ECR-RUS Forum June, 2nd-4th, 2010 Customer & Shopper Focus as the Basis of Cooperation Aya Tonoyan Category Management Ferrero-Russia Kirill Ionov Head of Space management Мetro Cash&Carry
May 27, 2015
ECR-RUS ForumJune, 2nd-4th, 2010
Customer & Shopper Focusas the Basis of Cooperation
Aya TonoyanCategory ManagementFerrero-Russia
Kirill Ionov Head of Space management
Мetro Cash&Carry
““FerreroFerrero is a family owned company, based on the is a family owned company, based on the overarching principle of achieving and maintaining overarching principle of achieving and maintaining consumer satisfaction: consumer satisfaction: The Consumer is our king!The Consumer is our king!””
F.P.FulciF.P.Fulci, , FerreroFerrero InternationalInternationalViceVice––President President
Alba, Italy, 1942
FerreroFerrero GroupGroup
Success Story Based on the Principles:Success Story Based on the Principles:qq LoyaltyLoyalty to the company to the company values and principlesvalues and principles at all timesat all times
qq Identifying and anticipatingIdentifying and anticipating ConsumerConsumer’’s tastes taste
qq ConstantConstant Research and InnovationResearch and Innovation
qq Always ensuring Always ensuring freshness of our products in the storesfreshness of our products in the stores
FerreroFerrero: : Quality & Innovation Leader in Confectionery Quality & Innovation Leader in Confectionery
* Incl. Packed Pralines, Chocolate Eggs, Bars, Tablets, Paste, Chilled Snacks, Refresh drops, Flour-based confec.(Ferrero segments)
25%
18%14%
14%
13%3%
14%
Mars (incl Wrigley)
Others
Nestle
Kraft
United Confectioners
Dirol Cadbury
FerreroSource: AC Nielsen, MAT DJ 2010
Russian Confectionery Market, Value shares, 2009*
Best Innovative Best Innovative FerreroFerrero Products in Russia:Products in Russia:
FerreroFerrero -- # 4 on Confectionery market in Russia# 4 on Confectionery market in Russia Bringing UpBringing Up--toto--Date Technologies to Russia:Date Technologies to Russia:
Factory in Vladimir - EUR 200 mln investment
q Confectioner #4 worldwideq 38 countriesq 18 factories; 22 000 employeesq Annual Turnover: > EUR 7 blnq Ferrero the World’s Most Reputable Company in 2009 -Reputation Institute, NY
FerreroFerrero: : Shopper Orientation & Category ManagementShopper Orientation & Category Management
qq Acknowledged Category Management Expert in Western EuropeAcknowledged Category Management Expert in Western Europeqq Category Management projects with major European retailersCategory Management projects with major European retailers
qq Professional Shopper Research & Actionable Insights with leadinProfessional Shopper Research & Actionable Insights with leading research g research agencies: agencies:
•• PralinesPralines•• Impulse confectioneryImpulse confectionery•• Chilled snacksChilled snacks•• Chocolate PasteChocolate Paste
qq Focus on Shopper/Consumer oriented Cooperation with Retailers Focus on Shopper/Consumer oriented Cooperation with Retailers
In Western EuropeIn Western Europe
In RussiaIn Russia
Metro Cash & CarryMetro Cash & CarryMission:METRO Cash & Carry is the
leading internationalplayer in self-servicewholesale: customer-focused, international andinnovative
METRO Cash & Carry, RussiaMETRO Cash & Carry, Russia• Operates 52 outlets in 36 regions.• Sales turnover in 2009 – EUR 2,6 bln• Over 12 000 employees• Cooperating with over 5000 suppliers
Metro Cash & Carry. Metro Cash & Carry. Leader in Modern Trade TechnologiesLeader in Modern Trade Technologies
The range of METRO Cash & Carry services all serve the goal of anticipating what professionals need:
Øfrom recently introduced delivery servicesØto modern Trader Shop concept planningØto up-to-date customer promotion services
