ecr community webinar

ECR COMMUNITY WEBINAR 24 November 2020

ECR – National AssociationECR - A Collaboration Model

WHAT IS EFFICIENT CONSUMER RESPONSE (ECR)?

ECR COMMUNITY

1. ECR RUSSIA

2. ECR IRELAND

3. ECR POLSKA

4. ECR AUSTRIA

5. ECR FRANCE / Institute du Commerce

6. ECR CZECH & SLOVAKIA

7. ECR ITALY

8. GS1 SWITZERLAND

9. ECR UK / IGD

10. ECR SPAIN

11. ECR GREECE

12. ECR CYPRUS

13. ECR SWEDEN

14. ECR PORTUGAL

15. ECR CROATIA

16. ECR ROMANIA

17. ECR FINLAND

18. ECR KAZAKHSTAN

19. GS1 MEXICO

20. Logyca COLOMBIA

21. ECR GERMANY

22. ECR CHINA

23. ECR RETAIL LOSS GROUP

24. AIM

25. EuroCommerce

3

ECR Community is the global not-for profit association for all ECR organisations.

ECR SUPPLY CHAIN PUBLICATIONS

4

ECR DEMAND SIDE PUBLICATIONS

5

CATEGORY MANAGEMENT YESTERDAY, TODAY & TOMORROW - 2020

EDITORIAL COMMITTEE

Ché McGann

ECR Community

Declan Carolan

Co-Chair

ECR Community

Dr. Brian Harris

Senior Advisor

Luc Demeulenaere

Senior Advisor

Birgit Schröder

GS1 Germany

Françoise Acca

Institut du Commerce

ECR France

Antonella Altavilla

GS1 Italy

David Ciancio,

dunnhumby

Claudio Czapski

ECR Brazil


CONTENTS1. Insight Papers

Highlighting how category management & shopper marketing can be drivers for growth.

Keynote Paper (Harris & Demeulenaere)

Covid-19 Learnings (Czapski, Ciancio & Harris)

Social Science of Shopper Marketing (Hughes)

2. ECR Community Initiatives

Category management is a cornerstone activity in ECR associations.

ECR / GS1 Germany

ECR / GS1 Italy

ECR France

3. Current Practices

14 case studies from 9 different countries

Template used to facilitate context & comparison

4. Technology in Category Management

5 articles illustrating the impact of effective technology

dunnhumby

Yagora

IBM


OBJECTIVES OF THIS WEBINAR

1. Describe the purpose of this important ECR initiative and how it was completed

2. Present structure of the Review + contents

3. Describe the key developments that have driven the evolution and contribution of Category Management through 3 key industry phases over the last 30 years

4. Offer recommendations for retailers and manufacturers to continue to win with Category Management in the future

5. Encourage you to study and share the new report

6. Invite you to participate in the #ECRCatmanNetwork to continue to share Category Management knowledge and experience.



WELCOME FROM SPONSORS

David Ciancio,

dunnhumby

Wilhelm Hoffrogge,

Hoffrogge


CATEGORY MANAGEMENT – YESTERDAY, TODAY AND TOMORROW

• Category Management 1987 to 2010 – Bringing the Consumer into Retail Marketing

• Category Management in the Omni-Channel Era - 2010 to 2020 – Bringing the Shopper into Retail Marketing

• The Future – Integrated Consumer and Shopper Marketing


Scanning

Space Management

Category Management

Next GenerationStore Designs

ShopperMarketing

2011

Shopper-FocusedCM

CollaborativeCRM

1975

1990

1985

2000

1993

2008

2005

2015

2020

Omni-ChannelMarketing

???

