Last issue we shared some of the results of Australia’s first Shopper Marketing Industry Benchmark Survey from POPAI / ShopAbility and supported by TorchMedia.

Some compelling results show that Shopper Marketing is definitely on the rise, supported by 70% of business leaders with one third of companies actively increasing people and budgets. The Shopper Marketing Train is leaving the station.

A snapshot recap from last time:

* Nearly 7 in 10 said that Shopper Marketing is supported by Executive Leadership. One third plan to increase their program budgets and/or people budgets in the next two years. Just under 40% are currently measuring their Shopper Marketing programs
* 60% are engaged in Shopper Marketing activities
* 65% are undertaking category level and retailer initiatives
* Two in five are engaged in trials, whilst nearly three in five are not, due to a lack of one or more of resources, retailer engagement or lack of co-funding (budget)
* Almost half have undertaken shopper research of some sort
* A primary issue is lack of resource allocation to Shopper Marketing. Only 4 in 10 respondents are satisfied overall with focus, expertise, and people. All respondents are least satisfied with budget (23%)
* How Shopper Marketing is defined and what is included varied among respondents. A point of consensus is that Shopper Marketing targets shoppers at multiple touchpoints using and leveraging insights

The focus of our article this time is on who is best practice and what they are doing.

So, who is on the Shopper Marketing train and where is it heading?

The USA and UK were commonly nominated as international best practice by survey respondents, with participants typically perceiving Australia to be 8-10 years behind in activations. However, momentum is gaining.

In-store ‘theatre’ was a big indicator of best practice for survey respondents. Overseas retailers believed to be doing this well included Whole Foods, Trader Joe’s “making private label cool and branded”, WalMart for its WinPlayShow strategy and digital on shelf media.

Leveraging loyalty programs to inform the in-store offer was another biggie, with survey respondents citing Tesco for their Club Card program, ability to mine their shopper data and provide tailored offers, and in-store occasion based executions. Similarly Boots received honourable mentions for their loyalty program, understanding of multiple occasions and marketing to impulse.

Apple received top marks for its total experience including store staff, and totally different model of sales based on shopper experience rather than price or offers.

Marks & Spencer and Sainsbury were seen to be leaders in marketing successfully to shopper occasions (such as the M&S “Dine in for two for £10” campaign).

Global manufacturers rating most mentions included P&G for its ‘last 3 feet’ and ‘shelf back’ approaches, and Pampers World 4 Kids program; Coca-Cola for its understanding of tailoring pack and product sizes and formats to channels and occasions; and  Unilever for its Dove real beauty campaign with WalMart, which was subsequently taken global.

In Australia, quoted leading retailers included: Apple, McDonalds, Priceline, and JB HiFi (for its performance and results, although its methods polarised opinion). Improvements in the Health & Beauty departments of both Coles and Woolworths were frequently mentioned.

Manufacturer P&G came up trumps for its shopper understanding and seamless ATL/BTL/in-store execution as well as retailer collaboration.  As with their global counterparts, Coca-Cola was mentioned for its understanding of occasions and packs per channel, and its ability to change messaging consumers vs. shoppers. Unilever also rated highly for its “seamless integration and customer specific activations”. Colgate made the list for its engaging activations.

The common thread running through all organisations considered at the forefront of Shopper Marketing is their understanding of shopper behaviour, types and needs; their ability to execute against this consistently with tailored and customized programs; and their willingness to innovate and trial new concepts.

What makes Best Practice?

The intent of this first study was to provide an initial benchmark (with future studies aimed at measuring specific best practice activities now that we have a benchmark), so we have defined Best Practice by a certain set of overarching areas:

What this indicates is that while Shopper Marketing is still in relative infancy in Australia, 60% are engaged in Shopper Marketing activities (and 40% are not). Whilst 2 in 5 are engaged in trials, nearly 3 in 5 are not, due to a lack of one or more of resources, retailer engagement or lack of co-funding (budget).  There were relatively more category level and retailer initiatives, at around 65% each.

When it comes to Shopper Insights, around half have been or are involved in research programs, and most are using sales and/or store data regularly. For the half that are not researching, budget and resources constraints (including lack of co-funding) were nominated reasons.

Defining and executing best practice measures for Shopper Marketing is also a huge opportunity,
with under half of respondents using shopper metrics (AWOP, frequency, basket and household penetration, spend, traffic etc) with regularity – either due to a lack of awareness/understanding of what these are and how to apply them, or cost of buying the data.

Similarly, achieving best practice retailer / manufacturer collaboration is an area for growth. Whilst nearly 70% say they have joint category discussions and have identified initiatives, fewer have actually conducted joint initiatives. 1/3 either don’t have or only infrequently have joint category level discussions or have identified joint initiatives to try. Shopper insights can be used as a jumping off point for collaboration between retailers and manufacturers at category level, a reason to increase shopper insights resources on both sides.

Implications and Opportunities for Retailers

Retailers cited a number of challenges to progress, including a lack of expertise, resources and people, how to differentiate low growth categories, gain store compliance and get suppliers to think in categories not brands.

Manufacturers, on the other hand, were hitting hurdles with retailer’s clean store policies and lack of willingness to innovate and trial new ideas and their expectation that suppliers should fund all Shopper Marketing initiatives for their stores.

Both sides have called for more effective collaboration in order to improve the experience for shoppers (and therefore optimise sales).

In the USA some manufacturers have set up cross functional retail customer specific business teams to achieve more holistic points of contact between retailers and manufacturers (not just via sales teams/merchant buyers).

What needs to happen in Australia:

* Retailers’ marketing teams need to start to establish links with brand manufacturer marketing teams and vice versa, in order to create broad joint programs of activity.
* Mutual understanding of objectives
* Mutual data sharing and shopper insights provision from both sides
* Customised programs per retailer and category
* Co-funded trials and insights programs.

Study respondents identified a number of areas for improvement, opportunity and sources of future growth.  These opportunities exist at a number of levels, so for ease of reading we’ve divided these into Engagement, Activities, Processes and Tools.

Engagement and Education:
* Closer Sales & Marketing team collaboration in manufacturers (e.g. alignment on trade promotions, price, retail customer specific campaigns on specific brands) to achieve a consistency of shopper experience in-store
* Raising the profile and value of the Shopper Marketing function: Internal education (particularly of brand marketers in manufacturers) to understand the role of, and see the value in, Shopper Marketing and the benefits of truly integrated consumer/shopper in-store and pre-store campaigns
* Closer retailer and manufacturer collaboration, as discussed above.

Activities:
* Utilising pre-store touchpoints: creating awareness and consideration of not just brand but retail offers pre-store. Understand the role of all touchpoints, which ones need to be activated for your objectives and how best to activate them based on shopper behaviour
* Tailoring and targeting: Programs targeting specific occasions, shopper segments, store types, retailers. Data mining and segmentation via research and loyalty programs. Related to occasions, day-part and seasonal marketing, and better Shopper Marketing leverage of major events
* Occasion based solutions: cross category and cross supplier
* In-store theatre: The store is considered a marketing medium – take advantage of this with ‘theatre’
* Interruption: there is a perception that shoppers are becoming increasingly habitual and that the game is becoming about interruption. Trials of new mediums to interrupt shoppers
* Increasing channels of activation: much interest was expressed in online retailing/e-commerce and the related ability to market to shoppers via online, email, mobile marketing and social media.

Resources:
* People: dedicated Shopper Marketing people, ideally in a team that reports into Executive Leadership rather than into Sales or Marketing
* Budget: dedicated Shopper Marketing budgets, in particular dedicated shopper research and shopper data budgets.

Processes and Tools:
* Development of a suite of measures customised to different activity types and mediums
* Shopper budgets and headcount built into the annual planning and budgeting process and into operating costs.

You don’t need a first class ticket to get on board

Evidence points to a Shopper Marketing industry that, while currently relatively new, is gaining momentum quickly on the back of international successes.

In most cases there is (passive) executive leadership support in Australia. The challenge – and opportunity – is in making that support active to actually generate operational change.

In looking at international examples, it is clear that best practice Retailers have not been trying to be expert at everything. They’ve picked one thing – one area of priority in Shopper Marketing – and tried new things. With Tesco it’s loyalty. With Whole Foods it’s theatre. With Marks & Spencer it’s occasion-based marketing.

The lesson is – don’t wait until the Wizard or Witch of Shopper Marketing comes along to wave their magic wand and make it all happen for you. Just get started.

“Shopper Marketing: The Journey Begins” report is available from POPAI for $495 plus GST.
A survey findings workshop will be held on September 22 as part of the Retail and Marketing at Retail Expo, for those interested in making most use of the survey findings and implications.
Go to www.popai.com.au for more information, to purchase the report or to register for the workshop.

ABOUT THE SURVEY

The POPAI/ShopAbility Shopper Marketing Industry Benchmark Survey, supported by TorchMedia, involved depth interviews with leading companies (n=19) and an online survey (n=134) with a representative sample of company sizes and roles across the industry.

The resulting report, entitled “Shopper Marketing – The Journey Begins” outlines a comprehensive overview of Shopper Marketing in Australia – attitudes, status, activities, successes and roadblocks. It is available for purchase at www.popai.com.au Findings workshops will be conducted on Sept 22 in Sydney and tickets are also available at www.popai.com.au

ABOUT NORRELLE GOLDRING
Norrelle Goldring is joint director of ShopAbility. She is a category and channel strategy specialist with 20 years’ experience on both the manufacturer and retailer sides of the fence with companies such as Diageo, Coca-Cola and Vodafone.  Call Norrelle on 0411 735 190 or email her at norrelle@shop-ability.com.au.

