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Uncovering the Myths around
  Unplanned Purchasing

  Dr David Bell Wharton School (Philadelphia)
 Dr Daniel Corsten IE Business School (Madrid)
  Dr George Knox Tilburg University (Tilburg)
It is widely believed that the majority of
purchases are unplanned


  • Oft-cited POPAI Consumer Buying Habit Study

    70% of In-Store Purchasing Decisions are Unplanned
  • Paco Underhill (“Why We Buy”)

    “Supermarkets are places of high impulse buying …
    – fully 60 to 70 percent of purchases there were
    unplanned, grocery industry studies have shown us.”
Our Study
Key Messages from Our Research

• Only 20% of category purchases are unplanned
• Not proportional to basket size
• Enormous differences across households

• Recommended Actions
  • Enhancing in-store marketing (state)
  • Attracting leisurely shoppers (trait)
Study Features


  • Definition—unplanned category purchases
  • Location—three European countries

  • Stores—multiple chains
  • Shoppers—tracked over time and stores
Approach

 • Explain number of unplanned category purchases
 in shopping basket
 • Control for differences …
   • Across shoppers
   • Across shoppers and stores
   • Across shoppers, stores, and trips
Comprehensive Shopper Model


 – Household Traits: Shopping Styles, Life Stage

 – Store Perceptions: Self-reported store assessments

 – Shopping Trip—Context: Travel mode, gender, etc.

 – Shopping Trip—In-Store Process: Offers seen in
   store, etc.
Key Findings
The majority of category purchases are
NOT unplanned

 • While most shoppers do it … 75% of households

 • And many trips see it … 40% of shopping trips

 • The overall rate is not that high …

 • … only 20% of all category purchases are unplanned
Top 5 Enablers of Unplanned Purchasing


1. Shopper Sees Offers In-Store       State   (53%)

2. Shopper Above Average Income       Trait   (45%)

3. Shopper Travels by Car             State   (44%)

4. Shopper is Informed at the Shelf   Trait   (35%)

5. Shopper on Unplanned Trip          State   (23%)
Top 5 Barriers to Unplanned Purchasing


1. Shopper is “Fast and Efficient” Type Trait    (82%)

2. Shopper from Larger Household        Trait    (65%)

3. Shopper in “Fast and Efficient” State State   (53%)

4. Shopper from Older Households        Trait    (47%)

5. Shopper is Informed by Newspaper     Trait    (25%)
Trait Versus State: Changing the Mix of
Shoppers May be the More Effective Strategy
 • Imagine the store wishes to increase the rate of
 unplanned category Thank You! ...
                      purchasing, then
 • 10% increase in Leisurely Shoppers =
             Questions &shoppers see In-Store Deals
 • 40% increase of trips where
                               Answers
                           Investment
       Attract Leisurely
                             1x
       Shoppers
       Increase In-Store
       Offers                4x
Customer-centric Retailing

Steve Gray, CEO of emnos GmbH

ECR Europe Conference, 28 May 2008
1   Introducing emnos and "customer-centric retailing"




                                        ECR Europe Conference - 28 May 2008   2
emnos helps leading retailers and suppliers achieve customer-
centric growth

         Steve Gray

   CEO of emnos & Director of    Offices : London, Munich, Paris, Madrid
   Loyalty Partner gmbh
                                 Skills: consulting, analysis, research,
   Formerly Managing Director    technology
   of dunnhumby UK & Ireland &
                                 Ownership : 100% Loyalty Partner GmbH
   director of dunnhumby USA




                                                 ECR Europe Conference - 28 May 2008   3
emnos follow a process called "customer centric retailing" that
creates significant value for customers & shareholders



 1                        2                          3
        Customer              Customer                         Customer
        Potential              Strategy                       Engagement


                               • user training
     Organisation Alignment    • processes
                               • organisation change



                               • participation with retailer
     Supplier Alignment        • jointly agreed growth




                                                         ECR Europe Conference - 28 May 2008   4
2   From loyalty data to customer insight




                                        ECR Europe Conference - 28 May 2008   5
Customer-centric retailing begins with loyalty data




                                Consumer
    Panel Data
                                Research


                 Loyalty Card




    Shopper                     Purchase
    Research                      Data




                                            ECR Europe Conference - 28 May 2008   6
Loyalty data enables unmatchable customer insight



   Customer Behaviour                   Lifestyle & Lifestage

   What did my customers do ?          What type of person are
   Where did they do it ?              they?
                                       Who else are they like ?



          Attitudes                       Value & Potential

   Why did they do it ?                What are my customers
                                       worth today ?
                                       How much could they be
                                       worth tomorrow ?




                                        ECR Europe Conference - 28 May 2008   7
"Insight should be a film not a photograph"




                  young        young
                                          family        retired
 Lifestage        single       married
                                         with kids      couple
                  person       couple



 Shopping              trip           trip             trip
 habits            frequency         value            time



             healthy       tradi-     price        gourmet
 Lifestyle   eating        tional   sensitive       foods
                                                                organic




 Shopping           big         top up       eat         non
 mission          baskets        shop        now         food




                                                                   ECR Europe Conference - 28 May 2008   8
Using insight to create value for
3   customers & shareholders




                                        ECR Europe Conference - 28 May 2008   9
Insight enables value growth via communication, store &
category optimisation


                                 Relevant and
                                 engaging customer
                                 communications
   Retailer
                 customer
                 database        Store clusters &                            customer,
                    and          layouts optimised                           retailer and
                  insight        for customers                               brand loyalty
                 platform
   Supplier
                                 Categories optimised
                                 for customers


                              customer feedback loop
                              (behavioural – what they did,
                               attitudinal – why they did it)



                                                   ECR Europe Conference - 28 May 2008   10
Customer-centric communications: helping PAYBACK to become
Europe's largest and most profitable coalition loyalty programme


                                                                      Account
 Personalisation




                                                  2008-?
                                                                      Statement
                                   2004-2007
                                                       10m+
                   2000-2003                         variations
                                        2m+
                   32 variations     variations
                                                                      Themed
                                                               io n   Mailings
                                                    ed e volut
                                            h t-bas
                                              t-
                                    In s ig
                                                               Time

                                                                      Partner
                                                                      Mailings



                        Multi channel communication



                                                                       ECR Europe Conference - 28 May 2008   11
Customer-centric pricing: focus on price sensitive products
bought by price senistive customers
   Customers’ price sensitivity is identified by                                                                                                                                                                     The importance of a product for price-sensitive
analysis of buying behaviour and market research                                                                                                                                                                            customers influences its price

  Quality-focused                                                                                                                                              Price-focused                                         Top products for very price-sensitive customers
  segments                                                                                                                                                         segments
                                                                                                                                                       Most Price-sensitive


                                                                                                                                Acheteurs rationnels




                                                                                                                                                        Repas du travailleur
                                                                                                        Jeunes Achats rapides




                                                                                                                                                                                                Acheteurs bas prix
                                                   Jeunes couples




                                                                                      Jeunes familles




                                                                                                                                                                               Famille Budget
                      Produits frais
         Alicaments




                                                                    Ligne et Beauté
                                       Bio Santé




   -1.00 -0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00




                                                                                                                                                                                                                          Customer-centric pricing
                                                                                                                                                                                                                                 optimisation
                                                                                                                                                                                                                          achieved savings of €18m
                                                                                                                                                                                                                              for a major retailer



                                                                                                                                                                                                                                       ECR Europe Conference - 28 May 2008   12
Customer-centric ranging: optimise range based on catchment
area customer insight

