0
Uncovering the Myths around
  Unplanned Purchasing

  Dr David Bell Wharton School (Philadelphia)
 Dr Daniel Corsten IE Bu...
It is widely believed that the majority of
purchases are unplanned


  • Oft-cited POPAI Consumer Buying Habit Study

    ...
Our Study
Key Messages from Our Research

• Only 20% of category purchases are unplanned
• Not proportional to basket size
• Enormou...
Study Features


  • Definition—unplanned category purchases
  • Location—three European countries

  • Stores—multiple ch...
Approach

 • Explain number of unplanned category purchases
 in shopping basket
 • Control for differences …
   • Across s...
Comprehensive Shopper Model


 – Household Traits: Shopping Styles, Life Stage

 – Store Perceptions: Self-reported store ...
Key Findings
The majority of category purchases are
NOT unplanned

 • While most shoppers do it … 75% of households

 • And many trips ...
Top 5 Enablers of Unplanned Purchasing


1. Shopper Sees Offers In-Store       State   (53%)

2. Shopper Above Average Inc...
Top 5 Barriers to Unplanned Purchasing


1. Shopper is “Fast and Efficient” Type Trait    (82%)

2. Shopper from Larger Ho...
Trait Versus State: Changing the Mix of
Shoppers May be the More Effective Strategy
 • Imagine the store wishes to increas...
Customer-centric Retailing

Steve Gray, CEO of emnos GmbH

ECR Europe Conference, 28 May 2008
1   Introducing emnos and "customer-centric retailing"




                                        ECR Europe Conference -...
emnos helps leading retailers and suppliers achieve customer-
centric growth

         Steve Gray

   CEO of emnos & Direc...
emnos follow a process called "customer centric retailing" that
creates significant value for customers & shareholders



...
2   From loyalty data to customer insight




                                        ECR Europe Conference - 28 May 2008 ...
Customer-centric retailing begins with loyalty data




                                Consumer
    Panel Data
          ...
Loyalty data enables unmatchable customer insight



   Customer Behaviour                   Lifestyle & Lifestage

   Wha...
"Insight should be a film not a photograph"




                  young        young
                                     ...
Using insight to create value for
3   customers & shareholders




                                        ECR Europe Conf...
Insight enables value growth via communication, store &
category optimisation


                                 Relevant ...
Customer-centric communications: helping PAYBACK to become
Europe's largest and most profitable coalition loyalty programm...
Customer-centric pricing: focus on price sensitive products
bought by price senistive customers
   Customers’ price sensit...
Customer-centric ranging: optimise range based on catchment
area customer insight

      Local catchment area flex        ...
Customer-centric promotions: focus on promotions that are
relevant to key customer segments

  Promotions are analysed for...
Customer-centric store layout: optimise layout based on
customer shopping patterns
Identification of the most frequently-b...
Using loyalty data to build collaboration & "Jointly
4   Agreed Growth" strategies with suppliers




                    ...
Optimising value for customers and shareholders requires the
key principles of ECR to be followed

        "fulfilling con...
Trusted 3rd parties help ensure a win / win / win




      Optimise processes & total
      system costs


      Act as t...
Thank you

steve.gray@emnos.com


www.emnos.com




                       ECR Europe Conference - 28 May 2008   19
Integrated Collaborative
                                               Planning
                                         ...
Objectives and Agenda


                                                                                Agenda
           ...
Leveraging Ahold USA and Unilever Assets

     Existing Assets
     Existing Assets                                       ...
Traditional Collaboration Barriers

                  Siloed Retail Organization

                             Store Depar...
Traditional Collaboration Barriers
                                                                                       ...
Traditional Collaboration Barriers
                                                                                       ...
Traditional Collaboration Barriers
                                                                                       ...
How Do We Collaborate?

