Blog Moving Time

It’s moving time for this blog and I am excited to announce that I’ve launched a new and improved personal website at www.tobydesforges.com.

Going forwards, all future blogs will be posted on www.tobydesforges.com, so please check it out and even subscribe if you’d like to get every post delivered right to your inbox. I promise not to spam you and your email address will only be used for the purposes of notifying you of updated posts and very occasional special offers.

If you are already a subscriber to this blog you will need to resubscribe to the new site to keep on receiving any post updates. It’s been great having you follow and participate in posts over the past year or so and I would love to have you join me over at the new site too.

The new site contains additional information about myself and engage. It also provides better opportunities for us to connect, share and discuss the goings-on in the world of shopper marketing and customer management.

If you have any questions or concerns, please don’t hesitate to contact me directly at toby@engageconsultants.com. I’d love to hear from you.

Best,

Toby

Hunting For Retail Innovation In Barcelona

I recently returned from a relatively rare business trip to Barcelona, Spain. Excited to be back in the market after a few years, I persuaded my client to take me on a tour of nearby stores. Predictably, of course Carrefour was on the list of stores we would go to, but so were Eroski’s Spanish subsidiary Caprabo and Spain’s own Mercadona. I was particularly keen to understand whether Spain’s economic woes had provoked any major retail innovations, and here’s what I found:

Discounters don’t have to be ‘cheap’

Think about hard discounters like Aldi and Lidl and immediately images of down-market stores, stocked with no-name brands and slim pickings in fresh foods come to mind. Not so in Mercadona, Spain’s home-grown answer to Germany’s upstarts.  Mercadona is no competitor to Whole Foods BUT a lot of thought has gone into the in-store environment and there is a clear focus on quality (sorry no photos here – I was under strict instructions!). This is most obvious in fresh foods, but interestingly also in home and personal care, where the chain has invested heavily in building own-label products that perform ‘better’ than the branded alternative. I’ told that to drive this, promoters work in stores to discuss the benefits of Mercadona’s range with shoppers directly. Indeed even my die-hard foodie guide told me he was happy to buy floor cleaner and laundry powder here, whilst spending the savings on high quality organic produce at the local market. This interests me as stores like Mercadona are creating an interesting new trend to split purchases across channels, which leads shoppers to cherry pick prices on more commoditized categories, whilst seeking out higher end offers for life’s little luxuries.

Online in-store 

Spain has its fair share of online operators and these are increasingly popular in larger cities, but what grabbed my attention in Caprabo’s well-stocked wine section was this booth next to the main wine aisle.

Here shoppers are able to order wines that aren’t available in-store for delivery or pick-up. You can search by origin and variety on a well-structured touch-screen interface. We’ve seen this before in department stores like the UK’s Debenhams, but this is a relatively rare example of a grocery store exploiting the broad range it offers online in a small community store.

Price, price, price

Spain’s cash-strapped housewives are well served with discounted offers and like all the other markets I visit, retailers compete hard on price. It’ll be no surprise that Carrefour’s sole distinguishing mark is its price offer, at least if judged by the store I visited. But I did notice two particular differences in the way the Spanish affiliate communicates price, which contrast messaging in my neighborhood. The first was the use of a very clear messaging in the power aisle, where bright panels advertise buy two, get second at half price.

The second was a VAT-free rebate on over 1000 non-foods lines.

Both offers and their communication are not really new, but they do illustrate that the retailer has grasped that a sea of yellow labels does not good communication make. The clear -50% panels are clean, easy to comprehend and offer more compelling reasons to stop.

Capitalizing on changes at retail

I guess I would have been more excited if I’d have come away with some really new ideas from my trip (as well as a stock of Serrano Ham!) but I do think that the above reflects some global trends in grocery retailing, and for the manufacturer provokes three potential actions:

1. Understand the changing roles of channels – if more shoppers are likely to split purchases, then different channels will play increasingly divergent roles for your brands – understanding these will help position your products more effectively in the future.
2. Combine online and offline to extend the available range – many shoppers complain about lack of in-store availability; as grocers increasingly integrate online and offline, the opportunity to make wider ranges available in-store becomes more viable, even in the smallest outlets.
3. Understand the role of price communication – much research suggests that shoppers respond more to the message of price than to the price itself. So, using clearer and more compelling price messages may deliver higher promotional off take. This is important as 70% of promotions lose money, mostly because they don’t create sufficient off take to deliver a payback. If better price communication is the secret then it’s time to embrace this.