via METRO Mail
Customers’ success is the engine of our effort
Metro Cash & Carry: Metro Cash & Carry: Shopper as Focus of TodayShopper as Focus of Today
• Operational Excellence inseparably linkedwith Customer Excellence
• The work of the Space ManagementDepartment is one of the bright examples ofinterrelationshipsinterrelationships ofof differentdifferent processesprocesseson the path toto ExcellenceExcellence
Customers’ success is the engine of our effort
Metro Cash & Carry: Metro Cash & Carry: Cooperation with ManufacturersCooperation with Manufacturers
Introduction of Category Management in a business tends to alter the relationship between
retailer and supplier:• the relationship moves to one of collaboration• exchange of information and data • joint business building
9
B. Quantitativequantification of major patterns in shopping behavior In-home interviews, Moscow, Spb, R-on-Don (N=450)
- Category structure/ consumer understanding of the category- Shopping patterns (overall and relating to category purchase)
- Consumer typology (attitudes)
- Store choice drivers
- Key Retail Accounts profiles
-Basic feedback on POS and promo activities
-POS/promo concept ranking
C. QuantitativeIn-store shopping behavior
In-store verification of category purchase details by channel (N=1600)-Decision tree within each channel
-Shopping missions (purpose/ need)
- Details of shopping situation
- Shoppers behaviour in case if chosen product is out of stock
- Choice drivers
- Shopper profiles by channel- Basic feedback on POS and promo activities (briefly)
- Store and channels evaluation (briefly)
A. Qualitative exploratory stage: revealing major patterns in shopping behavior
- Focus-group discussions (6)
- In-Store Observations
Moscow S-Petersburg Rostov-on-DonStores Interviews Stores Interviews Stores Interviews
Hypermarkets 4 200 4 200 2 100
Supermarkets 4 200 - 2 100
Discounters 4 200 4 200 4 200Food-stores 4 100 - 4 100
Total sample 700 400 500
February 2009
End March-April 2009
End March-April 2009
*Covered both Boxes & Parcels Pralines
PralinesPralines ShopShoppperer ResearchResearch
PralinesPralines ShopShoppperer Research Research FindingsFindingsØ Majority of Choice Decisions
Taken in-Store:
41% planned purchase at general level (pralines as category)
ØØ Purchasing byPurchasing by RRepertoirepertoir offavourite brands:
Purchased in the last 3 months - >5brands
Ø Most Popular:- Raffaello box 150 g & impulse pack- Korkunov box 200g * - 3 parcels (all United Confectioners)
Source: IPSOS, Pralines Shopper Research, February & April 2009
*Korkunov in 2009 had bigger volume share vs. Raffaello
ØØ To go with teaTo go with tea(parcels and boxes ~ 100 RUR) (parcels and boxes ~ 100 RUR)
qq Primary purchase occasionPrimary purchase occasion
41%
qq Festive occasions are still very Festive occasions are still very strongstrong
ØØ Guest & Parties (boxes) Guest & Parties (boxes) --19%19%
ØØ Gifting (boxes) Gifting (boxes) --17%17%
36%
Source: IPSOS, Pralines Shopper Research, February & April 2009, in-store interviews: 1600, Moscow, St. Petersburg, Rostov-on-Don
IN-STOREINTERVIEWS
CategoryCategory ShopperShopper FindingsFindings
CategoryCategory ShopperShopper FindingsFindingsØDecision drivers:
45
33
27
18
12
11
9
5
4
4
62
(%) Total
I have already bought these pralines and I like them
Specifics of taste and formula
Acceptable price
Producer company
Good value for money
Producer country
Brand
Beautiful pack
I wanted to taste novelty
Another person asked me
Different tastes in one pack
Source: IPSOS, Pralines Shopper Research, February & April 2009
PRICE•is also high at 33%.