                                                                                Customer



      ...
Ahold’s Objective




                                   Gain more Stock-Up trips through CRM and
                        ...
Unilever Objective




                               Convert Customers to Center Store Categories

Copyright © Informatio...
Customer Insights …

                                  Unilever’s brands are key big basket drivers

                     ...
Customer Insights …

                         Particularly in the case of Ahold’s target
                         Behavior...
Opportunity = Stock-Up Trips

        Ahold’s Trip Mission Analysis shows Stock up Trips are a growth opportunity
        ...
Shopper Insights > Opportunity: Stock-Up Trips

      Unilever’s Shopper Trip Analysis
       We can help the shopper save...
Shared Insights > Opportunity: Stock-Up Trips

            Ahold’s
             Ahold’s                                   ...
The Plan of Attack

       The Strategy
       1. Build Team:
                      Multi-discipline
                     ...
The Plan of Attack

        The Strategy
        1. Build Team:
                      Multi-discipline
                   ...
The Plan of Attack

        The Strategy
        1. Build Team:
                      Multi-discipline
                   ...
How We Co-differentiated:
                              Unilever Customized National Programs




Copyright © Information ...
How We Co-Differentiated:
                                                Unilever Customized CRM Assets




Copyright © I...
How We Co-Differentiated:
              360 Portfolio Selling: At Home Focus


                                           ...
How We Shared the Investment




                           Ahold programmed the store and leveraged its
                 ...
How We Share the Investment
             Ahold Programmed Store …Incented Customer
                                       ...
Ahold Bundled End Caps to Stock-up ‘Rooms’


      Laundry room
                   Detergent
                   Stain remo...
The Kitchen – Fridge, Freezer, Pantry

                                          Section Case
                            ...
Household - Bath, Wellness, Medicine




                 Section Case Cards




Copyright © Information Resources, Inc., ...
One of Most Successful Events Ever
            7.6% Household penetration (3x avg.); Significant sales lift

            “...
Largest Unilever Sales Spike in 2 Years




Copyright © Information Resources, Inc., 2007. Confidential and proprietary   ...
Customer Bought More Categories

                                Proving that category sales conversion works!


         ...
Event Increased Customer Appreciation


                                       “Do you feel more positive toward Ahold?”

...
Results Summary

      1. Shopping occasions
       1. Shopping occasions                                                 ...
What Was Hard…

                      Trust

                      Sharing agendas

                      Accepting trade-...
What We’ve Realized…

         1. We’re not that different – we can collaborate
          1. We’re not that different – we...
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ECR Europe Forum '08. Target shoppers, activate insights

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Target shoppers, activate insights

This second shopper session will focus on joint shopper targeting with two strong cases from L’ Oréal/dm and Unilever US/Stop and Shop. The latter case has won the prestigious Innovation Award of US Grocery Manufacturers Association. This session will also bring you the outcome of revolutionary academic research that refutes some persistent myths about in-store shopping behaviour.

Speakers: representatives of L’Oréal and dm-drogerie markt, Unilever and Stop and Shop.

Facilitated by Metro and Unilever.

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Transcript of "ECR Europe Forum '08. Target shoppers, activate insights"