Get in touch if you’d like to share your thoughts on retail innovations, or if you need advice on how to capitalize on the changes your retail customers are making.

How To Ruin A Brand

If, like me, you’ve been following the backlash against comments by Abercrombie and Fitch’s CEO Mike Jeffries, you’ll have seen how in today’s connected world that bad PR can have a huge impact on a brand. I have to admit that I have little sympathy for Mr. Jeffries and no affinity to the A&F brand at all but I do think that anyone who wants to learn exactly how to ruin a brand can learn a lot from what has happened.

The Story So Far

For those who have missed the story, here’s what has happened. Back in 2006 Jeffries gave a rare interview to Salon Magazine. In the interview Mr. Jeffries explained A&F’s target market by saying “Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong.” Jeffries’ pursuit of the ‘in crowd’ has led to the company eschewing the larger woman (they don’t make large sizes) and apparently recruiting only those considered to be ‘good looking’. The current furor stems from the re-emergence of these comments in a new book co-written by Robin Lewis, called “The New Rules of Retail”. And this has caused chaos!

Amidst a barrage of complaints, pickets outside US stores and a YouTube video imploring viewers to make A&F the fashion brand of the homeless, sales have declined 17% and stocks are off by 8%. In the middle of the maelstrom of bad publicity, Jeffries issued a qualified apology on A&F’s Facebook page suggesting his comments had been taken out of context. This prompted one reader to comment “How can ‘we don’t like fat people working in our stores or wearing our clothes’ be taken out of context? Seems pretty clear to me,” and another to write “Your CEO is an idiot”.

Three marketing lessons from Abercrombie & Fitch

Beyond the very obvious “Don’t let your CEO dis potential consumers”, there are three very powerful marketing lessons to be learned from what has happened in recent weeks:

1. If you want to limit your sales, limit your target market – Consumer brands grow by encouraging existing consumers to use the more of the brand more often or by attracting new consumers. Mike Jeffries defends his “exclusionary” marketing strategy by claiming it is legitimate to target a specific segment in order to avoid becoming “vanilla”. But here’s the thing: A&F’s growth in the last few years is due in no small part to the fact that it is an aspirational brand. New consumers have sought out A&F clothes because they want to be associated with “the cool kids”.
   By refusing to sell XL and XXL women’s sizes, the company already excludes nearly two thirds of the US market; by suggesting that if you are ‘not cool’ you can’t wear the brand, the market is limited further. This leaves a tiny proportion of the potential market: those who are slim enough and cool enough to wear the brand. Unfortunately, I suspect that a proportion of these people will now not choose A&F for fear of being labeled a bully, so all that will be left will be skinny people who don’t care what others think about them. This is not a great platform for growth.
2. Bad news travels really fast – Like United Airlines before it, I’m sure that the marketing team at A&F has been taken aback by how far and how fast the negative publicity has travelled. Whilst controversy is no stranger to this team, even they were probably not prepared for a global hate campaign exploding in their laps. Many brands have been encouraged to embrace ‘social’ and ‘market digitally’ seeking greater numbers of likes and shares as if these were more important than sales and profits. What we learn here is that this is a double-edged sword. Too many brands treat social channels as a one-way street and very few are effectively managing the opportunity to learn more about attitudes, behaviors and how to influence these
3. Manage bad press effectively – A&F’s response on Facebook is risible – they continue to post images of new products and little preppy questions like “If your friends could only describe you in one word, what would it be?” as if they are ignoring the barrage of negative comments that they receive in response (in answer to the question above, one user writes “Fat. Which means I won’t get anything from your store”). Mr. Jeffries’ response to why sales are off has been to blame poor stock availability which has created further negative comment. There’s little doubt that Mr. Jeffries’ days at A&F are numbered, but it will take years for his successor to overcome the issues he or she inherits. What current and potential consumers will need to hear from A&F is how they have changed and what they are doing to make amends, not that the brand will carry on regardless.

Really effective marketers today are able to define a target market that is likely to grow rather than decline; they engage that target market by creating an experience that resonates with and re-enforces consumers’ needs and desires and they manage their brand with care and integrity. It appears that Mr. Jeffries is not one of these marketers and those of us who are can only look on in despair. If you have examples of how to get it right that you’d like to share, please feel free to post them here!