ABOUT SHOPABILITY
ShopAbility helps improve manufacturer and retailer thinking and doing capabilities for increased sales in category and channel. Our offers span Research & Insight, Strategy & Planning, Activation & Implementation, and Capability & Training. We work with senior executives, sales departments, category/customer/trade marketing departments, insights people and brand marketers for an integrated 360 degree picture. Call us on 1300 88 56 44 to discuss your needs.

Who your shoppers are, why they visit you and how they behave provide clues as to what your offer should be and how you should be servicing them. However, the way the industry currently looks at itself (how it divides up or segments the convenience channel) doesn’t really look at shopper needs.
Traditional convenience channel segmentations include:
* Tier 1, 2 and 3 based on store footprint and sales
* Fuel vs non fuel vs dual
* Chains vs independents, based on whether you’re owned by a supermarket, or what banner/franchise/buying group you are or aren’t part of.

All of these are numeric, structural or operational. Whilst they provide an overview of the industry, they are not helpful to you in micromarketing an individual stores because they miss the intricacies of looking at where you are located, why shoppers choose you, and who you compete with, among other indicators.

We’ve started to have a think about how this could be approached differently – to provide a shopper overlay to the numeric and structural approaches. Based on a number of shopper related indices and dynamics, we suggest there are at least 5 different channel segments. As a starting point, we’ve called these segments Locals, MiniMarts, Arterial, Transit, and Roadhouse. There may well be some others, but these will do as a start.  The key principle is that your location – where you are -  largely dictates who your shoppers are and why they visit.

At the bottom of this article is an outline of what these segments look like, and some opportunities for each. These are just initial thoughts, we’ll build on it over time. Note that the channel segments outlined here are currently hypothetical, yet to be quantified with research.

What does this mean for opportunities and growth?

Why use the below table or start to think about what your store type is? Understanding who your audience is and why they are there helps identify ways you can grow, and they will differ slightly by segment. Some initial ideas are:

• Local: Community based programs (like IGA does). Expand range of essential items (compete with supermarket for small baskets). Expand services offer – you’re a destination anyway!

• Minimart: Similar opportunities to Local stores – expand range of essential items and services offer where you’re the regular go-to place for local apartment dwellers. Maps, guidebooks and other travellers needs for tourist locations

• Arterial: Daypart marketing – breakfast, afternoon pick-me-up, dinner on the run/dinner essentials, based on whether you’re inbound (breakfast) or outbound (dinner). Improved food range, eg meats and sauces , for ‘dinner tonight’ shops in outbound. Facilitate less queuing (open more registers during peak periods) to drive loyalty through efficiency

• Transit: Cross category bundles – snack, drink; non-spill format beverages; books and CDs, not just magazines. Work/date night essentials – stockings, cough/cold, pain relief, condoms

• Roadhouse: Differentiate from other roadhouses – expanded food offer with a point of difference (not just fried stuff). Kids toys & games suitable for travel (including electronic).

Here’s the reference table of hypothetical channel segments:

Types of Convenience Stores © ShopAbility 2010

Fig 1: Convenience Store hypothetical segmentation. © ShopAbility 2010

So that’s a very general outline on some potential different convenience store types. We welcome your feedback on the types and where your store fits (or doesn’t) as we discuss the opportunities per convenience store type further in later articles.

Until then!

Although still in its relative infancy, the Shopper Marketing discipline is gathering pace in Australia, with 60% of our recent survey participants implementing Shopper Marketing activities.

Back in January in our Retail World article ’Where to Shopper Marketing?’, we outlined some overseas status and practices in Shopper Marketing. Now that the first POPAI/ShopAbility Shopper Marketing industry study (supported by TorchMedia) is complete for Australia, we have a number of points of comparison. And there are some striking similarities – both opportunities and challenges – to overseas markets, particularly the USA.

Here we’re going to look at some of the key findings of the Australian study, extracted from the report ‘Shopper Marketing – The Journey Begins’ (© ShopAbility 2010). In the followup articles in subsequent issues of Retail World we will look more specifically at the implications for both retailers and manufacturers.

Survey Sample

The survey comprised 19 in depth interviews and an online survey completed by 134 respondents (66% brand manufacturers, 10% retailers, 8% POS/production agencies, 16% other agencies).
Online survey participants’ roles were represented across senior executive, sales, brand marketing, category and channel management, trade marketing/customer marketing, activations/in-store presence/merchandising, and shopper insights.
The sample achieved for this first Australian industry study into Shopper Marketing not only equalled that of the first similar American GMA/Deloitte Shopper Marketing study in 2007, but surpassed it.

Theme 1: Shopper Marketing is broad, resulting in ‘lots of homes’

It is commonly understood that Shopper Marketing targets shoppers at multiple touchpoints using and leveraging insights. The where (at what point) is up for debate. A summary of participants’ Shopper Marketing definitions might be: “The application of shopper insights across the marketing mix, using multiple touchpoints along the path to purchase, to engage shoppers and increase sales”.

The scope of what is considered included in Shopper Marketing is broad, and includes ‘traditional’ category management (see Figure 1 below). As mooted in our article in January Retail World, Shopper Marketing includes activities currently falling under the current labels of Customer/Account Marketing, Trade Marketing, Retail Marketing, Merchandising, Activations and Instore Presence.

So rather than being a new discipline in and of itself, Shopper Marketing is in essence an amalgam and evolution of shopper and retailer facing functions already in existence, albeit with some broader marketing elements thrown in.

The inclusions are not limited to traditional executions, with in-store media the third most cited activity type and ambient/sensory in-store experience coming in 8th. This is indicative of the ‘emotional , not just rational’ line we took back in January, underscored by nearly all survey participants’ identification of ‘instore theatre’ as an area of opportunity.

Retailer clean store policies notwithstanding, the above demonstrates that companies are broadening their perspective on what Shopper Marketing activities are, even if they are not yet actually trialling or implementing some of the ‘newer’ forms.

The flipside of this breadth of inclusions and amalgamation of more traditional fields is that there are too many different activity types to have a natural home in one place (or that ‘one home’ would need to encompass ‘everything’). This, combined with the fact that Shopper Marketing is considered a new discipline, is leading to it having ‘too many homes’.

This in turn is impacting resourcing – both people and budget – as we shall see.

Theme 2: Shoppers start before the store

The idea of marketing to shoppers outside of store/pre-store is not new. Major retailers like Target have been doing it for years, advertising their ‘20% off’ department sales. However, among manufacturers, perceived wisdom had traditionally held that Consumers and Consideration were pre-store, where Shopper and Conversion were in-store.

The survey indicates this notion is changing, alongside the broad definition of Shopper Marketing. Over half (52%) agreed that shopper is a mindset and/or shoppers can be influenced at any point between home, work and the store.  A further 26% considered Shopper Marketing to be activities inside and immediately outside the store. Only 22% believe that Shopper Marketing is limited to what is done inside the store.

This has positive implications for ‘above the line’ media traditionally used by marketers in consumer awareness and brand building. It indicates that the industry thinks there is a shopper messaging role for touchpoints outside of retail environments for activities including, but not limited to, major promotions. A further implication is that some Shopper Marketing messaging and activities will then fall under the remit and budgets of brand marketers – which means that brand marketers will need to start to understand and apply Shopper Marketing thinking.

Theme 3: Mind the gap – between Thinking and Doing

The good news is that nearly 7 in 10 said that Shopper Marketing is supported by Executive Leadership. This figure did not vary much between the retailers and manufacturers. A further 56% said that Shopper Marketing has been identified as a priority and source of growth.

90% have recognised and/or defined Shopper Marketing in some way and identified priorities and support required, even if 30% think they’re still at basic level.

40% said they have dedicated resources for shopper programs. However, only 1/3 plan to increase their program budgets and/or people budgets in the next two years.  A lack of Shopper Marketing people and expertise, and particularly budgets, were the two most common issues identified by both retailers and manufacturers, as Figure 2 indicates.

Very few had a sizeable or dedicated Shopper Marketing budget, with most shopper marketers going “cap in hand to marketing or sales in order to get stuff happening, and even then we have to justify ourselves a lot”, as one interviewee put it.

There was concern that other departments internally do not understand or support Shopper Marketing, with less than 30% saying they have internal understanding or support outside of the Executive Leadership. This problem was common to both retailers and manufacturers, and for manufacturers it is specific to brand marketing teams. There is a significant education opportunity in getting other areas of each business to understand and engage in and see the value of Shopper Marketing so that appropriate budgets can be released to support it.

Given the opportunity, more than half would put more Shopper Marketing resources underneath shopper insights and research programs as their first priority.

Theme 4: One third plan new directions for the train; the other 2/3 watch it leave

The gap between thinking and doing is demonstrated in changes to planned activity types, with the 1/3 planning more or different Shopper Marketing activities behind the small changes to percentage splits. Although there is an interest in pre-store Shopper Marketing, this is not yet reflected in wholesale changes to planned activities. However, some increases in Social Media, Loyalty Programs and Digital/Online are expected.

N = 134

The changes to planned activity types were mirrored in planned budget changes.

Theme 5: Measurement – The Great Unknown & Opportunity

Inability to, or not knowing how to, measure was identified by participants as one of the greatest sources of dissatisfaction as can be seen in Figure 4. The three areas relating to measurement and effectiveness added together equal the single largest area of dissatisfaction.

N = 129

Just under 40% are currently measuring their Shopper Marketing programs.  However, the forms of measurement are rudimentary, based around hard measures (sales data), with little recognition of the role of softer measures e.g. attitudinal, behavioural, influence and impact.

N = 134

Note that which types of activities being employed is reflected in the effectiveness rankings for activity types. The less utilised activities rate lower in effectiveness as fewer are using them and thus fewer understand their impact.