      Local catchment area flex                         Core range by customer segment



                       Produits T1
                 VMH


                       Produits T2

                       Produits T3
                            Produits à
                            déréférencer
                                      Taux de réachat




                                                         Customer-centric ranging
                                                         grew sales in a major food
                                                              category by 10%




                                                                 ECR Europe Conference - 28 May 2008   13
Customer-centric promotions: focus on promotions that are
relevant to key customer segments

  Promotions are analysed for their impact and                        We analyse promotional participation and
     effectiveness against customer criteria                              attitudes by customer segment
                                                                   Most                                          % spend promotions
                                                                               20% 25% 30% 35% 40% 50% 55% 60% 65%
                   Performance dimensions                          price-
                                                                   sensitive

     Category              Sales                Profitability

      Innovative       High performance              Profitable                                           “I like to buy on promotion“
      Switching         High penetration            Unprofitable
      Rewarding           High impact
                        Low involvement                                                                              Positive attitude
                                                                   Most
                                                                                                                  towards promotions
► Impact on category ► Impact on sales      ► Impact on customer   quality-
                                              profitability        focused     50% 55% 60% 65% 70% 75% 80% 85% 90%




                                                                           Customer-centric
                                                                        promotions optimisation
                                                                          generated savings of
                                                                      €10m and sales uplifts of €32m



                                                                                        ECR Europe Conference - 28 May 2008              14
Customer-centric store layout: optimise layout based on
customer shopping patterns
Identification of the most frequently-bought combined                                                                           The store arrangement is adapted to reflect buying
     products in relation to their distance in store                                                                                   behaviour and maximize purchasing
                   Menswear


                                                                                                    The analysis of combined                           Men’s underwear                                                                                                   TV
                                                                                                                                           Men


          Home & Leisure
                                           Childrenswear
                                                                Women’s
                                                               Accessories

                                                                                 Women’s
                                                                                 Fashion
                                                                                                    purchases shows which                                                                                                                      HOME
                                                                                                                                                                                                                                                                IT and
                                                                                                                                                                                                                                                                Photo
                                                                                                                                                                                                                                                                                    Radio /
                                                                                                                                                                                                                                                                              Telecommunication




                                                                                                                                                                                                                           De
                                                                                                                                                                                     SEASONAL                                                                                         s

                                                                                                    products are bought
                                                                                                                                                                                                                                         Important equipment




                                                                                                                                                                                                                              c
                                                                                                                                                                                                                             or
                                                                                                                                                                                                                                                                 CD /              Photo




                                                                                                                                                                                                                               at
                                Catering
                                                                                                                                                    Women’s underwear




                                                                                                                                                                                                                                  io
   Food
                                                                                                                                         Women




                                                                                                                                                                                                                                     n
                                                                                                                                                                                                                                                                 DVD
                                                                Health and
                                                                 Beauty

                                                                                                    together or bought by the
                                                                                                    same person                           Sport            Boys           Girls
                                                                                                                                                                                                                                                                               Household products




                                                                                                                                                                                         Books and leisure
                                                                                                                                         Textiles                    Variés, produits                                                            Cooking       Plants
                                                                                                                                                           Livres




                                                                                                                                                                                                              Stationery
                                                                                                                                                                      anniversaire




                                                                                                                                                                                                                              Edibles
                                                           e
                                                                                                                                     Games and Books
                                                                                    Photo
                                                                    House
                 Hardw




                                                                                                                                                                                                                                                               Animals
                                                                     hold
                  are




                                                  Men’s




                                                                                                                                                             Accessories and                                                                                                           Car
                                                  Clothi




                                                                                      s
                                                   ng




                                                                                                                                                                hygiene
                                                                                                                                                                                                                                                   PEM
                                                                                                                                        Camping          Underwear       Outerwear
                            a
                                                                                                                                                                                                                                                               Garden                 Tools


                            b
                                                           g
                                                                             f
                                                                                                    Considering the current
                                                                                       Household
                                                                                       appliances




                                                                                                    store arrangement
                                              Wome

                                              Clothi
                    Video




                                               n’s

                                               ng




                                                                     IT




                                                                             c

                                                                                                                                                                                                             Entrance




                                                                                                                                        Optimising store
                                                                                                                                        layout generated
                                                                                                                                  a LFL sales increase of 6%
                                                                                                                                    for a major food retailer


                                                                                                                                                                               ECR Europe Conference - 28 May 2008                                                                                  15
Using loyalty data to build collaboration & "Jointly
4   Agreed Growth" strategies with suppliers




                                          ECR Europe Conference - 28 May 2008   16
Optimising value for customers and shareholders requires the
key principles of ECR to be followed

        "fulfilling consumer wishes better, faster and at less cost"




         Retailer                                                Supplier




                         "true sharing of knowledge"
                              "set joint metrics"
                          "joint business planning"
                             "analyse outcomes"

                                                   ECR Europe Conference - 28 May 2008   17
Trusted 3rd parties help ensure a win / win / win




      Optimise processes & total
      system costs


      Act as the independent voice of
      the customer


      "Keep the retailer / supplier /
      customer song in tune"




                                             ECR Europe Conference - 28 May 2008   18
Thank you

steve.gray@emnos.com


www.emnos.com




                       ECR Europe Conference - 28 May 2008   19
Integrated Collaborative
                                               Planning
                                                 Turning Shopper Insights into Growth




Copyright © Information Resources, Inc., 2007. Confidential and proprietary
Objectives and Agenda


                                                                                Agenda
                                                                                Agenda
                                                                                 Concept Origination
                                                                                 Concept Origination
         Objectives
         Objectives
              Vision
              Vision                                                             Traditional Barriers
                                                                                 Traditional Barriers

              Challenges
              Challenges                                                         Ingredients for Success
                                                                                  Ingredients for Success

              Success Factors
              Success Factors                                                    Pilot Event and Results
                                                                                 Pilot Event and Results


                                                                                 Implications and Lessons
                                                                                  Implications and Lessons

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                  2
Leveraging Ahold USA and Unilever Assets

     Existing Assets
     Existing Assets                                                          Customer Centric Retailing

            Deep Customer Understanding
            Deep Customer Understanding                                       10,000,000+ Households

            Significant Customer Base
            Significant Customer Base                                         #1 in Key Markets

            Powerful Retail Brand Equity
            Powerful Retail Brand Equity                                      23% Aggregated Market Share

            Strong CPG Brand Equities
            Strong CPG Brand Equities                                         27 Brands Bought in 6
                                                                              Departments
            Scale CPG Brand Portfolio
            Scale CPG Brand Portfolio
                                                                              National and Local Vehicles
            Strong CPG Marketing Vehicles
            Strong CPG Marketing Vehicles
                                                                              In Store Execution in nearly
            Store Execution
            Store Execution                                                   700 Stores

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                  3
Traditional Collaboration Barriers

                  Siloed Retail Organization

                             Store Department
                             Store Department
                             Managers
                             Managers
                             Store Managers
                             Store Managers
                             Store Operations
                             Store Operations
                             Sales Planning
                             Sales Planning
                             Merchandising
                             Merchandising
                             Brand Marketing
                             Brand Marketing
                             CRM
                             CRM
                             Pricing
                             Pricing
                             Consumer Insights
                             Consumer Insights