  1. 1. Uncovering the Myths around Unplanned Purchasing Dr David Bell Wharton School (Philadelphia) Dr Daniel Corsten IE Business School (Madrid) Dr George Knox Tilburg University (Tilburg)
  2. 2. It is widely believed that the majority of purchases are unplanned • Oft-cited POPAI Consumer Buying Habit Study 70% of In-Store Purchasing Decisions are Unplanned • Paco Underhill (“Why We Buy”) “Supermarkets are places of high impulse buying … – fully 60 to 70 percent of purchases there were unplanned, grocery industry studies have shown us.”
  3. 3. Our Study
  4. 4. Key Messages from Our Research • Only 20% of category purchases are unplanned • Not proportional to basket size • Enormous differences across households • Recommended Actions • Enhancing in-store marketing (state) • Attracting leisurely shoppers (trait)
  5. 5. Study Features • Definition—unplanned category purchases • Location—three European countries • Stores—multiple chains • Shoppers—tracked over time and stores
  6. 6. Approach • Explain number of unplanned category purchases in shopping basket • Control for differences … • Across shoppers • Across shoppers and stores • Across shoppers, stores, and trips
  7. 7. Comprehensive Shopper Model – Household Traits: Shopping Styles, Life Stage – Store Perceptions: Self-reported store assessments – Shopping Trip—Context: Travel mode, gender, etc. – Shopping Trip—In-Store Process: Offers seen in store, etc.
  8. 8. Key Findings
  9. 9. The majority of category purchases are NOT unplanned • While most shoppers do it … 75% of households • And many trips see it … 40% of shopping trips • The overall rate is not that high … • … only 20% of all category purchases are unplanned
  10. 10. Top 5 Enablers of Unplanned Purchasing 1. Shopper Sees Offers In-Store State (53%) 2. Shopper Above Average Income Trait (45%) 3. Shopper Travels by Car State (44%) 4. Shopper is Informed at the Shelf Trait (35%) 5. Shopper on Unplanned Trip State (23%)
  11. 11. Top 5 Barriers to Unplanned Purchasing 1. Shopper is “Fast and Efficient” Type Trait (82%) 2. Shopper from Larger Household Trait (65%) 3. Shopper in “Fast and Efficient” State State (53%) 4. Shopper from Older Households Trait (47%) 5. Shopper is Informed by Newspaper Trait (25%)
  12. 12. Trait Versus State: Changing the Mix of Shoppers May be the More Effective Strategy • Imagine the store wishes to increase the rate of unplanned category Thank You! ... purchasing, then • 10% increase in Leisurely Shoppers = Questions &shoppers see In-Store Deals • 40% increase of trips where Answers Investment Attract Leisurely 1x Shoppers Increase In-Store Offers 4x
  13. 13. Customer-centric Retailing Steve Gray, CEO of emnos GmbH ECR Europe Conference, 28 May 2008
  14. 14. 1 Introducing emnos and "customer-centric retailing" ECR Europe Conference - 28 May 2008 2
  15. 15. emnos helps leading retailers and suppliers achieve customer- centric growth Steve Gray CEO of emnos & Director of Offices : London, Munich, Paris, Madrid Loyalty Partner gmbh Skills: consulting, analysis, research, Formerly Managing Director technology of dunnhumby UK & Ireland & Ownership : 100% Loyalty Partner GmbH director of dunnhumby USA ECR Europe Conference - 28 May 2008 3
  16. 16. emnos follow a process called "customer centric retailing" that creates significant value for customers & shareholders 1 2 3 Customer Customer Customer Potential Strategy Engagement • user training Organisation Alignment • processes • organisation change • participation with retailer Supplier Alignment • jointly agreed growth ECR Europe Conference - 28 May 2008 4
  17. 17. 2 From loyalty data to customer insight ECR Europe Conference - 28 May 2008 5
  18. 18. Customer-centric retailing begins with loyalty data Consumer Panel Data Research Loyalty Card Shopper Purchase Research Data ECR Europe Conference - 28 May 2008 6
  19. 19. Loyalty data enables unmatchable customer insight Customer Behaviour Lifestyle & Lifestage What did my customers do ? What type of person are Where did they do it ? they? Who else are they like ? Attitudes Value & Potential Why did they do it ? What are my customers worth today ? How much could they be worth tomorrow ? ECR Europe Conference - 28 May 2008 7