The Future Of Grocery Shopping

Ten years ago, if you had a shop selling books, airline tickets, music and video and consumer electronics, you probably weren’t too bothered by e-commerce. Sales on the internet were a marginal thing; there was little evidence to suggest the mass market was going online. Today if you still own a shop in these areas you are either highly specialized or going out of business. Nobody can argue that, in these categories, online shopping has not radically changed the retail landscape. Today this is far from being true in grocery retail. So should CPG marketers worry that the future of grocery shopping might be radically different to what we have become accustomed to today?

Today online grocery retail is marginal

Not a lot of people buy food and packaged groceries online today. Estimates suggest that in the US ‘non-traditional’ channels account for between 3 and 5%, in Australia maybe 5% and in most of Asia, less that 3%. So today internet sales are still a marginal thing – like they were 10 years ago for book retailers.

Whether you believe that grocery retail will stay offline or not, an un-arguable fact is that the likes of Walmart and Tesco are working hard to figure out how to create a great online offer and create a more enticing in-store offer. But despite all their efforts, progress has been slow.

Imagine my surprise then to find a great example of where I think grocery retail is going in Kuala Lumpur, Malaysia. My colleagues in KL recently took me to Ben’s Independent Grocer (BIG) in the Publika shopping mall.

BIG – A picture of the future

BIG is not so much a grocery store as a foodie’s theme park. The store presents an interesting case of what is likely to become the norm in leading stores globally. Here are four things I believe we are likely to see happening:

Focus on fresh 

What BIG does really well is to draw shoppers into large and diverse fresh offer with great merchandising, lighting and signage. Fresh food will become more important in the future because the physical experience of handling choosing and learning about fresh product is difficult to duplicate online. A strong fresh offer will give shoppers a reason for visiting real stores.

Focus on specialties

At BIG you can get things that aren’t generally available in the mass market or that aren’t necessarily practical to buy online – like organic baby products. Sure some concerned and very organized mums will take the time and effort to seek out these products. But most mum’s live in the real-world where they have to the juggle the needs of a family, a work life and a social life – stores that can bring the latest specialty products to these shoppers win kudos and make a trip all the more worthwhile.

Focus on giving more

At BIG you can buy a great range of booze – but here the added value is in the experience of buying – not just the act of doing so. Nothing that’s on offer in Ben’s could not be bought online in the future, but there’s something about a carefully curated range, set in a different and comfortable environment with a specialist on hand to advise, that makes visiting this liquor store just a little bit more fun than browsing online.

Packaged groceries are for service

There’s plenty of CPG product available at BIG and much is pretty well done but it’s for service only – not the prime purpose of the store. BIG is trading on the experience you get from buying fresh food and specialties, not trying to differentiate itself on a range of packaged groceries that can be bought just as easily elsewhere.

Is this the future of grocery shopping?

There’s no way of telling whether BIG will be a successful retailer in the long-term, certainly it’s long on high-priced stock and short on deep-pocketed shoppers. BUT there’s a lot to be learnt here about where multi-channel grocery retailing could end up.

The biggest implication for me of this is the role that real stores might play for the CPG industry. If CPG products become more marginalized in the store, brands will have to fight harder to make an impact both off-line and online. This is going to take some deeper thinking about the role that physical stores should play and the relationships brands need to create with shoppers and retail customers in the future. This is not a ‘sales problem’ – it’s a total marketing problem that requires marketers and sales people to work together to come up with new ways of engaging with consumers, shopper and retailers.

Here are some practical steps to take now:

1. Research the roles physical stores currently play and the propensity of your shoppers to use online channels
2. Learn more about those shoppers who already buy products online via CRM or digital analytics platforms.
3. Learn more about what draws shoppers back to stores regularly.

If you’ve already taken these steps and can share what’s been learnt or if you’ve found other great examples of really engaging grocery environments – please do post them here!

Big data – Big Headache!

Everywhere we turn at the moment, the massive explosion in “big data” affects us. In the consumer goods industry, data that was simply inaccessible a few years ago appears to be coming out of the woodwork. I wonder if managers can keep up.  In the last year I’ve heard marketing and sales managers complain frequently of their team’s inability to manage, work with and use the consumer and shopper insight they have available – Big data is causing a big headache!

