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категорийный менеджмент от компании Coca Cola

категорийный менеджмент от компании Coca Cola

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  • There is no doubt that consumers are facing greater pressures than ever before. One of the pressures that has the most impact on their shopping behavior is the speed of life. As the speed of life increases, time has a greater influence on shoppers’ definitions of value and convenience. As a result, a HH’s grocery shopping is not limited to a single channel, but rather spans many channels.
  • Shop-ability (identified here as fast checkout & easy to shop) clearly impacts the shopper’s decision as to where to shop. Given the losses in shopping trips that supermarket retailers have experienced, it’s extremely important retailers deliver on this shopper need.
  • Shop-ability is so important because shoppers are making more of their decisions while they are in the store 60% of supermarket purchase decisions are completely unplanned 53% of Mass Merchandiser shopping decisions are completely unplanned Given this, imagine how much of a shopper’s time can be wasted or saved, depending on how shopable it is...
  • Need states are critical in understanding the needs of the shopper. It all begins with the shopper.
  • Although most beverage categories index high for heavy grocery shopping trips, the % of purchase incidence is much greater on CSDs and juice/drinks.
  • Consumer needs and preferences are evolving and changing rapidly. The beverages available in 1984 have expanded into new segments and choices that are available today.
  • 1. Dr Pepper/7Up corporate growth rate is highest for 2nd consecutive year. 2. Corporate Coke’s lead vs corporate Pepsi increases 4th consecutive year. 3. National Beverage and Double Cola down mainly from private label incursions.
  • Beverages are important to your shoppers. Soft Drinks, Coffee, Juice and Bottled Water are all in the top 10 in shopper purchase behavior. Soft Drinks in particular are very important to shoppers as shoppers spend more on this category than any other and buy it more frequently than any other UPC’d category outside of Bread & Baked Goods. Purchase Frequency: Average number of Shopping Trips that included the purchase of a soft drink Buying Rate: Category $ per HH Of the 95% of all households buying soft drinks they average buying 19 times per year which is only surpassed by bread within key categories 28% of the shopping trips include the purchase of a soft drink Additionally, on these 19 trips soft drink consumers spend more annually than they spend on other categories.
  • This chart illustrates the Beverage Categories that meet the Consumer Need States.
  • Navigation - Shoppers said: “ Help me to find the beverage aisle” “ Help me to find my brand and package” “ Help me find what my family needs/wants” “ Help me get in and get out quicker” Information Price New products/packages Nutritional information Meal/snack solutions and occasions planning Inspiration Deliver call to action Focus on product/occasions imagery Key into Mom’s instinct to care for family Source: Beverage Landscape Operating Plan
  • As we look across needs states, obviously we consider which categories we have experience in and where we have brands that either currently compete, or could stretch their equities to compete more broadly in other need states.
  • This chart shows weekly adj gross profit for key categories within center store. Soft drinks are a key driver in center store profit performance ranking second only to bread in weekly adj gross profit. Adj GP = GP – Trade & Terms)
  • Using AGMROII (adj gross profit return on inventory investment) Soft drinks are very productive ranking third out of top ten categories in center store. The payment terms and inventory turn of national brand soft drinks are key drivers of this productivity. Make the point here that even though water may have a higher margin the category measures we have discussed such as frequency, household penetration and purchase incidence drive a higher turn rate for Soft Drinks that impacts this important financial productivity measure of Adjusted Gross Profit Return on Inventory Investment. Along with the other category benefits that have been discussed thus far this AGMROII number can help dispel the myth that supermarket retailers are better off focusing on water and/or isotonics vs. Soft Drinks for display space. As this chart shows Soft Drinks are just as productive in AGMROII as water and much more productive vs. other categories that get significant display support. A key driver of AGMROII is inventory turns. Soft Drinks inventory turns on average 84 times per year. This compares to these other categories as follows: Bread-78.7; Bottled Water-49.9; Salty Snacks-28.1; Shelf Stable Juice-25.3; Ready-To-Eat-Cereals; Soup-26.3; Cookies & Crackers-15.6; Candy-16.8; Coffee-13.1
  • Another finding from this recent consumer study is the very intuitive finding that Soft Drink pricing plays a key role in the category’s ability to draw shoppers to your store. However, it’s not the top reason. The top reason Soft Drinks drive shoppers to the store is that shoppers are simply out of Soft Drinks at home. This is a more important driver for Soft Drinks than other categories given the frequency with which shoppers buy the category. Additionally, the Soft Drink category’s ability to drive traffic isn’t just about price. The brand preference for Soft Drinks is evident when you see that a top reason Soft Drinks drive people to the store is that a family member asked for a specific item. Since an important motivator for home category managers is to care for her family, the opportunity is to help her meet this need and provide the brands her family is asking for. Finally, it’s disproportionately important for shoppers to see Soft Drinks in the ad compared to other categories.
  • The goal is to increase the overall size and value of the category
  • Together we can utilize the strategic role of each package to create a balance between driving traffic and transactions with generating the margin goals of the category.
  • The opportunity that I’d like to share with you today is that of Shopper Segmented Merchandising. We know that each of your stores serve a different combination of shoppers, occasions & needs. You know your stores better than anyone so you see this every day. Since each store is different and basically has a different “Shopper DNA,” the opportunity I want to talk to you today about is that of implementing merchandising solutions that reflect these differences – ultimately, bringing the right products to the right shoppers in the right store.
  • Why is Shopper Segmented Merchandising more important now than it has ever been? Shoppers are changing and are demanding what they want when they want and where they want it – they’re in control. Additionally, the shopper base is fragmenting with fewer “traditional families,” more women in the workforce, and segments of the population, like Hispanics, becoming a huge economic force. Finally, shoppers want what they want when they want it and, as a result, we know that you need to reduce out of stocks to make sure shoppers get what they want.
  • (REPLACE STORE PICTURE WITH IMAGE OF CUSTOMER’S STORE, IF POSSIBLE) So what is Shopper Segmentation? It means that, instead of trying to create one solution for everyone or a unique solution for every shopper, group shoppers together into segments and tailor solutions to these segments. Ultimately, the goal is to drive store level changes that deliver the right brand, package, price and occasion in the right store.
  • So here we outline the specifics of our Shopper Segmented Merchandising Methodology. Our goal was to segment shoppers in a way that would lead to meaningful & actionable changes at a store level. Therefore, we started with the shopper, segmented shoppers based on their beverage purchases, mapped these beverage segments to 90,000 stores and ended up with 5 actionable store clusters. Each cluster represents groups of stores serving shoppers with similar beverage needs.
  • What are our Beverage Clusters? There are 5 clusters with varying beverage needs. Shoppers living near Cluster 1 stores are less likely to adopt new beverage categories early on compared to other shoppers. These shoppers also give a much greater share of their beverage dollars to sparkling soft drinks compared to other categories. They are more inclined to buy citrus sparkling beverages as well as larger pack sizes such as 24 pack cans. We have very detailed overviews of how shoppers in these clusters differ that we can share with you at a later date when appropriate.
  • So are there meaningful changes in beverage assortment by cluster? Yes – here are two examples of how the beverage assortment emphasis would change based on whether you’re in a cluster 3 store or a cluster 5 store.