  20. 20. "Insight should be a film not a photograph" young young family retired Lifestage single married with kids couple person couple Shopping trip trip trip habits frequency value time healthy tradi- price gourmet Lifestyle eating tional sensitive foods organic Shopping big top up eat non mission baskets shop now food ECR Europe Conference - 28 May 2008 8
  21. 21. Using insight to create value for 3 customers & shareholders ECR Europe Conference - 28 May 2008 9
  22. 22. Insight enables value growth via communication, store & category optimisation Relevant and engaging customer communications Retailer customer database Store clusters & customer, and layouts optimised retailer and insight for customers brand loyalty platform Supplier Categories optimised for customers customer feedback loop (behavioural – what they did, attitudinal – why they did it) ECR Europe Conference - 28 May 2008 10
  23. 23. Customer-centric communications: helping PAYBACK to become Europe's largest and most profitable coalition loyalty programme Account Personalisation 2008-? Statement 2004-2007 10m+ 2000-2003 variations 2m+ 32 variations variations Themed io n Mailings ed e volut h t-bas t- In s ig Time Partner Mailings Multi channel communication ECR Europe Conference - 28 May 2008 11
  24. 24. Customer-centric pricing: focus on price sensitive products bought by price senistive customers Customers’ price sensitivity is identified by The importance of a product for price-sensitive analysis of buying behaviour and market research customers influences its price Quality-focused Price-focused Top products for very price-sensitive customers segments segments Most Price-sensitive Acheteurs rationnels Repas du travailleur Jeunes Achats rapides Acheteurs bas prix Jeunes couples Jeunes familles Famille Budget Produits frais Alicaments Ligne et Beauté Bio Santé -1.00 -0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00 Customer-centric pricing optimisation achieved savings of €18m for a major retailer ECR Europe Conference - 28 May 2008 12
  25. 25. Customer-centric ranging: optimise range based on catchment area customer insight Local catchment area flex Core range by customer segment Produits T1 VMH Produits T2 Produits T3 Produits à déréférencer Taux de réachat Customer-centric ranging grew sales in a major food category by 10% ECR Europe Conference - 28 May 2008 13
  26. 26. Customer-centric promotions: focus on promotions that are relevant to key customer segments Promotions are analysed for their impact and We analyse promotional participation and effectiveness against customer criteria attitudes by customer segment Most % spend promotions 20% 25% 30% 35% 40% 50% 55% 60% 65% Performance dimensions price- sensitive Category Sales Profitability Innovative High performance Profitable “I like to buy on promotion“ Switching High penetration Unprofitable Rewarding High impact Low involvement Positive attitude Most towards promotions ► Impact on category ► Impact on sales ► Impact on customer quality- profitability focused 50% 55% 60% 65% 70% 75% 80% 85% 90% Customer-centric promotions optimisation generated savings of €10m and sales uplifts of €32m ECR Europe Conference - 28 May 2008 14
  27. 27. Customer-centric store layout: optimise layout based on customer shopping patterns Identification of the most frequently-bought combined The store arrangement is adapted to reflect buying products in relation to their distance in store behaviour and maximize purchasing Menswear The analysis of combined Men’s underwear TV Men Home & Leisure Childrenswear Women’s Accessories Women’s Fashion purchases shows which HOME IT and Photo Radio / Telecommunication De SEASONAL s products are bought Important equipment c or CD / Photo at Catering Women’s underwear io Food Women n DVD Health and Beauty together or bought by the same person Sport Boys Girls Household products Books and leisure Textiles Variés, produits Cooking Plants Livres Stationery anniversaire Edibles e Games and Books Photo House Hardw Animals hold are Men’s Accessories and Car Clothi s ng hygiene PEM Camping Underwear Outerwear a Garden Tools b g f Considering the current Household appliances store arrangement Wome Clothi Video n’s ng IT c Entrance Optimising store layout generated a LFL sales increase of 6% for a major food retailer ECR Europe Conference - 28 May 2008 15
