You Never Know? Yes You Do, with Shopper Insights

Customer Centricity is Now a RealityQuentin Smelzer, Global Market Segment Manager, Omnichannel Merchandising Solutions

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So…what is IBM Shopper Insights?

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It’s Science…

… but it’s not scary!

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It’s an easy to use,

cloud based solution

Shopper Insights is software that lets you understand

and act based on actual shopper behaviors

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What Does Shopper Insights Tell You?

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With Shopper Insights You Can…

- Understand high value shoppers

- Improve retailer and vendor strategy

- Support marketing initiatives

- Determine merchandising plans in the store

- Facilitate effective collaboration with trading partners.

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What Makes It Different?

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Advantages…

Speed

Cloud

Visualization

Shopper segmentation

New insights

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Three levels of data/insights

1. Transaction (Basket) level data

2. Shopper identified transaction data‒ Including multiple register transactions

within a store

3. Shopper segmented transaction

data

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What can be shown from basket level data?

Affinity and co-purchase

# of Trips

# of Units

$ Sales

$ per Trip

$ per Unit (Price)

Units per Trip

Event comparison

New item intro

Promotional Lift

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What more can be shown from shopper identified data?

# of Shoppers

$ per Shopper

Trips per Shopper

Loyalty/Exclusivity

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What more can be shown from shopper segmented

data?

Analysis by shopper segments

Comparison across shopper segments

Importance by shopper segment

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Shopper Insights at a $50B+ Retailer

Retailer buyers and strategy teams

leverage SI for strategic and tactical

insights

• Shopper Segment Strategy

• Product Importance

• Price Strategy and Tactics

• Promotion Effectiveness

• Display Importance

• Adjacencies

• Multiples

• New Item Introductions

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Shopper Insights for the Retailer’s Suppliers:

Manufacturers & Brokers subscribe to

leverage:• Access to specific merchandise and categories

or Total Store to deliver critical insight to support

innovation in:

•Category Management

•Sales

•Research

•Marketing

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How’s it going?

“Hockey Stick” growth!

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500

1000

1500

2000

2500

3000

3500

4000

4500

Retailer

Vendor

Dashboard Requests

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Case Studies—Real World Results

How our customers are using Shopper Insights

now to drive powerful results and measurable

ROI

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Case Study 1: Playing Defense

From a sales and category management agency serving a Retailer’s vendors:

A buyer in vitamins was moving a significant number of private label products; there were perhaps fifteen items on the chopping

block. By pulling and sharing the exclusivity data we were able to show the importance of those items to shoppers and cut the

number of delists to five. This not only saved direct sales but also was key to maintaining the loyalty of those shoppers,

preserving their purchasing across the store.

ROI = value of the sales of those items * percent exclusivity of those items, plus potential rest of spend of shoppers loyal to

those delisted items

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Case Study 2: Retain a Valuable Display

From a major pharmaceutical manufacturer working with the Retailer:

We've realized a lot of success around displays and shelf location. We were able to look at each individual location to see if

there was overlap or what was incremental, and which locations were best for which shoppers, so for example this location is

better for our high value shoppers. We were able to clearly demonstrate the incrementality of each of our locations. We were

going to lose a location but we were able to keep that display. A single display like that is worth $2-3M in sales.

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Case Study 3: Turning Defeat into Victory

From a major pharmaceutical manufacturer working with the Retailer:

On the sales side, one success was snatched from a defeat. We had a launch this year with high expectations which we did

not meet. We only achieved 40% of the forecast, so that was a big miss. Even so, in Shopper Insights we were able to look at

our launch versus a key competitive launch and see in Trial and Repeat that once people tried our product they liked it.

We were able to go to the buyer and convince her that we need to retry this because people who tried our product liked it.

Going forward, we just need to do a better job on our display. Long term this will serve the Retailer, the Shopper, and us.

Without this insight all three of us would have lost out.

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Case Study 4: Saving a Brand

From a major pharmaceutical manufacturer working with the Retailer:

We were able to save a $3M brand by uncovering that it is unique; so we were able to show the retailer that they could not get

rid of that brand due to its exclusivity. The Shopper Insights data definitely helped us save the brand and tell a great story.

