HOW TO OPTIMIZE YOUR BRAND AND CATEGORY ...conference.progressive.bg/archive/2014/assets/PDF...HOW...

HOW TO OPTIMIZE YOUR BRAND AND CATEGORY PERFORMANCE THROUGH SHOPPER FOCUSED CATEGORY PLANOGRAMS

Presented by Paris GalanisMerchandising Services Business Consultant Nielsen Europe

AGENDA

• Introduction to Space Management

• Link between Space and Category Management

• How to optimize your brand and category performance through shopper focused category planograms

• Summary

• Questions

NIELSEN MERCHANDISING SERVICES

4More than 40,000 employees in over 100 countries…

The Nielsen Company is the world’s leading provider of marketing information, audience measurement, and business media products and services.

Who We Are

MERCHANDISING SERVICES

• Software Solutions

• Business Consulting

• Educational Services

• Tailor made solutions

• A division of Nielsen who specializes in tactical assortment, space planning and Category Management

• Strong presence in more than 100 countries in Europe, North and South America, Pacific Ocean Countries, East Europe, Africa, Mid-East and Asia

INTRODUCTION TO SPACE MANAGEMENT

LETS SEE AN EXAMPLE

Where is Wally?

x10Where is Wally?

When all of them are together

Where is Wally?

STORE LEVEL EXAMPLE• How easily can shoppers find the

categories that they are looking for?

• Based on what logic are the categories placed inside the store?

• Is there a link between the shopper flow and the floor plan design? Is it a positive or negative link?

• How will the above change as we move from a hypermarket to a convenience store or from city center to suburbs?

CATEGORY LEVEL EXAMPLE• How easily can shoppers find the

products that they are looking for?

• Based on what logic are the products placed on the shelf?

• Is there a link between the shopper flow and the category design? Is it a positive or negative link?

• How will the above change as we move from a hypermarket to a convenience store or from city center to suburbs?

One Wally is difficult to find

10 Wallys in different placesare still difficult to findx10

All Wallys togetherare very easy to find

To summarize:

WHAT IS SPACE MANAGEMENT?

The process of maximising the performance of the total category at the point of purchase by ensuring achievement

of in-store presence, which will promote

increased availability, accessibility and profitability.

WHAT ARE THE BENEFITS OF SPACE MANAGEMENT?

Shoppers

RETAILING ENVIRONMENT:

Retailers Manufacturers

IN STOREENVIROMENT

CONSUMERS’, RETAILERS’ AND MANUFACTURERS’ OBJECTIVES• Consumers:

Everything they need in the one shop and always in stock Well presented display of products that makes it easy to quickly find what

they need Enhanced shopping experience

• Retailers: Improve of store image Best use of available space Maintain existing shopper loyalty and attract new shoppers Maximize category and store performance

• Suppliers: Link ATL and BTL activities Good visibility, accessibility and availability of products Space allocation based on product performance Maximize brand and category performance

THE LINK BETWEEN SPACE AND CATEGORY MANAGEMENT

DEFINITION OF CATEGORY MANAGEMENT:

• A joint retailer – supplier process

of managing categories as strategic business units

and producing enhanced business results

by focusing on delivering consumer value

1. Define what products make up the category and what is their segmentation from the consumer’s perspective?

2. Develop & assign a role for the category based on a cross category comparison considering consumer, market, supplier and retailer information

3. Analysis of the category sub-categories, segments etc by reviewing consumer, market, supplier and retailer information

4. Establish the category’s performance measures & targets

5. Develop the marketing and product supply strategies that meets the category role & performance objectives

6. Determine the optimal assortment, pricing, shelf presentation & promotion tactics that ensure the category strategies are implemented

7. To implement the category business plan through a specific schedule & list of responsibilities

Category Definition1

Category Roles2

Category Assessment3

Performance Measurement4

Category Strategies5

Category Tactics6

Plan Implementation7

CATEGORY MANAGEMENT PROCESS:

WHAT IS A PLANOGRAM?