  • So what are the high-level beverage emphasis recommendations by cluster? Starting with the Coca-Cola Sparkling section, here are examples of the top emphasis areas in 3 clusters. In cluster 1 stores, these shoppers are better served with an emphasis on regular or sugar sparkling soft drinks. That change is reflected in the size of the “red” block in the shelf set picture below. Cluster 3 shoppers are better served with a Diet Sparkling Emphasis as is reflected in the larger silver block below. And Cluster 5 Shoppers would prefer to see a greater emphasis on Flavor Sparkling drinks, as is reflected in the bigger green and orange sections. Why are we looking at the shelf in color blocks? Our research shows that, in the sparkling soft drink aisle, shoppers use familiar brands and colors as visual cues to find the products they’re looking for. Therefore, a color block aids in presenting those visual cues.
  • Shopper Segmented Merchandising is only successful when it is successfully implemented at store level. The process for leveraging these shopper insights to drive store level changes is outlined here.
  • We do have some experience with Shopper Segmented Merchandising both globally and in the U.S. For example, in Latin America, our shopper segmented merchandising efforts drive an 8.5% increase in sales. In the U.S., we’ve had several successful segmented merchandising tests.
  • We discussed that consumers today are struggling with time pressures which focuses them on getting in and out of the store as quickly as possible. Through the Coca-Cola RFID Path Tracker Study trips have been both mapped and timed. 58% of all trips are less than 20 minutes. The impact of this is that only 1% of 10 minute or less trips are visiting more than 25% of the store and less than a third of the trips that are 10-20 minutes are visiting more than 25% of the stores. Trips that are 20 minutes plus result in 88% of shoppers visiting more than 25% of the store. But even with these longer trips consumers are not shopping up and down all the aisles.
  • The rear of the store is also another key area, in that it has high traffic. From this point, shoppers tend to shop the aisles from back to front. Aisle messaging that is designed to be seen from the rear perimeter stands a far greater chance of being effective. Given that the back of the store is also the most likely path that a shopper will take to get to the beverage aisle, we need to think about how we can merchandise displays in this area so they don’t merely cannibalize sales volume that would have otherwise come from the gondola.
  • In our RFID research, we were able to identify the areas of the store that had the highest shopper density, which is a function of: Shopper traffic throughout the store; and How much time shoppers spent in each section What we learned from this is that the earliest part of the trip provides the most exposure to shoppers. However, from other research we also learned that this is also a point in the trip where shoppers are adjusting to the retail environment and may not yet be in “shopping mode.” This would suggest that the role of the lobby display may be better suited to inform shoppers and not necessarily drive the purchase from the display at this point. More investigation is needed in this area.
  • Taking an integrated, total view of the store is something that needs to happen if we are to excel at shopper marketing. This means that we will need to think of what role each section of the store plays: Merchandise each section based on the shopper’s needs that drove the trip; and Activate each section based on the attitudes and values shoppers bring with them into the store. At the end of the day, what we will end up with is a holistic view of the store, where each part is designed to resonate with certain shoppers, and the combined whole is more shopable and relevant. Some of our early work in this area has already been used to shape 2006 programs. The Landmark study will help us further understand shoppers, and how we can best connect our brands with them throughout the store, section by section.
  • Near the entry of the store is where you will find the highest shopper traffic. This is also an area where behavior is difficult to categorize, as shoppers may not yet be in active shopping mode after entering the store. Characteristics of location: Shopper Traffic: Very High Decision-Making Time: None-Fast Shopper Trip Types: Quick-Long Stage in Trip Progression: Very Early Illustrative Opportunities: Generate excitement & awareness – shoppers want relevant information Key promotions “ New news” Engage the shopper early – get on their mental shopping list
  • The right rear section of the store is a very attractive part of the store: Shopper Traffic: High Decision-Making Time: Slow Shopper Trip Types: Medium & Long Stage in Trip Progression: Early Illustrative Opportunities: Message to the shopper’s needs – make the connection with the HCM Cross-promote center store or high margin perimeter categories – create incremental value for the shopper and retailer Showcase new products and variety (brand & pkg.) – high traffic means a high rate of impressions to drive awareness, trial and unplanned purchases Communicate information (e.g. product benefits or details) –Total store shoppers will be more willing to consume information early on in their trip rather than later
  • Our RFID work identified that quicker trips tend to show highest traffic & density in the front end of the store, where decision times tend to be made very quickly. The front end before the checkout typically has the following characteristics: Shopper Traffic: High Decision-Making Time: Fast Shopper Trip Types: Quick-Medium Stage in Trip Progression: Late Based on these characteristics, there are many opportunities to connect with shoppers with front endcaps. Some general examples include: Merchandising high frequency items to make them easy to find and purchase Cross-merchandising items frequently purchased in combination Communicating promotional information (e.g. hot pricing) to capture unplanned purchases – this is important because shoppers rarely shop the entire store and may not have awareness of the deal Emphasizing convenience benefits of packages
  • When shoppers reach the checkout, they have reached a transition period. The primary goal at this stage is completing the transaction and getting out of the store. Effectively reaching shoppers at this stage requires laser focus. The checkstand typically has the following characteristics: Shopper Traffic: Very High Decision-Making Time: Very Fast Shopper Trip Types: Quick - Long Stage in Trip Progression: Very Late These characteristics reveal some marketing opportunities: Inspiring impulse purchases with call-to-action messaging & bold imagery – it is critical to “break through the clutter” and be noticed Stimulating trial of new products with trial-sized packages –Impulsive, low-involvement, & trial products make sense at the checkout because there is high traffic and fast shopper decision-making times. Merchandise to her needs first – The solo female trip is the most common; merchandising and messaging needs to her consumption & usage needs.
  • Rear endcaps may be more well-positioned for: Longer trip, larger basket shoppers, to: Communicate pricing and sale-promoted brands and packages Remind them to visit the beverage aisle Introduce new products Provide product or promotional information Tie-in/cross-promote items in adjacent sections What makes them well-suited for this purpose : High % of larger basket shoppers that are likely to shop or consider shopping the bev. aisle Shoppers’ dominant, counter-clockwise pattern, tendency to shop aisles from back to front Slower decision-making times vs. front of store End aisle displays are used by shoppers to: Check prices (43%) Locate/purchase items on sale (29%) Serve as reminder to purchase beverages in the aisle (26%) Discover new products (18%) Actions to Consider : Occasion-based messaging and visuals Product information and/or cross-promotion details HCM-relevant call-to-action messaging Easily-visible pricing information Incremental space for new products (to drive awareness and satisfy discovery shoppers)
  • From our RFID studies, we learned that about 1 in 3 shoppers visits the CSD aisle. Beverages are also a high penetration category, which makes the aisle a very important place to connect with shoppers. From our work with retail agencies and understanding of shoppers, we identified three important functions of effective messaging: 1) Navigation (where is it?) 2) Information (what is it, what makes the product unique?) 3) Inspiration (why should I buy it?). These insights were built into our beverage aisle landscape messaging solutions that you see pictured. Given its high visit rate, another role we discovered for the beverage aisle is to connect the shopper with other beverage opportunities, particularly IC. Through analysis of shopper card data, we learned that IC beverage incidence for our brands was more than 3x higher when an FC package was also purchased. Given that the beverage aisle is one of our last points of availability before the checkout, messaging the IC occasion in the beverage aisle gives us an opportunity to drive higher awareness and IC incidence. This is why our IC3 messaging has a beverage aisle component, since nearly 1 in 4 shoppers is not aware of the opportunity to buy IC beverages. As we mine Landmark data in 2006, we will be able to further explore the ways we can use this section of the store more strategically.
  • Taking an integrated, total view of the store is something that needs to happen if we are to excel at shopper marketing. This means that we will need to think of what role each section of the store plays: Merchandise each section based on the shopper’s needs that drove the trip; and Activate each section based on the attitudes and values shoppers bring with them into the store. At the end of the day, what we will end up with is a holistic view of the store, where each part is designed to resonate with certain shoppers, and the combined whole is more shopable and relevant. Some of our early work in this area has already been used to shape 2006 programs. The Landmark study will help us further understand shoppers, and how we can best connect our brands with them throughout the store, section by section.
