Last month, we shared a framework to identify and prioritize opportunities by analyzing share of wallet (SOW) among the most attractive categories. But how do you then determine which products to focus on to drive growth?
Let’s take snacks as an example. Although it’s a large department with a moderate growth rate, Target has relatively low SOW (~5%), making it a good candidate for uncovering new opportunities. As shown below, Target’s SOW in private label (4.5%) is slightly below that of branded products (5.1%). While Target has attractive opportunities in both, we will focus on branded products given its large market size and relatively low SOW.
Snacks - Target SOW and Category Sale
Target Collaborative Network (TCN), a powerful platform that leverages Target’s operational lens, can provide more insights into the reasons behind Target’s low SOW. As shown in the chart below, Target shoppers leaked ~$15 billion in national brands in snacks to other retailers. Target shoppers who purchased branded snacks at Target (converted buyers) spent about $7BN at other retailers, and Target shoppers who shopped at Target but did not purchase snacks at Target (unconverted buyers) spent about $8 billion at other retailers. While both opportunities are large, the converted buyers provide a more attractive opportunity since they already purchase branded snacks at Target.
Branded Snacks, Dollar Leakage
So, where is Target leaking its dollars and what should it do? Find out next time as we peel back the next layer of data. Meanwhile, if you have any burning questions about your business with Target or the TCN platform and/or need help to develop new strategies to drive growth at Target, reach out to Paul Auberry or Sri Pankanti. So long for now!
Tracking New Products
IRI’s Dictionary Item Coding team provides 99.5% coverage and 800+ product attributes, and adds over 7,500+ new items per week! While IRI can always identify items once they start selling in the stores, you can get much faster insights into the product’s performance with what we call “pre-scan.”
Pre-scan item coding refers to the process of coding a new item within IRI’s Dictionary Database, prior to any movement (sales). IRI’s ability to code new items pre-scan is driven by manufacturers and retailers providing new item images in advance of their launch into the marketplace. IRI recommends manufacturers and retailers to provide their new product images to their IRI support team eight weeks prior to launch to alleviate any lag time.
Coding items pre-scan is the best way to ensure that items are coded quickly and accurately. It also helps ensure that IRI can include new items within any deliverable in a timely manner.