Of course not all companies are struggling – P&G recently introduced data walls in 40 conference rooms around the world. Managers working in these conference rooms can see real-time dashboards that allow them to rapidly visualize their performance and run what-if scenarios. Samsung have recently invested in an online marketing team for Asia. Based in Samsung’s offices in Singapore this team receives and responds to updates on social and e-commerce feeds and constantly updates and adjusts the marketing messages sent to potential consumer segments.  Unilever in Brazil worked with the POP Company to integrate all the data merchandisers gather from the field into a dashboard.  Trade marketers and key accounts managers can use this to monitor and respond to changes in the stores rapidly.

The trouble is P&G, Samsung and Unilever are three of the world’s top 10 biggest consumer goods companies. Most manufacturers having nothing like their resources to invest in data management.  In many companies I meet, the insight ‘team’ is one overstretched market research manager with a recently changed title.

As more and more data become available to companies, it is ‘teams’ like these who will be most challenged to cope and respond.

3 things your team can do to cope with Big Data

“Cut the crap” – there is a lot of useless data filling the hard drives and filing cabinets of consumer goods companies. The first step has to be to be a really good audit of the data that is actually available and figure out what is really likely to be useful. Useful data, in my opinion, helps identify business opportunities, it facilitates gap analysis and helps quantify potential gains. Further useful data helps track performance against strategic goals. In our experience this useful data is often a small fraction of the total data that has been purchased. Much of the ‘other data’ is nice-to-know narrative that is rarely applied in decision making. Cutting out this less-valuable stuff, cleans hard drives and cuts costs in the long-term.

“Get focused” – define the key strategic goals of the business and the data needed to measure the achievement against those goals. Broadly speaking a consumer goods company should be measuring how consumption is changing in target consumer groups and how purchase behavior is changing in target shopper groups. To understand what is affecting these behaviors, the organization should set and track KPIs that are based on an understanding of what drives this behavior. It is tracking these KPI’s that creates the ‘big data headache’ so you should make sure that the KPIs you track really support business improvement. Ironically, many businesses may need to conduct initial research to make sure they know what they should be measuring.

“Put strategy ahead of systems” – anyone who has been through the nightmare of a major software implementation will be aware that systems investments do not solve business problems. Following the installation of SAP, one of our clients spent several years trying to fit the system’s view of retail channels to the real-world situation with little success. With literally hundreds of vendors producing and selling sophisticated analytics systems, CIO’s are increasingly overloaded with sales pitches, many of which are extremely tempting. However, when it comes to consumer goods businesses, systems investments must support commercial strategy. Leaders of the marketing and sales organizations should be driving this, thinking expansively about how to tap growth opportunities and the data they will need to ensure these are measured and monitored.

Make no mistake, advanced analytics and the data that support this will be indispensable in the medium term and this will put major stresses on the traditional organization structure of consumer goods businesses. Sales and marketing leaders must embrace this now and take considered steps to capitalize on the possibility. Contact engage to learn more about what data is most valuable to you, and what you might be missing.

If It’s Not Strategic, It Isn’t Shopper Marketing

There has recently been a huge amount of debate recently as to whether shopper marketing is strategic or tactical, especially following Mike Anthony’s post on whether shoppers are consumers or not.  The major fact of the matter is that shopper marketing has been mis-defined for too long. Without a clear view of what shopper marketing is – the debate on what it does will rage. So just what is Shopper Marketing?

Shopper Marketing is marketing. 

Marketing in its many classical definitions boiled down to a simple proposition: identify a target customer, define that target customer’s behavior and figure out a way to change the targets’ behavior to the benefit of your brand.  As consumer goods marketing has evolved, the customer has come to mean different things and in its most common interpretation, the customer is generally seen to be the consumer – the person who uses the product. Over time a second definition of the customer has also arisen: the retailer. Most consumer marketers accept that unless they can secure distribution for a product, via a retail outlet, they can’t efficiently monetize consumer demand.

The Importance of the Shopper

So why all the fuss about the shopper? Mike’s recent blog explains this brilliantly. Consumers and shoppers behave differently (even when they are the same person). When we consume something we are responding to a need or a desire that arises on a certain occasion. Assuming that an appropriate product is available to us, our experience of consumption will re-affirm those needs and desires – driving a cycle of consumer behavior. This cycle of behavior explains why we brush our teeth at least twice a day and how we create a preference for a brand of toothpaste.

Shopping is different; we recognize a gap in the consumption cycle when a product is no longer available to meet our needs and desires on a specific occasion. So we set out to close that gap. At this point we start thinking about the constraints we have in time, money or attitude and we select an outlet that we believe might service our demand within those constraints. Inside the shop, we seek out a product within an outlet and we choose something that best meets our perceived requirements within our constraints. This explains why, even if we prefer a certain brand of toothpaste, we might often buy something else in a particular situation. Shoppers behave differently, and they should be treated as a different and additional customer.