Unsurprisingly, sales is the number 1 way in which measurement is applied, and likewise ROI is mostly being measured on spend/cost vs sales. However one of the challenges of Shopper Marketing is that it is difficult to prove that which specific type of execution is responsible for what % of the sales increase. There is therefore a role for softer measures (attitudinal, behavioural, influence, impact, reach) as drivers of the result (as opposed to sales – the result itself). As yet, this role is not broadly understood nor applied, with 30% or under using measures that do not directly relate to sales, ROI or executional compliance.

The Shopper Marketing needle will move faster around the dial once a comprehensive, and easily comprehensible, suite of measures is developed covering the scope of Shopper Marketing activities and embedded in organisations’ sales, shopper, category, and marketing functions.

So that’s some of the initial findings. Next time we’ll look at who is considered to be best practice, what they’re doing, some of the key opportunities in the Australian market and what retailers and manufacturers need to do differently to get the Shopper Marketing train to the next station quicker.

“Shopper Marketing: The Journey Begins” report is available from POPAI for $495 plus GST – click here
A survey findings workshop will be held on September 22 as part of the Retail and Marketing at Retail Expo, for those interested in making most use of the survey findings and implications. register here
POPAI can help you with  more information, to purchase the report or to register for the workshop.

The first Australian industry benchmark study into the Shopper Marketing function, conducted recently by POPAI and ShopAbility with the support of TorchMedia, highlighted the recognition of and growth in the discipline, and impediments to its acceleration.  Summarised below are some of the key themes for retailers, extracted from the report ‘Shopper Marketing – The Journey Begins’ (© ShopAbility 2010). These will be explored in more depth in the September issue of Inside Retailing.

Shopper Marketing is broad, and is not limited to in store

The scope of what is considered included in Shopper Marketing is broad, and includes ‘traditional’ category management, as indicated in Figure 1. Shopper Marketing includes activities currently falling under the current labels of Customer/Account Marketing, Trade Marketing, Retail Marketing, Merchandising, Activations and Instore Presence.

Rather than being a new discipline in and of itself, Shopper Marketing is in essence an amalgam and evolution of shopper and retailer facing functions already in existence, albeit with some broader marketing elements thrown in.

The inclusions are not limited to traditional executions, with in-store media the third most cited activity type and ambient/sensory in-store experience coming in 8th. Underscoring this, nearly all survey participants identified ‘instore theatre’ as an area of opportunity.

Retailer clean store policies are considered one of the major barriers to truly engaging with shoppers. Notwithstanding, both manufacturers and retailers are broadening their perspective on what Shopper Marketing activities are, even if they are not yet actually trialling or implementing some of the ‘newer’ forms.

Whilst the idea of marketing to shoppers outside of store/pre-store is not new for retailers, it is for manufacturers, who had traditionally held that Consumers and Consideration were pre-store, where Shopper and Conversion were in-store.

The survey indicates this notion is changing, alongside the broad definition of Shopper Marketing. Over half (52%) agreed that shopper is a mindset and/or shoppers can be influenced at any point between home, work and the store.  A further 26% considered Shopper Marketing to be activities inside and immediately outside the store. Only 22% believe that Shopper Marketing is limited to what is done inside the store.

Retailers prepared to recognise that clean stores are a hygiene factor and not an end in themselves, and to explore new shopper instore and out of store marketing alternatives with manufacturers beyond traditional catalogue and pallet/gondola displays, will find a willing audience.

Struggle for resources is slowing the pace of growth, even for retailers

Support for Shopper/Customer marketing is there, but it’s passive. Whilst 7 in 10 said that Shopper Marketing is supported by Executive Leadership and a further 56% said that Shopper Marketing had been identified as a priority and source of growth, only 40% have dedicated resources for shopper programs and only 1/3 plan to increase their program budgets and/or people budgets in the next two years.

Less than 2 in 5 retailers were satisfied with their overall shopper marketing resources, driven by a low 37% satisfaction with number of people/roles and organisational focus. A lack of Shopper Marketing people and expertise, and particularly budgets, were the largest areas of dissatisfaction, with less than 25% of retailers happy with their Shopper Marketing people’s expertise, and under 10% satisfied with their Shopper Marketing budget.

Smaller retailers are less likely to have any Shopper/Customer marketing capabilities, where larger retailers may have a larger Shopper/Customer Marketing department (generally reporting through to Marketing) but it competes for funds, resources and air time both with brand marketing and with Operations.

The lack of resources was mirrored in manufacturers, with only 35% happy with their people/roles and under 1 in 4 happy with their budget.

The struggle for resources (both people and $ for programs) to increase growth stems from several key obstacles:
* The role, scope and value of the Shopper Marketing function is not understood internally
* Shopper Marketing is still largely tactical and isolated rather than strategic and integrated, and sometimes viewed as an add-on
* Measurement of Shopper Marketing activities and impacts is piecemeal, inconsistent, and based around hard measures (sales/ROI), with little understanding of appropriate ‘soft’ measures (impact, awareness, influence, attitudes, behaviours etc). The range of appropriate measures is neither understood nor developed, leading to a difficulty in justifying spend.

Inability to, or not knowing how to, measure was identified by participants as one of the greatest sources of dissatisfaction outside of resource and funding competition.

Given the opportunity, more than half would put more Shopper Marketing resources underneath shopper insights and research programs as their first priority.

There is a significant opportunity in:
a) getting other areas of each business to understand and engage in and see the value of Shopper Marketing so that appropriate budgets can be released to support it
b) developing a suite of appropriate measurement tools and techniques that recognise the role of differing activation types, shopper behaviours, and touchpoints along the path to purchase, and understanding measurement of inputs versus outcomes
c) Retailers and manufacturers co-funding category level shopper research and trial programs. The current paradigm where retailers are looking to manufacturers to fully fund these activities isn’t working, as manufacturers don’t have sufficient resources either.

Opportunities, Directions & Trends

Based on what and who were identified as best practice, and understanding that Australia is broadly considered to be 8-10 years behind the UK and USA in Shopper Marketing activations, the future interest and energy in the Shopper Marketing space is behind:
* Dynamic and interactive POS, rather than static
* Understanding the role of each touchpoint on the path to purchase, and appropriate activation of each
* Digital, online and social media uses to drive traffic and sales conversion
* Cross category and cross-manufacturer occasion based promotions and programs
* Target market segmentation and data mining using loyalty programs to provide pinpointed offers to specific shopper segments
* Multichannel retailing and ecommerce
… based on a sound and consistent understanding of shopper attitudes and behaviours via insights and research.

Implications

From the above discussion, the following opportunities and implications apply to retailers:
* Closer collaboration with manufacturers (particularly those manufacturers who are ‘with’ the shopper marketing program – increasing the points of contact so marketers and category/shopper marketing people connect; co-funding programs and initiatives)
* Increasing dedicated Shopper Marketing budgets and people resources. Smaller retailers who don’t have budgets could potentially band together to syndicate for research and certain activities to achieve economies of scale
* Developing a comprehensive suite of Shopper Marketing measures and metrics (ideally in collaboration with manufacturers; this would require more collaborative data sharing)
* Broadening the scope of what Shopper Marketing activities and programs could include, both instore and prestore (particularly prestore media use)
* Mining market, retailer and manufacturer data to develop specific, tailored and customised programs and offers for differing shopper segments.

These and other elements will be discussed in more detail in the next hard copy issue of Inside Retailing.

The Shopper Marketing train is at the platform, ready to leave. What will you do to reach the next station faster?

*    *    *    *    *    *    *    *

About the POPAI/ShopAbility Shopper Marketing Industry Benchmark Survey

METHODOLOGY & SAMPLE
The survey comprised 19 in depth interviews and an online survey completed by 134 respondents (66% brand manufacturers, 10% retailers, 8% POS/production agencies, 16% other agencies).
Online survey participants’ roles were represented across senior executive, sales, brand marketing, category and channel management, trade marketing/customer marketing, activations/in-store presence/merchandising, and shopper insights.
Retailers taking part included some of Australia’s largest grocery, and mass merchant and convenience retailers as well as a number of small and medium specialty retailers.
The sample achieved for this first Australian industry study into Shopper Marketing not only equalled that of the first similar American GMA/Deloitte Shopper Marketing study in 2007, but surpassed it.

SHARING THE FINDINGS
A half-day findings workshop where participants will discuss and work through the survey outcomes and implications is being held on September 22 at Darling Harbour as part of Retail2010 conference and Marketing At Retail Expo. Participants will receive a copy of the full report valued at $495, a sector specific summary valued at $95, and a copy of the workshop outputs. Go to www.popai.com.au to register.
‘Shopper Marketing: The Journey Begins’ full study report is available from POPAI for $495 plus GST. Go to www.popai.com.au to purchase your copy.
Sector specific summaries (retailers, manufacturers, agencies) will be available from September from POPAI for $95 each plus GST. Email popai@popai.com.au with ‘Shopper Marketing Survey: Sector Summary’ in the subject heading to purchase a sector summary.

The first Australian industry study on Shopper Marketing involved depth interviews with leading companies (n=19) and an online survey (n=134) with a representative sample of company sizes and roles across the industry. This sample exceeded that of similar international research studies, so  thanks go to all the participants.

The resulting report, entitled “Shopper Marketing – The Journey Begins” outlines a comprehensive benchmark of Shopper Marketing in Australia – attitudes, status, activities, successes and roadblocks.

“Shopper Marketing – The Journey Begins” outlines robust research findings, along with the industry’s take on key opportunities and future directions.

The Survey  will be activiely discussed in industry media in forthcoming weeks.

The report can be purchased on the POPAI website via the following link http://www.popai.com.au/Market-Intelligence/documents/DocumentDetails.aspx?GUID=3c4d80e0-d802-4978-9264-c2b9aae21cdf

Workshops on the findings of the report will be held as part of the Retail and Marketing at Retail Expos at Sydney Convention Centre on Wednesday 22 September. Details at http://www.popai.com.au/Events/September-2010/Shopper-Marketing-Research-Findings-Workshop.aspx

Supabarn

Mustang Avenue Canberra

Well here we go! – I really was expecting to see something different with this store  based on what my FMCG contacts had to say. And I wasn’t disappointed – but in the wrong way!