  • This shows the Performance Beverages segmentation starting with Regular Sports Drinks, followed by Sports Hydration, and Enhanced Sports Drinks and ending with Energy Drinks. The images of products are examples are what can be found within each segment.
  • This shows the Water segmentation starting with Enhanced, Sparkling, Imported, Purified, Spring and Gallons. The images of products are examples are what can be found within each segment.
  • If there are Under stock, there will also be Overstock not only affects KO, also affects retailer

Transcript

  • 1. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising FMI May 6-8, 2007
  • 2. A Number Of Forces, Trends, and Pressures Are Affecting Shopper Behavior Source: The World According to Shoppers, 2004 As consumers grow more time-starved, we are seeing changes in their preferences and behaviors
    • Almost two thirds of consumers do not feel there is enough time in the day to meet all their commitments, with 36% feeling strongly that this is true.*
    • Americans are spending more than three times as much time sitting in traffic than they did 20 years ago. The average delay per person per year is 36 hours now vs. 11 hours in 1982.**
    *Source: Mintel/TechnoMetrica **Source: Texas Transportation Institute, Urban Mobility Study 2001 Shopper Insights
  • 3. Not Important Important Source: Meyers Research and MVI, August 2004 Important considerations for shoppers when deciding where to shop How are these lifestyle changes affecting the shopper’s behavior? “ Shop-Ability” Impacts Where Consumers Decide to Shop First to offer new products Store brand/private label items Quality name brand products Best selection of products for me Special deals or promotions Convenient location Broad product assortment Easy to shop Fast checkout Products always in stock Good customer service Shopper Insights
  • 4.
    • 60% of supermarket purchase decisions are completely unplanned
      • (i.e. category not in consideration set in advance of trip)
    Higher Shop-ability Greater Potential to Drive Unplanned Purchases = Shopable stores are better positioned to capture unplanned purchases Source:POPAI Consumer Buying Habits Study, MVI Shop-ability = “Anything that enables the shopper to make a faster, easier, better decision” Shopper Insights
  • 5. Consumer Pressures are Forcing Shopper Needs to Evolve Evolving shopper need states… Trends driving shopping patterns among consumers… Care for Family Smart budget shopping Efficient stock-up Discovery Bargain Hunting Specific Item Reluctance Grab & Go Immediate Consumption Care for Family Money Time Personal
      • Savings (good price) Important
      • Store Hopping is Common
      • Many are Paycheck-driven
      • One-stop Shopping
      • Less Tolerant of Delays
      • Fast Checkout is a Must
      • Personal Indulgences
      • “ Take Care of Me”
      • Like/Dislike Shopping
      • More Focus on Family
      • Trust Matters
      • Shopping Provides a Connection Point
    Fill-In Quick Mission Traditional Shopping Need States 27% 16% 18% 9% 10% 9% 4% 5% 2% % of Grocery Spend Source: “The World According to Shoppers” Advanced Shopper Insights Stock-up Shopper Insights
  • 6. Need States – Large Dollar Rings $110 Average spending per shopping trip 19% Percentage of grocery shopping trips Care for Family Driven to do the best they can for their families “ I buy what people ask for and what I think will please them, but I always make a decision that ensures it’s good for them.” Efficient Stock-Up Laying in supplies to minimize the number of times they have to go to the store “ I don’t like to grocery shop, so on my major trips, I buy everything I can $95 13% Smart Budget- Shopping Want to do the right thing for the family, but saving money is important in their decisions “ I’m laying in supplies for the long term. I want the store to make it easy for me to find savings.” $93 15% Discovery Explorers hoping to find something new $90 7% “ I like to browse during my grocery shopping trips. Every trip is a little different. I look for new ideas, new recipes, new foods—& non-grocery products like clothes.” Source: “The World According to Shoppers” Shopper Insights
  • 7. Need States – Medium Dollar Rings $57 13% $60 11% $58 8% Bargain-Hunting Among Stores Specific Item Reluctance “ I just don’t want to be here. I’d rather have somebody else do my shopping or go online.” Focus first and foremost on one or two urgently needed items “ I need something right away; a specific food, ingredient, prescription medicine, or alcoholic beverage. If it’s not on the shelf, I’m likely to go to the next store.” Don’t want to grocery shop and seek as little involvement as possible Look for tactical bargains on specific items as opposed to overall savings “ I take pride in what I do. I like to tell my friends about the deals I find.” Advanced Shopper Insights Source: “The World According to Shoppers” Average spending per shopping trip Percentage of grocery shopping trips Shopper Insights
  • 8. Need States – Small Dollar Rings Small-Basket Grab & Go Want to get in, grab a short list of items, and get out in a hurry “ Bread, milk, bananas, and beer. In and out in 10-minutes. That’s what I’m here for.” $41 Average spending per shopping trip 9% Percentage of grocery shopping trips Immediate Consumption “ I’m thirsty, I’m hungry, or I need cigarettes.” Seek to satisfy a craving $32 5% Source: “The World According to Shoppers” Shopper Insights
  • 9. Two Need States Indexing High for Non-Alcoholic Beverages (%) = Frequency of purchase (#) = Frequency of purchases in need state/avg. frequency of purchases across all need states. Source: “The World According to Shoppers” $32 Average spending per shopping trip 5% Percentage of grocery shopping trips $110 19% Care for Family Immediate Consumption Fresh prepared food (162) Cigarettes (143) Magazines (113) Imported cheese (157) Fresh fish (163) Refrigerated prepared food (158) Fresh baked goods (152) Non-alcoholic beverage (152) High Indexing Products Snacks/candy/gum (39%) Non-alcoholic beverage (26%) Dairy (26%) Produce (22%) Frozen Food (21%) Dairy (72%) Produce (70%) Packaged food (66%) Frozen food (64%) Fresh meat (60%) Top 5 Categories Purchased Shopper Insights
  • 10. 8 Beverage Categories 40 Retail Customers 7 Channels 50 DMAs across the U.S. Methodology Size One of the largest surveys we have ever conducted Breadth Unprecedented cross channel view Depth Deep view of customers never done before 60,000 online respondents, 1,200 in-store interviews 115,000+ shopping occasions Shopper Insights
  • 11. Connecting with the Shoppers’ Needs and Motivation helps Builds Loyalty and Sales It all begins with the NEEDS of the SHOPPER CONSUMPTION Grocery, Clubs, Supercenters, Drug, CR, Mass; Value PURCHASE CHOICE SHOPPING EXPERIENCE OCCASION BASED CHANNEL CHOICE SHOPPING NEED Shopper Insights
  • 12. Cleanliness, Selection and Convenience are Very Important in Store Choice Cleanliness and neatness of the store Source: Landmark Study, October 2005 Is close to where I live or work Freshness of produce and meats Does not run out of stock of products I want 38% 40% 22% 20% Source: Landmark Shopper Shopper Insights
  • 13. Health & Wellness Focus is critical Across a Variety of Areas Q55. For each statement please indicate how much you agree or disagree that the statement describes you and your household. Source: Landmark Shopper Study, October 2005 = over index 120+ = under index of at least 80 25% of Shoppers are Extremely Mindful of Health & Wellness when making choices of foods, beverages, and level of physical activity Shopper Insights
  • 14. Shoppers are Pressed for Time across all shopping segments Supermarkets have the opportunity to satisfy time starved grocery shoppers by ensuring high household penetration and high purchase frequency products are in stock on shelf and display and these categories are easy to shop. Q55. For each statement please indicate how much you agree or disagree that the statement describes you and your household. Source: Landmark Shopper Study, October 2005 = over index 120+ = under index of at least 80 Shopper Insights
  • 15. The Grocery Channel Satisfies a Variety of Functional Needs for Shoppers Q27. What needs were you trying to satisfy when you went to [store] on this occasion? Source: Landmark Shopper Study, October 2005 = over index 120+ = under index of at least 80 Shopper Insights
  • 16. Beverages are Staples on the Heavy Basket Shopper Trips Q33a: Which of the following types of non-alcoholic beverages did you buy on this shopping trip Source: Landmark Shopper Study, October 2005
      • Light Grocery Trip = $1 to $40 (roughly 50% of Grocery trips)
      • Medium Grocery Trip = $41 to $84 (roughly 30% of Grocery trips)
      • Heavy Grocery Trip = $85 and higher (roughly 20% of Grocery trips)
    = over index 120+ = under index of at least 80 225 125 50 Yogurt Drink 175 100 50 RTD Tea (not hot) 183 100 50 Sports Drinks or Fitness Water Heavy Grocery Trips Medium Grocery Trips Light Grocery Trips Incidence Index for Beverage Purchases on Light, Medium and Heavy Shopping Trips 36 73 142 No Beverages 131 113 79 Any Beverage 300 200 100 Meal Replacement Beverages 250 150 50 RTD Coffee (not hot) 250 150 50 Energy Drinks 154 108 69 Flavored or Fortified Milk or Milk Drink 194 125 56 Bottled Water or Flavored Water 178 113 61 Juices, Juice drinks, Fruit Smoothie 156 116 67 Carbonated Soft Drinks or Sodas Shopper Insights
  • 17.
