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HOW TO WIN THE BATTLE IN THE STORE
DRIVING GROWTH
Alexandru Zudor06.10.2016
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The Client is not authorised to publish and/or adapt this research report,
whether in whole or in part(s), in the press, on the radio, on television, in
leaflets, data search systems, litigations etc. without prior written consent of
Nielsen .
Consent for publication should be sought from Nielsen each time.
CONFIDENTIALITY CLAUSE
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• INTRODUCTION
• MARKET CONTEXT
• SALES FUNDAMENTALS
• HOW TO ENSURE IN-STORE PERFORMANCE
• CASE STUDY
AGENDA
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WHY ARE WE
HERE
TODAY?
Get to know
each other
Answer
your
questions
Present ways
to ensure the
optimal in-
store
execution
AGENDA
MARKET CONTEXT
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EVOLUTION OF RETAIL ASSORTMENT
1990 2000 201619501900
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157 7 4 1 5 6
38
2216
14
97 8
31
28
2425
18 13 12
10
25
1923
23
16 16
4
12
15 14
20
18 17
17
19 2129
40 41
2006 2008 2010 2012 2014 2015 2016
6 + retailers
5 retailers
4 retailers
3 retailers
2 retailers
1 retailer
AVERAGE NUMBER OF VISITED RETAILERSRETAILERS USED IN THE PAST 4 WEEKS
*Nielsen Shopper Trends Slovenia, 2016
2,5 3,4 3,9 4,1 4,7 5,0 5,1
In average, Shoppers visit 5different stores/retailers in 2015. 40% of shoppers are visiting 6 and more than 6 retailers in one month.
Average/
Retailers
%
6 Retailers 13%
7 Retailers 12%
8 Retailers 7%
> 8 Retailers 9%
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50% of shoppers will buy an alternative brand if their desired brand is out-of-stock
*Nielsen Shopper Trends Romania, 2016
THREAT OF OUT OF STOCKS AFFECTS EVERYONE
21%31%
20% 22%28%
35%
21%29%
55%43%
60%60%
57% 44%
51%
52%
13%14%
13%12% 10%
11%
10%
12%4% 8%
5%4% 5%
10%
3%
7%7% 5% 4%14%
Doesn't buy category
Wait until it was available
Look for the same brand butchange sub-brand, size stc.
Buy an alternative brand
Buy the same brand at anotherstore
THREAT TO
RETAILER
THREAT TO
MANUFACTURER
LOYALTY
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Although 80% of shoppers prepare a shopping list, they usually end
up buying additional grocery items, but it is decreasing compared to
2015
*Nielsen Shopper Trends Serbia, 2016
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11% 11% 12%
27%32% 28%
51%
53%55%
11%5% 6%
2014 (Feb) 2015 (Feb) 2016 (Mar)
I don't know about or notice theprices of grocery items
I don't necessarily know all theprices but I generally noticewhen the price changes
I know the prices of most of theitems and always notice whenthe price changes
I know all the prices of thegrocery items I buy regularly
40% of shoppers are very price conscious
40%43%
38%
PRICE AWARENESS
*Nielsen Shopper Trends Slovenia, 2016
SALES FUNDAMENTALS
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STORE EXECUTION FUNDAMENTALS
Distribution &
Assortment
Visibility
PriceInvestment
Promotions
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COMPARATIVE OUT-OF-STOCK
DISTRIBUTION & ASSORTMENT
ASSORTMENT OUT-OF-STOCKCOMPETITION’S ASSORTMENT
» Are all my target products available on the shelf?
» Are my minimum stock requirements met?
» How high is the OOS incidence?
» How high is the near-OOS incidence?
» Do I have defined the right assortment?
» For each store type?
» Considering region specifics?
» Considering the season?
» What is the competitions assortment?
» How does it compare to my target assortment?
» How is my OOS incidence compared to competition?
» Are the direct competitor SKUs present in the stores where my SKUs were OOS?
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SHARE OF SECONDARY
VISIBILITY
MERCHANDISING STANDARDS
SECONDARY PLACEMENT EXECUTION
SHARE OF SHELF
» Are my secondary placements present according to agreements?
» Are they executed according to standards?
» Where are the gaps?
» Are my shelf merchandising standards implemented?
» Where are the gaps?
» Are all products presented according to standard?
» Are all prices communicated according to standard?
» How is my overall shelf space compared to competition?
» How is my shelf space brand by brand compared to direct competitor brands?
» How many competitor secondary placements are present?
» What is my share of secondary placements compared to competition?
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COMPARATIVE PRICE
PRICE
SHELF PRICE PRICE ANALYSISRECOMMENDED SELLING
PRICE COMPLIANCE
» Which is the average shelf price?
» Most frequent shelf price?
» Minimum shelf price?
» Maximum shelf price?
» Are my prices according to standard?
» Are my prices communicated according to standard?
» Are my price promotions implemented?
» Do the retailers comply with my recommended selling price?
» Where are the gaps?
» Which are the shelf prices of my competitors?
» How are the prices compared to my prices?
» Are there price related promotions?
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COMPETITION’S INVESTMENT
INVESTMENT
COOLERSDRAUGHT / VENDING
MACHINESFURNITURE
» Are my draught machines / beverages vending machines present & functional?
» Are they used according to agreement?
» Are my coolers present & functional?
» Are the coolers merchandised according to standard?
