ECR Europe Forum '08. Shopper is a king

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The shopper is king. Is your business ready to serve? …

The shopper is king. Is your business ready to serve?

This session explores the status of joint shopper marketing and information sharing in Europe and in the US. Using extensive research by the Grocery Manufacturers Association (US) and Deloitte we will focus on current shopper targeting practices on both continents and examine the growing sophistication of joint shopper marketing. You will see a project from ECR Greece and Athens University that developed new and innovative shopper services and hear TNS Germany’s breakthrough shopper insights. Also, an update on shopper marketing practices in Europe and a detailed look at future global directions.

Speakers:
• Introduction – Sjoerd Schaafsma, Unilever / Rita Marzian, Metro
• In store Shopper Insights – Emilie Coles, TNS
• Innovative Shopper Services – A. Theotokis, ELTRUN Research Centre /G Lostarakos, P&G
• Future directions Shopper Marketing – V. Belcher/B. James, Oxford Strategic Marketing

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  • 1. SHOPPING VALUE SHOPPING 1
  • 2. Shopper Break Out Sessions BO 1.5 - Shopper is King; is your business ready ? BO 2.5 - Target Shoppers, Activate Insights BO 3.5 - “Differentiate or Die”; Shopping driven solutions BO 4.5 - What’s it worth ? Shopping Metrics 2
  • 3. Click for film 3
  • 4. Creating Shopping Value Usage Value Creation 1 Usage Value Shopping Missions To lt y Shopper Segments -S Store Choice ya to Lo re CONSUMER 3 2 Transaction Store Value In-Store Value Category Management Assortment Merchandising Shopping Value Creation
  • 5. Today’s session: Shopper is King; is your business ready ? • Introduction – Sjoerd Schaafsma / Rita Marzian • In store Shopper Insights – Emilie Coles • Innovative Shopper Services – A. Theotokis /G Lostarakos • Future directions Shopper Marketing – V. Belcher/B. James • Q& A panel 5
  • 6. SHOPPING VALUE SHOPPING 6
  • 7. Excerpts GCI Global Score Card (formerly ECR score card) About Collaborative Shopper Value Creation: Shopper Targeting Differentiated Solutions Identifying clear joint shopper segments Trading partners collaborate to create unique by sharing strategies and information with General solutions to meet targeted shopper needs, Score Meaning the purpose of developing differentiated creating a bond between the shopper, the store solutions within the context of Joint and the brand. Business Plans. The scope of the work has evolved to as many Roll-out of Retailer and supplier share and align categories as needed to influence the behavior implement market, shopper and consumer data to of the target shopper segment in the 3 ation identify and prioritise joint marketplace. The shopper recognizes the started shopper/consumer segments unique attribute provided by the retailer's solution. Clearly defined joint shopper segments The retailer and manufacturer work jointly agreed and used as the basis for making defined business plans to interact in a unique Fully decisions. Process in place to continuously way with a set of shopper segments to make 4 implement ed improve shopper segment knowledge. them prefer the retailer as a provider for well System infrastructure and organisation in defined shopper needs or occasions. The place to track and monitor this work. result is a measurably more loyal shopper. 7
  • 8. the shopper is king using shopper understanding to maximise category and brand success May 2008 By: Emilie Coles, Director - TNS
  • 9. Structure shopper understanding in the industry using shopper to influence key business issues implementing shopper knowledge
  • 10. we know there are three key touch points for our brands… expression Point of purchase idea experience Point of ATL consumption
  • 11. Point of purchase Point of ATL consumption Yet historically we have only really focussed on two!
  • 12. Point of purchase is a key touch point! üMedia fragments üMany new products don’t have supporting TV
  • 13. shopper adoption adoption early late early adopters majority majority time Q2 2008
  • 14. The industry has recognised the importance of shopper but - we still don’t consider the challenges presented by the retail environment….
