The key challenges with traditional retailer-supplier collaboration include:
- Siloed organizations on both sides, with separate departments and teams focused on specific areas like stores, sales, marketing, etc. rather than collaborating holistically.
- Lack of integrated planning and goal-setting across the organizations. Each side plans independently rather than jointly.
- Information sharing is limited due to the silos. Both sides lack a full view of customer behaviors, preferences, and opportunities for growth.
Overcoming these barriers requires breaking down the silos, implementing integrated planning processes, and leveraging both organizations' customer insights and other assets to work towards common goals.
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
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
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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
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17. 2 From loyalty data to customer insight
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18. Customer-centric retailing begins with loyalty data
Consumer
Panel Data
Research
Loyalty Card
Shopper Purchase
Research Data
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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 ?
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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
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21. Using insight to create value for
3 customers & shareholders
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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)
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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
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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
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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%
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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
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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
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28. Using loyalty data to build collaboration & "Jointly
4 Agreed Growth" strategies with suppliers
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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"
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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"
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