Stephen Schueler: Non-food as a business engine

Non-food as a business Non-food as a business

engine engine

in Food retailin Food retail

Stephen Schueler Procter and Gamble

4 Feb 2011

Who wants to increase your market

share?

What determines your ability to drive market

share?

YOUR SHOPPER!

Top drivers to increase your market

share:

Attract NewShoppers

Attract NewShoppers

Build Loyalty of Existing Shoppers

Build Loyalty of Existing Shoppers

Win with High Spenders

Win with High Spenders

WHY NON-FOOD CATEGORIES WHY NON-FOOD CATEGORIES

ARE IMPORTANT TO WIN ARE IMPORTANT TO WIN

WITH SHOPPERS?WITH SHOPPERS?

1.Non-Food has strong potential with

your existing shoppers

food

Dairy 59

Juice 49

Cheese 44

Biscuits 46

non-food

Hand Dish 28

Fem Care 31

Shampoo 32

Dentifrice 34

Size of the prize = 400 mln.$ for HM channel

% of store shoppers buying category in this store (Hypermarkets)

% of store shoppers buying category in this store (Hypermarkets)

2. Non-Food helps shoppers to choose

your store for Bulk Shopping

Bulk shopping   Refill shopping

Laundry & Home Care Bakery

Coffee & Tea Milk& Dairy

Shampoo & Shower Fruits & Vegetables

Toilet Paper & Towels Soft drinks& Juices

Fem Care Cheese

Oral Care Fresh Meat & Poultry

Fresh Meat & Poultry Snacks

Cheese Toilet Paper & Towels

Soft drinks & Juices Coffee& Tea

Fruits & Vegetables Oral CareNon-food categories are highlightedNon-food categories are highlighted

Top powerful categories that define shoppers’ satisfaction

by the store:

Value of Bulk trip = 4.7x Value of Refill trip Value of Bulk trip = 4.7x Value of Refill trip

How to leverage non-food to How to leverage non-food to

win Your Shopperwin Your Shopper

Three Business Ideas:1. Improve Shopping

experience in Beauty Care.

2. Leverage Innovation in Non-Food − Attract new Shoppers− Get disproportionate share by

being first with new item.

3. Win with Young Families – Heavy Spenders

… win her man

Importance of Russia

WE

Being attractive to men, %

90 41

Having stylish feminine clothes, %

89 57

She needs to be beautiful to…

1. Russian consumers are “Thirsty for

Beauty”

P&G is committed to develop Beauty business

in Russia• Plays in 12 out of 13 Beauty Categories• Market leader in 5 out of 12• Focus on Category Development to drive

basket size

HAIR CARE EXAMPLE: Conditioners /Treatments – significant growth potential

vs. Shampoo behind increase in penetration and

consumption

• Plays in 12 out of 13 Beauty Categories• Market leader in 5 out of 12• Focus on Category Development to drive

basket size

HAIR CARE EXAMPLE: Conditioners /Treatments – significant growth potential

vs. Shampoo behind increase in penetration and

consumption

45 5288

335

0

50

100

150

200

250

300

350

Penetration CDI

CONDITIONERS

SHAMPOOS

P&G is committed to develop Beauty business

in RussiaHow to capture Conditioner/treatment growth potential:

1. Conditioner/treatment driven innovation

2. Shelving by collection: co-location of Shampoo/Conditioner/Treatments

Beauty Categories will are the most

sensitive to shopping atmosphere and

new innovation• Beauty Department Objective within Food

retailer: Create better Shopping Environment:

• Enjoyable/emotional• Spends more time/ browsing • Trying new things

• Beauty Department Objective within Food retailer:

Create better Shopping Environment:• Enjoyable/emotional• Spends more time/ browsing • Trying new things

2. Attract new shoppers via

innovation

45% of Russian 45% of Russian shoppersshoppers

are experience-driven. This means that they:• enjoy shopping and like shop around before making a purchase;• need a comfortable shopping experience;• are driven by new items.

are experience-driven. This means that they:• enjoy shopping and like shop around before making a purchase;• need a comfortable shopping experience;• are driven by new items.

Non-food suppliers are investing heavily

in TV

creating strong demand for new

productsTop 10 advertisers, GRPs

2009 2010

Food 289 655 311 713

Non-Food 705 404 768 122

1 Procter & Gamble 94 255 121 511

2 Henkel Group 56 036 65 010

3 L'Oreal 74 592 64 457

4 Unilever 57 651 53 005

5 Reckitt Benckiser 48 764 47 458

6 Beeline 26 858 32 665

7 MTS 29 159 27 453

8 Megafon 27 265 25 278

9 Kalina 13 952 21 704

10 Colgate-Palmolive 17 938 21 419

Period: Jan-Dec 30" 18+ Russia

1. In-Store Support – massive in-store communication linked to TV

2. On-line announcement of new product launches/marketing campaigns

Get Disproportionate share of New

Items!

3. Winning with Young FamiliesChild birth is a point of change in values Now baby

is #1, #2 and #3 spending priority

Now she has less time in her new role: =>she visits less stores and shop more in E-commerce

(Intensity Ind=124);

Now she has less time in her new role: =>she visits less stores and shop more in E-commerce

(Intensity Ind=124);

Spending Index Total Russia Modern Trade

Young parents 113 112

Mature parents 120 101

Parents with teenagers 106 94

Families w/o children 121 97

Adults 87 108

Seniors 81 86

Families spend more, especially younger ones… especially in Modern

Trade

GFK, 2009GFK, 2009

Baby Diapers is the biggest category

in moms basket

Moms with 0-36 babies, Shoppers of Hypermarkets

1HY 10, HM shoppers

Moscow

Russia w/o

Moscow

Diapers & Wipes 32,9 42,7

Baby Food 27,3 38,2

Clothes & Shoes 15,7 5,6

Toys 4,9 4,0

Baby Laundry 5,7 4,5

Cosmetics & Hygiene 5,3 3,8

Other 8,1 1,1

GFK, 2009GFK, 2009

• Baby Diapers is the Destination categories for Young Moms • Shoppers Basket is 4x times bigger in case diapers are in

• Baby Diapers is the Destination categories for Young Moms • Shoppers Basket is 4x times bigger in case diapers are in

Total Basket Spending on Baby, % in value

Total Basket Spending on Baby, % in value

Help her in the new role of being a motherPampers Charity program

Partnering with Retailers and leading websites

Pampers Charity programPartnering with Retailers and leading websitesP&G donates 1 vaccine

for UNICEF with every

purchased pack of

Pampers

Communication tools:

- Internet (mail.ru)

- In-Store

Let’s work together to win with your

shopperLeverage top non-food categories to win with your consumer:Bring in New Shoppers:

•Co-Marketing programs (e.g. Pampers Unisef)

•E-media partnership with Manufacturers

Drive Loyalty of Existing Shoppers:•Drive Basket via regimen Beauty Purchases

•Novelties exploitation in-Store;

•Improve Shopping Experience on Beauty

Attract Heavy Spenders•Win with Young Families by leveraging Diapers as destination

category

THANK YOU