The Future of Category
Analytics – Win with Shoppers
Who is Acosta
ACOSTA SALES
Headquarter Selling
Sales
Customer Relationship
Management
Joint Business Planning
Business Insights
Category Management
Space Management
Business & Retail Analysis
Loyalty Analytics
Retail Merchandising
Continuity
Sets
Projects
Business Process
Outsourcing
Order to Invoice
Invoice to Cash
AMG Strategic Advisors
Strategic Consulting
Shopper Insights
Market Research
Advanced Analytics
The Agency at AMG
Integrated Marketing Solutions
Shopper Marketing
AMG Activation
In-store Media, promotion
and Communication
Mosaic
Assisted Selling
Training
Experiential Marketing
Interactive
Discussion Topics
• A quick look at the evolution of category
analytics
• The need to focus on the shopper
• New skills and methods needed
• Bret Thurston
• Sr. Manager Category Development – Hillshire
Brands
The industry is evolving back to a
local shopper focus
1980’s
Future
Past
2012+
Local Store Control
National Strategies
Shopper Based Offers
Local Market Advertising
One Plan for the Entire
Chain
Neighborhood/
Precision Marketing
Limited Assortment
Assortment as a
Differentiator
Assortment
customization
Private Brands as a Point
of Difference
Private Brands as a
Margin Play
Private Brands as a Point
of Difference
Small Neighborhood
Stores
Larger Super Stores
Neighborhood StoresMulti Formats
Customer focus
Efficiency focus
“Shopper "focus
- Everything Old is New Again(with a twist)
Category Management
Process-Driven Multiple Templates
New Metrics like GMROI, DOS,
Opp Gap, Market Coverage, etc
5
Cut the store into Micro units versus looking at how
Shoppers were buying across the store
Refrigerated Juice
Shelf Stable Juice
Loyalty programs introduced
New metrics like top shopper, trips,
frequency, basket affinity, conversion, etc
7
Most do not align loyalty analytics to the
category management process
Loyalty Analytics
Who are my Shoppers?
Segment
Loyalty
Other
What are their purchase Behaviors?
Trips
Frequency
Basket
Programs
Loyalty offers
Category Management
Category Priority, Roles and Strategies
and Tactics.
Assessment
Assortment, Pricing, Merchandising,
Shelf Placement, and Scorecards
Promotions
Price reductions
Features
Displays
8
Need to move analytics from just a
category focus to shopper focus
Our process is to continue the transition from
traditional category management as retailers place
more focus on their shoppers
Store
YESTERDAY
TODAY
Category
Category
Category
Category
CATEGORY TA
Convenient, easy to shop, good variety.
CATEGORY ROM
Store
Consumer
Category
Category
Category
Category
High quality products, fun to shop, low prices.
Home Delivery
Store
Category
Category
Category
Category
Convenient, easy to shop, good variety,
low prices.
Low prices, especially on HBC and Paper Products.
Driven by shopper insights along the path to purchase, and is
more holistic to include the aisle, department, and store.
New shopper based analytical approach
Strategic
Discovery Phase
• Understand the
macroenvironmental
trends impacting
Shoppers
• Identify Shopper
traits of the
Category & Brand
• Identify Shopper
traits of the Retailer
and their position
in the marketplace
Tactical
Opportunity Phase
• Measure the
retailer on the basis
of Shopper KPI’s
• Evaluate the size of
the opportunity
based on favorable
changes
• Define a strategic
purpose
Diagnostic Phase
• Measure the
Retailer and
Category on
Shopper KPI’s
Execution Phase
• Outline the key
insights from each
phase
• Measure the
Category and Brand
on Sales KPI’s
• Establish
importance &
implications of each
insight
• Dive deeper on the
levers truly
impacting the
business
• Provide
recommendations
to achieve a
positive return
Report Progress & Adjust As Needed
11
Discovery Phase
Product
Shopper DNA
•
•
•
•
Retailer
Shopper DNA
What Discoveries can be made:
Who does my product
• Who does my store
appeal to?
appeal to?
What need do I fulfill?
• What is my position in
How am I purchased?
the marketplace?
How/when am I
• How is my store
consumed?
shopped?
Environmental
Influence
• What external factors
are affecting
households?
• What is important to
the shopper?
• What does the path to
purchase look like?
Objective:
Better understand who the shopper is at the Product and Retailer
level, how they purchase the Product and shop the Retailer, and
identify environmental issues that are affecting purchasing decisions.
12
Key Trends Impacting Our Industry
1. Shopper Landscape is Changing
2. Digital is Here and Growing Quickly
3. Retail Landscape is Changing
4. Marketing Spend is Shifting
5. Success is Driven by Innovative Growth Strategies
4/8/2015
Slide 13
Tale of Two Shoppers
Millennial
Generation
Generational
Boomer
Generation
Economic
>$100k
per year
Multi-cultural
General
Population
<$45k per
year
MultiCultural
Source:AMGSA WBTB
“Older consumers tend to use the new technology to do
old things. Younger consumers use the new technology
to do new things.”
-Antone Gonsalves, “Gen Y Taking Technology to New Level”
Digital is Here and Growing Quickly
• The typical consumer spent 4% of their grocery budget over the internet
• 52% of shoppers are using digital tools on the path to obtaining grocery
goods
• 32% of shoppers said they reclaimed online coupons
• 31% used mobile phones for making lists, searching for recipes, and
similar activities
• 23% checked prices at multiple stores on the web before buying
• Shoppers are buying online mainly for convenience (both shopping and
delivery) and lower prices
The Web Has “Quietly
Encroached” on the Grocery
Sector
4/8/2015
Slide 16
Many changes in how shoppers view
the shopping landscape
Dollar General (*Prototype)
Grab & Go at CVS
Target pFresh
Source: Kantar Retail , Nielsen
Walgreens Expands Fresh
Opportunity Phase
Buyer Conversion
• Is the Retailer
converting Shoppers
into buyers?