I visited this store with another experienced industry figure and for the life of us, we could not work out if this store was trying to be a Costco clone, a little bit of Aldi, a failed Campbells Cash and Carry or a reversion back to the old Jewell super stores that popped up in the 90’s. Whatever the real answer, we were left with the view that this store just does not make it on any of those counts.

To be fair, we visited around 5.30pm on a bleak Canberra Thursday evening, dark and cold outside, drizzling with winter rain.  The store is located near the airport and we were one of about 6 other Customers in the store, so the tribal feel of a price driven shopping experience just was not there, if it is intended to be at all.

Apart from a woefully inadequate Fresh offer, in width of range, quality and in presentation standards the overall feel was one of a cold barn with long sterile aisles that had an inordinate amount of out of stocks.

A very shallow grocery range complemented the Fresh offer nicely. The ends were up but there was little cut carton action to tempt the moths out of the wallet. Ticketing and POS was reserved to say the least, not shouting a competitive set that embarrassed the majors or congratulating Shoppers for making the right decision to shop there and save! Plenty of own brands, imported branded products that were hard to recognise and a few large pack sizes in certain categories. But again not in the concentration that said what this store stands for.

Oddly General Merchandise is in a separate room off to the right as you walk in the entrance, somewhat like a decommissioned cool room with large doors and warehouse racking – no width or depth of stock at all – half or full shelves of SKU’s that one would think bore no resemblance to their actual AWS…or case size…or SRP unit…or anything else

Pricing appeared sharp, but what Price is adequate if the offer looks and feels inadequate and uncompetitive to a comparable Woolies, Coles or even an IGA for that matter.

In summing up, I hope I don’t appear too negative from the outset,  but either this store is under trading by a country mile and management is taking steps to frugally operate the store, or someone made a serious (and costly) mistake when the initial site and design assessment was completed.

Make your own mind up by either visiting the store or having a good look at the accompanying photos. I’ll also revisit and report back again before Xmas in the interests of fair play, maybe we just got them on a bad night…..maybe.

Coles

Dee Why

And here we go again! – now this is more like it, we are at the new Coles Dee Why on Sydney’s Northern Beaches, opened just 3 days before this scribe decided to do a Saturday afternoon visit.

True to form this is another development on the refreshed store theme that we are seeing pop up all over Australia and the one that continues to keep Woolies back peddling, and this is a brand spanking new store. From a Shopper perspective it is a pleasure to shop in and you can see the little improvements that are added as each “new” refreshed store is opened. Store location is a little awkward as it sits one floor above ground level reached via lifts or travelators – this may influence local shoppers as there is another Coles and a Woolworths within 2 minutes, and a new Harris Farm is directly below on the ground floor, time will tell but that does not take away from the ambience and standards shown in the store.

Unlike most new store openings, this one opened without the usual fan fair of 100’s of deep cut specials across the store, but with an elegant catalogue leveraging Masterchef and with a discount off for selected SKU’s and a $ offer off the total purchase value redemption vouchers. Obviously all of the regular Coles weekly specials were up and ready for action so the overall price thrust was still very evident.

For a change, Indian is at the front entrance rather than at the back adjacent to an on-the-run chilled case, and that has pushed Seafood and Meat to the back corner. Cheese and Deli is in the middle of these Depts and to the usual standard for this format and judging by the queues, were doing a roaring trade. The overall Fresh format is sufficiently well known by now so I am not going to comment on that, sufficient to say it is good, very good. One plus was that Coles have finally started to put some cross merchandising in and around  the open dairy and meat cases, little barrels of stock neatly ticketed – the whole area still cries out for more, much more but it may be a CODB issue or a decluttered feel that Coles want to continue to drive with the fresh area.

Bakery is located at the back of the store, again combining proprietary Branded bread and in house Bakery. Focus is on driving the baked fresh for you theme.

Each Dept is also fine tuned to the local area and Coles proudly boast of supporting local manufacturers – a boast that they live up to with products sourced from as close as Brookvale (a serious throw with a cricket ball) and Manly Vale (about 2k’s away). They also photos and wording to reflect the beach side site and Customer base, a nice touch to “localise” the store.

The key destination Depts that Coles have targeted such as Health and Beauty did look great, and you are hard pressed to notice that the range has been significantly cut. Entertainment and Paper Shop is also a “new” destination Dept and looked the part and was well frequented by the locals. Extensive GM ranges were also show cased, but in a separate aisle location and not cross merchandised. No clip strips were evident at all.

I am looking forward to seeing one new store with all of the key destination Depts completed and trading .

Coles have also made “promises” for service, out of stocks and PL performance which clearly positions their view of Customer service – and in this store it is all about the Customer, plenty of attention by plenty of knowledgeable and keen staff.

One thing that was out of place for a new store though was the Reduced to Clear tickets on some SKU’s – for a 3 day old store????

So overall another opening of another refreshed store.

Bring it on!!

Harris Farm

Dee Why

Well here it is – the latest Sydney based offering from the Harris family right underneath the new Coles described above, and also right in the middle of a fairly intense fresh food competitive area with two other well established fresh malls close by. Harris Farm also have stores at Manly/ Queenscliff and at Mona Vale so they are a known retail brand to the local Customers.

This is a small store with the usual forced flow through Fresh leading to an extensive Mediterranean range of Grocery products. It feels smaller than the Kings Cross store we reviewed in May, but the shape is also quite different. Again narrow aisles do not facilitate browsing as trolley clashes would annoy rather than excite. Presentation was standard HF fixtures, water fall stock and the fluro product and price tickets  = standard fare and why change if it works?

It did not look too much different to other Harris Farm stores apart from what seems to be a more defined Grocery offer at the end of the Fresh run, this may have been more to do with the type and location of the fixtures. Some of the Grocery ranges were normal products you’d find in Woolies and Coles, and the impression I got was that this store leans more toward the normal flow and departmentalisation of the traditional players, albeit without the dominance of the well known Brands, but with a slow creep of other Tier 2 and 3 products.

Overall a neat copy and paste of the regular Harris Farm offer and one that should carve out a solid business base in this area.

JBDP: Joint Business Development Planning or Joint Business Planning. ‘Where do you start?’  some cynics ask. With two dominant (some say dominating) grocery retailers calling the shots, is there really room for joint planning?

Joint Business Planning was fairly common a few years ago. But with changes in senior executives across all of the major retailers, new entrants to the market, and new owners/ shareholders, all with different priorities and growth strategies, how prevalent is it or should it be today?

A few underlying questions that regularly get debated in the FMCG industry include:

* Will the goodwill and creative initiatives be abandoned at the first sign of stalled growth, by either party?
* Will Operations (stores and field teams) fully execute when, and the way that, has been agreed?
* Will we truly share the pain and the gain?
* Will other mid-senior level executives be as committed as the Planning team to abide by what has been agreed, and ostensibly paid for?
* What will other Retailers or Suppliers do if they find out what has been committed to with a competitor – especially if increased trade spend is involved?
* How do I react when our agreed Plans are nothing more than a perceived Terms grab and little has been achieved despite all of the great rhetoric?

WHY DO A JBDP?

The commercial decisions that surround a JBDP are certainly complex and can create confusion, frustration and indecision with many suppliers. The questions we pose are commonly asked across most FMCG suppliers, especially at the moment. A JBDP is only worth the paper it’s written on when initiatives are not just agreed to but actually implemented – which we will discuss later.

So what is a JBDP?

“JBDPs are written, formal annual business plans or goals, developed in collaboration and with equal contribution by both the supplier & the retailer, outlining how they are going to work together in developing the Category over the next 12 months to achieve their goals.”

Typically a JBDP contains top level business strategy for the Category including historical and current research data, marketing plans, tactical plans, time frames and financial forecasts including responsibilities and accountabilities for achievement across each party.

Let’s separate JBDP from Business Reviews, which are a means of monitoring the JBDP on a regular basis, usually quarterly of more frequently if agreed and required, and quite tactical in application and measurement. We will cover these in more detail in a future article later in the year.

So what are the benefits of a JBDP?

1. Joint commitment to growth, aligning Category plans and strategies to increase Sales and Profits for both parties – logical and fairly basic
2. Have a clear understanding how this will occur – who does what and when
3. Align the two companies behind one plan, all of the silos line up
4. Develop the relationship for the future, and hopefully develop a bit of Trust along the way.

WHEN TO BROACH THE PLAN IDEA?

Before embarking on the process of developing a JBDP, ensure that there is internal alliance to both the process and the potential outcomes. Obviously clarity of your expected outcomes will be critical prior to commencement, but also understanding what unexpected requirements may be tabled or aggressively leveraged by your trading partner. Anticipating and understanding your level of flexibility prior to commencing the process is really a must.

When should we consider opening a discussion about a JBDP?

If you have a current or lapsed Plan, never too soon is the answer. If last year’s Plan was a success, usually restarting is easy, however a new conversation can be awkward especially if there is an incumbent supplier you want to usurp. Usually prior to the start of the financial trading period for both participants is a good time as a clear line of sight exists between the JDBP with each retailer and the Corporate Plan. Each is a jigsaw piece that fits in to build the overall Company budget.

WHAT’S IN A JOINT BUSINESS DEVELOPMENT PLAN?

There are six basic steps to creating a JBDP, somewhat similar to a Corporate planning session that is part of the Annual Budget Planning process. The focus here however is very much on the Category, or on multiple Categories if your trade in more than one Category.