Evolution of Retail Marketing


THE DRIVING FORCES OF

CHANGE


CATEGORY MANAGEMENT

YESTERDAY

Category Management 1987 to 2010

Bringing the Consumer into Retail Marketing


CATEGORY MANAGEMENT YESTERDAY, TODAY & TOMORROW - 2020 CATEGORY MANAGEMENT YESTERDAY, TODAY & TOMORROW - 2020

RETAILING PARADIGM: 1987 – 2010

Disruptive New Competitors

Category Killers Global Discounters

CATEGORY MANAGEMENT WAS BORN UNDER THIS PARADIGM


GLOBAL ECR BEST PRACTICE

1997

Europe

1998

South America

1995

USA / North America


Category Role

Plan Implementation

C

ate

gory

Re

vie

w

Category Definition

Category Scorecard

Category Assessment

Category Strategies

THE

PROCESS -

8 STEPS

Pricing

Shelf Presentation

Promotion

Assortment

Category Tactics



MAIN FOCUS

• Consumer-based Category Definitions and Consumer Decision Tree (CDT) provided new tools for assortment and presentation decisions

• The route to gain brand presence and efficient new product introduction on the shelf

• Category Roles created differentiation (Destination categories) and improved resource allocations



MAIN FOCUS

• Growth of Retail / Store Brands as a competitive response

• Category Strategies drove tactical decisions

• Process provided platform for collaboration

• Focus on capturing “low hanging fruit” (category cleanup) opportunities

• Impressive sales and profit increases validated Category Management concept



KEY CHALLENGES

Developing new organizational capabilities

Raising effectiveness of retailer - supplier collaboration

Improving implementation processes

Limitations of data (market, POS, some loyalty data)


CATEGORY MANAGEMENT

TODAY

Category Management in the Omni-Channel Era

2010 to 2020

Bringing the Shopper into Retail Marketing


Scanning

Space Management

Category Management


ShopperMarketing

2011

Shopper-FocusedCM

CollaborativeCRM

THE SHOPPER COMES INTO FOCUS

1975

1990

1985

2000

1993

2008

2005

20152020



NEW CONSUMER & SHOPPER VALUE DRIVERS

Traditional Value

Drivers

New Value

Drivers

Source: Deloitte Food Value Equation Survey 2016

Taste

Price

Convenience

Health & Wellness

Product Safety

Social Impact / Ecology

Experience


MILLENNIALS LARGESTSHOPPER SEGMENT

New Expectations:

•Experiences

•Convenience

•Quality


KEY CHALLENGES

Understanding expectations of new generation of shoppers (Millennials and Gen Z’s)

Creating a differentiated shopping experience

Responding to the new competition


THE NEW RETAILING PARADIGM

• e-Commerce

“Click” Shopping

• Next Generation of

Discounters

• Integrated

“Click-Brick”

Omni-Channel

Shopping


KEY CHALLENGES

Meeting demands of omni-channel shopping – seamless on-line / in-store experiences

Getting a return on expanded pickup and delivery options

Using more sophisticated data-based marketing analytics and programs


CATEGORY MANAGEMENT

TOMORROW

The Future -

Integrated Consumer and Shopper Marketing


Scanning

Space Management

Category Management


ShopperMarketing

2011

Shopper-FocusedCM

CollaborativeCRM

THE NEXT WAVE?

1975

1990

1985

2000

1993

2008

2005

2015

2020


IntegrationInnovation

Personalization


INTEGRATED CONSUMER-SHOPPER APPROACH

• Takes retailer-manufacturer collaboration to a higher level

• Increases both manufacturer brand and retailer brand equity

• Enables category innovation and differentiation to be key outputs and drivers of the category growth and development


THE FUTURE – INTEGRATED CONSUMER AND SHOPPER MARKETING

❑ The era of shopper marketing in the consumer-shopper journey to win the shopping mission

❑ Big Data forming the platform for Artificial Intelligence

❑ Technology Innovation drives retailer innovation

❑ Next Generation of Supply Logistics


MAIN FOCUSECR Consumer & Shopper Journey provides framework for consumer and shopper insights and understanding segment behavior which drive Category Management decisions


MAIN FOCUS

•More shopper segment and store-by-store application

•Category Management creates differentiation by delivering cross-category solutions and shopping experiences