• What is the value of
increasing conversion
rates?
Share of Wallet
• How much of the
Shoppers’ spend
is captured by the
Retailer?
Leakage
• If the sale is not captured
at the Retailer, where is
it going?
• How does the
competition treat the
category?
Objective:
Establish consistent measures to benchmark Retailer store performance
And identify areas of opportunity. Define a strategic purpose and
quantify the value potential for the retailer.
18
Starting with a more holistic view shows shoppers
are buying different categories more often at
competitive retailers
These are important categories that drive
trips and larger baskets
19
Comparison of top 25 categories
Retailer
Source: IRI Reviews Latest 52 WE 1/22/12
20
If Retailer could convert Pet Food buyers at the same rate as
competitors, sales would increase by $4.5MM.
•Retailer buyer conversion = 33.7%
•Avg conversion for other similar retailers= 40.2%
$693,025 x 6.5= $4.5MM
21
Source: Nielsen Channel Facts L52 WE 7/2/2011, Nielsen Planners 52 Weeks Ending 12/24/2011
Opportunity to drive additional sales in
stores within three miles of Supercenter
Correlation between Pet sales to Supercenter proximity
Sales 24% higher
Stores less than
three miles
Stores more than
three miles
Source: ACNielsen: Spectra
22
Diagnostic Phase
Objective: Evaluate category performance on the basis of Shopper
and traditional sales metrics to identify the levers of sales results.
23
Execution Phase
• WHAT do we know?
• WHY is it important?
• NOW WHAT do we do?
• What is the cost?
Objective: Articulate the key insights driving the business, the
opportunity if addressed, and provide a clear and actionable
recommendation that can be followed to close the gaps.
24
Bret Thurston
Category Leadership
Hillshire Brands Customer Development Focus
Shopper Insights
o Shopper Integration
into Category
Leadership Platform
Capability
Category
Leadership
Shopper
Marketing
o Shopper Informed
o Shopper ROI’s via
Shopper
Marketing
Development
o Change
Management
o Link Insights to
Solutions
o Specific KPI
improvement
o Pricing and
Promotion
Expertise
o Promotional Shopper
Insights
o KPI’s Against
Shopper and
Category
o Improved
Communication
Advantaged Process for Shopper
Development
o Market Structure
o Custom Shopper & Trip
Segmentation
o Proprietary Insight into
Shopper Barriers
o Supported by Well-developed
Marketing and Advertising
Support
Consumer
Needs
o Merge Shopper,
Category, and Retailer
Needs with Insight
Shopper
Insights
Category
Leadership
Shopper
Marketing
o Enhanced Platforms
o Infused by Shopper Insight
o Adv. Insight into Value &
Promotion
o Level Up customer loyalty
Precision
Merch.
o Shopper/Demand Based Assortment
o Shelf Optimization and Theater Driven by Barriers
The Shopper’s Journey
o The journey is where we learn about consumer & shopper’s emotional and
rational dynamics and identify the shopper’s triggers, barriers and opportunities
Pre-Shop
Shop
Influence of occasions and cultural
assumptions about the category
How the store frames the choice and
directs behavior
• Occasion, category and brand
implications
• Importance of promotion which drives
channel and store choice
• Understanding of the trip mission
•
•
•
•
Store layout
Assortment modeling, Planograms
Fixture design
Shopper Marketing Programs
Post Shop
How consumption, storage,
packaging delights or frustrates
•
•
•
Promotional ROI
Product developments
Packaging development
Hillshire Brands’ Commitment
to Shopper Focused
Category Leadership
- Shopper Capabilities enable our strategies
- Customer Focused engagement strategies
enable our partnerships
- Shopper Focused activation enables our
success
Hillshire Brands Category Leadership
Guiding Principles
Strong Category Leadership platforms
informed with shopper/category/customer
insights
Clear understanding of and alignment to the
customers’ category planning cycles,
operational requirements, and category goals
Investment in customer-facing category teams
charged with driving retail partnerships and
customizing our category leadership platforms to
create unique activation plans for customers
Disciplined approach to measuring results
in order to ensure success
Hillshire Brands Building Capability
to Ensure reaches all customers
IRI
Panel
POS
Shipments
ACNielsen
Data Updates
Presentation Updates
Data Analysts
Business Support, IT
Integrate &
Manage Data
Hillshire Brands
Category Leadership
Acosta Partners
Develop Insights &
Recommendations
Key Customers
Customize. Present. Win.
Enable customization and ensure ROI
-
Align with the customer to a level we
are able to support well
-
Fully engage in the areas where it
makes sense to invest
-
Ensure that we have a point of view on
each of the customer’s strategies and
tactics
-
Become experts in areas that drive
our business model forward with our
customers
Closing thoughts
Industry needs to focus on delivering new
analytics to drive business insights
Insights
Observation
Reporting
Data
Rich Diagnostics driving hypothesis
and begin understanding the why
and prescribing what next
Basic analysis, tell what the data says,
Smart text when possible, getting to
the who, what, when, and where
Common when possible,
automated, national and local
Multiple sources, store level upc
to total store, syndicated, panel,
third party observation, etc.
35
Need to develop new metrics and common language
Item ranking retailer productivity
by point of distribution
* High ACV is>=50%, High Velocity is SPPD > Ctgry avg.
WATCH OUT
CONT TO GROW
High ACV/Low Velocity
ACV
Item ranking retailer vs market
High ACV/High Velocity
AT RISK
GROW
ACV
Low ACV/Low Velocity
LowACV/High Velocity
Velocity
A learning environment is critical for consistency and
to deliver the insights to participate as an “advisor”
37