The Future of Category Analytics Win with Shoppers Slide 2
ACOSTA SALES Headquarter Selling Sales Customer Relationship
Management Joint Business Planning AMG Strategic Advisors Strategic
Consulting Shopper Insights Market Research Advanced Analytics
Business Insights Category Management Space Management Business
& Retail Analysis Loyalty Analytics The Agency at AMG
Integrated Marketing Solutions Shopper Marketing Retail
Merchandising Continuity Sets Projects AMG Activation In-store
Media, promotion and Communication Business Process Outsourcing
Order to Invoice Invoice to Cash Mosaic Assisted Selling Training
Experiential Marketing Interactive 2 Who is Acosta Slide 3
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 Slide 4 Shopper Based Offers Neighborhood/ Precision
Marketing Neighborhood/ Precision Marketing Assortment
customization Private Brands as a Point of Difference Neighborhood
Stores- Multi Formats - Everything Old is New Again(with a twist)
Past Future 1980s 2012+ Local Store Control National Strategies
Local Market Advertising One Plan for the Entire Chain Limited
Assortment Assortment as a Differentiator Private Brands as a Point
of Difference Private Brands as a Margin Play Small Neighborhood
Stores Larger Super Stores The industry is evolving back to a local
shopper focus Customer focusEfficiency focus Shopper "focus Slide 5
Category Management Process-Driven Multiple Templates 5 New Metrics
like GMROI, DOS, Opp Gap, Market Coverage, etc Slide 6 Cut the
store into Micro units versus looking at how Shoppers were buying
across the store Refrigerated Juice Shelf Stable Juice Slide 7 7
Loyalty programs introduced New metrics like top shopper, trips,
frequency, basket affinity, conversion, etc Slide 8 8 Most do not
align loyalty analytics to the category management process Who are
my Shoppers? Segment Loyalty Other What are their purchase
Behaviors? Trips Frequency Basket Programs Loyalty offers Category
Priority, Roles and Strategies and Tactics. Assessment Assortment,
Pricing, Merchandising, Shelf Placement, and Scorecards Promotions
Price reductions Features Displays Loyalty AnalyticsCategory
Management Slide 9 Need to move analytics from just a category
focus to shopper focus Slide 10 Our process is to continue the
transition from traditional category management as retailers place
more focus on their shoppers Driven by shopper insights along the
path to purchase, and is more holistic to include the aisle,
department, and store. TODAY YESTERDAY CATEGORY TA CATEGORY ROM
Consumer Store Category Store Category Store Category Path to
Purchase Convenient, easy to shop, good variety. Low prices,
especially on HBC and Paper Products. High quality products, fun to
shop, low prices. Convenient, easy to shop, good variety, low
prices. Home Delivery Slide 11 11 New shopper based analytical
approach Discovery Phase Understand the macro- environmental trends
impacting Shoppers Identify Shopper traits of the Category &
Brand Identify Shopper traits of the Retailer and their position in
the marketplace Opportunity Phase Measure the retailer on the basis
of Shopper KPIs Evaluate the size of the opportunity based on
favorable changes Define a strategic purpose Diagnostic Phase
Measure the Retailer and Category on Shopper KPIs Measure the
Category and Brand on Sales KPIs Dive deeper on the levers truly
impacting the business Execution Phase Outline the key insights
from each phase Establish importance & implications of each
insight Provide recommendations to achieve a positive return Report
Progress & Adjust As Needed StrategicTactical Slide 12 12
Discovery Phase 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. Product Shopper DNA Retailer
Shopper DNA Environmental Influence Who does my product appeal to?
What need do I fulfill? How am I purchased? How/when am I consumed?
Who does my store appeal to? What is my position in the
marketplace? How is my store shopped? What external factors are
affecting households? What is important to the shopper? What does
the path to purchase look like? What Discoveries can be made: Slide
13 4/18/2015 Slide 13 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 Slide 14 Tale
of Two Shoppers Millennial Generation Boomer Generation Multi-
Cultural General Population Generational Multi-cultural $100k per
year Economic Source:AMGSA WBTB Slide 15 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 Shoppers Slide 16 4/18/2015 Slide 16
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 Slide 17 Many changes in how shoppers view the
shopping landscape Value Stores Online Replenishment Grab & Go
at CVS Dollar General (*Prototype) Walgreens Expands Fresh Target
pFresh Increased Food Offerings Urban / multiple formats Source:
Kantar Retail, Nielsen Slide 18 18 Opportunity Phase 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. Buyer
ConversionShare of WalletLeakage Is the Retailer converting
Shoppers into buyers? What is the value of increasing conversion
rates? How much of the Shoppers spend is captured by the Retailer?