Copyright © Information Resources, Inc., 2007. Confidential and proprietary       4
Traditional Collaboration Barriers
                                                                                       Siloed CPG Organization
                  Siloed Retail Organization
                                                                                       Grocery Division
                                                                                        Grocery Division
                                                                                         Sales Team
                                                                                          Sales Team
                            Store Department                                        Refrigerated Division
                                                                                     Refrigerated Division
                            Store Department                                             Trade Marketing
                                                                                          Trade Marketing
                            Managers                                                  Sales Team
                                                                                       Sales Team
                            Managers                                                     Co-Marketing
                                                                                  Frozen Co-Marketing
                                                                                   FrozenDivision
                                                                                           Division
                            Store Managers                                            Trade Marketing
                                                                                       Trade Marketing
                            Store Managers                                               Consumer Promotions
                            Store Operations                                          Co-Marketing Promotions
                                                                              HBC Division
                                                                              HBC Division
                                                                                          Consumer
                                                                                       Co-Marketing
                            Store Operations                                             CRM
                                                                                          CRM
                                                                               Sales Team
                                                                                      Consumer Promotions
                                                                                Sales Team
                                                                                       Consumer Promotions
                            Sales Planning
                            Sales Planning                                               Brand Management
                                                                               Trade Marketing Management
                                                                                      CRM Brand
                                                                                Trade Marketing
                                                                                       CRM
                            Merchandising
                            Merchandising                                                Advertising
                                                                                          Advertising
                                                                               Co-Marketing Management
                                                                                      Brand Management
                                                                                Co-Marketing Research
                                                                                       Brand
                            Brand Marketing
                            Brand Marketing                                              Market
                                                                               Consumer Market Research
                                                                                ConsumerPromotions
                                                                                      Advertising
                                                                                           Promotions
                                                                                       Advertising
                            CRM
                            CRM                                                CRM Market Research
                                                                                CRM Market Research
                            Pricing
                            Pricing                                            Brand Management
                                                                                Brand Management
                            Consumer Insights
                            Consumer Insights                                  Advertising
                                                                                Advertising
                                                                               Market Research
                                                                                Market Research


Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                      5
Traditional Collaboration Barriers
                                                                                                 Siloed CPG Organization
                  Siloed Retail Organization
                                                                                                      Grocery Division
                                                                                                       Grocery Division
                                                                                                         Sales Team
                                                                                                          Sales Team
                            Store Department Managers                                                Refrigerated Division
                                                                                                      Refrigerated Division
                             Store Department Managers                                                   Trade Marketing
                                                                                                          Trade Marketing
                            Store Managers                                                             Sales Team
                                                                                                        Sales Team
                             Store Managers                                                        Frozen Division
                                                                                                         Co-Marketing
                                                                                                    Frozen Division
                            Store Operations                                                              Co-Marketing
                                                                                                       Trade Marketing
                             Store Operations                                                           Trade Marketing
                                                                                                         Consumer Promotions
                            Sales Planning                                                             Co-MarketingPromotions
                                                                                                          Consumer
                                                                                                 HBC Division
                                                                                                        Co-Marketing
                             Sales Planning                                                              CRM
                                                                                                  HBC Division
                                                                                                          CRM
                            Merchandising
                             Merchandising                                                         SalesConsumerPromotions
                                                                                                       Consumer Promotions
                                                                                                    SalesTeam Management
                                                                                                         Brand Management
                                                                                                          Team
                            Brand Marketing                                                            CRMBrand
                                                                                                   TradeCRM
                                                                                                         Marketing
                             Brand Marketing                                                             Advertising
                                                                                                    Trade Advertising
                                                                                                          Marketing
                            CRM                                                                        Brand Management
                                                                                                   Co-MarketingResearch
                                                                                                        Brand Management
                             CRM                                                                         Market
                                                                                                    Co-MarketingResearch
                                                                                                          Market
                            Pricing                                                                    Advertising
                                                                                                   Consumer Promotions
                                                                                                        Advertising
                             Pricing                                                                Consumer Promotions
                            Consumer Insights
                             Consumer Insights                                                     CRM MarketResearch
                                                                                                    CRM
                                                                                                       Market Research
                                                                                                   Brand Management
                                                                                                    Brand Management
                                                                                                   Advertising
                                                                                                    Advertising
                                                                                                   Market Research
                                                                                                    Market Research

                                                                              Conflicting Objectives
                                             My Brand Equity
                                             My Brand Equity                        vs.
                                                                                     vs.    My Store Equity
                                                                                            My Store Equity
                                             My Brand Value
                                             My Brand Value                         vs.
                                                                                     vs.    My Category Value
                                                                                            My Category Value
                                             My Brand Share
                                             My Brand Share                         vs.
                                                                                     vs.    My Market Share
                                                                                            My Market Share
                                             My Brand Margin
                                             My Brand Margin                        vs.
                                                                                     vs.    My Category Margin
                                                                                            My Category Margin
                                             My Brand ROI
                                             My Brand ROI                           vs.
                                                                                     vs.    My Category ROI
                                                                                            My Category ROI
Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                                     6
Traditional Collaboration Barriers
                                                                                                     Siloed CPG Organization
                  Siloed Retail Organization
                                                                                                         Grocery Division
                                                                                                          Grocery Division
                                                                                                            Sales Team
                                                                                                             Sales Team
                            Store Department Managers                                                   Refrigerated Division
                                                                                                         Refrigerated Division
                             Store Department Managers                                                      Trade Marketing
                                                                                                             Trade Marketing
                            Store Managers                                                                Sales Team
                                                                                                           Sales Team
                             Store Managers                                                           Frozen Division
                                                                                                            Co-Marketing
                                                                                                       Frozen Division
                            Store Operations                                                                 Co-Marketing
                                                                                                          Trade Marketing
                             Store Operations                                                              Trade Marketing
                                                                                                            Consumer Promotions
                            Sales Planning                                                                Co-MarketingPromotions
                                                                                                             Consumer
                                                                                                    HBC Division
                                                                                                           Co-Marketing
                             Sales Planning                                                                 CRM
                                                                                                     HBC Division
                                                                                                             CRM
                            Merchandising
                             Merchandising                                                            SalesConsumerPromotions
                                                                                                          Consumer Promotions
                                                                                                       SalesTeam Management
                                                                                                            Brand Management
                                                                                                             Team
                            Brand Marketing                                                               CRMBrand
                                                                                                      TradeCRM
                                                                                                            Marketing
                             Brand Marketing                                                                Advertising
                                                                                                       Trade Advertising
                                                                                                             Marketing
                            CRM                                                                           Brand Management
                                                                                                      Co-MarketingResearch
                                                                                                           Brand Management
                             CRM                                                                            Market
                                                                                                       Co-MarketingResearch
                                                                                                             Market
                            Pricing                                                                       Advertising
                                                                                                      Consumer Promotions
                                                                                                           Advertising
                             Pricing                                                                   Consumer Promotions
                            Consumer Insights
                             Consumer Insights                                                        CRM MarketResearch
                                                                                                       CRM
                                                                                                          Market Research
                                                                                                      Brand Management
                                                                                                       Brand Management
                                                                                                      Advertising
                                                                                                       Advertising
                                                                                                      Market Research
                                                                                                       Market Research

                               Conflicting Objectives

                     My Brand Equity
                      My Brand Equity                               vs.
                                                                     vs.      My Store Equity
                                                                               My Store Equity
                                                                                                     Shared Customer Focus
                                                                                                     Shared Customer Focus
                     My Brand Value
                      My Brand Value                                vs.
                                                                     vs.      My Category Value
                                                                               My Category Value
                     My Brand Share
                      My Brand Share                                vs.
                                                                     vs.      My Market Share
                                                                               My Market Share       Willingness to Innovate
                                                                                                     Willingness to Innovate
                     My Brand Margin
                      My Brand Margin                               vs.
                                                                     vs.      My Category Margin
                                                                               My Category Margin
                     My Brand ROI                                   vs.       My Category ROI
                      My Brand ROI                                   vs.       My Category ROI      Drive to Overcome Barriers
                                                                                                    Drive to Overcome Barriers
Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                                        7
How Do We Collaborate?

