA- 4,000 sq feet urban grocery store.=> Net Effect. Retailers big and small will see many new ideas come to life in Retailers are starting to invest again could break records for the highest levels of capital expenditures. Among the Top 15 food retailers, Kantar Retail expects Capital Expenditure to nearly reach 2008 levels of spending.Source: Kantar Retail , Nielsen
18 Opportunity Phase Objective: Buyer ConversionShare of WalletLeakageIs 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?Objective:Establish consistent measures to benchmark Retailer store performanceAnd identify areas of opportunity. Define a strategic purpose andquantify the value potential for the retailer.
19 Starting with a more holistic view shows shoppers are buying different categories more often at competitive retailersThese are important categories that drive trips and larger baskets
20 Comparison of top 25 categories RetailerSource: IRI Reviews Latest 52 WE 1/22/12
21 If Retailer could convert Pet Food buyers at the same rate as competitors, sales would increase by $4.5MM.Supercenters and pet are capturing roughly half of all lost Pet Food sales from Schnucks.Value and assortment (esp from Pet) are most likely driving lost sales.Retailer buyer conversion = 33.7%Avg conversion for other similar retailers= 40.2%$693,025 x 6.5= $4.5MMSource: Nielsen Channel Facts L52 WE 7/2/2011, Nielsen Planners 52 Weeks Ending 12/24/2011
22 Correlation between Pet sales to Supercenter proximity Opportunity to drive additional sales in stores within three miles of SupercenterCorrelation between Pet sales to Supercenter proximitySales 24% higherStores less than three milesStores more than three milesSource: ACNielsen: Spectra
23 Diagnostic PhaseObjective: Evaluate category performance on the basis of Shopperand traditional sales metrics to identify the levers of sales results.
24 Execution PhaseOpportunityDiscoveryDiagnosticWHAT do we know?WHY is it important?NOW WHAT do we do?What is the cost?Objective: Articulate the key insights driving the business, theopportunity if addressed, and provide a clear and actionablerecommendation that can be followed to close the gaps.
26 Hillshire Brands Customer Development Focus Category LeadershipShopper MarketingCapabilityShopper InsightsShopper InformedPricing and Promotion ExpertiseKPI’s Against Shopper and CategoryShopper Integration into Category Leadership PlatformPromotional Shopper InsightsShopper ROI’s via Shopper Marketing DevelopmentLink Insights to SolutionsChange ManagementImproved CommunicationSpecific KPI improvement
27 Advantaged Process for Shopper Development Market StructureCustom Shopper & Trip SegmentationProprietary Insight into Shopper BarriersSupported by Well-developed Marketing and Advertising SupportShopper InsightsCategory LeadershipPrecision Merch.Shopper MarketingConsumerNeedsEnhanced PlatformsInfused by Shopper InsightAdv. Insight into Value & PromotionLevel Up customer loyaltyMerge Shopper, Category, and Retailer Needs with InsightShopper/Demand Based AssortmentShelf Optimization and Theater Driven by Barriers
28 The Shopper’s Journey Pre-Shop Shop Post Shop The journey is where we learn about consumer & shopper’s emotional and rational dynamics and identify the shopper’s triggers, barriers and opportunitiesPre-ShopShopPost ShopInfluence of occasions and cultural assumptions about the categoryOccasion, category and brand implicationsImportance of promotion which drives channel and store choiceUnderstanding of the trip missionHow the store frames the choice and directs behaviorStore layoutAssortment modeling, PlanogramsFixture designShopper Marketing ProgramsHow consumption, storage, packaging delights or frustratesPromotional ROIProduct developmentsPackaging development
30 Hillshire Brands Category Leadership Guiding Principles 4/12/ :01 AMHillshire Brands Category Leadership Guiding PrinciplesStrong Category Leadership platforms informed with shopper/category/customer insightsClear understanding of and alignment to the customers’ category planning cycles, operational requirements, and category goalsInvestment in customer-facing category teams charged with driving retail partnerships and customizing our category leadership platforms to create unique activation plans for customersDisciplined approach to measuring results in order to ensure successNot just shopper… shopper, category, and customer.Align to customers business needs.Day00_Speaker_Topic_v00.pptx
31 Integrate & Manage Data Develop Insights & Recommendations Hillshire Brands 2012Hillshire Brands Building Capability to Ensure reaches all customers4/12/ :01 AMPOSACNielsenIRIPanelShipmentsIntegrate & Manage DataDevelop Insights & RecommendationsCustomize. Present. Win.Data UpdatesPresentation UpdatesData UpdatesHillshire BrandsCategory LeadershipKey CustomersData Analysts Business Support, ITAcosta PartnersWal-Mart, Kroger, Safeway, SuperValu, strategic growth accounts…Day00_Speaker_Topic_v00.pptx
32 Enable customization and ensure ROI Hillshire Brands 20124/12/ :01 AMEnable customization and ensure ROIAlign with the customer to a level we are able to support wellFully engage in the areas where it makes sense to investEnsure that we have a point of view on each of the customer’s strategies and tacticsBecome experts in areas that drive our business model forward with our customersAlign to what customer needs… align strategically.Invest in capabilities completely where return is.Have point of view and broader perspective across customer strategiesDo not give the house away…Become experts in areas that drive business… and meet customer objectives.Day00_Speaker_Topic_v00.pptx
35 Industry needs to focus on delivering new analytics to drive business insights Rich Diagnostics driving hypothesis and begin understanding the why and prescribing what nextInsightsBasic analysis, tell what the data says, Smart text when possible, getting to the who, what, when, and whereObservationCommon when possible, automated, national and localReportingMultiple sources, store level upc to total store, syndicated, panel, third party observation, etc.Data
36 Need to develop new metrics and common language Item ranking retailer productivity by point of distributionItem ranking retailer vs market* High ACV is>=50%, High Velocity is SPPD > Ctgry avg.WATCH OUTHigh ACV/Low VelocityCONTTO GROWHigh ACV/High VelocityATRISKLow ACV/Low VelocityGROWLowACV/High VelocityACVVelocityACVOldNew
37 A learning environment is critical for consistency and to deliver the insights to participate as an “advisor”