    • Convenience Retail Shopper Behavior Study
    • Display Effectiveness Studies
    • Display Mix Study – Supermarkets
    • CSD Ad Feature Optimization Analysis
    • Out-of-Stock Study Supermarkets
    • Beverage Consumption Purchase Cycle Learnings
    Coca-Cola leads in Insights and Research used to Understand the Shopper, Industry and Category
    • Home Meal Replacement Study
    • Cross Category Shelf Space Comparison
    • Role of the CSD Category in Supermarkets
    • Beverage Market Structure Study
    • Coca-Cola Retailing Research Council Studies
    • ACN Channel Blurring
    • Grocery SuperStudy
    • Convenience SuperStudy
    • Center-Store Re-invention
    • Store Optimization Research
    • Landmark Study
    • RFID Shopper Insights
    • Shared Ad Analysis
    Shopper Insights
  • 18. Insights to Action Shopper Insights Actions Insights Retailer focus on “shop-ability” will help attract and maintain loyal shoppers. As consumers grow more time-starved, we are seeing changes in their preferences and behaviors. Utilize in-store messaging to help consumers effectively navigate categories and store. Cleanliness, Selection and Convenience are very important in Store Choice. Shoppers feel strongly that there is not enough time in the day to meet all their commitments. Emphasize perimeter selections and fast checkouts. Shopper Insights
  • 19. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising
  • 20. Clear Segments CSD MILK BEER JUICE POWDERED DRINKS INSTANT COFFEE TEA Treat, Fun Nutrition Relax Perk Up Social Reward Cheap for Kids Breakfast 1984 Now - Many New “Categories” and Further Segmenting BEER Spirits Diet MILK Reg. JUICE Juice Drinks Bottled Water Flavored Milk Energy Drinks Sports D ri nks Mixers Tap Water Purified Water INSTANT COFFEE Herbal Teas Café Coffee Flavored Coffees 2007 Flavored Sparkling Water Diet Flavored Mineral Water Yogurt Drinks Premium Wine TEA Fruit Teas Fresh Coffee CSD Regular Imported Light Imported Light Soy Drinks Powdered Drinks 2% Skim Consumers Have More Beverage Choices Than Ever Before Category Insights
  • 21. Share Of Stomach – Total U.S. Reflects consumption rates and importance of categories Source: Beverage Digest Fact Book 2007, BD/Maxwell CSD 27.9 (-.4) Tea 3.9 (+.1) Juices 4.4 (-.3) Bottled Water 11.5 (+.8) Coffee 8.9 (-.1) Milk 10.7 (-.3) Beer 11.9 (+.2) Sports Drinks / Energy 2.6 (+.3) Wine 1.3 (+.1) Tap Water 14.8 (-.5) Share (Share chg. vs. Prior) 155 Total Annual Gallons per Person = 54oz. Per Day Category Insights
  • 22. CSD 56.5 (-0.7%) The Size and Value of the Nonalcoholic Beverage Category in all measured channels is growing >$2.3B +6.0% Category Value (Dollar) Share / Dollar % Change Source: Nielsen All Measured Channels Total US 12 months ending 3/31/2007 Sports Drinks 10.0 (+6.8%) Single Serve Water 14.7 (+14.1%) Energy Drinks 8.5 (+30.3%) RTD Tea Bottle/Can 4.3 (+19.6%) RTD Coffee 1.5 (+14.4%) Juice & Drinks 4.4 (-1.4%) Total Nonalcoholic Beverages = $39B, of which $22B is CSD Category Insights
  • 23. The Beverage Category is very Important: More Consumers say they drink CSDs Daily or Weekly than any other non-tap Water Beverage Source: USA BevCAT 2005 Survey Beverage Category Consumption Frequency Category Insights
  • 24. Carbonated Soft Drinks Total U.S. Corporate Share and Brand Rankings Retail / Fountain / Vending Channels Source: Beverage Digest Fact Book 2007 Includes Retail, Fountain and Vending Channels Coca-Cola Pepsi-Cola Dr Pepper / Cadbury Cott National Beverage All Other Corporate Share Category Insights
  • 25. The Soft Drink Category is very important to Shoppers: In addition to high buying rate, Soft Drinks Purchase Frequency ranks second only to Bread
    • Annually, shoppers spend 51% more dollars on Soft Drinks than on any other top 10 center store category - 28% of the Shopper trips include Soft Drinks.
    • Bread is the only center store category that surpasses Soft Drinks purchase frequency.