                                                                                Customer



                                   2                                                                   3
                   We both                                                                      We collaboratively
                 invest to Co-                                                      1             measure and
                 Differentiate                                                                      improve
                                                                               Identify where
                                                                              our needs align
                                                                              with Customers



                     Ahold                                                                          Unilever

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                          8
Ahold’s Objective




                                   Gain more Stock-Up trips through CRM and
                                          Merchandising Integration

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                       9
Unilever Objective




                               Convert Customers to Center Store Categories

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                        10
Customer Insights …

                                  Unilever’s brands are key big basket drivers

                                                                                  Average Market Basket $
                                                                                                $78.35
                                                $80

                                                $70

                                                $60

                                                $50

                                                $40                      $31.47

                                                $30

                                                $20

                                                $10

                                                   $0
                                                                      Avg Shopper            Unilever Shopper



            Source: IRI
Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                     11
Customer Insights …

                         Particularly in the case of Ahold’s target
                         Behavior Segments
                                                                                Average Market Basket $
                                                                                                                  $108.08
                                                                                                      $103.62
                                                       $100

                                                                                $78.35     $80.26
                                                         $80


                                                         $60


                                                         $40        $31.47


                                                         $20


                                                           $0
                                                                  Avg Shopper   Unilever   Discerning Good Lifers Quick Fixers
                                                                                Shopper      Diners
                                                                                 (total)



                                                                                           Unilever Shoppers


Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                                      12
Opportunity = Stock-Up Trips

        Ahold’s Trip Mission Analysis shows Stock up Trips are a growth opportunity
        • Disproportionately high $ ring/trip
        • Increase conversion – get them to buy more categories
        • Unilever portfolio critical within Stock-up across key categories


                                                  % of Trips                  % of Net Dollars

     Emergency

     Replenishment

     Fresh Fill-in

     Need a Meal

     Great Sale

     Stock-up

     Institutional

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                      13
Shopper Insights > Opportunity: Stock-Up Trips

      Unilever’s Shopper Trip Analysis
       We can help the shopper save time by anticipating her needs and converting her
       trip to a stock-up trip
       Get her attention at pressure points along the perimeter, and convert her to
       additional categories




                                                                                                 Meat
                                                                                 y
                                                                              ir




                                                                                                                       Produce
                                                                  Beverage Da




                                                                                                              Bakery
                                                                                                              Deli &
                                                                                     Center-of-store Aisles
                                                                    Cold

                                                                     s




                                                                              Beer                              Entrance

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                                      14
Shared Insights > Opportunity: Stock-Up Trips

            Ahold’s
             Ahold’s                                                          Unilever’s
                                                                               Unilever’s    Build
           Objectives
           Objectives                                                         Objectives
                                                                              Objectives     Mutual
         and Strengths
          and Strengths                                              +           and
                                                                                  and       Business
                                                                              Strengths
                                                                               Strengths




                                      Win with Key Customer through
                                              Collaboration!
Copyright © Information Resources, Inc., 2007. Confidential and proprietary                            15
The Plan of Attack

       The Strategy
       1. Build Team:
                      Multi-discipline
                      Ahold + Unilever
       2. Agree on:
                      Rules of Engagement
                      Joint Metrics
                      Role of Assets
       3. Commitment:
           Integrate Assets
           Mutual Investment
           Test & Learn Philosophy

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                        16
The Plan of Attack

        The Strategy
        1. Build Team:
                      Multi-discipline
                      Ahold + Unilever
        2. Agree on:
                      Rules of Engagement
                                  The Mechanics
                      Joint Metrics
                      Role of Assets
                                  1. Economics
        3. Commitment:
                            2.       Offer Strategy
                      Integrate Assets
                      Mutual Investment
                            3.       CRM Targets
                      Test & Learn Philosophy
                                  4. Test Structure
                                  5. Store Compliance
                                  6. Measurement




Copyright © Information Resources, Inc., 2007. Confidential and proprietary                        17
The Plan of Attack

        The Strategy
        1. Build Team:
                      Multi-discipline
                      Ahold + Unilever
        2. Agree on:
                                      The
                      Rules of Engagement                              Mechanics
                      Joint Metrics
                                      1.                                          Economics
                      Role of Assets
                                2.                                                Offer Strategy
        3. Commitment:          3.                                            TheCRM Targets
                                                                               TheConcept
                                                                                    Concept
             Integrate Assets
             Mutual Investment
                                4.                                            1. Determine Desired Customer Experience
                                                                                  Test Structure
                                                                               1. Determine Desired Customer Experience
                                5.                                                Store Compliance
                                                                              2. Develop the Theme
             Test & Learn Philosophy
                                6.                                             2. Develop the Theme
                                                                                  Measurement
                                                                              3. Partner in the Creative Process
                                                                               3. Partner in the Creative Process
                                                                              4. COLLABORATE ON FINAL ‘INTERNAL
                                                                               4. COLLABORATE ON FINAL ‘INTERNAL
                                                                                 SALES’ DECK
                                                                                  SALES’ DECK
                                                                              5. JOINTLY PRESENT INTERNALLY
                                                                               5. JOINTLY PRESENT INTERNALLY
                                                                              6. Determine Store Engagement Approach
                                                                               6. Determine Store Engagement Approach
                                                                              7. Communicate Regularly throughout Execution
                                                                               7. Communicate Regularly throughout Execution

Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                                    18
How We Co-differentiated:
                              Unilever Customized National Programs




Copyright © Information Resources, Inc., 2007. Confidential and proprietary   19
How We Co-Differentiated:
                                                Unilever Customized CRM Assets




Copyright © Information Resources, Inc., 2007. Confidential and proprietary      20
How We Co-Differentiated:
              360 Portfolio Selling: At Home Focus


                                                                                                                                r”
                                                                                                                          M aile
                          “R                                                                                   tio   ns
                            eta
                               il C                                                                   “   Solu
                                   on
                                                        ne
                                                          cti
                                                              on
                                                                              s”

                                                                                       National FSI
                                                                                                                                       CRM
                                                                                                                             Solutions




                                                                                   Giant Circular



Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                                                  21
How We Shared the Investment




                           Ahold programmed the store and leveraged its
                                        marketing assets
Copyright © Information Resources, Inc., 2007. Confidential and proprietary          22
How We Share the Investment
             Ahold Programmed Store …Incented Customer
                                                                              Circular Full Page   In-store Shopping List


          1. In Ad stock-up items across
           1. In Ad stock-up items across
                    Unilever categories
                    Unilever categories

          2. Complementary CPG’s
           2. Complementary CPG’s
                    participated to truly enable
                     participated to truly enable
                    a “stock up” trip.
                     a “stock up” trip.