•Shopping Missions become key in delivering Category Roles

•Growth of e-commerce provides new category strategies and tactics


CATEGORY MANAGEMENT CREATES DIFFERENTIATION BY DELIVERING CROSS-CATEGORY SOLUTIONS AND SHOPPING EXPERIENCES


THE SHOPPING MISSION – LINKING CONSUMER SOLUTION NEEDS AND SHOPPER BEHAVIOR➢Retailer equity to embrace consumer value drivers

➢Shopping experience response versus expectations on the driving categories of the shop mission

➢Differentiating role of the categories


INTEGRATED BRAND EQUITY MODELS

• Leverages the value of consumer and shopper insights

• Deploys these insights across an omni-channel structure that captures shopper decision making in either in-store or on-line mode

• Incorporates the Consumer and Shopper Journey as a roadmap for understanding consumer and shopper needs and behavior across different channels


INTEGRATED BRAND EQUITY

COLLABORATION MODELS

Source: ECR Europe Consumer & Shopper Journey Report 2011


BIG DATA FORMS PLATFORM FOR ARTIFICIAL INTELLIGENCE: CONNECTING THE DOTSConnecting the dots between consumer insights

Connecting the dots with the shopper

Who - consumer

What- consume

Why- driver of

product choice

Where - consume

When- consume

Who - shopper

What - purchase

Why - driver of product choice

Where – retailer

When - shopping mission

Source: Lumino


TECHNOLOGY INNOVATION DRIVES RETAILER INNOVATION

AI machine learning to connect information

of consumer segments with shelf behavior


NEXT GENERATION OF SUPPLY LOGISTICS

o Multiplication of assortment variety in the e-Commerce giants - (Amazon > 50million sku’s)

o Opportunity for increased # Local and Innovative producers to find online shop platforms as easy route to market

o Multi delivery vans replaced by local Distribution Centers to consolidate online deliveries per street/ adress in one ecological delivery structure (Van/Bike/..)

o Development of Eco-packaging returnables to replace plastic packs


SOME RECOMMENDATIONS FORRETAILERS

oAchieve deep understanding of consumer-shoppers, their value drivers and behavior across all channels

oLeverage insights to develop and implement superior “category solutions” to the retailer’s most important consumer-shopper segments

oBuild consumer-shopper understanding to transition from mass marketing to mass customization to 1-1 personalization using Artificial Intelligence tools

oDevelop a strategic multi-source data intelligence masterplan to connect the various sources of customer insights

oConnect marketing and merchandising decisions to the primary and aspirational value drivers of customers

oCo-invest with manufacturers to improve the desired price / value equation of category solution propositions


SOME RECOMMENDATIONSFOR MANUFACTURERS

• Update New consumer growth drivers for the brand and integrate in a quantified value consumer-shopper segment category vision model; to capture today’s and tomorrow’s purchase power from the market

• Develop communication strategies and media choice tactics along the same structure to capture that potential value ahead of competition

• Develop new levels of collaboration to:

• Understand how brand segments connect with retailer segments

• Create new alliances to capitalize on the ability of new media to activate behavior along the journey ( new negotiation on brand presence and below the line communication)

• Gain Category Management insights for these segments along the Consumer and Shopper Journey

• Develop a strategic multi-source data intelligence masterplan to connect the various sources of consumer-shopper insights


MANAGING IN TIMES OF CRISIS

Insights and Learnings from the Covid-19 Pandemic

The Role of Category Management


THE IMPACT OF COVID-19

• Significant changes in consumer – shopper values, expectations and behavior have occurred; some will have short term impact; others will be long term changes

• “Back to Basics” principles and process of Category Management provide sound approach for adapting to new environment and for avoiding under or over reactions

• Most obvious learning - need for more effective collaboration


IMPACT ON CONSUMERS AND SHOPPERS

•Increased emphasis on value – more price sensitivity

•More focus on local shopping – fewer trips, bigger baskets, shopping closer to home

•Shifting formats and channels – increase in shopping smaller formats, in one store only and online shopping and delivery

•Increase in food@home – more cooking, more eating at home

•Elevated interest in personal and societal wellbeing

Source – dunnhumby research surveys


THE “BACK TO BASICS”

PROCESS


BACK-TO-BASICS

Revise / reduce Revise / reduce category assortments to reflect changes in shopper needs and preferences

Include Include new strategies in category strategy assignments (e.g. Health Image and Safely Image)

Put Put more emphasis on operational KPI’s in category scorecards (OOS, inventory levels etc.)