• Display: It’s a way of displaying the arrangement of a product collection in a

store, a store typology or a retailer

• Position & Facings: It indicates the position of every product in the shelf, as

well as the number of facings per product

• Realism: There are required exact dimensions of the shelves and the

products so as the representation to be 100% realistic

• Data: It may include qualitative and financial data for further analysis and

valuation of the current and the expected results

• Collaboration: It contributes to the bargaining between the retailers and the

suppliers

HOW TO OPTIMIZE YOUR PERFORMANCE THROUGH SHOPPER FOCUSED CATEGORY

PLANOGRAMS

SPACE MANAGEMENT PROCESS

Create existing planogram

Analyze current performance

Shopper / consumer understanding

Category performance assessment

Blueprint creation and product allocation

Implement the proposed planogram

Evaluate the category performance

ANALYZE CURRENT PERFORMANCE1 IMPLEMENT

AND EVALUATE3CREATE THE PROPOSAL2

ANALYZE THE CURRENT PERFORMANCE

CREATE THE EXISTING CATEGORY PLANOGRAM

RECREATE THE CURRENT IN STORE PLANOGRAM

Market Data

Retailer Data

Supplier Data

Consumer Data

ANALYZE THE EXISTING CATEGORY PERFORMANCE THROUGH YOUR

PLANOGRAM

• How is the current category planogram designed?

• Is there a link between the category performance and the existing planogram?

• What are the problematic areas and where do opportunities exist?

EXISTING PLANOGRAM ANALYSIS

ANALYSIS EXAMPLES

Whisky

Brandy

SEGMENTATION ANALYSIS

• How is the current category designed?

PERFORMANCE ANALYSIS

• Is there a link between the SKUs performance and their on shelf placement?

QUADRANT ANALYSIS

• What happens when I combine more than one KPIs?

STOCK ANALYSIS

• Do I have the optimal facings, stock on shelf and replenishment cycles to avoid OOS situations?

SALES VS. SPACE ANALYSIS

• What is the link between the allocated space and the SKU performance?

• What SKUs, brands, manufacturers or subcategories are over and underspaced?

• How can I change my space allocation in order to improve my category performance?

CREATE YOUR PROPOSAL

SHOPPER AND CONSUMER UNDERSTANDING

Are the purchasers of a product/ service prior to end use e.g. a parent buying baby food for consumption by their child

Are people who need something, a product or service, the end user of a product/service e.g. a person who buys an ice cream to eat immediately

Shoppers:

Consumers:

SHOPPERS VS. CONSUMERS

LETS SEE AN EXAMPLE

• Shoppers = Consumers:– Coffee: Since each person has its own criteria regarding coffee

the shopper will be influenced according to his own priorities:– Flavour– Price– Promotion

• Shoppers ≠ Consumers:– Baby food: Parents who are the shoppers of the category will

be influenced mainly by their doctor recommendation & the specific product attributes e.g. vitamins rather than price, promotion or package.

ANOTHER POINT OF VIEW

High Sensitivity Low Sensitivity

Shopper = Consumer

Coffee Snacks

Shopper ≠ Consumer

Baby Food Pet Food

SHOPPER AND CONSUMER DECISION TREE

AlcoholicDrinks

Whisky Vodka Brandy Rum

Premium

Gin Special

Brand A Brand B Brand C Brand D

CATEGORY ASSESSMENTAND PERFORMANCE MEASUREMENT

Consumer Assessment

MarketAssessment

RetailerAssessment

SupplierAssessment

OpportunityGap

Analysis

AssortmentAnalysis

PricingAnalysis

PromotionAnalysis

SpaceAnalysis

Product Supply Analysis

PERFORMANCE ASSESSMENT

CATEGORY MEASURES

Consumer Behavior Current TargetConsumer Household Penetration 90% 95%

Average Category Transaction 10 € 12 €

Consumer Satisfaction 85% 90%

Retailer Current TargetCategory Turnover 40.000 € 45.000 €

Category Gross Profit 6.000 € 8.000 €

Turnover / allocated space 2.000 € / m 2.250 € / m

Market Current TargetCategory Market Share 5% 7%

Productivity Current TargetDays of inventory 8 5

GMROI 7 8,5

CREATE THE CATEGORY BLUEPRINT AND PLACE THE PRODUCTS

WHAT IS A CATEGORY BLUEPRINT?