          3. Achievable “Stock-up”
           3. Achievable “Stock-up”
                    basket instant reward
                     basket instant reward
                    incentive
                     incentive

          4. “Stock-up” destination
           4. “Stock-up” destination                                                                    Circular Aisle
                    stops throughout store                                                                 Violator
                     stops throughout store                                      Stanchion Sign
Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                              23
Ahold Bundled End Caps to Stock-up ‘Rooms’


      Laundry room
                   Detergent
                   Stain remover
                   Paper products



                               End-Cap Card




Copyright © Information Resources, Inc., 2007. Confidential and proprietary   24
The Kitchen – Fridge, Freezer, Pantry

                                          Section Case
                                                 Cards




Copyright © Information Resources, Inc., 2007. Confidential and proprietary   25
Household - Bath, Wellness, Medicine




                 Section Case Cards




Copyright © Information Resources, Inc., 2007. Confidential and proprietary   26
One of Most Successful Events Ever
            7.6% Household penetration (3x avg.); Significant sales lift

            “GOLD Standard”

            Target Segments showed highest level broad conversions for Ahold

            Traditionalists, Segment “F”, due to overall size, drove sales volume



                                                                                                Behavior Segments
                      12%
     HH Penetration




                                                                                                                    F
                      10%
                                                                                                                    E
                      8%
                                                                                                                    D
                      6%                                                              Series1

                      4%                                                                                            C

                      2%                                                                                            B
                      0%
                            A          B             C             D          E   F                                 A

                                                                                                                        0%   5%   10%   15%   20%   25%   30%   35%



                                    Behavior Segments                                                                        Contribution to Sales
Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                                                                           27
Largest Unilever Sales Spike in 2 Years




Copyright © Information Resources, Inc., 2007. Confidential and proprietary   28
Customer Bought More Categories

                                Proving that category sales conversion works!


                                        40%                                                        30.6%

                                        30%                                    18.9%

                                        20%

                                        10%

                                           0%
                                                                              2+ Categories Purchased

                                                                              Pre-Event   During Event


Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                29
Event Increased Customer Appreciation


                                       “Do you feel more positive toward Ahold?”


                                                                              Yes
                                                                              67%




                                                                              No
                                                                              33%




               Q6b. The magazine is sent to you by Stop & Shop/Giant Carlisle. Does
               knowing that make you feel more positive toward Stop & Shop/Giant
               Carlisle?
Copyright © Information Resources, Inc., 2007. Confidential and proprietary           30
Results Summary

      1. Shopping occasions
       1. Shopping occasions                                                         1. Drove Stock-up trips
                                                                                      1. Drove Stock-up trips

      2. Total store shopping behavior
       2. Total store shopping behavior                                              2. Increased Category conversions
                                                                                      2. Increased Category conversions

      3. Unilever event performance
       3. Unilever event performance                                                 3. Biggest event and volume spike
                                                                                      3. Biggest event and volume spike

      4. Ahold USA incremental $$$
       4. Ahold USA incremental $$$                                                  4. Real sales, not just brand
                                                                                      4. Real sales, not just brand
                                                                                       switching
                                                                                        switching
      5. CRM relevance
       5. CRM relevance
                                                                                     5. Excellent target Segment
                                                                                      5. Excellent target Segment
      6. Customer-driven decision
       6. Customer-driven decision                                                     response
                                                                                        response
            making
            making
                                                                                     6. Consumers liked what they saw
                                                                                      6. Consumers liked what they saw
      7. Greater Mutual Understanding
       7. Greater Mutual Understanding
                                                                                     7. More Insights Driven Solutions
                                                                                      7. More Insights Driven Solutions




Copyright © Information Resources, Inc., 2007. Confidential and proprietary                                               31
What Was Hard…

                      Trust

                      Sharing agendas

                      Accepting trade-offs

                      Corralling the categories

                      Clear ownership within each company

                      Fitting programs into ingrained processes

                      Getting Marketing and Merchandising to show up at the
                      same meetings…!
Copyright © Information Resources, Inc., 2007. Confidential and proprietary                    32
What We’ve Realized…

         1. We’re not that different – we can collaborate
          1. We’re not that different – we can collaborate
         2. This may not work for everyone
          2. This may not work for everyone
         3. Need champions at each company
          3. Need champions at each company
         4. Need long Planning lead times, simple shopper requirements
          4. Need long Planning lead times, simple shopper requirements
         5. Need to communicate with our customer in-home and in-store
          5. Need to communicate with our customer in-home and in-store
         6. Complementary manufacturers should partner to scale opportunity
          6. Complementary manufacturers should partner to scale opportunity
         7. If it isn’t repeatable, it isn’t worth it – think annual calendar, a series
          7. If it isn’t repeatable, it isn’t worth it – think annual calendar, a series
         8. Collaborate on success criteria and measurement
          8. Collaborate on success criteria and measurement
         9. Keep it simple –shoppers don’t want to think
          9. Keep it simple –shoppers don’t want to think


Copyright © Information Resources, Inc., 2007. Confidential and proprietary                 33

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ECR Europe Forum '08. Target shoppers, activate insights