    $41.38 $29.35 $28.97 $46.71 $72.17 $26.85 $29.54 $22.11 $26.18 $58.01 21 7 9 8 5 7 14 18 8 10 7 Soft Drinks Bread & Baked Goods Cookies Crackers RTE Cereal Snacks Candy Shelf Stable Juice Soup Bottled Water Coffee Buying Rate ($) Purchase Frequency $109.65 Buying Rate = Annual Category $ per Household. Purchase Frequency = Average number of shopping trips (purchase occasions) on which the Category was purchased. Penetration = % of Households Buying the Category at least once per year in any outlet. Incidence = % of ALL trips made by all shoppers that include a purchase of the item/category Source: Nielsen Homescan TOTAL U.S. - TOTAL GROCERY $2MM- 52 WEEKS ENDING 12/31/06 Incidence: HH Penetration: Category Insights
  • 26. Nonalcoholic Beverage Categories can be grouped into four Consumer Need States Performance Beverages Functional CSDs and Refreshing Alternatives Convenient Refreshment “ Enjoyable Refreshment” CSDs “ Healthy Refreshment” Fruit Drinks (<10% Juice) “ Versatile Refreshment” RTD Teas “ Refreshing Alternatives” Shelf Stable Juices & Drinks ( > 10% Juice) Sports Drinks Sports Hydration Energy Drinks Water Hydration On-the-Go Single-Serve Water: At Home Gallons Enhanced Sparkling Purified Spring Imported Juice/Drink Shelf Stable Health & Wellness Youth Family Adult Shelf Stable Juices & Drinks (>10% Juice) Category Insights
  • 27. Clear Organization and Messaging helps Drive Shopper Conversion within the Need States CSDs Water Performance Beverages Convenient Refreshment Hydration Functional “ Navigating the store and simply finding the desired product easily becomes a more important consideration” - MVI Sports Drinks, Sports Hydration, and Energy Drinks Purified, Spring, Imported, and Enhanced Sparkling Juice / Juice Drink Health & Wellness Shelf Stable Juices & Drinks (>10% Juice) Category Insights
  • 28. Enjoyment Today Feel Good Today Feel Good Tomorrow Hunger & Digestion Sensory Pleasure & Food Enhancement Having a Good Time Confidence & Individuality Energy / Stimulation Active Replenishment Mental Renewal Health, Beauty & Nutrition Comfort & Relaxation Routine Refreshment Power Opportunity White Space Top Coca-Cola Brands in each need state Coca-Cola’s Innovation Strategy Is Focused On Meeting Consumption Need States Of Your Consumers Category Insights
  • 29. Insights to Action Category Insights Actions Insights Armed with Advanced Shopper Insights, Retailers can evolve with Consumers. Consumer need states and occasions drive beverage tastes, preferences and consumption. Non-Alcoholic Beverages can be organized into Consumer Need States. Each beverage need state is unique, serving different consumer needs. Clear messaging provides navigation, information and drives Shopper Conversion. Consumer needs are evolving with more beverage choices than ever before. Category Insights
  • 30. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising
  • 31. As Many Retailers Focus On Perimeter Categories In Their Efforts To Differentiate, Total Labor Costs Will Increase Even More
    • “ The total dollar value of labor costs for the perimeter can nearly triple those of center store items, driving down margins.”*
    *Source: 2005 GMA Center of Store Study; True Profit from WBC SuperStudy True Profit = Adjusted Gross Profit - Activity Based Costing Financial Analysis
  • 32. The Coca-Cola System Recognizes that Getting Center Store & Non-Alcoholic Beverages Right is Essential
    • 3 of top 10 center store categories are Non-Alcoholic Beverages
    Source: Willard Bishop Consulting 2005 Supermarket Retailer Survey & WBC SuperStudy Adj. Gross Profit $ per Store per Week $63,983 Center Store Perimeter 65% 35% $118,299 Retail Executives say: “There are too many sales at take; perishables can’t grow fast enough to overcome center-store losses” Total Retail Dollars (Billions) Top Center Store Dollar Categories Source: Nielsen Strategic Planner; Supermarkets $2mm+, 52 WE 9/9/06 Financial Analysis
  • 33. Soft Drinks are an Important Component to “Center Store” Profitability $3,449 $3,539 $2,560 $1,896 $2,314 $1,839 $1,754 $1,472 $1,469 $1,081 Based on Weekly Sales, Soft Drinks rank second in Adjusted Gross Profit. Source: Bishop Consulting (3) Chain Average Super Study – (Adjusted Gross Profit = GP – Trade & Terms) Soft Drinks Bread Cookies & Crackers RTE Cereal Salty Snacks Candy Shelf Stable Juice Soup Bottled Water Coffee Top Ten Center Store Categories Center Store Adjusted Gross Profit Adjusted Gross Profit= Gross Profit + Terms + Trade Dollars Financial Analysis
  • 34. Soft Drinks are One of the Most Productive Categories in “Center Store” Source:2005 WBC Super Study: *AGMROII:Adjusted Gross Profit (Gross Profit+Terms+Trade dollars) / Avg Inventory $ on Hand (Adjusted Gross Margin Return on Inventory Investment) $11.92 $12.59 $17.41 $20.82 $25.81 $27.66 $34.30 $62.48 $63.67 $72.85 Coffee Candy Cookies & crackers Soup Ready-To-Eat Cereals Shelf stable juice Salty snacks Soft Drinks Bottled water Bread AGMROII Top Ten $ Categories Financial Analysis
  • 35. Insights to Action Financial Analysis Actions Insights Add value to make center store easier to shop with relevant product information and convenience features. Evaluate store real estate dedicated to products with high Gross Margin Return on Investment. Leverage the strength of Soft Drinks to drive traffic to Center Store. “ Center Store” contributes significantly to results and is critical to Supermarket Profit. Source:2005 WBC Super Study: Soft Drinks are an Important Component to “Center Store” Profitability. “ Center Store” departments deliver 65% of Adj. Gross Profit. Financial Analysis
  • 36. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising
  • 37. Soft Drink Pricing and Ad Presence Play a Significant Role in the Category’s Ability to Drive Traffic
    • Soft Drink brand strength is a much stronger draw for shoppers than for other categories.
    Disproportionately important to shoppers to have Soft Drinks in ad Q.1c: Still thinking about your next trip to purchase grocery items, which of the following are reasons you will go to the store for each of the items listed? Source: 2005 Shopper Pricing Perception Study Top Reasons Why Shoppers Say Specific Categories Draw Them To their Supermarket % of Shoppers Need to replenish home stock To get the best price A family member asked for a specific item Saw item on sale in a newspaper/flyer Soft Drinks Dairy (Milk, Eggs, Cheese) Fresh Meat/Fish Produce (Fresh Fruit and vegetables) 94 39 32 23 96 27 3 14 88 40 2 14 83 18 17 2 Pricing & Promotion Analysis
  • 38. Promotional Planning Modeler 12pk Cans Retail Price Package Planning Tool linked to Sales Forecasting System for developing a Retailer Promotional Plan by Package versus Prior Data Source: KAEP – Key Account Event Planning Pricing & Promotion Analysis
  • 39. Nielsen Based Elasticity Model Retail Price Package Planning Tool for Evaluating and Analyzing Elasticity over time Data Source: Nielsen Pricing & Promotion Analysis
  • 40. Nielsen Volume Throw Model Retail Price Package Planning Tool for Analyzing Volume lifts by price point across time Data Source: Nielsen Pricing & Promotion Analysis
  • 41. Expanding Category Sales and Profits are mutually beneficial It is not about dividing the pie between . . . It is about growing the total pie Zero Sum Game Win – Win Game Manufacturer Retailer Retailer Manufacturer Pricing & Promotion Analysis
  • 42. Together We Can Improve Category Profitability, even in a rising cost environment Traffic Driving Packages Profit Packages Creating Value for the Retailer Our Packages Play Various Category Roles in Balancing Traffic Building and Profit Generation Pricing & Promotion Analysis
  • 43. Insights to Action Pricing & Promotion Analysis Actions Insights Utilize Soft Drinks to maintain and grow trips, as well as increase basket size. Soft Drink pricing is an important factor in driving shoppers to the store. Set pricing and profitability goals and measure performance against them. 76% of shoppers believe mid priced Soft Drinks are reflective of total store pricing. Total Basket Price Image is Closely Aligned with Soft Drink Price Image. Use tools like RPA to jointly develop Profitable Retail Price Package Plans. Pricing & Promotion Analysis
  • 44. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising
  • 45. The Shopper Segmented Merchandising Opportunity Shopper Segmented Merchandising: Delivering beverage solutions matched to each store’s DNA Store A’s “Shopper DNA” Each store serves a different mix of Shoppers, Occasions & Needs Each store has a unique DNA Market Evaluation
  • 46. The Shopper Landscape Is Changing
    • The shopper base is fragmenting
    U.S. Census and BLS, 2003; Yankelovich Monitor, 2005; *GMA Study – Reducing Out of Stocks in the Grocery Channel, 2002 . . . of U.S. households may now be counted as “Traditional” families – a married couple with at least one child – vs. 44.3% in 1960
      • . . . of women are now in the workforce
      • . . .first year that Hispanics will control more disposable income than any other U.S. minority group.