Revise Revise category roles to reflect reordered consumer importance of categories

Review Review category definitions and CDT attribute rankings based on new consumer value drivers


GETTING “BACK TO BASICS”

Put more emphasis on private brands as consumers search for acceptable price/quality options

Adjust store layouts and shelf space allocations based on new shopping behavior

Revise promotional tactics to reflect changes in levels of category importance

Review supply chain tactics to ensure adequate safety stock levels in key categories


THE SOCIAL SCIENCE OF SHOPPER MARKETING

Ken Hughes

Applying four key tools of shopper science (Sociology, Behavioral Economics, Psychology and Cyber-Behavioralism) to better understand consumer and shopper Value Drivers and how to activate behaviour based on these drivers.


ECR COMMUNITY REPORTS



Total Store Optimization

Next Level of Category Management

GS1 / ECR Germany

Based on shopper studies, report provides a total store framework for managing individual categories to best meet the needs of shoppers and create differentiation for retailers.

Ten dimensions for total store optimization are identified.



Most Efficient Functionalities to Improve User Experience on Food e-Retail Websites

Institute du Commerce / ECR France

A joint retailer-manufacturer work group defined the requirements for an effective retailer online shopping website to deliver the best shopper experience and to maximize conversion rates.

A recommended scorecard of KPI’s to measure effectiveness of retailer online shopping websites is developed.



Omni-channel Category Management

Moving from Product Categories to Shopper Needs & Wants Categories

GS1 / ECR Italy

A joint retailer-manufacturer work group developed an omni-channel approach for applying Category Management principles and processes.

A key proposition is to view categories as “shopper needs and wants categories” and not just “product categories”.


CURRENT PRACTICES IN

CATEGORY MANAGEMENT

14 Case Studies from 9 Countries


CATEGORY MANAGEMENT FOCUS AREAS

1. Redefining categories to reflect new consumption habits, lifestyles and expectations

2. Integrating Category Management into the broader Consumer and Shopper Journey construct

3. Applying Category Management processes in e-Commerce channels

4. Joint brand building collaboration between retailers and manufacturers

5. Using comprehensive multi-source consumer and shopper data sets enabled by AI and related technologies

6. Expanding use of Category Management in other channels (e.g. DIY and Pharmacy) and in new markets


1. REDEFINING CATEGORIES TO REFLECT NEW CONSUMPTION HABITS, LIFESTYLES AND EXPECTATIONS

Infant Nutrition (Brazil)

Pasta Meals (Italy, France, UAE)

Non-Alcoholic Beer (Ireland)

Rice (Greece)

Provenance Information (France)

Using Blockchain to promote food category

quality and implement Carrefour’s Food

Provenance Program

Rejuvenating the Pasta Category

and shopping experience across retail stores in

three different countries (Italy, France, UAE)



Provenance Program

Re-inventing Non-Alcoholic Beer category

consumer value drivers to transform the in-

store experience using an innovative “Zero

Zone” presentation concept in Ireland


2. INTEGRATING CATEGORY MANAGEMENT INTO THE BROADER CONSUMER AND SHOPPER JOURNEY FRAMEWORK

Lunch Meats (Ireland)

Ready to Drink Beverages (France)

OTC Pain Relief, Flu and Gastro (Brazil)

Health and Wellness (Ireland)

Soft Beverages (Greece)

Rice (Greece)