If the sale is not captured at the Retailer, where is it going? How
does the competition treat the category? Slide 19 19 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 Slide 20 20 Source: IRI Reviews
Latest 52 WE 1/22/12 Comparison of top 25 categories Retailer Slide
21 21 Source: Nielsen Channel Facts L52 WE 7/2/2011, Nielsen
Planners 52 Weeks Ending 12/24/2011 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 Slide 22 22
Stores less than three miles Stores more than three miles
Correlation between Pet sales to Supercenter proximity Sales 24%
higher Opportunity to drive additional sales in stores within three
miles of Supercenter Source: ACNielsen: Spectra Slide 23 23
Diagnostic Phase Objective: Evaluate category performance on the
basis of Shopper and traditional sales metrics to identify the
levers of sales results. Slide 24 24 Execution Phase 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. Discovery Opportunity
Diagnostic WHAT do we know? WHY is it important? NOW WHAT do we do?
What is the cost? Slide 25 Bret Thurston Category Leadership Slide
26 Hillshire Brands Customer Development Focus Shopper Insights
oShopper Integration into Category Leadership Platform oPromotional
Shopper Insights Category Leadership Shopper Marketing oShopper
ROIs via Shopper Marketing Development oLink Insights to Solutions
Capability oChange Management oImproved Communication oSpecific KPI
improvement o Shopper Informed o Pricing and Promotion Expertise o
KPIs Against Shopper and Category Slide 27 Advantaged Process for
Shopper Development Shopper Insights Category Leadership Precision
Merch. Shopper Marketing Consumer Needs o Market Structure o Custom
Shopper & Trip Segmentation o Proprietary Insight into Shopper
Barriers o Enhanced Platforms o Infused by Shopper Insight o Adv.
Insight into Value & Promotion o Level Up customer loyalty o
Shopper/Demand Based Assortment o Shelf Optimization and Theater
Driven by Barriers o Merge Shopper, Category, and Retailer Needs
with Insight o Supported by Well-developed Marketing and
Advertising Support Slide 28 The Shoppers Journey o The journey is
where we learn about consumer & shoppers emotional and rational
dynamics and identify the shoppers triggers, barriers and
opportunities Influence of occasions and cultural assumptions about
the category Occasion, category and brand implications Importance
of promotion which drives channel and store choice Understanding of
the trip mission How the store frames the choice and directs
behavior Store layout Assortment modeling, Planograms Fixture
design Shopper Marketing Programs How consumption, storage,
packaging delights or frustrates Promotional ROI Product
developments Packaging development Pre-Shop Shop Post Shop Slide 29
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 Slide 30 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 Slide 31 Hillshire
Brands Building Capability to Ensure reaches all customers
Integrate & Manage Data Develop Insights & Recommendations
Customize. Present. Win. POSACNielsen IRIPanelShipments Data
Analysts Business Support, IT Acosta Partners Key Customers
Presentation Updates Data Updates Slide 32 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
customers strategies and tactics -Become experts in areas that
drive our business model forward with our customers Slide 33 Slide
34 Closing thoughts Slide 35 35 Industry needs to focus on
delivering new analytics to drive business insights Multiple
sources, store level upc to total store, syndicated, panel, third
party observation, etc. Common when possible, automated, national
and local Basic analysis, tell what the data says, Smart text when
possible, getting to the who, what, when, and where Rich
Diagnostics driving hypothesis and begin understanding the why and
prescribing what next Slide 36 Need to develop new metrics and
common language Item ranking retailer vs market Item ranking
retailer productivity by point of distribution * High ACV
is>=50%, High Velocity is SPPD > Ctgry avg. WATCH OUT High
ACV/Low Velocity CONTTO GROW High ACV/High Velocity ATRISK Low
ACV/Low Velocity GROW LowACV/High Velocity ACV Velocity ACV Old New
Slide 37 A learning environment is critical for consistency and to
deliver the insights to participate as an advisor 37