  • 1. Uncovering the Myths around Unplanned Purchasing Dr David Bell Wharton School (Philadelphia) Dr Daniel Corsten IE Business School (Madrid) Dr George Knox Tilburg University (Tilburg)
  • 2. It is widely believed that the majority of purchases are unplanned • Oft-cited POPAI Consumer Buying Habit Study 70% of In-Store Purchasing Decisions are Unplanned • Paco Underhill (“Why We Buy”) “Supermarkets are places of high impulse buying … – fully 60 to 70 percent of purchases there were unplanned, grocery industry studies have shown us.”
  • 4. Key Messages from Our Research • Only 20% of category purchases are unplanned • Not proportional to basket size • Enormous differences across households • Recommended Actions • Enhancing in-store marketing (state) • Attracting leisurely shoppers (trait)
  • 5. Study Features • Definition—unplanned category purchases • Location—three European countries • Stores—multiple chains • Shoppers—tracked over time and stores
  • 6. Approach • Explain number of unplanned category purchases in shopping basket • Control for differences … • Across shoppers • Across shoppers and stores • Across shoppers, stores, and trips
  • 7. Comprehensive Shopper Model – Household Traits: Shopping Styles, Life Stage – Store Perceptions: Self-reported store assessments – Shopping Trip—Context: Travel mode, gender, etc. – Shopping Trip—In-Store Process: Offers seen in store, etc.
  • 9. The majority of category purchases are NOT unplanned • While most shoppers do it … 75% of households • And many trips see it … 40% of shopping trips • The overall rate is not that high … • … only 20% of all category purchases are unplanned
  • 10. Top 5 Enablers of Unplanned Purchasing 1. Shopper Sees Offers In-Store State (53%) 2. Shopper Above Average Income Trait (45%) 3. Shopper Travels by Car State (44%) 4. Shopper is Informed at the Shelf Trait (35%) 5. Shopper on Unplanned Trip State (23%)
  • 11. Top 5 Barriers to Unplanned Purchasing 1. Shopper is “Fast and Efficient” Type Trait (82%) 2. Shopper from Larger Household Trait (65%) 3. Shopper in “Fast and Efficient” State State (53%) 4. Shopper from Older Households Trait (47%) 5. Shopper is Informed by Newspaper Trait (25%)
  • 12. Trait Versus State: Changing the Mix of Shoppers May be the More Effective Strategy • Imagine the store wishes to increase the rate of unplanned category Thank You! ... purchasing, then • 10% increase in Leisurely Shoppers = Questions &shoppers see In-Store Deals • 40% increase of trips where Answers Investment Attract Leisurely 1x Shoppers Increase In-Store Offers 4x
  • 13. Customer-centric Retailing Steve Gray, CEO of emnos GmbH ECR Europe Conference, 28 May 2008
  • 14. 1 Introducing emnos and "customer-centric retailing" ECR Europe Conference - 28 May 2008 2
  • 15. emnos helps leading retailers and suppliers achieve customer- centric growth Steve Gray CEO of emnos & Director of Offices : London, Munich, Paris, Madrid Loyalty Partner gmbh Skills: consulting, analysis, research, Formerly Managing Director technology of dunnhumby UK & Ireland & Ownership : 100% Loyalty Partner GmbH director of dunnhumby USA ECR Europe Conference - 28 May 2008 3
  • 16. emnos follow a process called "customer centric retailing" that creates significant value for customers & shareholders 1 2 3 Customer Customer Customer Potential Strategy Engagement • user training Organisation Alignment • processes • organisation change • participation with retailer Supplier Alignment • jointly agreed growth ECR Europe Conference - 28 May 2008 4
  • 17. 2 From loyalty data to customer insight ECR Europe Conference - 28 May 2008 5
  • 18. Customer-centric retailing begins with loyalty data Consumer Panel Data Research Loyalty Card Shopper Purchase Research Data ECR Europe Conference - 28 May 2008 6
  • 19. Loyalty data enables unmatchable customer insight Customer Behaviour Lifestyle & Lifestage What did my customers do ? What type of person are Where did they do it ? they? Who else are they like ? Attitudes Value & Potential Why did they do it ? What are my customers worth today ? How much could they be worth tomorrow ? ECR Europe Conference - 28 May 2008 7
  • 20. "Insight should be a film not a photograph" young young family retired Lifestage single married with kids couple person couple Shopping trip trip trip habits frequency value time healthy tradi- price gourmet Lifestyle eating tional sensitive foods organic Shopping big top up eat non mission baskets shop now food ECR Europe Conference - 28 May 2008 8
  • 21. Using insight to create value for 3 customers & shareholders ECR Europe Conference - 28 May 2008 9
  • 22. Insight enables value growth via communication, store & category optimisation Relevant and engaging customer communications Retailer customer database Store clusters & customer, and layouts optimised retailer and insight for customers brand loyalty platform Supplier Categories optimised for customers customer feedback loop (behavioural – what they did, attitudinal – why they did it) ECR Europe Conference - 28 May 2008 10
  • 23. Customer-centric communications: helping PAYBACK to become Europe's largest and most profitable coalition loyalty programme Account Personalisation 2008-? Statement 2004-2007 10m+ 2000-2003 variations 2m+ 32 variations variations Themed io n Mailings ed e volut h t-bas t- In s ig Time Partner Mailings Multi channel communication ECR Europe Conference - 28 May 2008 11
  • 24. Customer-centric pricing: focus on price sensitive products bought by price senistive customers Customers’ price sensitivity is identified by The importance of a product for price-sensitive analysis of buying behaviour and market research customers influences its price Quality-focused Price-focused Top products for very price-sensitive customers segments segments Most Price-sensitive Acheteurs rationnels Repas du travailleur Jeunes Achats rapides Acheteurs bas prix Jeunes couples Jeunes familles Famille Budget Produits frais Alicaments Ligne et Beauté Bio Santé -1.00 -0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00 Customer-centric pricing optimisation achieved savings of €18m for a major retailer ECR Europe Conference - 28 May 2008 12
  • 25. Customer-centric ranging: optimise range based on catchment area customer insight Local catchment area flex Core range by customer segment Produits T1 VMH Produits T2 Produits T3 Produits à déréférencer Taux de réachat Customer-centric ranging grew sales in a major food category by 10% ECR Europe Conference - 28 May 2008 13
  • 26. Customer-centric promotions: focus on promotions that are relevant to key customer segments Promotions are analysed for their impact and We analyse promotional participation and effectiveness against customer criteria attitudes by customer segment Most % spend promotions 20% 25% 30% 35% 40% 50% 55% 60% 65% Performance dimensions price- sensitive Category Sales Profitability Innovative High performance Profitable “I like to buy on promotion“ Switching High penetration Unprofitable Rewarding High impact Low involvement Positive attitude Most towards promotions ► Impact on category ► Impact on sales ► Impact on customer quality- profitability focused 50% 55% 60% 65% 70% 75% 80% 85% 90% Customer-centric promotions optimisation generated savings of €10m and sales uplifts of €32m ECR Europe Conference - 28 May 2008 14
  • 27. Customer-centric store layout: optimise layout based on customer shopping patterns Identification of the most frequently-bought combined The store arrangement is adapted to reflect buying products in relation to their distance in store behaviour and maximize purchasing Menswear The analysis of combined Men’s underwear TV Men Home & Leisure Childrenswear Women’s Accessories Women’s Fashion purchases shows which HOME IT and Photo Radio / Telecommunication De SEASONAL s products are bought Important equipment c or CD / Photo at Catering Women’s underwear io Food Women n DVD Health and Beauty together or bought by the same person Sport Boys Girls Household products Books and leisure Textiles Variés, produits Cooking Plants Livres Stationery anniversaire Edibles e Games and Books Photo House Hardw Animals hold are Men’s Accessories and Car Clothi s ng hygiene PEM Camping Underwear Outerwear a Garden Tools b g f Considering the current Household appliances store arrangement Wome Clothi Video n’s ng IT c Entrance Optimising store layout generated a LFL sales increase of 6% for a major food retailer ECR Europe Conference - 28 May 2008 15
