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November 2012
Retailer Collaboration Category Leadership Insights & Strategies to Win
Rob Colarossi VP Category Leadership
Hostess Brands
2
Retailer Collaboration
Starts and end with the “Consumer”
• Understand how their consumer ”thinks”
• Understand how their consumer ”purchases”
Collaboration is looking at business thru retailer’s lens
• Deep dive in Facts & Insights
• Understanding our customer’s objectives, wants & needs
• Category Strategies & Category Solutions that deliver results!
3
Category Leadership Process – How we do it?
WHERE TO FOCUS HOW TO WIN RESULTS
INSIGHTS STRATEGY ACTIVATION
Assessment Discovery Aligned
Planning Action
Planning Execution
Measure Results
• Consumer Trends • Category Trends • Market Trends • Competitive Assessment • Shopper Behavior • Research / Modeling • Finance / IT / Supply Chain
• Guiding Principles to Win
• Customer’s Corp Strategies/ Platforms
• Category Strategies/ Needs
• Custom Programs • Assortment/ Space • Price/ Promotion • Sponsorships • Innovation • Scorecard/ Measure • Finance / IT Solutions
CUSTOMER-CENTRIC Current Volume Initiatives (1 yr) Future Volume Initiatives (2+ yrs)
Developing Stronger Relationships
4
Insight Generation Process
CONSUMER
WHAT they buy –
“natural groups”?
WHO are
they?
WHERE do they shop?
HOW do we
merchandise?
Market Structure/ Purchase Decision
Data/ HB & Industry
Assortment/ Space Planning/ Merchandising
Principles/ HB & Industry
Opportunity Gap & Leakage Chart/
IRI Panel Data
Demographic Data/ SPECTRA
How the consumer
think about
category?
How the consumer
purchase
category?
5
Five Mega Trends – Shopper Behaviors
Quest for Value “Budget Consciousness”
• Coupon use exploding +67% vs 2007
• Net worth declined -17% since 2007
• Gasoline +130% increase since 2008
Demand for Convenience “Value / Cost of my time”
• +300% increase in single parent families
• 50% growth fresh convenient food
• (-59%) chg in time spent cooking / cleaning
• $250 bil US on line sales by 2014
Personalization ”Value of doing things my way”
• Facebook 900mil = 3rd largest country
• +5000% 2010 Black Friday sales using mobile device vs 2009
• +60% cons <45 online ads as source to find bargins over TV/ Print
• 29% coupon users exclusively digital
Age & Health “Value / Cost of my well-being”
• 77% consumers believe healthy food is more expensive
• share of US pop over 65 will double by 2030; 13% today
Ethnicity “Values of My culture / lifestyle”
• Hispanic 50mil in US (50% of growth)
• Buying Power over $1trillion
6
Retailer E – Conversion Shopper Behavior – Fresh Bread
Increase Conversion Leader?
National Best-in-Class
Source: Builders Suite – Calendar Year 2011
7
Best in Class - Bread Consumer Behavior Panel Data
Source: Builders Suite – Mid-Year 2012
8
Account E - Bread Consumer Behavior Panel Data
Source: Builders Suite – Mid-Year 2011
Current: 62% $32mil - Leader: 80% $41mil +9mil - BIC: 93% $48mil +$16mil
T
How the Consumers thinks about bread . . . . How the Consumer purchases bread . . .
Bread Insights
7 Segments–3 Key Factors Define Consumption Decision Tree: Bread Type, Flavor/Variety . . .
Source: Consumer Market Structure Study
• Fresh bread/rolls 3rd Largest Category
• 1/3 of all bread consumers looking for better for you +12%
• Fiber is important, Sodium is a concern
7 Consumer Segments Define the Category
Source: 2008 NPD Eating
Patterns of America
T
Proprietary Research that deliver Category Solutions
Shopper Preference on Aisle Flow Unified Research Approach: Retailer + Mfr
Category Reinvention Solutions
Source: 2008 NPD Eating Patterns of America
10
Shopper Preference by Product type & brand
T
Marketing Tools “4-P’s” that deliver Category Results
Assortment Tool – Acct vs ROM Diagnostic Tool / Scorecard – Acct / Market
Price / Promo Tools
Source: 2008 NPD Eating Patterns of America
11
Planogram capabilites JDA, Apollo
12
Insights, Strategies & “Best in Class” Solutions
1. Category Insights
3. Category Solutions BIC (Best in Class)
Bus Review vs ROM
Panel Data – Conversion vs Competiton
Consumer Research
Segmentation Studies / Decision Trees
Spectra, Simmons, IRI
4 P’s of Marketing
1. Assortment / Space
2. Best in Class POG Flow
3. Best in Class Merchandising
4. Price Promo Tool
5. Finance / IT Solutions
6. Supply Chain / Operations
Product Assortment
Placement / Merchandising
Price
Promotion
Collaborative Solutions
2. Category Strategies