To Change Behaviors, Think Of The Shopper

‘Clearly the consumer and the shopper represent different targets, so if we want to change these behaviors, we need a different approach: The things that influence a mom to buy a product for her kids are different to the things that make her kids want it in the first place.

Shopper Marketing embraces this and accepts that if you want to make a consumer use a product, you have to get someone to buy it. Shopper Marketing is the process of creating and executing a marketing mix to change purchase behavior in order to drive the consumption of a brand.

 Is Shopper Marketing Strategic or Tactical?

Why the debate about whether this is strategic or tactical? Well most of the ‘shopper marketing’ we see is the marketing mix that gets implemented in shops. In fact there are a lot of misguided people out there who have decided that all Shopper Marketing  is nothing more than stuff you implement in stores. This is daft. It’s like saying that an advert is great consumer marketing. The advert is the tactical expression of a marketing mix that has been designed to influence a target consumer’s behavior. The marketing process that got to the creation of the advert is recognized as being strategic. So is also the marketing process of establishing exactly the right target shopper whose behavior needs to change to drive consumption.

It’s fine to recognize great Shopper Marketing tactics when you see them in-store, but to presume that they are not playing a role in a strategic process is short-sighted. The fact is that marketing is changing. The boys and girls who are driving this change have recognized that a long-term strategy for growth needs to build consumer demand AND change shopper behavior to service this.

I think this is where the battle lines are drawn. Those businesses that think this is all terribly tactical will see an increase in the expenditure with little or no return in growth or market share. Those that recognize shopper marketing as a strategic pillar are already reaping the rewards of increased efficiency and better results. You have a choice in how you want to play this, for those seeking to build a strategy, feel free to contact us at engage!

Do Retailers Dictate Your Brand Strategy?

I bet reading this question most CPG marketers will immediately respond with a chorus of “Hell no, I determine my own brand strategy!”. But before you get too excited, let’s just think about the facts: For most, if not all, consumer goods companies, retail expenditure is the number one cost after cost of goods. In many cases 60% of A&P budgets now go “below-the-line”. Most companies struggle to contain a widening gap between gross and net sales.  In many markets, getting a listing in key retailers is essential to ensure the success of a brand.

With all this in mind it’s credible to believe that for most marketers, retailers have a major influence on brand strategy. For some the power equation is so strong that retailers really do dictate brand strategy. Take for instance the role of Watson’s in China – many personal care brands, on wanting to enter the market, have chosen to offer Watson’s exclusive rights to distribute the product. Think a little about the power of Coles and Woolworths in Australia, where between them they account for over 80% of the sales of many CPG brands. Even in the US – a marginally  less concentrated market is it inconceivable that, without the support of Walmart, many CPG brands could be successful. In all these cases, the power some retailers wield borders on strategic control over the brand.

Is this a bad thing? Surely retailers know best how to sell brands to shoppers and their council is important? Herb Sorensen, thinks differently. In a conversation we had with Herb whilst writing “The Shopper Marketing Revolution”, he told us:

“The fact of the matter is, many brands are laboring under the illusion that retailers have a clue in terms of what they’re doing in managing the shopping process, and they don’t, and it’s a serious problem.”

Herb’s point of view reflects a reality that many retailers are less effective at managing marketing than they are at managing money. Many manufacturers are anaware that retailers are first-and-foremost financial animals. The financial imperative for a retailer is not, as many manufacturers believe, to drive growth for their category, but instead it is to deliver returns on capital employed. It’s worth bearing in mind too that most retailers are really good at this, more so than their suppliers in the main.

This central financial imperative is delivered only by consistently enhancing margins, reducing inventory and driving growth – and only the last of these three has anything to do with marketing at a category level. This underlying drive is a constant source of frustration for marketers who come up with “great plans for retail engagement” only to have them knocked back because the retailer will always place her financial objectives ahead of anything else.

Driving brand strategy through retail

It’s time for marketers to become much more proactive in their attitude to retail. Retailers and marketers do share a common interest – increasing shopper loyalty. Granted for the marketer this is to the brand and for the retailer to the store. But, when marketers can demonstrate that their activities can improve retailer’s financial performance, they can lead the strategic agenda. To achieve this will require:

1. An in-depth understanding of which shoppers are important
2. A clear view of where shoppers can really be influenced to buy
3. A definition of which retail channels are really important.
4. Effective prioritization of retailers that leads to investments being made in customers that can deliver results.