  28. 28. Using loyalty data to build collaboration & "Jointly 4 Agreed Growth" strategies with suppliers ECR Europe Conference - 28 May 2008 16
  29. 29. Optimising value for customers and shareholders requires the key principles of ECR to be followed "fulfilling consumer wishes better, faster and at less cost" Retailer Supplier "true sharing of knowledge" "set joint metrics" "joint business planning" "analyse outcomes" ECR Europe Conference - 28 May 2008 17
  30. 30. Trusted 3rd parties help ensure a win / win / win Optimise processes & total system costs Act as the independent voice of the customer "Keep the retailer / supplier / customer song in tune" ECR Europe Conference - 28 May 2008 18
  31. 31. Thank you steve.gray@emnos.com www.emnos.com ECR Europe Conference - 28 May 2008 19
  32. 32. Integrated Collaborative Planning Turning Shopper Insights into Growth Copyright © Information Resources, Inc., 2007. Confidential and proprietary
  33. 33. Objectives and Agenda Agenda Agenda Concept Origination Concept Origination Objectives Objectives Vision Vision Traditional Barriers Traditional Barriers Challenges Challenges Ingredients for Success Ingredients for Success Success Factors Success Factors Pilot Event and Results Pilot Event and Results Implications and Lessons Implications and Lessons Copyright © Information Resources, Inc., 2007. Confidential and proprietary 2
  34. 34. Leveraging Ahold USA and Unilever Assets Existing Assets Existing Assets Customer Centric Retailing Deep Customer Understanding Deep Customer Understanding 10,000,000+ Households Significant Customer Base Significant Customer Base #1 in Key Markets Powerful Retail Brand Equity Powerful Retail Brand Equity 23% Aggregated Market Share Strong CPG Brand Equities Strong CPG Brand Equities 27 Brands Bought in 6 Departments Scale CPG Brand Portfolio Scale CPG Brand Portfolio National and Local Vehicles Strong CPG Marketing Vehicles Strong CPG Marketing Vehicles In Store Execution in nearly Store Execution Store Execution 700 Stores Copyright © Information Resources, Inc., 2007. Confidential and proprietary 3
  35. 35. Traditional Collaboration Barriers Siloed Retail Organization Store Department Store Department Managers Managers Store Managers Store Managers Store Operations Store Operations Sales Planning Sales Planning Merchandising Merchandising Brand Marketing Brand Marketing CRM CRM Pricing Pricing Consumer Insights Consumer Insights Copyright © Information Resources, Inc., 2007. Confidential and proprietary 4
  36. 36. Traditional Collaboration Barriers Siloed CPG Organization Siloed Retail Organization Grocery Division Grocery Division Sales Team Sales Team Store Department Refrigerated Division Refrigerated Division Store Department Trade Marketing Trade Marketing Managers Sales Team Sales Team Managers Co-Marketing Frozen Co-Marketing FrozenDivision Division Store Managers Trade Marketing Trade Marketing Store Managers Consumer Promotions Store Operations Co-Marketing Promotions HBC Division HBC Division Consumer Co-Marketing Store Operations CRM CRM Sales Team Consumer Promotions Sales Team Consumer Promotions Sales Planning Sales Planning Brand Management Trade Marketing Management CRM Brand Trade Marketing CRM Merchandising Merchandising Advertising Advertising Co-Marketing Management Brand Management Co-Marketing Research Brand Brand Marketing Brand Marketing Market Consumer Market Research ConsumerPromotions Advertising Promotions Advertising CRM CRM CRM Market Research CRM Market Research Pricing Pricing Brand Management Brand Management Consumer Insights Consumer Insights Advertising Advertising Market Research Market Research Copyright © Information Resources, Inc., 2007. Confidential and proprietary 5