BRAND• known product (62%), • favourite taste (45%)• manufacturer/brand (27%)
IN-STOREINTERVIEWS
CategoryCategory ShopperShopper FindingsFindingsØØ ShoppersShoppers welcomewelcome in Pralines:in Pralines:
- wide choice- clear shelf structure- with navigation POSM
ØØ Most Most AttractiveAttractive promospromos::- price-promos- increased pack size
ØØ Attractive Pralines presentation:Attractive Pralines presentation:- Teatralisations- Branded shelves, stands, dispensers
Source: IPSOS, Pralines Shopper Research, February & April 2009
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Stock upFor Several
Days Top up Specific product
for todayGrab &
GoSmthng to
indulgeParties & Special
occasions For a kid
Metro 6.19 -1.90 -3.29 -3.44 -3.35 -0.44 5.78 0.18
Hypermarket 14.87 -1.33 -7.41 -8.38 -8.66 -0.86 11.89 -1.25
/ : Positive/ Negative fit between Mission and Channel
Main Missions in C&C and HypermarketsMain Missions in C&C and Hypermarkets::• Stock-up & For Several Days;• Parties & Special Occasions;• Something to Indulge – is present but not the strongest
IN-HOMEINTERVIEWS
Source: Ipsos Pralines Shopper Research; **Internal Metro Data
58% of Metro Customers are SCO (services, companies, offices & private demand) ;11% - HORECA;31% - Traders**
ShoppShoppinging Missions in the ChannelMissions in the Channel
Knowledge of Shoppers Missions helps to Optimize Knowledge of Shoppers Missions helps to Optimize StoreStore’’s Assortment, Layout and Promotions s Assortment, Layout and Promotions ProgrammesProgrammes
AssortmentAssortment:• Popular brands• Big boxes for the Festive table and for Gifting• Medium and small packs – for tea-drinking and “to indulge oneself”LayoutLayout:: should reflect package design & size;PromotionsPromotions::• “Good deal” purchase for frequent missions;• Striking promo-actions – for seasonal occasions
MORE PLANNED PURCHASE
Оccasion
«Gifting-Guests-Parties»
MORE IMPULSE PURCHASE
Оcсasion «TEA DRINKING»
Categories Location Categories Location based on Shopper Missionsbased on Shopper Missions
Tea & Coffee
Pralines in Boxes
Parcels-Marshmallow-Fruit jellies
Chocolate Tablets & Bars
Biscuits-Waffles-Ginger bread
Pastry & Patisserie
Traf
fic F
low
Biscuits-Waffles-Ginger bread
Category Decision Tree Category Decision Tree
• Category Layout Structured by brands: 1. Brand is a Clear Price indicator for many, hence, display separately
medium and premium brands.2. Within planogram of each brand – a clear structure of SKUs by
weight/size
3. Parcels & Boxes to be laid out in different aisles.Source: IPSOS, Pralines Shopper Research, February & April 2009
Visual Anchor of the CategoryVisual Anchor of the Category
• Brings shoppers in the aisle • Helps to orientate
*Raffaello = 100% brand awareness, >17%* market share“Brand of the Year” in Pralines in 2009
Source: Nielsen Retail Audit, National Urban, Sept-March 2010
Traffic Flow
Visual anchor through the strongest
brand in the categoryq Raffaello as the Boxes Anchor
Shopper Based Concept Accounting for:Shopper Based Concept Accounting for:
q Occasions & Missions
q Shopper Decision factors (Decision tree)
q Brand as recipe and price tier
q Visual Anchor
Shopper Based LayoutShopper Based LayoutVisual AnchorVisual Anchor
Traffic FlowTraffic Flow
Visual AnchorVisual Anchor
PlanogramsPlanograms Based on:Based on:
• Sales in RUR• Sales in MetroUnits• Total Income• Shelf Stock coverage• Professional assortment• Own Brands
New Concept Implementation ResultsNew Concept Implementation Results
Department manager: “It’s excellent”
I asked: “Why?”
Department manager: “Now I know where to put each item and suddenly customers see the products much better ”
New Concept Implementation ResultsNew Concept Implementation Results• Store staff knows exactly where and how many facing to put of each item• No more “guts feeling” but planning
• Increasing Department manager’s productivity:- saving up to 20% of time, previously spent on “shelf-wars” with suppliers
• Planogram effect in Turnover Growth + 3% in this category (implementation case in SPb)*
* Source: Metro Internal data, 1 month past implementation in SPb excluding seasonality
Key Key LearningsLearnings
q Include in the project Market or Shopper based Targets for Shelf Share/Inventory Optimizationq Plan a compact ad-hoc shopper research
for more accurate assessment of project resultsq Navigation brings emotions and clear
structure in shopping
Next StepsNext Steps
q Study more Market & Shopper potential informationq Update and Follow-up for planograms
effectiveness q Consider navigation materials for easy
and pleasant shopping
Thank youThank youСпасибоСпасибо заза вниманиевнимание
Ая ТоноянРуководитель отделаКатегорийного менеджмента «Ferrero-Russia»[email protected]
Кирилл ИоновРуководитель отдела
Space management «Мetro Cash&Carry»[email protected]