  • 15. 80% shopping is done in beta mode… sub conscious low involvement
  • 16. visual processing visual stimuli 1% sensory buffer store unprocessed 0.5 seconds 5% short term memory 7 +/- 2 bits 15-30 seconds
  • 17. challenge cut through
  • 18. reality check!
  • 19. what can shopper insight influence?
  • 20. we can use shopper insight to influence all category levers… merchandising/layout packaging range shopper sales NPD marketing insight in-store brand price/promotion activation
  • 21. How? Merchandising/layout Packaging range Shopper sales NPD marketing insight In-Store Brand Activation price/promotion
  • 22. through the eyes of consumers! What do you It looks great! think to the new pack?
  • 23. 3 important shopper considerations for packaging…. be visible (in the right place) be recognisable match the shopping style of that category
  • 24. 1. Be Visible
  • 25. It doesn’t matter how fantastic your packaging is, if in the wrong location, it won’t be seen!
  • 26. eye level is 15-30º downward
  • 27. Unless our brand is the best selling product, people won’t naturally search the top or bottom shelves! cold cold
  • 28. 2. Be Recognisable
  • 29. we shop using colour&shape
  • 30. 3. Match Shopping Style
  • 31. High interaction Engaging Shoppers engaged Searching for on pack information/education Staple Commodities Packaging acts as a signpost
  • 32. Understanding shopper behaviour can help maximise the success of all category levers, including packaging
  • 33. Shopper Knowledge is not the issue
  • 34. shopper implementation adoption early late early adopters majority majority time Q1 2008
  • 35. As an industry, we need to make sure that we use and embed shopper insight
  • 36. How?
  • 37. Stop working in silos… consumer shopper Marketing Sales Packaging Merchandising NPD Shopper! Range Brand Price/Promos activation
  • 38. insight vs. information? X Information information information Information information information insight Information information information Information information information Information information information Information information information one true insight is more powerful than one hundred pieces of information 31
  • 39. Bring shopper data to life!
  • 40. Get people to apply How? learning Simplify complex ideas use movies to show what actually happens
  • 41. Summary Understand the store environment to maximise the shopper opportunity Use shopper knowledge to influence all areas of our business Embed shopper knowledge into the organisation
  • 42. to learn more, visit our stand - 17/24 thank you
  • 43. Value Creation beyond Price The Case of Dynamic Pricing George Lostarakos Aristeidis Theotokis Customer Team Leader PhD Student - Researcher Customer Business Development ELTRUN Research Centre P&G Hellas Department of Management Science and Technology Athens University of Economics and Business
  • 44. Athens University of Economics and Business
  • 45. Value Creation Beyond Price Current trade Environment: Shopper behavior changes Loyalty in brands and stores is shrinked and markets are commoditised. Value is the difference between cost and perceived benefit. The project was aimed to: Record current value creation practices Map the local market Analyze and align common business practices Provide value creation guidelines
  • 46. Value Creation Beyond Price Price is still important!
  • 47. What is happening today
  • 48. Value Creation Beyond Price Value is not necessarily linked with price in consumer mind!
  • 49. Value Creation Beyond Price 1. Current Business Practices Interview with Retailers - Suppliers 2. Super Group with Consumers Workshop with “innovative” consumers 3. Consumer Survey
  • 50. Current business Practices- Industry Consumer After Sale Research Brand Loyalty Services EDI Programs Sign Free Sampling POS data posting Out of Stock Shopping Direct mail Consumer Projects Environment direct line Loyalty cards Consumer Innovation Training Charity Category Programs Consumer Management Events
  • 51. Suppliers’ Priorities Category Management Shopper Research Innovation In store Environment Shelf Availability
  • 52. Current Business Practices - Retail Safe & Clean Database Credit Product Environment marketing Card Assortment value for category POS data money management Proximity Service In store Environment Loyalty In store cards communication Quality of Fresh Products
  • 53. Retailers Priorities Shopping Environment Consumer & Shopper insights Category Management
  • 54. Super Group Methodology & Results Methodology Full day workshop with “special trained” innovative consumers Target: Generate Innovative ideas Results Up to 100 innovative ideas related with improved shopper experience Sorted by satisfaction rate and implementation feasibility.