  37. 37. Traditional Collaboration Barriers Siloed CPG Organization Siloed Retail Organization Grocery Division Grocery Division Sales Team Sales Team Store Department Managers Refrigerated Division Refrigerated Division Store Department Managers Trade Marketing Trade Marketing Store Managers Sales Team Sales Team Store Managers Frozen Division Co-Marketing Frozen Division Store Operations Co-Marketing Trade Marketing Store Operations Trade Marketing Consumer Promotions Sales Planning Co-MarketingPromotions Consumer HBC Division Co-Marketing Sales Planning CRM HBC Division CRM Merchandising Merchandising SalesConsumerPromotions Consumer Promotions SalesTeam Management Brand Management Team Brand Marketing CRMBrand TradeCRM Marketing Brand Marketing Advertising Trade Advertising Marketing CRM Brand Management Co-MarketingResearch Brand Management CRM Market Co-MarketingResearch Market Pricing Advertising Consumer Promotions Advertising Pricing Consumer Promotions Consumer Insights Consumer Insights CRM MarketResearch CRM Market Research Brand Management Brand Management Advertising Advertising Market Research Market Research Conflicting Objectives My Brand Equity My Brand Equity vs. vs. My Store Equity My Store Equity My Brand Value My Brand Value vs. vs. My Category Value My Category Value My Brand Share My Brand Share vs. vs. My Market Share My Market Share My Brand Margin My Brand Margin vs. vs. My Category Margin My Category Margin My Brand ROI My Brand ROI vs. vs. My Category ROI My Category ROI Copyright © Information Resources, Inc., 2007. Confidential and proprietary 6
  38. 38. Traditional Collaboration Barriers Siloed CPG Organization Siloed Retail Organization Grocery Division Grocery Division Sales Team Sales Team Store Department Managers Refrigerated Division Refrigerated Division Store Department Managers Trade Marketing Trade Marketing Store Managers Sales Team Sales Team Store Managers Frozen Division Co-Marketing Frozen Division Store Operations Co-Marketing Trade Marketing Store Operations Trade Marketing Consumer Promotions Sales Planning Co-MarketingPromotions Consumer HBC Division Co-Marketing Sales Planning CRM HBC Division CRM Merchandising Merchandising SalesConsumerPromotions Consumer Promotions SalesTeam Management Brand Management Team Brand Marketing CRMBrand TradeCRM Marketing Brand Marketing Advertising Trade Advertising Marketing CRM Brand Management Co-MarketingResearch Brand Management CRM Market Co-MarketingResearch Market Pricing Advertising Consumer Promotions Advertising Pricing Consumer Promotions Consumer Insights Consumer Insights CRM MarketResearch CRM Market Research Brand Management Brand Management Advertising Advertising Market Research Market Research Conflicting Objectives My Brand Equity My Brand Equity vs. vs. My Store Equity My Store Equity Shared Customer Focus Shared Customer Focus My Brand Value My Brand Value vs. vs. My Category Value My Category Value My Brand Share My Brand Share vs. vs. My Market Share My Market Share Willingness to Innovate Willingness to Innovate My Brand Margin My Brand Margin vs. vs. My Category Margin My Category Margin My Brand ROI vs. My Category ROI My Brand ROI vs. My Category ROI Drive to Overcome Barriers Drive to Overcome Barriers Copyright © Information Resources, Inc., 2007. Confidential and proprietary 7
  39. 39. How Do We Collaborate? Customer 2 3 We both We collaboratively invest to Co- 1 measure and Differentiate improve Identify where our needs align with Customers Ahold Unilever Copyright © Information Resources, Inc., 2007. Confidential and proprietary 8
  40. 40. Ahold’s Objective Gain more Stock-Up trips through CRM and Merchandising Integration Copyright © Information Resources, Inc., 2007. Confidential and proprietary 9
  41. 41. Unilever Objective Convert Customers to Center Store Categories Copyright © Information Resources, Inc., 2007. Confidential and proprietary 10
  42. 42. Customer Insights … Unilever’s brands are key big basket drivers Average Market Basket $ $78.35 $80 $70 $60 $50 $40 $31.47 $30 $20 $10 $0 Avg Shopper Unilever Shopper Source: IRI Copyright © Information Resources, Inc., 2007. Confidential and proprietary 11
  43. 43. Customer Insights … Particularly in the case of Ahold’s target Behavior Segments Average Market Basket $ $108.08 $103.62 $100 $78.35 $80.26 $80 $60 $40 $31.47 $20 $0 Avg Shopper Unilever Discerning Good Lifers Quick Fixers Shopper Diners (total) Unilever Shoppers Copyright © Information Resources, Inc., 2007. Confidential and proprietary 12