Step 1 – Assembling and filtering background information is a key step in the preparation of the key performance criteria of the Category – last year’s Plan (what worked/ what didn’t/ why) sales and profit performance, supply/ inventory management and retail/ field operations, ranging, promotional performance, new line performance, Shopper data for that Retailer etc. Construct and circulate to the key participants as well as internal stake holders, having everyone singing from the same hymn book focuses on the same data and reduces confusion and distraction

Step 2 – Situational analysis or overview completed both externally and internally. What does a current snapshot of the Category look like? Determine what has changed over the ensuing period – a new competitor, changed Category dynamics such as ranging, source of supply or alternate usage (eg rice vs pasta consumption), GP%  to name a few.

Step 3 – Internal and external SWOT analysis. This also identifies the key strengths that need to be leveraged as a point of potency for the future year, as well as weaknesses that must be identified and worked on.

Step 4 – What are the key commercial or financial objectives that will form the basis of this year’s Joint Business Development Plan – what do we both want out of the process? Sales growth? Profit growth? Inventory measures? Promotional investment? NPD? PL involvement and Retailer goals?

Step 5 – develop the Category growth strategy, or Category Development Plan. The key disciplines of RSVPPP are identified, clarified and developed :
* Range
* Space
* Visibility
* Price
* Promotion
* Persuasion
(The plan also needs to include retail/shopper objectives eg traffic, penetration, AWOP, spend, frequency).

Step 6 – Implementing is usually the hard part – see our questions at the start of the article. This is where the internal fortitude of each participant is tested, sometimes quite hard. Especially when a competitor arrives with an aggressive offer that tempts or gains agreement from the retailer. Or despite assurances from senior execs, initiatives are stalled or given a lesser priority.

The addition of an extra step,   Step 7 is the most important, this is where the JBDP is monitored and fine tuned to ensure compliance, implementation, hopefully success and if not, the development of alternatives to further focus on achieving the commercial targets that have been agreed. Everything else is little steps to get to these measures, this is what ‘success’ is measured by, not how close we have been or what happened that resulted in missed Goals

So there is the theory and a step by step guide on how to develop a JBDP – there are plenty of templates around that can be used, or certainly the majors have their own templates that they preferred to use

WHERE TO FROM HERE?

So how relevant are they in today’s market?

It feels like we are going backwards at the moment, with focus given to Price/ Terms/ Projects that are “resetting” the way the industry has worked – the question is whether this is a cycle or this is now the way the industry will now work -  a Darwinian evolution of sorts.

Not sure on that one yet, it is probably a little too early to give a clear indication, most likely in 12 months or so the answer will be clear, and will probably be driven by the relative and comparable performance of each of the dominant chains.

One clear sign that will answer the question is the implementation of the agreed initiatives that have cost suppliers new trading arrangements. Non-implementation with new terms would indicate that new relationship dynamics are being forced within a narrow time frame, without the agreed benefits accruing to both parties, certainly a lop sided result.

Implementation, either in full or in part, would indicate some degree of commitment to both the process, the relationship and on-going delivery, and therefore rationalize the relevant commercial arrangements. This means Trust – something that is running a little thin these days.

Geoff Frost

As former CEO of Bartter / Steggles, Geoff headed up the company’s transition from a $35 million company in 1987 to more than $900 million in 2008, implementing business improvement programs to reduce debt by $20 million per annum and restructuring the Sales function to better meet customer needs.

Since 2008, Geoff has been involved in various due diligence roles and has assisted with the evaluation of potential business acquisitions by individuals and equity investors.

John Day

With a reputation for strategic thinking and a realistic approach John has had more than 25 years of General Management and Senior Management experience in blue chip companies such as National Foods, Simplot, Mars Confectionery, Masterfoods, Uncle Bens and Bowater Scott. He has held General Manager roles across a number of functional streams including Sales (all Channels), Marketing, Distribution and International and Domestic Business Development. In addition he was General Manager of National Foods Milk Operation (Victoria) and on the Board of Management with Simplot, heading up the Shelf Stable Division with brands including Leggos, Edgell, and Plumrose.

John’s expertise covers all channels including Grocery, Convenience, General Route, Catering, Institutional, Distributor, Delicatessen and other Foodservice Channels. Whilst he has had many successes and achievements in this time, from a Grocery perspective he led the team which achieved the biggest Housebrand Tender in FMCG, that being the Woolworths National Milk Contract in 2002 for National Foods.

Geoff and John join our core members Peter Huskins (ex Senior Exec & Board levels with Franklins, Millers & Grace Bros) and Margaret Haseltine (ex CEO Mars / Masterfoods) to provide a comprehensive and results-focussed business strategy service for our clients.

Click on the links to find out more about our Business Regeneration & Strategy services.

You can also download our handy Business Success Scorecard.

From the outset let me state that this store has only opened stage one of a major refurb so the comments are not based on looking at a complete “new” store, but on one where there are still builders walking around looking busy, hoardings and plastic sheets covering the next stages and a centre store Grocery area that is yet to be touched.

But the word on the street is that this refurb is Woolies response to the Coles refresh program, so looking at the first stage as an indicator of what is to come is a fair and worthwhile exercise and relevant for industry discussion, especially when it covers most of the Fresh depts – and they are the key depts in a Shoppers mind that they use to determine their store of choice. So from a rollout/ on-going perspective this store is an important indicator of the evolving competitive playing field.

Also Woolies are using their local Shopper data base to publicise that fact that in their view certain of the Fresh Depts are open for trade and in their “final” positions and layouts etc .

New fresh departments at Woolworths Caringbah
Hi XXXX,

We’ve got some great news about the renovations at Woolworths Caringbah! Our new fruit and vegetable, deli and seafood departments are now open.

The new market-style fresh produce department is now lighter and brighter with wider aisles, giving you a better view of our delicious, quality produce and our great specials that you can enjoy every week.

There’s an exciting new deli with a greater range of local and international gourmet cheeses and delicious fresh cooked chickens. The seafood section now brings you live mussels – nothing comes fresher than that!
Thanks again for your patience during the renovations, and don’t forget to visit to take advantage of your 50% extra Qantas Frequent Flyer points offer!

We look forward to seeing you in-store soon,

Kris
Store Manager
Woolworths Caringbah

So game on for us to comment!

Looking through the obvious refurb mayhem, this store does not have the theatre or the market feel in the Fresh depts of the new Coles stores, it is certainly not a generation or two ahead.

They have moved and centralised Cheese and Smallgoods from the Dairy to the front of the Deli area, Proprietary Bread will obviously join in store Bakery at the entrance when it opens and they have used new fixtures, signage and educational prompts in Produce.

Plus fine tuning/ new locations/ new fixtures for Seafood (live mussels) and Hot Chickens, one small demonstration cooking table and another small table at the front with assorted fruit for sale at 0.50c a piece targeting kids.

Meat is in the back left hand corner and is yet to be finished by the look of it. Macro is present with an organics Produce range – they had 21 SKU’s when I was there.

The Produce black boxes are also absent, with stock now being hand packed onto the new style of fixtures that are quite small compared to the usual Woolies store and to the new Coles offer. The Produce wall on the right as you enter looks great, plenty of colour and the housekeeping was excellent, as you would expect with all of the staff walking around, they needed something to do!

The Deli, Seafood and Poultry cases were in one straight line, with some excellent graphics on the walls behind the Depts.

But again, most of what was there had been done already and it is felt that with the changes they had lost that bulky, chunky market feel in Produce which is the most important Dept for Shopper impact and perception. Deli/ Seafood and Poultry depts. were quiet clinical in the feel and visual personality.

But at least they had some cross merchandising using small Woolies branded wooden barrels, unlike Coles that still don’t use them to add some Grocery colour to the Fresh departments and target the impulse sale / increase transaction value.

The above may change when it all comes together in July and the whole store is complete – I look forward to returning for another visit, I may be mistaken, but on first glance this offer is very good, but not ‘step change great’.

SPAR ALEXANDRIA

Spar stores aren’t new to Queenslanders, but until recently there haven’t been many in the Sydney and Melbourne metro areas. The Alexandria store opened a couple of months ago in Sydney so we thought we’d take a look.

What it is and where it is:
* A small footprint supermarket, effectively a mini mart. More supermarket than convenience store though. Reminiscent of Tesco Fresh & Easy or WalMart Neighbourhood Markets in the US
* Elements of Thomas Dux/Harris Farm, with a small supermarket dry grocery offer
* Alexandria is a suburb full of high disposable income SINKs and DINKs living in medium density, brand new apartment blocks. The Spar store is only a couple of blocks from Danks St, which has the well known Danks St Depot cafe deli and a Whole House Foods organic supermarket. There isn’t a Coles or WW in the immediate vicinity.

First impressions:
* Fresh fruit and veg external signage and decaling similar to the FoodWorks Ryde store reviewed last issue.
* This Spar had an outdoors-facing cafe utilising the kitchen from the Deli department inside the store. Deli service was one side of the kitchen, facing into the store, and the cafe was on the other side of the kitchen, facing out
* I was greeted entering the store by a Movenpick (premium ice cream) demonstration and tasting person, setting the tone for a higher end product store.

Instore:
* Low profile bread racking and fresh fruit and veg tables. Small selection of fruit & veg but some interesting packs of nuts
* Large deli as a % of the store print, AND they had white anchovies (which are my yardstick for deli range), however the quality of the anchovies was poor as they were very hard and not fresh
* Whole chiller bay right next to the deli of duck cuts and duck ready meals, first time we’ve seen a bay of duck products. This one was all LuvADuck brand, looked like an initiative by them
* Range instore generally smaller pack formats (catering to the locals living in small apartments), high end ready meals and a lot of premium icecream brands
* Not many overtly ticketed price specials
* No real gondola ends, only a couple on two aisle ends near the checkout.