  • 55. Super Group Results • The possibility of get informed dynamically by a display for a relevant promotion when buying a product. • Dynamically reducing prices of products according to their situation or expiry date (especially for fresh foods) • Electronic tags in shelf that show clearly and dynamically products’ prices • An express super-market in store that sells only basic products and can shop quickly • An automatic vending machine in store that sells all basic products and works 24h/day • Being able during checkout to order products that I didn’t found on shelf
  • 56. Consumer Survey Identity
  • 57. What the Consumer Wants…
  • 58. What is Dynamic Pricing ? Dynamic Pricing = Item-level Price Discrimination A modern practice… But also traditional…
  • 59. Dynamic Pricing as an Innovative Retail Service Perishables discounting based on “sell by” date Dynamic Pricing as a value adding consumer service Identify factors and situations that affect consumer perceptions Dynamic Pricing Project is funded by Athens University ICI- Unilever Research Grant of Economics and Business
  • 60. The Dynamic Pricing Project
  • 61. We ask consumers to choose… Milk 1 Litre We test… • Different levels of 1,38€ 0,98 € 4 days 2 days discount – (30-50%) Chicken Breast 500 gr • Different days to expire – ( 1-3 days) • Different consumer 6€ 4,2€ 4 days 2 days segments – ( Price / Quality Pre-cut salad 250 gr consciousness) • Different Countries 1,85€ 1,3€ – (Ireland and Greece) 4 days 2 days
  • 62. And they chose…
  • 63. Alternative Product Attributes
  • 64. Rate the products…
  • 65. Importance of Product Attributes Price is not the most important Expiration Date has importance for consumers CSR and Quality Guarantees could enhance Dynamic Pricing
  • 66. The Effect of Shopping Trip Type
  • 67. Determinants Of Consumer Reactions To Dynamic Pricing Category-related factors Product Risk (functional, performance and physical) Stockpiling – Stop the aging process (Category Characteristic Situation-related factors Shopping Trip Type Day of the week Response to Dynamic Pricing Consumer-related factors Buy the near-to-expiration-date Price Consciousness Buy the “Fresh” Quality Consciousness Other Shopping Frequency Average Shopping Quantity Expiration Date Perceived Risk Store-related factors Store Trust Store Loyalty Brand-related factors Brand Trust Brand Loyalty
  • 68. Enabling Technology Intelligent Integration of Supply Chain Processes and Consumer Services based on Unique Product Identification in a Networked Business Environment (EU FP6: ST-5-034957-STP)
  • 69. Pilot Study • Time: May- June 2008 • Retailer: METRO ( MyMarket) Greece • Supplier: Vivartia /∆ΕΛΤΑ • Category : Milk
  • 70. A “Real-World” Case Shelf-Talkers Package with Sticker MyMarket Store Sepolia, Athens Stickers with new barcode
  • 71. Conclusions Added value can be created beyond price if the consumer needs is the centre of every stage of new service design process THINK SMART OR JUST LET CONSUMERS DO IT FOR YOU
  • 72. Thank you! For more information and survey results: www.eltrun.gr & www.smart-rfid.eu lostarakos.g@pg.com a.theotokis@aueb.gr George Lostarakos Aristeidis Theotokis Customer Team Leader PhD Student - Researcher Customer Business Development ELTRUN Research Group P&G Hellas Department of Management Science and Technology Athens University of Economics and Business
  • 73. Today’s Best Practice, Tomorrow’s New World: Future Directions for Shopper Marketing Vicki Belcher Bob James Oxford Strategic Marketing © Oxford Strategic Marketing 2008
  • 74. Shopper is Big News! Why? Drives Growth B lurb Daily PPE R!!! SHO Competitive Advantage Increased Investment BUT… is it in the bag??? © Oxford Strategic Marketing 2008
  • 75. OxfordSM & ECR Europe Shopper Marketing Study Why? To identify opportunities, challenges & future direction for Shopping Marketing across Europe What? On-line survey & interview with Head of Customer Marketing or Insight © Oxford Strategic Marketing 2008