  44. 44. Opportunity = Stock-Up Trips Ahold’s Trip Mission Analysis shows Stock up Trips are a growth opportunity • Disproportionately high $ ring/trip • Increase conversion – get them to buy more categories • Unilever portfolio critical within Stock-up across key categories % of Trips % of Net Dollars Emergency Replenishment Fresh Fill-in Need a Meal Great Sale Stock-up Institutional Copyright © Information Resources, Inc., 2007. Confidential and proprietary 13
  45. 45. Shopper Insights > Opportunity: Stock-Up Trips Unilever’s Shopper Trip Analysis We can help the shopper save time by anticipating her needs and converting her trip to a stock-up trip Get her attention at pressure points along the perimeter, and convert her to additional categories Meat y ir Produce Beverage Da Bakery Deli & Center-of-store Aisles Cold s Beer Entrance Copyright © Information Resources, Inc., 2007. Confidential and proprietary 14
  46. 46. Shared Insights > Opportunity: Stock-Up Trips Ahold’s Ahold’s Unilever’s Unilever’s Build Objectives Objectives Objectives Objectives Mutual and Strengths and Strengths + and and Business Strengths Strengths Win with Key Customer through Collaboration! Copyright © Information Resources, Inc., 2007. Confidential and proprietary 15
  47. 47. The Plan of Attack The Strategy 1. Build Team: Multi-discipline Ahold + Unilever 2. Agree on: Rules of Engagement Joint Metrics Role of Assets 3. Commitment: Integrate Assets Mutual Investment Test & Learn Philosophy Copyright © Information Resources, Inc., 2007. Confidential and proprietary 16
  48. 48. The Plan of Attack The Strategy 1. Build Team: Multi-discipline Ahold + Unilever 2. Agree on: Rules of Engagement The Mechanics Joint Metrics Role of Assets 1. Economics 3. Commitment: 2. Offer Strategy Integrate Assets Mutual Investment 3. CRM Targets Test & Learn Philosophy 4. Test Structure 5. Store Compliance 6. Measurement Copyright © Information Resources, Inc., 2007. Confidential and proprietary 17
  49. 49. The Plan of Attack The Strategy 1. Build Team: Multi-discipline Ahold + Unilever 2. Agree on: The Rules of Engagement Mechanics Joint Metrics 1. Economics Role of Assets 2. Offer Strategy 3. Commitment: 3. TheCRM Targets TheConcept Concept Integrate Assets Mutual Investment 4. 1. Determine Desired Customer Experience Test Structure 1. Determine Desired Customer Experience 5. Store Compliance 2. Develop the Theme Test & Learn Philosophy 6. 2. Develop the Theme Measurement 3. Partner in the Creative Process 3. Partner in the Creative Process 4. COLLABORATE ON FINAL ‘INTERNAL 4. COLLABORATE ON FINAL ‘INTERNAL SALES’ DECK SALES’ DECK 5. JOINTLY PRESENT INTERNALLY 5. JOINTLY PRESENT INTERNALLY 6. Determine Store Engagement Approach 6. Determine Store Engagement Approach 7. Communicate Regularly throughout Execution 7. Communicate Regularly throughout Execution Copyright © Information Resources, Inc., 2007. Confidential and proprietary 18
  50. 50. How We Co-differentiated: Unilever Customized National Programs Copyright © Information Resources, Inc., 2007. Confidential and proprietary 19
  51. 51. How We Co-Differentiated: Unilever Customized CRM Assets Copyright © Information Resources, Inc., 2007. Confidential and proprietary 20
  52. 52. How We Co-Differentiated: 360 Portfolio Selling: At Home Focus r” M aile “R tio ns eta il C “ Solu on ne cti on s” National FSI CRM Solutions Giant Circular Copyright © Information Resources, Inc., 2007. Confidential and proprietary 21
  53. 53. How We Shared the Investment Ahold programmed the store and leveraged its marketing assets Copyright © Information Resources, Inc., 2007. Confidential and proprietary 22
  54. 54. How We Share the Investment Ahold Programmed Store …Incented Customer Circular Full Page In-store Shopping List 1. In Ad stock-up items across 1. In Ad stock-up items across Unilever categories Unilever categories 2. Complementary CPG’s 2. Complementary CPG’s participated to truly enable participated to truly enable a “stock up” trip. a “stock up” trip. 3. Achievable “Stock-up” 3. Achievable “Stock-up” basket instant reward basket instant reward incentive incentive 4. “Stock-up” destination 4. “Stock-up” destination Circular Aisle stops throughout store Violator stops throughout store Stanchion Sign Copyright © Information Resources, Inc., 2007. Confidential and proprietary 23