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Case Study 5: The Right Flavors and Packs

From a major health and fitness energy bars manufacturer working with the Retailer:

We saw that for the female shopper of one of our brands; they are routinely buying five or more favors. So we were able to

show the retailer that if they were to cut back to just three flavors they would lose significant sales. This was a win for us, the

retailer and the shopper.

We're also using Shopper Insights to understand counts. We saw the need for singles so we've preserved that selection in the

stores. We have a twelve pack now, but next we're going to use the solution to test whether that's enough; should we go to an

18 pack? These are the kinds of questions we can answer now.

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Case Study 6: Overlap and Multiples

From a third party category management group working for the Retailer and multiple Vendor clients

Now with Shopper Insights, if a buyer sends an email and asks about overlap on an item color, for example, we can quickly

provide that answer and show where those overlaps change. That's a huge win. Shopper Insights offers continuous solutions

right away for ad hoc questions, instead of waiting days for an answer. Understanding how people buy in the Multiples

dashboard has enabled us to create much more effective mandatory multiples ads and promotions.

Shopper Insights offers time savings for the buyer. When we are planogramming a category we use the Affinity dashboard to

understand product adjacencies. Also, for advertising, we want to picture items that the shopper already buys together.

Shopper Insights lets us understand what those items are.

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Case Study 7: Understanding the Shopper

From a third party category management group working for the Retailer and multiple Vendor clients

With the new segmentation we were able to see who the shoppers are in a category. For example, we didn't know how

many Empty Nesters we had. So now we know not to include back to school items in ads targeted to that group, and we don't

need to show a woman with young children in our ads. We can also target products and proof points more relevant to these

older shoppers of our category.

Young singles are our faster growing segment. Urban, young, with no kids are buyers of our category along with the empty

nesters so we have these polar opposite shoppers. This presents us with challenges but also opportunities to test and explore

ads and offerings relevant to these two groups individually or even collectively.

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Case Study 8: Gaining Space and Skus

From another major pharmaceutical manufacturer working with the Retailer

We've been looking at brands and pain relief with sleep aids in the Shopper Insights Overlap dashboard and we found that

boomers over index with PM analgesics, which wasn't too surprising. But we found they also over index with young

singles. So we were able to show the retailer the need, and we were able to win more space for PM pain relievers in stores

over indexing in those two demographics.

We met with the buyer, and showed them importance of the boomer demographic in another of our categories; something we

didn't know before. Then we showed how one of our products with a specific feature over-indexed with these shoppers. This

showed the need for two of these products in a specific cluster of 300 stores. This enabled us to get those incremental

skus into those stores. What's it worth? I am sure that getting those two items into those 300 stores paid for the tool!

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5 Sample Quotes – What our customers are saying:

1. It is an unbelievably great tool. And we've only used the tip of the iceberg. -- Category Management Team lead for a third

party category management provider working with a major U.S. general merchandise retailer

2. We like the flexibility of Shopper insights and the ability to create product groups. Some of the new dashboards are really nice;

the New Item Introduction and the New/Lost/Retained dashboards are very valuable. Another cool thing is the ability to

download an analysis to Flash to send it to sales so they can manipulate the dashboard on their own. -- Category Manager for

a marketing company working with a major U.S. general merchandise retailer

3. We appreciate the great support we get from the IBM team. We can reach out any time with any question and get the help

and personal attention we need. -- Category manager for a broker working with a major U.S. general merchandise retailer

4. The ability to have multiple dashboards open at once is a great benefit that is heavily used. -- Category specialist for a

marketing company working with a major U.S. general merchandise retailer

5. Shopper Insights puts the information we need at our fingertips. I like that I can pull the dashboards anytime, anywhere. I like

the overall flexibility of the tool, the fact that it is online, and the flexibility to create our own groups of products and store

groups. The solution has a ton of benefit for our sales teams. -- Category specialist for a marketing company working with a

major U.S. general merchandise retailer