We’ve Done Category Management – Now What?

I met a client in China last week who was telling me of their success in conducting category management programs with two major multi-national retailers. “The thing is, we’ve been doing this for two years and we ask ourselves, now what? Our partners are supportive but they keep challenging us to come up with something new”.  I started reflecting on their options and what guidance to give.

Thinking about the situation, the people I met where in a fortunate situation – first their experience was positive: the retail partners had delivered a reasonable level of implementation (c. 50% – which is great for China); both sales and market share had grown and the retailers remained engaged. Second, buoyed by a positive experience, the company had gone on to invest in deeper research into shopper behavior  in broader capability in managing large data sets. The management team I spoke to was convinced that the next step was to secure more category partnerships with key retailers. I’m not so sure, here’s why:

Is extending category partnerships always a good idea?

Working with key retailers is resource hungry: No company has infinite resources and finding good people with the right blend of competencies to steer their way through a major piece of joint-working is difficult. Presumably any business that has a successful relationship with a small group of customers already is likely to want to maintain this. So extending the number of relationships will require more resources or require the existing team to put less focus on existing relationships. The reduced level of focus this inevitably leads to is unlikely to deliver better results than those the team delivered before.

Category management is not the only way to get things done: The magic of category management is that it’s such a powerful vehicle for common languages and objectives. Successful projects deliver what retailers need: category growth, improvements in category margin and improvements in category efficiency. They also deliver against manufacturer’s goals: increased sales, improvements in market share and better returns on investment. Empowered with two years of learning, data and a proven track record of delivery, my client has a great opportunity to persuade other retailers to make changes in-store without the need for expensive joint-working programs. A more efficient route to getting progress would be to convert all of the understanding the business has into great selling stories, and have the account team drive execution in the traditional way.

Key retailers are not necessarily the biggest priority: In China, key multinational retailers have tended to cluster in grocery supermarket and hypermarket channels. This is the case in many markets globally. It’s often a ‘default setting’ of the CPG industry to assume that big stores=big opportunities.  And yet, its these large formats which seem to be most hit by slowing consumption growth – it appears shoppers globally are choosing smaller, more local alternatives and switching gradually to alternative channels (6% of China’s housewives now buy all food online).  Further despite the onslaught of the big box, many markets have a thriving independent sector.  What if the bigger prizes lay beyond the walls of Tesco and Carrefour?  I believe if you have limited resources, they should be focused on the largest prizes, so I’d want to be assured that that was the case.

So what will I advise my client, and indeed anyone with the same questions about category management programs? First, know you priorities. Before extending a category management program make absolutely sure that that the retailers you might work with operate in the channels you would prioritize. A priority channel is one which not only attracts a large volume of shoppers; it is also one where your target shoppers shop and where they can be influenced to buy more. Secondly, review your approach. It is cheaper to persuade a retailer to change using data and insight than it is to conduct category management programs. Insight-based selling should be the default approach to getting things done. Lastly pick your partners carefully: I’m pretty certain most will agree that retailers don’t make great bedfellows. Retailers who implement what is agreed are a good place to start but more is needed for partnerships to work in the long-term. Partnership is two-way, so a great partner doesn’t leave everything to you, they work with you, bringing ideas and concepts to the party.  If you are left being challenged to deliver “something new”, perhaps the retailer you are working with isn’t actually your partner at all!

Featured image: Flickr

What Consumer And Shopper Insights Do You Really Need?

In a world of “Big Data” it’s surprising that one of the major challenges that we come across every week is a lack of information. It’s not that there is no data; it’s just that many of the marketers we work with perceive that they have little or no useful insight that would help them grow. This is a common problem. The data people have, just isn’t helping them deliver the growth they need! So what data do you need to help make decisions that will deliver significant growth? 

To answer this question one needs to grasp a very simple principle – growth comes from getting people to do something they don’t already do now. For a brand to grow it needs to be consumed more, this means getting more people to use it, more often and in greater quantities. For this to happen, people who don’t already buy the brand need to do so, and those that already do need either to buy more or more frequently. So faced with the challenge to deliver growth, data that tells you where consumption gaps exist and explains how purchase behavior can be changed to deliver this is really useful.