  • 76. Fastest growing spend area! Manufacturer Respondents estimated share of Marketing Investment 2004 – 2010 Digital Shopper Marketing 2% 8% 2% 12% Base = 14 companies, The Journey To Strategic Shopper Marketing, OxfordSM May 2008 © Oxford Strategic Marketing 2008
  • 77. Why this enthusiasm? Retailer Consumer/ Manufacturer Shopper • Brands go • Competition •Well informed Global • Strategic Positioning •Hard to reach • Local Marketing via traditional evolves media Engaging shoppers in last 30 metres or “first moment of truth” is critical … BUT up to 5,000 marketing messages per store trip! © Oxford Strategic Marketing 2008
  • 78. EVERYONE wants to win… Q: Across the industry, Shopper Marketing…. Is a Key Success Factor 4.3 Can deliver Competitive Advantage 3.6 Today Will deliver Competitive Advantage in 3 years 4.2 1 = Strongly disagree 5= strongly agree Average Agreement Score* © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 79. And no-one wants to miss… Q: Across the industry, Shopper Marketing…. Is a Key Success Factor 4.3 Can deliver Competitive Advantage Today 3.6 Will deliver Competitive Advantage in 3 years 4.2 1 = Strongly disagree 5= strongly agree Average Agreement Score* © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 80. Whichever part of the world you’re in… Shopper Marketing is a Source of Shopper Marketing is a Strategic Competitive Advantage Enabler of Growth Today in 3 years 3.7 4.1 3.6 4.2 53% 77% Strongly Disagree=1, Strongly Agree=5 % of companies agreeing.. % of Manufacturer Marketing Shopper Marketing is supported by Investment my Company’s Leadership 14 12 12 10 9 8 8 8 6 4 42% 4 3 82% 2 2 2 0 Digital Digital Shopper Shopper % of companies agreeing.. 2004 2010 2004 2010 US EU US data: Capturing a Shopper’s Mind, Heart & Wallet, Deloitte & GMA Nov 2007 © Oxford Strategic Marketing 2008 EU data : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 81. So, we’re all agreed. It’s very important & we’re going to spend lots of money on it… …But - On What Exactly? Q: How do you define Shopper Marketing in your company? “Making our business “Integrating what we do at retail fluent” Mfr point of sale with our broader marketing effort” Rtlr “Understanding & knowing how to speak to customers in “A business strategy, to win different formats” Rtlr at the moment choice by satisfying shopper needs in a “Category category context” Mfr Management on steroids” Mfr “Enhancing our brand equity in store” Mfr © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 82. Why is there no common definition & understanding? Shopper Marketing is a journey… ….varying definitions reflect progression from executional to strategic Define & develop future offer Strategic Innovation Focus Total shopper experience Retailers & manufacturers: Offer Placement Different start points Channel/ Format Channel Focus Different agendas Ranging Different pace Excellence at Point of Purchase Executional Merchandising Focus Promotions © Oxford Strategic Marketing 2008 © Oxford Strategic Marketing 2008
  • 83. OxfordSM’s Definition of Shopper Marketing The capability to drive growth through insight-led, shopper-based demand creation & fulfilment © Oxford Strategic Marketing 2008
  • 84. Before starting any journey, it’s a good idea to know where you’re heading Few companies have a clear vision for Shopper Marketing, with some notable exceptions…. “ Our Vision is that Shopper Marketing will not be a function or department but a capability and way of doing business – everyone will be focussed on shopper” Mfr © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 85. Even with a vision, it’s not easy! “Current talent pool and Why? experience bank is thin” “External agencies “Investment hard to justify not geared up” vs. traditional spend” Wake Up Call for manufacturers: “Cuts across organisational retailers are further down the track structures & decision procedures” © Oxford Strategic Marketing 2008