  • 28. Using loyalty data to build collaboration & "Jointly 4 Agreed Growth" strategies with suppliers ECR Europe Conference - 28 May 2008 16
  • 29. Optimising value for customers and shareholders requires the key principles of ECR to be followed "fulfilling consumer wishes better, faster and at less cost" Retailer Supplier "true sharing of knowledge" "set joint metrics" "joint business planning" "analyse outcomes" ECR Europe Conference - 28 May 2008 17
  • 30. Trusted 3rd parties help ensure a win / win / win Optimise processes & total system costs Act as the independent voice of the customer "Keep the retailer / supplier / customer song in tune" ECR Europe Conference - 28 May 2008 18
  • 31. Thank you steve.gray@emnos.com www.emnos.com ECR Europe Conference - 28 May 2008 19
  • 32. Integrated Collaborative Planning Turning Shopper Insights into Growth Copyright © Information Resources, Inc., 2007. Confidential and proprietary
  • 33. Objectives and Agenda Agenda Agenda Concept Origination Concept Origination Objectives Objectives Vision Vision Traditional Barriers Traditional Barriers Challenges Challenges Ingredients for Success Ingredients for Success Success Factors Success Factors Pilot Event and Results Pilot Event and Results Implications and Lessons Implications and Lessons Copyright © Information Resources, Inc., 2007. Confidential and proprietary 2
  • 34. Leveraging Ahold USA and Unilever Assets Existing Assets Existing Assets Customer Centric Retailing Deep Customer Understanding Deep Customer Understanding 10,000,000+ Households Significant Customer Base Significant Customer Base #1 in Key Markets Powerful Retail Brand Equity Powerful Retail Brand Equity 23% Aggregated Market Share Strong CPG Brand Equities Strong CPG Brand Equities 27 Brands Bought in 6 Departments Scale CPG Brand Portfolio Scale CPG Brand Portfolio National and Local Vehicles Strong CPG Marketing Vehicles Strong CPG Marketing Vehicles In Store Execution in nearly Store Execution Store Execution 700 Stores Copyright © Information Resources, Inc., 2007. Confidential and proprietary 3
  • 35. Traditional Collaboration Barriers Siloed Retail Organization Store Department Store Department Managers Managers Store Managers Store Managers Store Operations Store Operations Sales Planning Sales Planning Merchandising Merchandising Brand Marketing Brand Marketing CRM CRM Pricing Pricing Consumer Insights Consumer Insights Copyright © Information Resources, Inc., 2007. Confidential and proprietary 4
  • 36. Traditional Collaboration Barriers Siloed CPG Organization Siloed Retail Organization Grocery Division Grocery Division Sales Team Sales Team Store Department Refrigerated Division Refrigerated Division Store Department Trade Marketing Trade Marketing Managers Sales Team Sales Team Managers Co-Marketing Frozen Co-Marketing FrozenDivision Division Store Managers Trade Marketing Trade Marketing Store Managers Consumer Promotions Store Operations Co-Marketing Promotions HBC Division HBC Division Consumer Co-Marketing Store Operations CRM CRM Sales Team Consumer Promotions Sales Team Consumer Promotions Sales Planning Sales Planning Brand Management Trade Marketing Management CRM Brand Trade Marketing CRM Merchandising Merchandising Advertising Advertising Co-Marketing Management Brand Management Co-Marketing Research Brand Brand Marketing Brand Marketing Market Consumer Market Research ConsumerPromotions Advertising Promotions Advertising CRM CRM CRM Market Research CRM Market Research Pricing Pricing Brand Management Brand Management Consumer Insights Consumer Insights Advertising Advertising Market Research Market Research Copyright © Information Resources, Inc., 2007. Confidential and proprietary 5
  • 37. Traditional Collaboration Barriers Siloed CPG Organization Siloed Retail Organization Grocery Division Grocery Division Sales Team Sales Team Store Department Managers Refrigerated Division Refrigerated Division Store Department Managers Trade Marketing Trade Marketing Store Managers Sales Team Sales Team Store Managers Frozen Division Co-Marketing Frozen Division Store Operations Co-Marketing Trade Marketing Store Operations Trade Marketing Consumer Promotions Sales Planning Co-MarketingPromotions Consumer HBC Division Co-Marketing Sales Planning CRM HBC Division CRM Merchandising Merchandising SalesConsumerPromotions Consumer Promotions SalesTeam Management Brand Management Team Brand Marketing CRMBrand TradeCRM Marketing Brand Marketing Advertising Trade Advertising Marketing CRM Brand Management Co-MarketingResearch Brand Management CRM Market Co-MarketingResearch Market Pricing Advertising Consumer Promotions Advertising Pricing Consumer Promotions Consumer Insights Consumer Insights CRM MarketResearch CRM Market Research Brand Management Brand Management Advertising Advertising Market Research Market Research Conflicting Objectives My Brand Equity My Brand Equity vs. vs. My Store Equity My Store Equity My Brand Value My Brand Value vs. vs. My Category Value My Category Value My Brand Share My Brand Share vs. vs. My Market Share My Market Share My Brand Margin My Brand Margin vs. vs. My Category Margin My Category Margin My Brand ROI My Brand ROI vs. vs. My Category ROI My Category ROI Copyright © Information Resources, Inc., 2007. Confidential and proprietary 6
  • 38. Traditional Collaboration Barriers Siloed CPG Organization Siloed Retail Organization Grocery Division Grocery Division Sales Team Sales Team Store Department Managers Refrigerated Division Refrigerated Division Store Department Managers Trade Marketing Trade Marketing Store Managers Sales Team Sales Team Store Managers Frozen Division Co-Marketing Frozen Division Store Operations Co-Marketing Trade Marketing Store Operations Trade Marketing Consumer Promotions Sales Planning Co-MarketingPromotions Consumer HBC Division Co-Marketing Sales Planning CRM HBC Division CRM Merchandising Merchandising SalesConsumerPromotions Consumer Promotions SalesTeam Management Brand Management Team Brand Marketing CRMBrand TradeCRM Marketing Brand Marketing Advertising Trade Advertising Marketing CRM Brand Management Co-MarketingResearch Brand Management CRM Market Co-MarketingResearch Market Pricing Advertising Consumer Promotions Advertising Pricing Consumer Promotions Consumer Insights Consumer Insights CRM MarketResearch CRM Market Research Brand Management Brand Management Advertising Advertising Market Research Market Research Conflicting Objectives My Brand Equity My Brand Equity vs. vs. My Store Equity My Store Equity Shared Customer Focus Shared Customer Focus My Brand Value My Brand Value vs. vs. My Category Value My Category Value My Brand Share My Brand Share vs. vs. My Market Share My Market Share Willingness to Innovate Willingness to Innovate My Brand Margin My Brand Margin vs. vs. My Category Margin My Category Margin My Brand ROI vs. My Category ROI My Brand ROI vs. My Category ROI Drive to Overcome Barriers Drive to Overcome Barriers Copyright © Information Resources, Inc., 2007. Confidential and proprietary 7
  • 39. How Do We Collaborate? Customer 2 3 We both We collaboratively invest to Co- 1 measure and Differentiate improve Identify where our needs align with Customers Ahold Unilever Copyright © Information Resources, Inc., 2007. Confidential and proprietary 8
  • 40. Ahold’s Objective Gain more Stock-Up trips through CRM and Merchandising Integration Copyright © Information Resources, Inc., 2007. Confidential and proprietary 9
  • 41. Unilever Objective Convert Customers to Center Store Categories Copyright © Information Resources, Inc., 2007. Confidential and proprietary 10
  • 42. Customer Insights … Unilever’s brands are key big basket drivers Average Market Basket $ $78.35 $80 $70 $60 $50 $40 $31.47 $30 $20 $10 $0 Avg Shopper Unilever Shopper Source: IRI Copyright © Information Resources, Inc., 2007. Confidential and proprietary 11
  • 43. Customer Insights … Particularly in the case of Ahold’s target Behavior Segments Average Market Basket $ $108.08 $103.62 $100 $78.35 $80.26 $80 $60 $40 $31.47 $20 $0 Avg Shopper Unilever Discerning Good Lifers Quick Fixers Shopper Diners (total) Unilever Shoppers Copyright © Information Resources, Inc., 2007. Confidential and proprietary 12