Checking out:
* Low profile gum & confectionery ‘aisle’ near the checkouts rather than at checkout
* Checkouts were messy but service was friendly

Verdict:
They know their local market well and have focussed on top up and dinner tonight shopping trips with their deli and ready meals emphasis.

WW Parramatta

We were led to believe whilst Caringbah is the ‘next generation’ WW store refurb, that the Parramatta store (located in the Westfield) is the WW version of Coles’ Oakleigh store. Ie, the ‘trial magnet’, where lots of different things are tested. So we scuttled off to have a look.

Wasn’t as much happening there as was expecting … but boy does that store get a shedload of traffic.
Health and Beauty was very obviously a focus, with two full-height aisles separated by a low profile walk-around aisle to total 3 aisles. It had very large overhead department signage in colours and font reminiscent of Big W.

The health aisle has been extended to include a low profile sports nutrition aisle.
Bread was ranged in its plastic trays (rather than on wire racking). Looked like the bread equivalent of shelf ready trays, but it was a bit ugly. As were the HUGE thick grey plastic trolleys, very obviously heavy duty but I’m not sure to what end.

Things that differed from the usual run of the mill WW store included more shelf media (but less floor media) than we’re used to seeing, used for information and recipes etc.  Also more brand blocking (particularly in dairy case).

Two apparent trials included various headers in the fruit & veg, confectionery and health/beauty aisles; and some educational aisle blades in the Coffee aisle which talked about the various types of coffee.

So a few minor tweaks, rather than anything revolutionary. And they need to lose the ugly grey trolleys that make aisles impassable!

And then there’s …

The Village Grocer, Balgowlah: situated 3 doors from a refurbished Coles in the Stockland centre, this store was like a Harris Farm or Thomas Dux store with a ramped up fresh meal and deli area as well as a broad range of imported dry grocery products ranging from cordials to chilli sauces. Great selection of dips with some interesting brands and products we haven’t found elsewhere.
Novelty brandy packaging in Dan Murphys: What is going on in the brandy category? Unclear whether these are specific to Dan’s, but they’re carrying Stiletto brandy (high heel shoe shaped bottle); Venus (bottle shaped like guess who); Bouzouki (packaging shaped like a type of  mandolin/banjo), and another shaped like a cello or double bass stringed instrument. Last ditch attempt to grow a struggling category by promoting the ‘high end’ with novelty products?

The Shopper Marketing survey interviews we’ve been conducting during April are consistently identifying two key instore marketing areas of opportunity: occasion based solutions and instore theatre.

The major Australian grocery retailers’ relentless focus on clean store policies, particularly in centre store, is all well and good from an ease of shopping point of view. But an easy shopping experience isn’t necessarily a fun, exciting or enjoyable one.

Occasion based solutions and instore theatre provide a sense of delight and discovery that not only increase basket size but generate store and retailer loyalty by providing a genuine point of difference.

Following are some examples from overseas markets to demonstrate what can be done, with a few Australian iterations thrown in for good measure.

THEATRE STARTS OUTSIDE THE STORE

Westfield’s global retail tours highlight the creativity employed to draw traffic to store. The giant Louis Vuitton suitcase enveloping the Louis Vuitton store in New York comes to mind.

Figure 1. Just Sports exterior, Dallas, Texas

Figure 2. Whole Foods market, Los Angeles. Flowers and plants out front signify ‘Fresh’.

Outdoor chains in the USA such as Outdoor World, Bass Pro Shops, and Cabelas (the US versions of BCF – Boating Camping Fishing, except that they include large hunting departments) start the theatre outside the store with hunting trophies and stuffed animals. At centre store are huge dioramas of stuffed wildlife – deer, bears, mountain lions etc – as well as aquariums with live fish. These dioramas serve as points of navigation, dividing departments.

The stuffed animals ironically continue to ‘bring products to life’ at shelf.

Figure 3. Stuffed animals ‘enliven’ hiking boots in Bass Pro Shop, Nashville, Tennessee.

THE THEATRE OF FOOD – INSTORE FOOD PREPARATION

Mainstream and premium grocers in the USA ranging from HEB to Whole Foods to Bristol Farms increase their food sales margins by preparing food instore in front of shoppers.
At Whole Foods, for example, you can order your salmon cooked to specification.  At Bristol Farms you can sit in the coffee shop located in the centre of the store. Foodland Adelaide’s Finest at Fairview Park is doing a version of this with its instore cafe and takeaway coffee.

Some grocery retailers such as HEB have a chef’s corner (eg HEB’s Cooking Connection) where they not only prepare recipes of the day and display ingredients and complementary products, but also provide advice, effectively acting as an instore salesperson.

Figure 4. Cooking Connection in HEB, Fredericksburg, Texas

Feels like this is a natural extension of the Feed the Family and Curtis Stone programs in Coles, if they chose to go there.  Other Australian examples include SupaBarn in Canberra City, where they bake the bread in front of you (impulse sales based on the fresh bread smell alone!) and again Foodland Adelaide’s Finest, who have a chef’s corner.

THEATRE IN AISLE

Providing theatre in aisle and at shelf increases basket incidence of multiple categories by attracting top up shoppers who may otherwise only shop 1 category per aisle or second aisle. Australian examples of using fixturisation to increase category incidence include the much-cited and award winning Cafe At Home project from a few years ago. Below is an example of how Whole Foods approach the coffee ‘fixture.

Figure 5. Coffee ‘fixture’, Whole Foods, Los Angeles.

Figure 6. Craft beer tap handles in Old Chicago brewpub, Denver, Colorado

In US brewpubs (chain and independent pubs ranging many specialty and craft beers) the beer taps are centre stage, with the tap handles the engine room of discovery.

OCCASION BASED SOLUTIONS: SECONDARY DISPLAYS

One of the retail issues in the Australian market is that retailers are selling products, rather than solutions. Bunnings is a classic example, where by attempting to maintain a ‘warehouse feel’ they are missing the ‘this goes with that’ solution nature of the hardware category. Sure they have floor stacks in aisles, such as hammers where the nails are, but true solution based displays, eg ‘I’m building a deck, what are all the things I need?’, are thin on the ground.

Occasion based solutions, such as all breakfast elements (milk, bread, spreads, cereal etc) being placed together can drive AWOP as they increase the number of items in the basket.

However, for logistical, political and buying structure reasons, retailers aren’t going to just up and relocate a number of categories’ primary locations to group them together.

But shopper focussed solutions such as dinner tonight, lunch on the go, and entertaining can still be catered to with secondary and offlocation displays. (A nod here to Coles, where some of their renewal stores include a Food To Go chiller case). In the UK, pharmacy chains such as Boots and Superdrug offer food-to-go solutions in front-of-store chillers.

Figure 7. Food To Go area at Coles St Agnes, Adelaide SA

Figure 8. Takeaway Soup & Sandwich display, Whole Foods, California

This is the model being pursued in the USA, where smaller grocery and mass merchant suppliers who wouldn’t normally get an offlocation display look-in are banding together with complementary larger players to achieve impactful solution based displays.

Traditionally behind Australia in offpremise liquor execution, the USA is starting to catch up with a couple of ‘big box’ liquor chains gaining scale. Both Total Wine and Bevmo understand liquor consumption occasions. Aside from substantial gifting offers including boxes, bags, cards, glassware, wine openers etc in dedicated areas instore, they also play to entertaining occasions by ranging specialty cheese and gourmet crackers.

Figure 9. Cheese and Crackers unit in Bevmo, Arizona, USA. All that’s missing is the soft drink and mineral water.

So there are a few examples. Now that the basic ‘hygiene’ elements are in place, it’s time for Australian retailers to pick up their game.

We’ll discuss the role of interactivity and instore education in subsequent articles.

SHOPPER MARKETING SURVEY – HAVE YOUR SAY BEFORE TIME RUNS OUT

POPAI and ShopAbility are currently running the first industry benchmark study into the status of the Shopper Marketing, Category Management and POP functions in Australia.
Interviews have been conducted and now is your opportunity to have your say in the online survey, closes June 2. Participation is free, and study participants will receive a summary of the findings. To participate go to  http://www.ys3.net.au/surveys/5/y100514register.asp

All participants receive a FREE summary of the findings in July. The survey is now running and closes on June 2. Click the link below to participate FREE in the online survey, which will take approx 30 mins to complete. http://www.ys3.net.au/surveys/5/y100514register.asp .

Forward to a friend in the industry! If you think someone else involved in, or with views of the shopper marketing and category functions, would be interested in participating (and receiving the findings), please send them this link -http://www.ys3.net.au/surveys/5/y100514register.asp .
The more the merrier for a robust sample and holistic view.

Thank you for your participation, we look forward to presenting you with the results!
. Details about the study below.

The POPAI & ShopAbility Shopper Marketing & Category Management Industry Study  will help provide FMCG and retail sectors with a comprehensive overview of how to optimise both their internal and in-store shopper marketing and category management opportunities.
The Global Association for Marketing at Retail, POPAI Australia and New Zealand and shopper research and strategy firm, ShopAbility, have combined forces to put together a new study to help industry professionals enhance the shopping experience in-store, improve in-store areas of influence and ultimately help boost sales.
The study has come about after reviews of related studies overseas. It will be conducted over April and May and will combine in-depth face-to-face and telephone interviews with an online opinion survey.
“We are excited to be involved in the first industry wide study in this area in Australia,” said POPAI Australia and New Zealand General Manager, Karen Spear.

“We have previously conducted studies on the point of purchase industry but with this study, the scope is significantly expanded to take a more holistic view of the various functions involved in Marketing at Retail,” she said.

Co-Director of ShopAbility, Norrelle Goldring, said the results of the survey will help deliver the information they need to map out an activity and resources path for retailers and manufacturers.

“The study will help us to evaluate how Australian shopper marketing and category management related functions compare with overseas markets, identify common issues and opportunities and outline key steps for industry participants to take to make the most of their capabilities,” she said.