    Only 60% 2007
    • Given the competitive environment & total shopping trips are down, each retailer has fewer opportunities to reach the shopper, so merchandising needs to match your shoppers when they are in your store
    • Fewer Out-Of-Stocks is one of the top 3 items identified by shoppers to improve the shopping experience*
    Market Evaluation
  • 47. What Is Shopper Segmentation?
    • Instead of creating one solution for millions of shoppers, develop smaller shopper segments and tailor solutions to these segments
      • For Beverages, segmentation drives assortment on Shelf, Displays and Coolers: Right Brand, Right Package, Right Price, Right Occasion in the Right Store
    Your Shopper Base Clusters Impact At Store Level Market Evaluation
  • 48. Shopper Segmented Merchandising Methodology 5 0 1 1 Store 4 7 12 7 7 Store 5 7 2 13 4 Store. . . 9 3 14 2 Store 6 15 2 1 Segment … 0 6 5 Segment 3 3 6 5 Segment 2 3 Store 3 12 Store 2 10 Store 1 Segment 1 110K+ Households . .clustered into 59 Beverage Purchase Segments 90,000 stores are scored on 59 Beverage Segments Stores with similar scores are grouped together to form 5 Store Clusters Water Sports Drinks Segments are based on beverage Purchase Drivers and demographics Scoring is based on demographic fit between store shoppers and beverage Purchase Drivers Dynamic Clustering: Grouping together stores with similar beverage opportunities Nielsen panel households Beverage Segments SS Juice Energy Tea Beverage Segments 90,000 stores in Spectra database: Grocery, Mass, Club, Drug, and Dollar formats 2 3 4 5 59 SSD 90,000 store profiles Utilizing Nielsen’s new Dynamic Clustering Model , Shopper Purchase Segments are mapped to Store Clusters to drive store-level changes Store level changes Market Evaluation
  • 49. What Are The Coca-Cola Beverage Clusters? Source: Nielsen Homescan Panel; AO Beverages includes RTD Coffee, Dairy Alternatives, Vegetable Drinks, Powdered Soft Drinks, Drinkable Yogurts, Baby Juice, Non-Carbonated Mixers and Meal Replacement beverages Rural
    • Late adopters of new beverage categories
    • Sparkling Soft Drinks 53% of Beverages—62% of Sparkling is Regular
    • High Citrus and 24 pack cans
    Mainstream
    • Middle-of-the road beverage preferences
    • Sparkling Soft Drinks 46% of Beverages—60% of Sparkling is Regular
    • Average brands and packages
    Urban Upscale
    • Early adopters of new beverage brands & categories
    • Sparkling Soft Drinks 37% of Beverages, 14% is Juice/Juice Drinks
    • High Ginger Ale and 2 liter
    Suburban Upscale
    • Strong users of all beverage categories
    • Sparkling Soft Drinks 42% of Beverages—46% of Sparkling is Diet
    • High Diet Cola and Tea
    Urban Ethnic
    • Strong users of beverages with flavor
    • Sparkling Soft Drinks 42% of Beverages, 65% of Sparkling is Regular
    • High Lemon-Lime and Orange
    Share of Non-Alcoholic Beverage Retail $ Reg: 60% Diet: 40% Reg: 54% Diet: 46% Reg: 59% Diet: 41% Reg: 65% Diet: 35% Reg: 62% Diet: 38% Market Evaluation
  • 50. How Can Beverage Assortment Differ by Segment? Deliver “Store Level” Merchandising and Marketing Solutions C luster 3: Suburban Upscale C luster 5: Urban Flavor Right Brands Right Packages Right Occasions Urgent Items HH Stock-up Speedy Fill-in JIT Meals HH Stock-up Everyday Savings Right Brands Right Packages Right Occasions Market Evaluation
  • 51. Beverage Emphasis by Cluster In Coca-Cola Section Flavor Emphasis Rural Diet Sparkling Emphasis Regular Sparkling Emphasis 13% 11% 17% 28% 31% Urban Ethnic Urban Upscale Suburban Upscale Mainstream % of Stores Market Evaluation
  • 52. Applying Shopper Segmented Merchandising At Store Level
    • Process:
    • Map beverage clusters to your shopper/store segments
    • Calibrate store list to ensure each store is mapped to the right cluster
    • Survey each store to collect correct Coca-Cola section fixture, cold equipment & rack information and confirm store cluster classification
    • Start assortment work with review of macro merchandising guiding principles for relevant clusters
    • Develop shelf planogram for each store utilizing store level sales data & merchandising guiding principles
    • Develop Marketing & Messaging that connects with your Shoppers to drive Profitable Growth, in Beverages and Cross Category
    Market Evaluation
  • 53. Coca-Cola Experience Shows Shopper Segmented Merchandising Drives Results
    • Proven success in Latin America: +8.5% in Coca-Cola Sales
      • SKU rationalization by cluster
      • New SKU launches to meet shopper needs
      • Pricing decisions
      • Planogram resets by shopper cluster
    • Initial test results in the U.S. very positive
      • Tienda (Hispanic) small store program in LA: +23% sales growth
      • Denver market large format resets based on shopper clusters: +5.8% sales growth
      • Shopper Segmentation of Enviga brand launch: Target key shopper segments and stores for the brand introduction
    Launched New Package to Target Consumer +10.6% ! Activated Convenience Package +13.1% ! Market Evaluation
  • 54. Insights to Action Market Evaluation Actions Insights Convert Shopper knowledge into information in action, information focused on results (i.e., Store tailored planograms to maximize sales and reduce out of stocks). Each store has a unique DNA (Shoppers, Occasions & Needs). Extensive shopper research & insights drive store level assortment changes. Segment shoppers based on their beverage purchases with five actionable store clusters. Segment shoppers in a way that would lead to meaningful & actionable changes at a store level. Develop smaller shopper segments and tailor solutions to these segments. Implement merchandising solutions that reflect these differences. Market Evaluation
  • 55. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising
  • 56. Supermarket visits are focused on today’s needs Source: 2005 Coca-Cola RFID PathTracker Study Note: Visuals do not represent only traffic pattern by visit segment. Visuals represent examples of types of visits. 20 Minute+ Trips (42% of all visits) 88% of these trips visit more than 1/4 of the store 58% of Trips Are Less Than 20 Minutes 10-20 Minute Trips (21% of all visits) 28% of these trips visit more than 1/4 of the store <10 Minute Trips (37% of all visits) 1% of these trips visit more than 1/4 of the Store Advanced Merchandising
  • 57.
    • Rear endcaps receive more shopper traffic than front endcaps
    • Products that are in the gondola will receive more shopper exposure if they are positioned towards the back
    Traffic flow in most aisles (including CSD aisle) tends to run back to front, with shoppers buying mostly on their left. Implication: Shoppers spend a significant amount of time in the back perimeter, shopping aisles from back to front. Source: 2005 Supermarket RFID Study Shoppers shop in a dominant, counter-clockwise pattern, shopping aisles from back to front Advanced Merchandising
  • 58.