Mike Anthony and I have written at length about this in our new book The Shopper Marketing Revolution, but here’s a simple rationale for holding this point of view:  a consumer can’t wash her hair with your brand if your brand is not in her shower. She might think your brand is fantastic, she might believe that your brand is the only one that meets her specific needs and she may well be aware no other brand can deliver what she needs, but if someone hasn’t bought the brand for her, she can’t use it. Just understanding her consumption needs is not enough – you have to also understand what would actually make her buy the brand.

Here’s a simple view therefore of what insights that we feel are really useful:

Consumer insights:

To define growth opportunities there are really only two types of question to ask:

1. Who currently uses the category and your brand, how often and in what quantities? Which of these consumer segments could be encouraged to use more?
2. Who doesn’t use the category or your brand and why not? Which of these consumer segments would use your brand and how could they be encouraged to do so?

A really good usage and attitude (U&A) survey is the best source of data that would help respond to these questions. That said, few marketers have access to “a really good U&A”: Many studies focus on users alone and ignore non-users and several limit their scope to a notional target market which excludes other demographics. Many companies conduct U&A research infrequently, favoring more frequent brand tracking surveys or adhoc “dip-stick” research. As a result, most companies end up with a narrative of existing consumption but little insight into the opportunity for growth. My advice would be to pair back on research that delivers this sort of narrative in favor of acquiring better insight into the opportunity to grow.

Shopper insights:

To realize growth opportunities there are again two groups of questions that need to be resolved:

1. Who currently buys the category or brand for the consumer segments that could use more? What would make these people buy more frequently or in greater quantities?
2. Who would buy for consumers who don’t currently use the brand but would? What would make these people buy your brand?

In many companies, data to help answer these questions is rare. For me this needs to change – in the short-term great proxies can be created from shopper panel data and from loyalty card data,  but often these are limited in their scope, either by sampling methodology or by the fact they are derived from a small proportion of the total market. In the medium-term marketers should seek more structured shopper research that helps then pin-point and unblock pinch points in the path to purchase.

It falls to the leaders of consumer goods businesses to seek out better sources of insight in the future. With many seeking to grow whilst trimming budgets, now might be a good time to do away with low-value narratives and focus scarce resources on insights that might deliver results. Simply put its time to stop buying junk that clutters up the decision making process and start investing in insights that really drive growth

What Makes Consumer Goods Sales Teams Work?

Ok so it’s pretty tough out there just now – driving sales is a corporate imperative but for many I speak to the first quarter of the year has been like wading through treacle with sluggish demand and customer reticence. Consumer goods sales teams have never been busier but what will make the difference for the rest of this year? Here are a few thoughts about how to improve total sales team performance:

Prioritize – sales growth doesn’t come from just anywhere, it comes from those accounts that fall into three groups:

1. Those who could buy more but don’t
2. Those who could buy more frequently but don’t
3. Those who just don’t buy yet

In a tough sales year it’s essential to understand your customer base and focus. Most customer’s fall into one of the first two groups, so now is the time to take a long hard look at the missed opportunities in the customer base. Do you have customers with major distribution gaps or customers whose shopper base is not fully tapped? If so prioritize these. Avoid efforts with customers who are quick to say ‘yes’ but slow on delivery in favor of those who take action and deliver results.  Equally take another look at those customers you don’t service and look to activate a relationship with them. A wider customer base now might pay back in the future.

Specialize – Focus your sales team on those customers with growth opportunities and ensure you have the right team working on them. Delivering results with these customers requires clear priorities and clear priorities require you to put the best guys for the job, on the job. Make sure that you allocate your best resources to the biggest opportunities and ensure they have they time to address the key opportunities. Now is the time to take away extraneous tasks and ensure your team can deliver what they are good at.

Train – The best sports teams in the world spend 90% of their time training and 10% on delivery. While your sales teams play more than one ‘match’ a week, it doesn’t mean that ensuring they are at their best when they perform is a bad idea. Focus your managers on coaching not selling; ensure that individuals are performing at their best so you leave nothing to chance.

Evaluate – sales teams need constant feedback, not everything works first time, take the time and apply resource to ensuring you know what is working and what is not. Establish a constant review process and ask yourself monthly – what should we keep doing? What isn’t working and should be done differently? What isn’t working and should be stopped? And what should we start doing that we are not doing now?

This year is not a year where busy fools will succeed. It is a year where leaders will be made so now is the time to step up!