Individuals responsible for creating or running shopper marketing, category management and trade marketing/point of purchase disciplines or those who have frequent dealings with these functions including sales directors, marketing directors, (group) category managers/development directors, insights and innovations professionals, trade marketing managers, customer/channel marketing or development directors are strongly urged to take part in this survey.

To participate in this Australian-first survey, please go to this link:

http://www.ys3.net.au/surveys/5/y100514register.asp .

Results will be available early in the new financial year. Survey participants will receive a free summary of the results of the shopper marketing and category management findings of the survey.

For further information contact:

Norrelle Goldring, Director
ShopAbility
M: 0411 735 190
E: norrelle@shop-ability.com.au
W: shop-ability.com.au

Karen Spear, General Manager

POPAI Australia & New Zealand
M: 0412 668 579

E: karens@popai.com.au

W: popai.com.au

About POPAI Australia and New Zealand:

POPAI (Point of Purchase Advertising Institute) is the only global, not-for-profit association exclusively dedicated to the retail marketing industry. It has a global network of 20 offices covering 45 countries dedicated to serving in excess of 1,700 member companies.

In Australia, POPAI’s mission is to advance the evolution of Marketing at Retail as a strategic and tactical advertising medium and an integral part of the marketing mix.

This includes promoting the importance of Marketing at Retail in the total marketing mix; improving levels of education in the industry; developing and encouraging improved standards of practice; representing industry views; promoting a better understanding of POP mediums; provide opportunities to exchange ideas and experiences; and to conduct research for more effective strategy.

Call POPAI on (02) 9984 9322, look us up at www.popai.com.au or email marketing@popai.com.au

About ShopAbility:

ShopAbility is a specialist FMCG & retail consultancy spanning multiple channels. We help clients improve both their thinking and doing capabilities to improve instore execution for increased sales results. We help clients understand shoppers, retailers and store; we develop standout strategies for market advantage; and we build clients’ capability to deliver them.  Our retail and go-to-market strategies are holistic, differentiated and shopper-driven. Our offers span insight/research, strategy, execution, capability and training. Call us on 1300 88 56 44 for more information, look us up at www.shop-ability.com.au or drop us an email to enquiries@shop-ability.com.au

Our previous article on shopper insights, way back in January last year, looked at deriving applicable findings from shopper research.

This time around we thought we’d take a more practical, hands on approach and look at the grocery shopping experience and behaviours from the shopper’s point of view to highlight gaps between what shoppers want and what retailers are currently providing. In other words, opportunities to improve execution and therefore sales.

Get me in and out quick

After location (‘Closest to my home/work’), the top reasons shoppers choose a grocery store are Range (‘they have what I want and need’) and Convenience (‘I know where everything is and can get in and out quick’). Price is further down the list.

You’ll retain shoppers over time if your store is laid out in a way that makes sense to them and makes it easy to navigate. (This is something to bear in mind for renewal stores, which can take shoppers up to a month to acclimatise to and ‘learn’ the new layout).

The biggest irritation factor in supermarkets is usually checkout waiting times. These average 6 minutes – and (ironically) longer for the ‘express checkouts’ queues in late afternoons/early evenings for all the Dinner Tonight shoppers (who have smaller baskets). There’s a relationship between the time to shop vs the time at checkout, a bit like reward vs time spent. The quicker the shopping time (the fewer the items in the basket) the faster the shopper expects to get out of the store. I’ve recently changed my preferred supermarket for this reason (along with one to do with better range).

My local supermarket always has long queues. Their competitor recently opened a store 10 doors up the road, and this new store has more checkouts open more of the time, and importantly (for me) self-scan checkouts. I don’t go back to the ‘old’ supermarket any more because it’s too much hassle. The only time is when I need items that the new competitor supermarket doesn’t stock … which is once in a blue moon. So the ‘old’ supermarket has effectively lost me as a shopper for logistical reasons. Nothing to do with price.

So aside from opening more checkouts at peak periods and adding self-scan checkouts, what can you do? Well, give shoppers something to DO at the checkout to keep them entertained whilst they’re waiting. Magazines, sure. But what else? There’s a role for digital media here – recipes, informercials, education about complex categories. ‘Did you know?’ type stuff, not just playing manufacturers’ or retailers’ brand ads. Also, sampling and demonstrations could be conducted at, along or near checkouts, with displays of the sampled stock near the checkouts so the shopper doesn’t have to break out of the queue and go back into the centre store to get the sampled item. Better yet, the sampling company could physically hand the desired item to those wanting them. This is a way to create further impulse opportunities without cluttering the checkouts with more gum, softdrinks, batteries etc.

My Fruit & Veg is getting squashed

In other words, lay it out in the order they shop it.

This one comes up a lot in shopper research. It arises from retailers putting supermarket entry through fresh fruit & veg as a way to position themselves as ‘owning’ fresh. Trouble is, unless you’re on a Dinner Tonight shopping trip (around 20% of trips) the reality is you’re going to be buying a whole lot of other stuff that winds up going on top of the fruit & veg in the trolley/basket because it’s been shopped first.

Supermarkets need to think about having multiple points of entry to mitigate this, and a proper compartmentalised trolley and basket solution.

Shopping traffic direction will vary based on the entry points of the store, but as a general rule shoppers move around a store according to the side of the road they drive on. Ie Australian shoppers will tend to shop from left to right of store, where Americans will do the reverse.

Anything that’s likely to melt or thaw out (ice cream, frozen meals) is generally shopped last.

So you could argue that the ideal departmental layout for a shopper would actually go something like this (from point of entry):
1. Non-food & General Merchandise
2. Ambient/shelf food
3. Fresh fruit & veg plus bread
4. Frozen foods.
(This will obviously change a bit based on trip type, there’s no perfect solution so the above is the closest to one-size-fits-all).

As many non-food items are at the higher value and margin end (think Personal Care) and/or are items purchased ‘so we don’t run out’ (like toilet paper), encouraging more traffic through this area upfront could net you profitable impulse sales.

Put similar things together

Old school retail thinking is to place unrelated categories in the same aisle for assumed ‘halo’ effect of increased traffic and strong category impact on the weak one. This makes for a confusing shopping experience. From the shopper’s point of view, unless it’s for a gifting occasion, why would (box) chocolates and confectionery be in the same aisle opposite gift cards and wrap?

To be fair, supermarkets have improved their category adjacencies within aisles in recent years so we now have most general merchandise together, most household cleaning together etc.

But what is not done here, and yes I am a broken record about this, is marketing by occasion (outside of major seasonal retail occasions like Easter, Xmas, Mothers’ Day and Back to School).

What I mean here is creating solutions around usage and consumption occasions rather than ranging by product, format or manufacturer type. Dinner Tonight, Entertaining, Lunchbox, Gifting, Ready Meals are just a few. These can be executed in-aisle and/or as secondary displays.

One of the major supermarket chains has started having a crack at this with a concept that combines cards, wrap, magazines, and DVDs. Given that these are mostly longer browse time type items in what is not traditionally a browse channel (certainly not to the extent that say Borders and book specialty is) I’d wager that the traffic in this area will be low but the browse to buy conversions for those shopping the area should be pretty good, and the value per item will be higher than in many other areas of the store.

Maximising impulse when 85% already do it

The traditional retail thinking is ‘Put milk at the back – make them walk the store as they might buy other things on the way’.

The reality is that more than 85% of shoppers deviate from (add to) their list anyway once they are in the store, irrespective of whether the list is a mental or written one.

So you’re already getting a high degree of impulse shopping. The question is how much per shopper. This is a function of trip type and dwell time.

Putting milk at the back of the store for a shopper only wanting 2 or 3 items is pointless, because they’ll be going to the convenience store for the milk anyway in this instance … see the point above about standing in checkout queues for only a few items. Back to Get Me In and Out Quick -  shoppers prefer milk at the front of store. A study done a few years ago with a major independent grocer and major dairy supplier proved it when they dual located milk both in main dairy chiller AND in impulse fridges at front of store. Milk sales shot up by a double digit percentage.

But you can’t use the front of store for EVERYTHING. So aside from front of store and gondola ends/wing displays, then what?

Use the aisles.

Clean store policy is one thing, but hang sell and clip strips aren’t necessarily noticed in aisle by many shoppers. Without cluttering the aisles, I see a role for well-placed case stack displays of complimentary products to that category (not products from the category, all you’ll do then is create brand switch and trade down rather than an incremental sale).

Specific shopping missions (trip types) are more likely to get more impulse than others. Shoppers on stock up shops (approx 30% of shopping trips) will do an aisle by aisle shop regardless of what’s in each aisle (see Figure 1). These are the shoppers and trips likely to result in the most impulse.

Top up shoppers will potentially browse the aisles their destination products are in, but will avoid aisles that don’t have products on their list (see Figure 2). So you need to maximise the aisles they are likely to be in (or simply execute 1-2 small impulse displays in every aisle, that way you catch both the stock up and top up shoppers).

Dinner Tonight shoppers, depending on store layout, tend to ‘racetrack’ around the perimeter of the store. They concentrate on fresh fruit & veg, frozens, and shelf ready ambient and chilled meals. Your opportunity here is to put complimentary meal solution displays in these areas … salad dressings with the salads, chilled or shelf stable desserts near the pasta etc.

In summary, by reducing hassle (getting them in and out quick), laying out the store in the order they’d prefer to shop it, providing occasion based solutions by placing similar products together and providing impulse opportunities that make sense, you should not only increase your average basket values in the short term, but retain your shoppers’ business in the long term.