    • Hot Spots: Mostly on the perimeter and a few center of store aisles leading to the checkouts: produce, meat, dairy and frozen food
    • Dead Zones: Much of the center of store has light traffic
    Shopper Density Map Implication: The front and first quadrant of the store offer the greatest number of shopper exposures for messaging & displays High Density Low Density The earliest part of the trip provides exposure to the most shoppers Source: 2005 Supermarket RFID Study Advanced Merchandising
  • 59. Early Progression Shoppers Total Store Shoppers Quicker Decision Shoppers CSD In-store merchandising efforts should align with shopper behavior and motivations
    • Early Progression Shoppers:
    • Generate Excitement
    • Message to the shopper’s needs.
    • Cross-promote with center store or higher margin perimeter categories.
    • Showcase new products and variety (brand & pkg.).
    • Total Store Shoppers:
      • Cross-promote (e.g. tie-in center store categories).
      • Drive new product awareness.
      • Showcase variety (brand & pkg.).
      • Message to the shopper’s needs.
      • Improve shopper navigation.
      • Provide product information.
    • Quicker Decision Shoppers:
      • Merchandise high frequency items to make them easy to find and purchase.
      • Cross-merchandise items frequently purchased in combination.
      • Communicate promotional information (e.g. hot pricing) to capture unplanned purchases.
      • Inspire the impulse purchase.
      • Emphasize convenience.
    Advanced Merchandising
  • 60. Zone 1 : Early Progression Shoppers
    • Illustrative Opportunities:
    • Generate excitement & awareness
      • Key promotions
      • “ New news”
    • Engage the shopper early
    • Characteristics of location:
      • Shopper Traffic: Very High
      • Decision-Making Time: None-Fast
      • Shopper Trip Types: Quick-Long
      • Stage in Trip Progression: Very Early
    Targeting Early Progression Shoppers: Applying Insights to Early Displays Advanced Merchandising
  • 61.
    • Illustrative Opportunities:
    • Message to the shopper’s needs
    • Cross-promote with center store or higher margin perimeter categories
    • Showcase new products and variety (brand & pkg.)
    • Communicate information (e.g. product benefits or details)
    • Characteristics of location:
      • Shopper Traffic: High
      • Decision-Making Time: Slow
      • Shopper Trip Types: Medium & Long
      • Stage in Trip Progression: Early
    Targeting Early Progression Shoppers: Applying Insights to Secondary Locations Zone 1 : Early Progression Shoppers Permanent/Semi-Permanent Merchandising Advanced Merchandising
  • 62. Zone 2 : Quicker Trip Shoppers
    • Characteristics of location:
      • Shopper Traffic: High
      • Decision-Making Time: Fast
      • Shopper Trip Types: Quick-Medium
      • Stage in Trip Progression: Late
    • Illustrative Opportunities:
      • Merchandise high frequency items to make them easy to find and purchase
      • Cross-merchandise items frequently purchased in combination
      • Communicate promotional information (e.g. hot pricing) to capture unplanned purchases
      • Emphasize convenience benefits of packages
    Connecting with Quicker Decision Shoppers: Applying Insights to Front Endcaps Advanced Merchandising
  • 63. Zone 2 : Quicker Trip Shoppers Temporary Cooler Shrouds IC3 Call-to-Action Messaging
    • Characteristics of location:
      • Shopper Traffic: Very High
      • Decision-Making Time: Very Fast
      • Shopper Trip Types: Quick - Long
      • Stage in Trip Progression: Very Late
    • Illustrative Opportunities:
      • Inspire the impulse purchase with call-to-action messaging & bold imagery
      • Stimulate trial of new products with trial-sized packages
      • Merchandise to her needs first
    Connecting with Quicker Decision Shoppers: Applying Insights to the Checkout Advanced Merchandising
  • 64. Zone 3 : Total Store Shoppers
    • Characteristics of location:
      • Shopper Traffic: High - Medium
      • Decision-Making Time: Med. Slow
      • Shopper Trip Types: Medium - Long
      • Stage in Trip Progression: Early - Late Middle
    Endcap
    • Illustrative Opportunities:
      • Cross-promote (e.g. tie-in center store categories)
      • Drive new product awareness
      • Showcase variety (brand & pkg.)
      • Message to the shopper’s needs
    Connecting with Total Store Shoppers: Applying Insights to Rear Endcaps Advanced Merchandising
  • 65. Zone 3 : Total Store Shoppers
    • Characteristics of location:
      • Shopper Traffic: Low-Medium
      • Decision-Making Time: Med. Slow–Medium
      • Shopper Trip Types: Medium-Long
      • Stage in Trip Progression: Late Middle-Late
    • Illustrative Opportunities:
      • Improve shopper navigation
      • Provide product information
      • Inspire the shopper to purchase (HCM-relevant imagery)
      • Connect the shopper with front-end categories (e.g. IC beverages)
    Beverage Landscape Aisle Messaging Connecting with Total Store Shoppers: Applying Insights to the Center Store Advanced Merchandising
  • 66. Early Progression Shoppers Total Store Shoppers Quicker Decision Shoppers CSD In-store merchandising efforts should align with shopper behavior and motivations
    • Early Progression Shoppers:
    • Generate Excitement
    • Message to the shopper’s needs.
    • Cross-promote with center store or higher margin perimeter categories.
    • Showcase new products and variety (brand & pkg.).
    • Total Store Shoppers:
      • Cross-promote (e.g. tie-in center store categories).
      • Drive new product awareness.
      • Showcase variety (brand & pkg.).
      • Message to the shopper’s needs.
      • Improve shopper navigation.
      • Provide product information.
    • Quicker Decision Shoppers:
      • Merchandise high frequency items to make them easy to find and purchase.
      • Cross-merchandise items frequently purchased in combination.
      • Communicate promotional information (e.g. hot pricing) to capture unplanned purchases.
      • Inspire the impulse purchase.
      • Emphasize convenience.
    Advanced Merchandising
  • 67.
    • The three most influential factors in a shopper’s purchase decision from a display are: Price, Brand and Variety.
    • Two-thirds of shoppers say displays help them to stop and look at different products.
    • Shoppers say CSD displays help remind them to shop for that category.
    • Carbonated soft drinks are the category shoppers claim to purchase most often when they see it on display.
    • Shoppers say that they purchase almost half of the soft drinks they buy from a display.
    Shoppers frequently purchase categories when seen on display Source: Shopper Display Intercept Study 2006: Integrated Research Associates Advanced Merchandising
  • 68. Traditional “New Age” Sections are a Hodge-Podge of DSD Items Advanced Merchandising
  • 69. Redefine Categories Based on Consumer Need States CSDs and Refreshing Alternatives Juice/Drink Shelf Stable Water Performance Beverages Convenient Refreshment Health & Wellness Hydration Functional
    • CREATE A “REFRESHMENT CENTER” CSD's and “New Age” SKU’s meet the Convenient Refreshment Need State and should be grouped together
      • Redefine the Antiquated “New Age” Category as “Refreshing Alternatives” to Better Meet Consumers Needs for “Healthy” and “Versatile” Refreshment
      • Shelve CSDs (“Enjoyable” Refreshment) on One Side of the Aisle and Refreshing Alternatives across from CSDs when possible
      • Move Non Carbs from CSD set to Refreshing Alternatives
    • IMPROVE ORGANIZATION OF WATER CATEGORY Group items together that meet the Hydration Benefit Need State
      • Move Sports Water (e.g. Propel) from Water Aisle into Performance Beverages
      • Reallocate space from declining Gallons to fast growing Single Serve
      • Segment the Water aisle by Enhanced, Sparkling, Imports, Purified, Spring and Gallons
    • ENHANCE JUICE & JUICE DRINK CATEGORY Group items together that meet the Health and Wellness Need state
      • Relocate All Drink Items That Contain 10% or More Juice Content to this Aisle Regardless of Route-to-Market
      • Evolve the Consumer Usage Set to Include the Emerging PET Segment Between Aseptics (Youth) and Multi-Serve
    • CREATE A “PERFORMANCE BEVERAGE” CATEGORY Functional Benefit Need State has grown in importance and redefining category will help consumers find the products they want and create excitement in the aisle.
