“It’s complicated.” That’s not just a vague relationship status on social media but also a perfect way to describe what’s going on in the retail world. Retail is no longer all about just the physical store – now retailers must consider how e-commerce, click and collect, home delivery, reviews, search, social chatter and more fit into their strategies and marketing plans.
Consider this: The average grocery store carries 40,000+ items while the average supercenter carries 140,000+ items. These stores advertise almost 200 items each week across various media and promotion channels. With all of the rich data assets available on consumer packaged goods and their shoppers, such as point of sale, frequent shopper, panel, in-store and other causal, and media data, it can seem challenging – perhaps impossible – to fully maximize the use of these assets to develop true insights on what, why, who, when, where, and how to activate.
Obviously, everything at retail begins and ends with the customer. In this essentially flat economy and ever-increasing competitive environment, retailers have, smartly, been increasing their focus on consumer-centric insights as an essential way to protect and grow sales, market share, conversion and trips.
Close collaboration between retailers and manufacturers increases the success of both parties, no matter what channel shoppers are in. But it’s not always easy. Retailers tend to drive collaboration discussions based on what is happening in their stores and with their customers while manufacturers are more focused on brand strategies and market measurement data.
For retailers to win in this complex marketplace, they must understand the key drivers that influence customers decisions, the relative importance of each, and how they translate to purchasing behavior in order create compelling strategies for growth. This won’t happen overnight, but it’s about progression, not perfection. Progress begins when retailers commit to becoming obsessed with understanding their customers, localizing their stores and assortment, and aligning owned and partner data with third-party data sources, such as weather, gas and economic indicators.
For the most effective collaboration programs, retailers need their manufacturer partners to have the following capabilities:
- Insights and Strategy – Understand all of the consumer dynamics that are driving brand and category growth
- Shopper and Trips – Know the shopper and their trip occasions
- Localized Assortment – Provide products that reflect shopper demand
- Pricing Strategy and Leadership – Demonstrate pricing excellence while maximizing profitability
- Innovation Plans – Share innovation plans two to three years in advance in order to maximize collaboration opportunities
- Consumer Engagement – Use shopper activation programs that drive traffic and sales by getting in front of the right people in the right place at the right time
At the same time, retailers must:
- Start with an operational lens
- Measure their results versus the rest of the market
- Protect and grow buyer conversion and shopper trips
- Capture competitor shopper trips
- Grow shopper share of wallet
By consolidating all of these retailer and manufacturer insights into a single strategic plan for customer activation, retailers will enhance their customer-centricity while also driving category sales, conversion, loyalty, and share of wallet for their business.
Want to learn more about opportunities in retailer collaborative planning? Reach out to us at Paul.Owens@IRIworlwide.comorPeter.Updike@IRIworldwide.com.