  55. 55. Ahold Bundled End Caps to Stock-up ‘Rooms’ Laundry room Detergent Stain remover Paper products End-Cap Card Copyright © Information Resources, Inc., 2007. Confidential and proprietary 24
  56. 56. The Kitchen – Fridge, Freezer, Pantry Section Case Cards Copyright © Information Resources, Inc., 2007. Confidential and proprietary 25
  57. 57. Household - Bath, Wellness, Medicine Section Case Cards Copyright © Information Resources, Inc., 2007. Confidential and proprietary 26
  58. 58. One of Most Successful Events Ever 7.6% Household penetration (3x avg.); Significant sales lift “GOLD Standard” Target Segments showed highest level broad conversions for Ahold Traditionalists, Segment “F”, due to overall size, drove sales volume Behavior Segments 12% HH Penetration F 10% E 8% D 6% Series1 4% C 2% B 0% A B C D E F A 0% 5% 10% 15% 20% 25% 30% 35% Behavior Segments Contribution to Sales Copyright © Information Resources, Inc., 2007. Confidential and proprietary 27
  59. 59. Largest Unilever Sales Spike in 2 Years Copyright © Information Resources, Inc., 2007. Confidential and proprietary 28
  60. 60. Customer Bought More Categories Proving that category sales conversion works! 40% 30.6% 30% 18.9% 20% 10% 0% 2+ Categories Purchased Pre-Event During Event Copyright © Information Resources, Inc., 2007. Confidential and proprietary 29
  61. 61. Event Increased Customer Appreciation “Do you feel more positive toward Ahold?” Yes 67% No 33% Q6b. The magazine is sent to you by Stop & Shop/Giant Carlisle. Does knowing that make you feel more positive toward Stop & Shop/Giant Carlisle? Copyright © Information Resources, Inc., 2007. Confidential and proprietary 30
  62. 62. Results Summary 1. Shopping occasions 1. Shopping occasions 1. Drove Stock-up trips 1. Drove Stock-up trips 2. Total store shopping behavior 2. Total store shopping behavior 2. Increased Category conversions 2. Increased Category conversions 3. Unilever event performance 3. Unilever event performance 3. Biggest event and volume spike 3. Biggest event and volume spike 4. Ahold USA incremental $$$ 4. Ahold USA incremental $$$ 4. Real sales, not just brand 4. Real sales, not just brand switching switching 5. CRM relevance 5. CRM relevance 5. Excellent target Segment 5. Excellent target Segment 6. Customer-driven decision 6. Customer-driven decision response response making making 6. Consumers liked what they saw 6. Consumers liked what they saw 7. Greater Mutual Understanding 7. Greater Mutual Understanding 7. More Insights Driven Solutions 7. More Insights Driven Solutions Copyright © Information Resources, Inc., 2007. Confidential and proprietary 31
  63. 63. What Was Hard… Trust Sharing agendas Accepting trade-offs Corralling the categories Clear ownership within each company Fitting programs into ingrained processes Getting Marketing and Merchandising to show up at the same meetings…! Copyright © Information Resources, Inc., 2007. Confidential and proprietary 32
  64. 64. What We’ve Realized… 1. We’re not that different – we can collaborate 1. We’re not that different – we can collaborate 2. This may not work for everyone 2. This may not work for everyone 3. Need champions at each company 3. Need champions at each company 4. Need long Planning lead times, simple shopper requirements 4. Need long Planning lead times, simple shopper requirements 5. Need to communicate with our customer in-home and in-store 5. Need to communicate with our customer in-home and in-store 6. Complementary manufacturers should partner to scale opportunity 6. Complementary manufacturers should partner to scale opportunity 7. If it isn’t repeatable, it isn’t worth it – think annual calendar, a series 7. If it isn’t repeatable, it isn’t worth it – think annual calendar, a series 8. Collaborate on success criteria and measurement 8. Collaborate on success criteria and measurement 9. Keep it simple –shoppers don’t want to think 9. Keep it simple –shoppers don’t want to think Copyright © Information Resources, Inc., 2007. Confidential and proprietary 33
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