STOP PRESS – SHOPPER MARKETING SURVEY – CALL FOR EXPRESSIONS OF INTEREST
Following the response to our ‘Where to Shopper Marketing?’ article in the Feb 1 issue, POPAI and ShopAbility are running the first industry benchmark study into the status of the Shopper Marketing, Category Management and POP functions in Australia.
Interviews and online surveys will be conducted across April and May.
Study participants will receive a summary of the findings.
To register your interest in participating, email marketing@popai.com.au

Ian Kingham’s mini-tasting of low carb beers got me thinking about how to drive shopper exploration of low carb beers, where they should go in the fridge and thus about beer fridge layouts more broadly.

Sure the beer fridge layouts should be laid out in a way that makes sense for shoppers, but can you use the layout to get active uptrade or even impulse?

Below are some thoughts on different ways to lay out the beer fridges in a bottleshop, and their pros and cons.

How shoppers shop fridges

It will vary a bit by store layout and the angle/direction from which they approach the fridges, but generally shoppers tend to ‘read’ fridge doors like they read a newspaper. That is, diagonally from top left to bottom right, a bit like the below.

This means that there are some dead spots in the fridge, generally the bottom left and the top right.
However, this is mitigated a little because shoppers will generally look a little to the right of their intended purchase (rather than to the left). So when launching new products, in order to be seen they should generally go slightly to the right of the biggest selling or destination products.

Shoppers spend most time in front of or browsing the middle to right hand side fridge doors.  Assuming a 6 door and 6 shelf layout, the most heavily browsed shelf and door areas looks like the below.

Conventional wisdom would have it that shelf 2 – the ‘eye level’ (‘buy level’) shelf – is the key shelf but as seen in the above there are actually a number of ‘pole’ positions.

So the question is, do you put your destination products (eg VB longnecks, top selling domestic premium 6 packs) in the most browsed space, use it to try to turn around a declining category segment, or do you use the most browsed space to introduce new products, for fastest growing category segments or to get tradeup?

Do you:
a) go with what’s easiest for the shopper or
b) what might get you a better sales result?

In our view it’s b). An example is mainstream longneck beers. Shoppers of these destination products will find them in the fridge regardless of where you put them (generally the bottom two shelves). They don’t need to occupy the primary browse zone as these types of destination products aren’t browsed anyway.

Beer Category Segmentation, Flow & Adjacency Options

Let’s assume for simplicity that the beer category has six segments from the shopper’s point of view:
* Mid Strength (including Light)
* Low Carb
* Mainstream domestic heavy
* Domestic premiums
* Craft
* Imported.

(Dark and flavoured beers would sit in their appropriate segment eg Guinness in Imported).

There are a number of ways to look at how to group the segments, but the main ones are probably:
* By potency/ABV: but there’s not much ABV difference among Mainstream, Domestic Premium beers and many Craft and Imports have roughly the same ABVs as Mainstream beers
* By ‘premiumness’: where Mid and Mainstream beers sit together, Low Carb and Domestic Premium sit together, and Imported/Craft sit together
* By brand or supplier: which generally makes the least sense to shoppers unless it’s a sparse category with only a few brands in it. Again brand blocking may make sense for destination purchase items and for shoppers rusted onto a specific brand (the minority), but the reality is most beer shoppers have a repertoire.

Let’s look at how these options might play out in fridge door layouts.

We’ll assume for simplicity that there are 6 doors each with 6 shelves and that each door is a category segment (eg each segment has equal sales and therefore equal space). Each door contains a combination of pack sizes (stubby singles, longnecks, 6 packs) rather than there being longneck-specific or stubby-specific doors. It won’t be this neat in real life obviously, but you’ve got to start somewhere.

Layout by Potency/ABV

Assumes that Low Carb has the lowest perceived abv and that craft beers have the highest perceived abvs.

This layout puts Low Carb at a disadvantage because Door 1 traditionally has least browse traffic (depending on direction of store traffic flow).

Layout by Perceived Premiumness

Assumes that Craft beers are perceived to be more premium than Importeds due to their specialised nature. If this layout were by origin then the Craft and Imported doors would be swapped around.

There may be some conjecture around whether Low Carbs are perceived to be more premium than Domestic Premiums, but if your goal were to increase your sales of Low Carbs you’d run with it in Door 4 rather than Door 3.

Ultimately in determining your beer fridge layout you need to figure out which products you want shoppers to trade up to, and then layout out those products/segments in the middle and to the right in the planogram.

By Peter Huskins for Retail World Magazine.

Rather than write about the theories and well trodden path of Relationships in general, I’d like to frame this article more about challenging you to identify what capabilities and competencies matter to you and your business when you are managing your Customer relationships NOW. We all know, and have been trained in our careers, about Customer management and how to influence the sale. We know we need a win/ win relationship, good networks across our Customer’s business and a reputation for trust, confidentiality and achievement.

But how do you measure how good you really are, and how good you want to be?

In our last article on Scorecarding Your Business, Norrelle mentioned the importance of key factors in building and using a Scorecard. One specific area of competence that was identified was Customer Engagement – read Relationship Management.

But what does it mean in a Scorecard context and then in an application context? Measuring and assessing performance on a Company or Individual level is one thing, but the ability to transform a relationship into a powerful partnership focussed on joint growth and profitability is quite another challenge.

Being able to adequately assess the capability of your business (and of individuals) to manage Customer Engagement, in other words Relationship Management, is a critical first step in understanding if it is a core strength that can be leveraged, or an underlying weakness that needs development. A thoughtfully developed Scorecard also allows for future re-assessment that enables progress to be measured and fine tuning to take place.

So let’s look at the basic framework around Customer Engagement and the possible criteria to look at if want to apply a specific lens to this fundamental discipline, what we call

The 5 R’s of a Relationship

Relevant – Rigorous – Respect – Resourceful – Right Time

We believe these are the key competencies and capabilities that Customer facing people need to have and use when they engage with their Customer. They also apply to functions that may not have direct day to day responsibility for Relationship Management but in many instances their decisions or actions have a direct impact on a Customer…and someone else has to sort out the mess.

The next time a Brand decision is taken in apparent isolation to the Sales function, and to the bewilderment of a Retail Customer, will not be the last! Likewise the next time a promotional price point is promoted to the bewilderment of both Sales and Marketing will not be the last! These are the day to day challenges of managing a Relationship, both external and internal.

Now let’s expand on these 5 R words, using other words that hopefully will strike a chord and assist in building your own Scorecard and identifying areas of improvement for your Customer Relationships:

1. Relevant – how appropriate and significant you and your Company are in your dealings with your Customer.
Words like current knowledge (of the Category), product and competitors, store conscious, future focussed, clear and concise, objective, informative, KPI driven, cost conscious or low cost come to mind

2. Rigorous -  how thorough and accurate you are in managing your Customer’s business
Focussed, applied, consistent, curious, speedy, interested, targeted, well planned, analytical and diagnostic are good descriptors

3. Respect – is there a high mutual admiration and opinion of each other?
Committed to the Retailer, single minded focus internally, your Customer’s champion, loyal, flexible,

4. Resourceful – how practical yet creative you are?
Being different, exclusive, innovative, imaginative, knowledgeable, strategic, whole of business,

5. Right time – balancing a sense of urgency with timeliness and applicability
Urgent, available, timely, opportune, sensible and appropriate.

Now it should be a fairly simple exercise to identify the words you would like to use to fashion into this table featuring the 5 x R’s (or another set of key words/ titles that you would like to use to benchmark your business)

There is a level of complexity and thought that needs to be applied to develop a ‘fair’ scaling methodology to the Scorecard. By scaling, I mean what does good – better – best look like for Relationship Management? The words and phrases must describe exactly what you mean for each level of Relationship Management, and these may vary by Company based on the emphasis you place on these from a strategic sense as well as an application sense.

The best and most engaging way to do it is to develop what you believe best describes each scale for the Scorecard and then distribute the draft around to key people in the business asking for their input and amendments.

Sometimes you hear that it is an easy solution to “ask your Retail Customer” however in reality it is a lot more difficult than that. Different Buyers in different categories within the same Retail company have different hot buttons. Some KPI’s and business strategies will be the same however each Category (read Buyers) is unique. Also the ability to be able to benchmark against your peers is beneficial as strategic and tactical opportunities are frequently highlighted.

Everyone has days where everything just seems to go wrong – think about asking a Buyer to candidly rate your business the day after a particularly heavy negotiation session over Trading Terms or a competitor’s hot promotional price point, note the word ‘candidly’. Of course they will be distracted, the outcome of your business rating will be dependent on the success (or not) of the previous day.

Strategically some companies also wish to excel in some areas and not in others, much like the alternatives offered in The Discipline of Market Leaders (Treacy & Wiersema) where one of either Operational Excellence, Product Leadership or Customer Intimacy are selected as the core strategic Company capability. Your chosen discipline is the driver for your business, one that you master vs your Competitors, however the model requires at least normal/ average capability in the other two disciplines in order for the chosen model to succeed.

If you do wish to pursue the Customer Intimacy model, the key indicators are:

* Deliver to specific Customer needs, not broad market requirements
* Know the people you sell to & exactly what products & services they need
* Continually tailor products & services at reasonable prices
* Customer loyalty is a key asset; cultivate Relationships rather than pursue transactions
* Give the Customer more than they expect, constantly upgrading offerings
* Consider Customers a lifetime value, not just profit & loss on a few transactions
* Tailored mix of services or customized products; using 3rd parties to supplement internal activities
* Obsession with solution development, results management, and relationship management

The above descriptors also provide a neat alternative to use in the Customer Relationship Scorecard as well.

The overall message here is do not try to be all things to all people, select your Customer Relationship criteria and scaling methodology and  then strongly measure and apply it, as the capabilities and competencies you design for your business must become a key strength in your relationship with your Retail Customer.

Relationship management is not all one sided, although it may definitely appear to be the case sometimes. The ability to see over the seemingly large immediate issues and then be able to contextualise for the benefit of a sound on-going relationship is the key – and that works both ways!