  • 44. Opportunity = Stock-Up Trips Ahold’s Trip Mission Analysis shows Stock up Trips are a growth opportunity • Disproportionately high $ ring/trip • Increase conversion – get them to buy more categories • Unilever portfolio critical within Stock-up across key categories % of Trips % of Net Dollars Emergency Replenishment Fresh Fill-in Need a Meal Great Sale Stock-up Institutional Copyright © Information Resources, Inc., 2007. Confidential and proprietary 13
  • 45. Shopper Insights > Opportunity: Stock-Up Trips Unilever’s Shopper Trip Analysis We can help the shopper save time by anticipating her needs and converting her trip to a stock-up trip Get her attention at pressure points along the perimeter, and convert her to additional categories Meat y ir Produce Beverage Da Bakery Deli & Center-of-store Aisles Cold s Beer Entrance Copyright © Information Resources, Inc., 2007. Confidential and proprietary 14
  • 46. Shared Insights > Opportunity: Stock-Up Trips Ahold’s Ahold’s Unilever’s Unilever’s Build Objectives Objectives Objectives Objectives Mutual and Strengths and Strengths + and and Business Strengths Strengths Win with Key Customer through Collaboration! Copyright © Information Resources, Inc., 2007. Confidential and proprietary 15
  • 47. The Plan of Attack The Strategy 1. Build Team: Multi-discipline Ahold + Unilever 2. Agree on: Rules of Engagement Joint Metrics Role of Assets 3. Commitment: Integrate Assets Mutual Investment Test & Learn Philosophy Copyright © Information Resources, Inc., 2007. Confidential and proprietary 16
  • 48. The Plan of Attack The Strategy 1. Build Team: Multi-discipline Ahold + Unilever 2. Agree on: Rules of Engagement The Mechanics Joint Metrics Role of Assets 1. Economics 3. Commitment: 2. Offer Strategy Integrate Assets Mutual Investment 3. CRM Targets Test & Learn Philosophy 4. Test Structure 5. Store Compliance 6. Measurement Copyright © Information Resources, Inc., 2007. Confidential and proprietary 17
  • 49. The Plan of Attack The Strategy 1. Build Team: Multi-discipline Ahold + Unilever 2. Agree on: The Rules of Engagement Mechanics Joint Metrics 1. Economics Role of Assets 2. Offer Strategy 3. Commitment: 3. TheCRM Targets TheConcept Concept Integrate Assets Mutual Investment 4. 1. Determine Desired Customer Experience Test Structure 1. Determine Desired Customer Experience 5. Store Compliance 2. Develop the Theme Test & Learn Philosophy 6. 2. Develop the Theme Measurement 3. Partner in the Creative Process 3. Partner in the Creative Process 4. COLLABORATE ON FINAL ‘INTERNAL 4. COLLABORATE ON FINAL ‘INTERNAL SALES’ DECK SALES’ DECK 5. JOINTLY PRESENT INTERNALLY 5. JOINTLY PRESENT INTERNALLY 6. Determine Store Engagement Approach 6. Determine Store Engagement Approach 7. Communicate Regularly throughout Execution 7. Communicate Regularly throughout Execution Copyright © Information Resources, Inc., 2007. Confidential and proprietary 18
  • 50. How We Co-differentiated: Unilever Customized National Programs Copyright © Information Resources, Inc., 2007. Confidential and proprietary 19
  • 51. How We Co-Differentiated: Unilever Customized CRM Assets Copyright © Information Resources, Inc., 2007. Confidential and proprietary 20
  • 52. How We Co-Differentiated: 360 Portfolio Selling: At Home Focus r” M aile “R tio ns eta il C “ Solu on ne cti on s” National FSI CRM Solutions Giant Circular Copyright © Information Resources, Inc., 2007. Confidential and proprietary 21
  • 53. How We Shared the Investment Ahold programmed the store and leveraged its marketing assets Copyright © Information Resources, Inc., 2007. Confidential and proprietary 22
  • 54. How We Share the Investment Ahold Programmed Store …Incented Customer Circular Full Page In-store Shopping List 1. In Ad stock-up items across 1. In Ad stock-up items across Unilever categories Unilever categories 2. Complementary CPG’s 2. Complementary CPG’s participated to truly enable participated to truly enable a “stock up” trip. a “stock up” trip. 3. Achievable “Stock-up” 3. Achievable “Stock-up” basket instant reward basket instant reward incentive incentive 4. “Stock-up” destination 4. “Stock-up” destination Circular Aisle stops throughout store Violator stops throughout store Stanchion Sign Copyright © Information Resources, Inc., 2007. Confidential and proprietary 23
  • 55. Ahold Bundled End Caps to Stock-up ‘Rooms’ Laundry room Detergent Stain remover Paper products End-Cap Card Copyright © Information Resources, Inc., 2007. Confidential and proprietary 24
  • 56. The Kitchen – Fridge, Freezer, Pantry Section Case Cards Copyright © Information Resources, Inc., 2007. Confidential and proprietary 25
  • 57. Household - Bath, Wellness, Medicine Section Case Cards Copyright © Information Resources, Inc., 2007. Confidential and proprietary 26
  • 58. One of Most Successful Events Ever 7.6% Household penetration (3x avg.); Significant sales lift “GOLD Standard” Target Segments showed highest level broad conversions for Ahold Traditionalists, Segment “F”, due to overall size, drove sales volume Behavior Segments 12% HH Penetration F 10% E 8% D 6% Series1 4% C 2% B 0% A B C D E F A 0% 5% 10% 15% 20% 25% 30% 35% Behavior Segments Contribution to Sales Copyright © Information Resources, Inc., 2007. Confidential and proprietary 27
  • 59. Largest Unilever Sales Spike in 2 Years Copyright © Information Resources, Inc., 2007. Confidential and proprietary 28
  • 60. Customer Bought More Categories Proving that category sales conversion works! 40% 30.6% 30% 18.9% 20% 10% 0% 2+ Categories Purchased Pre-Event During Event Copyright © Information Resources, Inc., 2007. Confidential and proprietary 29
  • 61. Event Increased Customer Appreciation “Do you feel more positive toward Ahold?” Yes 67% No 33% Q6b. The magazine is sent to you by Stop & Shop/Giant Carlisle. Does knowing that make you feel more positive toward Stop & Shop/Giant Carlisle? Copyright © Information Resources, Inc., 2007. Confidential and proprietary 30
  • 62. Results Summary 1. Shopping occasions 1. Shopping occasions 1. Drove Stock-up trips 1. Drove Stock-up trips 2. Total store shopping behavior 2. Total store shopping behavior 2. Increased Category conversions 2. Increased Category conversions 3. Unilever event performance 3. Unilever event performance 3. Biggest event and volume spike 3. Biggest event and volume spike 4. Ahold USA incremental $$$ 4. Ahold USA incremental $$$ 4. Real sales, not just brand 4. Real sales, not just brand switching switching 5. CRM relevance 5. CRM relevance 5. Excellent target Segment 5. Excellent target Segment 6. Customer-driven decision 6. Customer-driven decision response response making making 6. Consumers liked what they saw 6. Consumers liked what they saw 7. Greater Mutual Understanding 7. Greater Mutual Understanding 7. More Insights Driven Solutions 7. More Insights Driven Solutions Copyright © Information Resources, Inc., 2007. Confidential and proprietary 31
  • 63. What Was Hard… Trust Sharing agendas Accepting trade-offs Corralling the categories Clear ownership within each company Fitting programs into ingrained processes Getting Marketing and Merchandising to show up at the same meetings…! Copyright © Information Resources, Inc., 2007. Confidential and proprietary 32
  • 64. What We’ve Realized… 1. We’re not that different – we can collaborate 1. We’re not that different – we can collaborate 2. This may not work for everyone 2. This may not work for everyone 3. Need champions at each company 3. Need champions at each company 4. Need long Planning lead times, simple shopper requirements 4. Need long Planning lead times, simple shopper requirements 5. Need to communicate with our customer in-home and in-store 5. Need to communicate with our customer in-home and in-store 6. Complementary manufacturers should partner to scale opportunity 6. Complementary manufacturers should partner to scale opportunity 7. If it isn’t repeatable, it isn’t worth it – think annual calendar, a series 7. If it isn’t repeatable, it isn’t worth it – think annual calendar, a series 8. Collaborate on success criteria and measurement 8. Collaborate on success criteria and measurement 9. Keep it simple –shoppers don’t want to think 9. Keep it simple –shoppers don’t want to think Copyright © Information Resources, Inc., 2007. Confidential and proprietary 33