1. Collaborative Consumer Relationship Management Building Differentiation through Mass Customization / Relationship Marketing

2. Germany U.K. Italy Spain France U.S. Many markets experience deflation in grocery prices...... Absolute change in real grocery prices, 1993-2001 % Constant money Source: WEFA (National Statistics Institutes and OECD)

3. ‘Collaborative CRM’ answers key business questions.... HOW to improve shopper and consumer understanding, and translate it into winning market strategies HOW to move from mass marketing into mass customisation into relationship marketing; and WHY. HOW to differentiate beyond Price

4. Recognizing that CRM strategy is only one of several possible business differentiation strategies... Mass / Scale / Price Business Differentiation Strategy Individuals / CRMSegments / Loyalty CRM area

5. Mass Segment customizedIndividual relation Mass Segment Customized Individual Relation Manufacturer Driven Work most attractive segments with retailer Depending on both sides’ consumer strength Traffic creators Manufacturer driven Optimize personalized consumer value offer in Retailer Long-term Integrated strategy Retailer driven Cherry picking of manufacturers offers Retailer driven Personalized shopper value offer Retailer selects offer for segments Collaborative strategy for relevant segments Manufacturer driven insights into lead consumer needs C-CRM Area Retailer Strategy Manufacturer Strategy Manufacturer-Retailer Relationship types (based on Consumer Relationship types)

6. Example Tesco:Walking away from your competition….

7. Mainstream 22% Family type meals Popular brands Kids products Finer Foods 18% “Foodies who are time poor, money rich and choose everyday luxury items” Price Sensitive 16% Cost conscious customers who tend to buy cheapest on display Traditional 17% “Traditional housecraft with time to buy and prepare ingredients” Healthy 18% “Organic shoppers, fruit and vegetables weight watchers etc” Upmarket 24% Mid-market 53% Cost conscious 23% Convenience 9% “People on the go who haven’t time or inclination for scratch cooking” Affluence Age Based on deeper shopper and consumer understanding......

8. Why should ‘Collaborative CRM’ become a priority for ECR Europe ? Definition of Collaborative CRM by ECR Europe: “Collaborative CRM is an integrated ECR demand management strategy, which helps manufacturers and retailers to jointly recognise and value consumers’ / shoppers’ individual needs, and tailor their offers to them.”

9. Doesn’t Collaborative CRM compete with Category Management ? Phase 1 Up-front strategy phase, performed across all categories, allowing a retailer to effectively manage all (~200) of its categories. Phase 2 Development of the category plan. Phase 4 On going tracking and review of the implemented category plan by retailers and suppliers ensures that the jointly agreed targets are being met. Automation of this phase will truly bring the process into a day to day environment. Phase 3 This phase focuses on in store implementation. Additional implementation guidelines are included within the planning phase thereby increasing the likelihood of implementation success.

10. ECR Europe Collaborative CRM ROADMAP STRATEGIC ALIGNMENT -Scope -Methodologies -Stakeholders -Choices on resources -Rules for collaboration ASSESSMENT -the business challenge -state of capability -state of mind on cooperation With trade partners CRM ENABLING COMPONENTS Organization Communication channels Data Systems COLLABORATIVE BUSINESS PROCESS: SEGMENTATION SHOPPER KNOWLEDGE BUILDING OBJECTIVE SETTING AND KPI’s JOINT BUSINESS PLANNING IMPLEMENTATION MONITOR LEARN/IMPROVE

11. The deliverables Increased Store AND Brand Loyalty through increased Consumer Satisfaction Less waste and more effectiveness of marketing and promotion spending through more targeted marketing programs - today more than 70% of promotion spending delivers less than 20 % of promotional volume uplift… Improved margin mix, reflecting the place of price in the hierarchy of needs for different shopper segments. sustainable profitable growth through shopper focused differentiation sustainable profitable growth through shopper focused differentiation

12. Our FMCG industry needs to re-gain consumers’ share of wallet (life) Collaborative CRM is a key demand strategy to facilitate value added market differentiation, and therefor FMCG growth. To break away from current confusion around CRM, ECR Europe needs to steer codification and harmonisation of CRM process, data definitions,and tools across our industry. Currently available tools and data are not used appropriately …by lack of insight on how to use them to create value. (loyalty card data, shopper and consumer research, coupon systems, direct mail …) ECR Europe to facilitate development/sharing of ‘Best Practices’ To drive business acceptance and ‘ownership’ of CRM; out of hands of consultants and I.T. providers. The Business cases for Berlin demonstrate growth results from 15% up to 200% on total store to category level. IN SHORT: ‘TO SERVE CONSUMERS BETTER.......’ Why should ‘Collaborative CRM’ become a priority for ECR Europe ?