» Are the coolers used according to agreement?
» Are my branded furniture / parasols present?
» Are they used according to agreement?
» Does the competition have coolers?
» Does the competition shave draught / beverages machines?
» Does the competition has branded furniture?
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COMPETITION’S PROMOTIONS
PROMOTIONS
PRESENCE OF PROMOTIONS
TYPE OF PROMOTIONSCOMMUNICATION OF
PROMOTIONS
» TPR / Discount
» Co-Package
» Gift-pack
» Buy 1 get 2
» Are my promotions implemented in the stores according to agreement?
» For which SKUs / brands?
» Are the promotions properly communicated?
» What kind of POSMs are present?
» Does the competition have promotions in the store?
» For which SKUs / brands?
» What type of promotions?
» How are they communicated?
HOW TO ENSURE IN-STORE PERFORMANCE
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Continuously
Track In-Store
Execution
(Re)define In-
Store
Benchmarks
Implement &
Maintain
Benchmarks
THE PROCESS
Analyze In-
Store
Performance
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ANALYZE & DEFINE IN-STORE BENCHMARKSOrganic, natural and local fresh produce
Actual Performance
• How are current standards
performing?
• Sales Performance
• Store Execution
• Compared to
competition
Advanced Analytics / Modeling
• What will be the impact in
terms of sales if we would
increase / decrease:
• Distribution / OOS
• Visibility
• Price
• Investment
• Promotions
New Benchmarks
• Target Stores
• Assortment
• Merchandising standards
• Cooler / Draught / Other
assets usage
• Pricing policy
• Promotional activity
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IN-STORE BENCHMARKS EXAMPLES
ASSORTMENT MINIMUM STOCK VISIBILITY COOLER PRICING
• Brand A CAN 0.5l
• Brand A RGB 0.5l
• Brand A PET 2.5l
• Brand B CAN 0.5l
• Brand B RGB 0.33l
• Min 3 pieces for CAN 0.5l
• Min 6 for RBG 0.33 & 0.5l
• Minim 5 for PET 0.5l
• Share of Shelf >30%
• Share of Secondary >=Each Competitor
• Minimum 2 POSM materials
• Min 80% full
• Bottom 2 shelvesonly PET
• Top shelf only premium brands
• Vertical block by brand merchandising
• Minimum 5% lower than directcompetitor for RGB
• Same price for CAN and PET as direct competitor
Supermarket Type A
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CONTINUOUSLY TRACK EXECUTION
Distribution
Visibility
Price
Investment
Promo
Channel
Distributor
Sales Rep
City
Chain
Catchment Area
Store
Region
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BACK TO PERFORMANCE ANALYSIS
6-12
Months
Implement &
Maintain
Analyze
Performance
CASE STUDY
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BACKGROUND
1 Romania 2016
2 Beverages Manufacturer
3 Promo Activation period
4 Modern Trade channel
5 Weekly tracking of execution
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BUSINESS OBJECTIVE
Evaluate activation campaigns with focus on:
• In-store execution: how was POS activated?
• Impact on sales: how the company
performed in activated stores?
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• What is the total effect of the activation program?
• How much additional sales is generated by activation
mechanics?
• Which mechanics are most impactful and which are not
contributing to sales?
27
BUSINESS QUESTIONS
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1. Evaluate true in-store execution information2. Combine with store level sales and performance metrics
STORE AUDITSSTORE LEVEL DATA
ANALYTICS
END RESULT: EVALUATE IMPACT OF ACTIVATIONS & DRIVE OPTIMAL EXECUTION
NIELSEN SOLUTION HAD TWO STEPS…
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COMBINING EXECUTION WITH PERFORMANCE
Execution levelExecution audit
A
B
C
Activation/ execution Impact
Modelling to separate baseline sales from promotions& activations mechanics, which influence sales
Audit was used for execution level assessment & to build foundations for activation/execution impact analysis.
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HOW MUCH ADDITIONAL SALES WAS GENERATED BY THE ANALIZED ACTIVATION CAMPAIGN?
This analysis shows how much additional sales was generated by the different elements considered in the model: seasonality, target activation, banded pack, TPR
Total Incremental
vs. Base
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WHICH ACTIVATION ELEMENTS TRANSFER TO INCREMENTAL SALES?
This analysis shows how much of the incremental sales generated by the activation was due to the different activation element:
• Display• Gondola• Palet• And so on
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RANKING OF THE ACTIVATION MATERIAL
Ranking
Type 1
Type 2
Type 3
Type 4
Type 5
1
2
3
4
5
This analysis shows how the different Activations materials rank in terms of impact on sales growth:
• Poster• Wobbler• Shelf Divider• And so on
SUMMARY & RECOMMENDATIONS
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SUMMARY & RECOMMENDATIONS
• Threat of out of stocks affects everyone, manufacturers & retailers alike
• The shelf is getting crowded – visibility is a key issue
• Shoppers are shopping around, they visit 5-6 retailers a month on average
• The battle on the shelf is as important as always, what have changed are
the tools and tactics
• Taking empirical based decisions it is not enough anymore
• A more elaborate analysis, evaluation and decision making process is
needed
• The tools are there, the knowledge is there, use them, invest in store
execution in order to win the “battle in the store”
THANK YOU!
Alexandru Zudor
Store Observation Leader South-East
Europe
Mobile: +40 755 140 016
www.nielsen.com