      • Co-locate All Functional or Performance Beverage Categories Together (Regular Sports Drinks, Sports Hydration, Energy Drinks)
      • Shelve Where Sports Drinks Are Currently Located in Your Store
    Advanced Merchandising
  • 70. Specific Steps to Reorganize Categories to Better Meet Consumers Needs
    • Create NEW “Performance Beverages” Set
      • Move Propel from Water Aisle and create Sports Hydration Segment which includes PowerAde Option
      • Move Energy Drinks from New Age to Performance Beverages
    • Move High Velocity Single-Serve Items Currently in New Age to Cold Equipment
    • Move RTD Coffee from New Age to Coffee Aisle
    • Reorganize New Age to Create NEW “Refreshing Alternatives” Section That Includes Fruit Drinks & Teas Previously in CSD Section
      • <10% Fruit Drinks (Healthy Refreshment)
      • RTD Teas (Versatile Refreshment)
    • Use Vacated CSD Space for Innovation and Highly Productive SKUs
    “ Performance Beverages” in Shelf Stable J/D Aisle “ Refreshing Alternatives” in Soft Drink Aisle Cooler Coffee Section Refreshing Alternatives Aseptics S-S MPs & Single Units Multi-Serve Performance Beverages Healthy & Versatile NCBs (Fruit Drinks & RTD Tea) CSDs 2 3 1 5 4 Advanced Merchandising
  • 71. Performance Beverage Benefits Performance Beverages - Functional Beverages Segment Sports Drinks Sports Hydration Energy Product (s) Consumed during physical activity during the day or during a light to moderate workout Consumed during social or other activities when energy is desired Used as a lower calorie alternative drink with added vitamins and electrolytes during workouts Consumer Benefits Retailer Benefits
    • Improve shop-ability of the aisle
    • Sports Drinks, Sports Hydration, Energy:
      • Different ingredients
      • Align like products
    • Improve ‘Center Store’ productivity
    • Differentiate versus competition
    • Convert shoppers into buyers
    • Drive excitement into stores
    • Create and define emerging categories
    Advanced Merchandising
  • 72. Products Can Then be Grouped Within this Segmentation
    • Refreshing Alternatives
    Clear segmentation allows the shelf to be organized and easy to shop For My Family (All Ages) 12oz/12pk Cans, Multi-Pack Bottles, 1L-3L For Me (Teens/Adults) Single- Serve and Multi-Serve Bottles Product (s) Segment Teas Fruit Drinks Teas Fruit Drinks Advanced Merchandising
  • 73. Segmentation and Products in the Water Category
    • Water-Hydration
    Clear segmentation allows the shelf to be organized and easy to shop Single Serve Multi Serve Segment Enhanced Sparkling Imported Purified Spring Gallons Product (s) Advanced Merchandising
  • 74. Insights to Action Advanced Merchandising Actions Insights Shoppers spend a significant amount of time in the back perimeter, shopping aisles from back to front. Display new products, Cross-Merchandising category tie-ins, and utilize Promotional messaging . Message to the shopper’s needs and Cross-promote with center store or higher margin perimeter categories. Engage the shopper early - Merchandise high frequency items to make them easy to find and purchase. The First Third of the Supermarket Shopping Trip provides exposure to the most shoppers - Higher Traffic and Slower Shop Times. Shoppers shop in a dominant, counter-clockwise pattern, shopping aisles from back to front. Traditional “New Age” Sections are a Hodge-Podge of DSD Items. Redefine Categories Based on Consumer Need States and Segmentation. Advanced Merchandising
  • 75. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising
  • 76. Efficient Assortment (Too Many SKUs, Limited Space) In-Store Space In Supermarkets Has Not Expanded As Quickly As SKUs CPG Manufacturers Have Responded With A Record Number Of New SKU(s) Expansion of Coca-Cola SKU(s) From 1986 to 2006 Impact Of Inventory-to-Sales and Assortment On System Value Chain Efficient Assortment
  • 77.
    • Which items drive sales, traffic and profits
    • Lost opportunities due to not carrying certain items
    • Which items represent true variety, not duplication
    • Which items are critical to consumer loyalty
    • Which items bring valuable (high spending, frequent shopping) consumers to the category
    • Which items support your mission and category strategy
    Efficient Assortment (Helps Determine..) Efficient Assortment
  • 78. Efficient Assortment (Using Efficient Item Assortment Software)
    • EIA Combines industry-standard methodologies for Efficient Assortment
      • As established by the Joint Industry Committees on Efficient Consumer Response
    • … And JDA’s industry-leading merchandising/software development expertise
    Set Market Coverage Level Confirm/Validate Additions/Deletions/ Retentions Review and Finalize Assortment Assortment Quantification Fit Assortment to Shelf Gather the Data Calculate Assortment Category Management Basics Efficient Assortment
  • 79. Insights to Action Efficient Assortment Actions Insights Assess new products and positioning. Brand and Package innovation - Increasing SKU proliferation. Perform comprehensive analyses & interpretation of category performance. Evolving brands - missed sales and revenue opportunity to reach full potential. Initiate and execute efficient assortment process. Consumer demand for variety may lead to “Variety Confusion”. Efficient Assortment
  • 80. Shopper Insights Market Evaluation Pricing & Promotion Analysis Financial Analysis Category Insights Space Management Efficient Assortment Advanced Merchandising
  • 81. Allocation of Inventory
    • Out-of-Stocks
    • Lost Revenue
    • for Retailer and Bottler
    • Creates trial purchase
    • of competitors’ products
    Out-of-Date Product Excessive Cash Tied up in Inventory Quality Assurance Issue Even Sell Downs Maximizes Cash Flow Maintains/grows consumer base The Proper Allocation of Products at the Point-of-Sale to Minimize Out-of-Stocks and Excessive Inventory and Maximize Category Profit, Share and Volume. Space Management Inadequate Inventory Excessive Inventory Proper Inventory Proper Inventory
  • 82. Space Management (Principles: Art and Science) ART Space Management
  • 83. C:/data/customer/ACFS/ACFS2 6/4/99 ( ) Space Management (Principles: Art and Science) Data Sources Store Specific or Cluster POG Measures SCIENCE ADD / DELETE Days of Supply Space to Sales GP/LINEAR FT. CROSS POG ANALYSIS NEW ITEM PLACEMENT EFFICIENT ASSORTMENT VALIDATION Space Management
  • 84. Space Management (Getting “IT” Right at the Shelf) EIA Space Management
  • 85. Insights to Action Space Management Actions Insights Sales / Category / Space analysis. Pressure on permanent space and effective inventory levels. Continuous Assessment of each SKU performance. Exciting new CSD category innovation has “Squeezed” core CSD brand space. Tight Space has stunted core CSD brand growth and expansion opportunities. Develop and implement a course of action for product introductions. Space Management
  • 86. Summary - Coca-Cola is Focused on Understanding the Shopper
    • We are engaging every aspect of our system to become a shopper-insights led, shopper marketing-driven organization.
    • We are driven to help customers differentiate themselves by targeting shoppers based on their unique needs states and occasions.
    • We are working with retailers to develop segmented business solutions that will better differentiate their stores and increase beverage category and total store sales.
    • We are converting Shopper knowledge into information in action, information focused on results.
    Summary