  • 86. Hybrid Customer Shopper & Consumer Experience is Scarce Q: In my business… Significant Capability Gaps We have sufficient Shopper Marketing talent 2.4 We harness all shopper data sources 2.8 Voice of Shopper heard as well as Voice of 2.1 Consumer Shopper Insights are applied effectively 2.7 0 1 2 3 4 5 1 = Strongly disagree 5= strongly agree Average Agreement Score* © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 87. Talent pool & experience are thin, especially for suppliers • Can translate Strategy “It can take a into Action year to fill a • Is Brand & Retail literate role” • Savvy on Shopper Insight • Sees & acts on whole Shopper Journey • Creative & Analytical © Oxford Strategic Marketing 2008
  • 88. Shopper Marketing cuts across current organisation and procedures Q: In my business, Shopper Marketing is… well understood across 2.2 functions • Ownership & responsibility are blurred • Budgets are ill defined well measured 2.5 & evaluated • Companies believe they under invest 0 1 2 3 4 5 1 = Strongly disagree 5= strongly agree Average Agreement Score* • AND chronic lack of measurement “I spend too much time in turf wars, arguing over who’s paying” Mfr “Calculating ROI for in-store work is really tricky….we lack the tools” Mfr “If we see an opportunity, we just get on with it” Rtlr © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 89. Show me the Money! What’s happening to Investment? Q: When considering % allocation of marketing investment 2004 - 2010 for.. • Investment in Shopper & Retailer Promotions 38 Digital primarily from traditional ATL Consumer Promotions 38 • Store becomes a new “Marketing Medium” Traditional Media 70 • Implications for agency skills sets 0 10 20 30 40 50 60 70 80 • Financial & Shopper % of respondents forecasting decline* metrics required to determine in/out of “ I need a one stop “We are starting to making store investment shop - an agency who judgements about the commercial choices understands this return, getting more disciplined & holistically” Mfr accountable” Rtlr © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 90. Dialogue & Co-operation is Vital! Q: Co-operation between manufacturers & retailers on Shopper Marketing… is currently • Some relationships are still too good 2.7 transactional – focus on deal vs. value add will be • Skills issue at both Account Manager & significantly Buyer level better in 3 3.7 years • In store activation - control vs. creativity 0 1 2 3 4 5 1 = Strongly disagree 5= strongly agree Average Agreement Score* “There’s a handful of retailers who get this – they can see the value of insights” Mfr “ Too often it’s linked to trading…IF we hit our numbers, THEN we can do this nice stuff together” Rtlr * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 91. So, how do I start on the Journey to Strategic Shopper Marketing? 5 step aisles The journey of a thousand miles starts with a single s V IV Retailer & Supplier III Hardwire Strategic Generate, Shopper into Dialogue II Share Core Process & Apply I Build Insights Effective Set Ways of Breakthrough Working Vision Tactical, ad hoc Strategic, Sustained © Oxford Strategic Marketing 2008 © Oxford Strategic Marketing 2008
  • 92. Where next for Shopper Marketing? Trend Implications Retailers & Suppliers seek partners From granular, category approach to full who understand & can activate at store & shopping mission focus broader level Redefinition of roles between sales & Focus on Shopper acts as catalyst for marketing, local & global organisational transformation Shopper will help design tomorrow’s Voice of Shopper heard more broadly Innovation as well as optimise today’s and deeply within companies brand plan “We want insights to be the motor of innovation” Rtlr © Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008
  • 93. The Journey to Strategic Shopper Marketing Top Ten Findings of a Survey Conducted on Behalf of ECR Europe by Oxford Strategic Marketing Participants Preview May 2008 To accelerate your own progress on the Journey To Strategic Shopper Marketing, download Key Findings from the Survey at www.oxfordsm.com Shopper Marketing from 2nd June 2008 © 2008 Oxford Strategic Marketing. All rights reserved