• It is a reflection of the

decision tree into the category

• Shows how each segment and

SKU should be merchandised

• Highlights their importance

and aligns their placement

based on the category

objectives and strategies

• More than one blueprint can

be produced according to

different product

assortments, store

formats, regions

CREATE YOUR PROPOSAL BY ADDRESSING THE ISSUES AND OPPORTUNITIES IDENTIFIED

DURING THE PREVIOUS STEPS

SEGMENTATION ANALYSIS

Current Proposed

PERFORMANCE ANALYSIS

Current Proposed

STOCK ANALYSIS

Current Proposed

CREATE DIFFERENT SCENARIOS

• Create multiple

scenarios

• Estimate the expected

category performance

• Select the scenario that

best fits your strategy

and maximizes the

category performance

IMPLEMENT AND EVALUATE

IMPLEMENTATION

• Test stores:

There should be sufficient number of test stores to produce robust

conclusions

Since trial stores are frequently chosen based upon relationships with

stores or store managers, it is crucial to ensure that these trial stores are

representative.

Where possible, rotate trial stores, so that consumers do not become

immune, or aware of their existence

• Support: depending on scale of changes, trial stores may require field-based

support to ensure that the plan is successfully implemented

• Checkpoints: pot checks will be useful to help determine the level of

compliance

PROJECT IMPLEMENTATION

IMPLEMENTATION:• Enhance head office to stores communication and

maintain consistent standards across similar store

formats

• Achieve quality control in documentation

EVALUATION

IMPORT THE UPDATED DATA INTO THE PLANOGRAM& REDO THE SAME TYPES OF ANALYSIS

Market Data

Retailer Data

Supplier Data

Consumer Data

Whisky

Brandy

EVALUATION STAGES:

Pre implementation Proposed After implementation

Vs. Vs.• Recreate the existing in

store planogram

• Use multiple data & information sources to assess the current category structure & performance

• Identify problematic & opportunity areas

• Agree on a common category definition & segmentation

• Assess the role of the category in store

• Create common scorecards based on the pre implementation results & future targets & strategies

• Proceed with the proposal creation

• Import the updated data in order to holistically evaluate the category performance

• Compare vs. control stores, total market, LY etc

• Extract key findings that could be replicated & issues that should be resolved in future implementations

CATEGORY EVALUATION

Consumer Behavior Current Target Actual

Consumer Household Penetration 90% 95% 93%

Average Category Transaction 10 € 12 € 13 €

Consumer Satisfaction 85% 90% 90%

Retailer Current Target

Category Turnover 40.000 € 45.000 € 43.000 €

Category Gross Profit 6.000 € 8.000 € 8.500€

Turnover / allocated space 2.000 € / m 2.250 € / m 2.150 € / m

Market Current Target

Category Market Share 5% 7% 6%

Productivity Current Target

Days of inventory 8 5 5

GMROI 7 8,5 8

SUMMARY

Space management can improve your in store environment which is one

of the touch points between shoppers, retailers and manufacturers.

It can help you maximize your brand and category performance through

a shopper centric approach.

Planograms are more than a display of products. They are databases that

contain all the necessary information and KPIs about the category.

Analyze the current situation in order to identify the opportunities and

threats

Use your proposals in order to address them and further develop the

category performance.

Always evaluate your plans and use both positive and negative findings

for future reference.

Thank you!

For any additional information please contact your local Nielsen Office

or send your questions at paris.galanis@nielsen.com

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