Provenance Program

Delivering a comprehensive consumer solution in

health & wellness categories through a superior

shopper experience based on shopper mission

insights in Ireland

Reinventing and reinvigorating the in-store

shopping experience for the Non-Alcoholic

Ready-to-Drink Beverages category in France

Blending global led innovation with local

consumer & shopper insights into a new

consumption occasion based category vision for a

successful Rice Category Business Plan in Greece


3. APPLYING CATEGORY MANAGEMENT PRINCIPLES AND PROCESSES IN E-COMMERCE CHANNELS

Yogurt and Dairy Desserts (France)

Multi-Channel Customer Journey (US)

Pet Food (Greece)



Provenance Program

Developing a Category Business Plan for the

Yoghurt and Chilled Desserts category for the e-

Commerce channel in France

Supporting Category Management with the

development of the Multi-Channel Customer

Journey Platform in the US

Bringing the Pet Food category into the e-

Commerce channel with an

e-Commerce Purchase Decision Tree

implementation in Greece


4. JOINT BRAND BUILDING COLLABORATION BETWEEN RETAILERS AND MANUFACTURERS

Beer (Italy)

Dairy and Frozen Foods (Canada)

Soft Beverages (Germany)



Provenance Program

Developing a Category Business Plan to recover

declining sales in the Beer category in the

hypermarket and supermarket channels in Italy

Applying a collaborative approach driven by

shopper insights to create new growth in the

Dairy category in Canada

Individual Outlet Category Management on a

Big Scale - optimization of space, assortment

and placement in the beverage category using

smart software solutions and dialogue -

oriented collaboration in Germany


5. USING MORE COMPREHENSIVE MULTI-SOURCE CONSUMER AND SHOPPER DATA SETS AND ANALYTICS

Pasta Meals (Italy, UAE, France)

OTC Pain Relief, Flu and Gastro (Brazil)

Dairy AI Application (US)

Meat Snacks (Germany)



Provenance Program

Using Category Management principles to

develop an integrated shopper solution for three

interrelated OTC categories in the Brazil Drug

store channel

Using multi-source datasets and AI to create a

better Dairy Category shopping experience in a

regional US market

Using shopper insights to optimize shelf and

secondary placements for the Meat Snacks

category in the German supermarket channel.

The result of the optimization was an +18%

growth for the category


6. EXPANDING USE OF CATEGORY MANAGEMENT IN NEW CHANNELS AND IN NEW MARKETS

Fresh Fruit (China)

Infant nutrition (Greece)

OTC Pharma (Brazil)



Provenance Program

Creating & implementing a Destination Role

Category Business Plan to create a strategic

competitive advantage for Fresh Fruit category in

China resulting in 25%+ increases in sales & profit

Developing and implementing an Infant Nutrition

Category Business Plan to maintain category

growth and development in the Brazil Drug Store

/ Pharmacy channel

Using Category Management principles to

develop an integrated shopper solution for

three interrelated OTC categories in the Brazil

Drug Store channel


CLOSING THOUGHTS

The consumer focused principles of Category Management are as relevant as ever

Category Management forces a “back to basics” approach for adapting to change

Changes will continue to be shaped by consumer / shopper, competition and technology developments

Future likely to be more shaped by technology changes (especially AI and multi-source database analytics)


NEXT ECR WEBINARS

3 Webinars

Focus on different aspects of this Review

Manageable bite-sized chunks

Aiding its circulation and in-depth understanding

Creating a global network of Category Managers

#ECRCatManNetwork.

o Webinar 1 = 12 Jan @ 16.30 CET

o Webinar 2 = 16 Feb @ 16.30 CET

o Webinar 3 = 16 March @ 16.30 CET


ECR CATEGORY MANAGEMENT NETWORK

#ECRCatManNetwork

A global network

Share Category Management knowledge & experience.

Track latest relevant technologies

Focus on effective collaboration

Provide a forum for discussion, debate & learning.

CONTACT ECR COMMUNITY

Co-Chairs

Declan Carolan, ECR Ireland

[email protected]

Tomas Martoch, ECR Czech & Slovak Republic

[email protected]

Marketing & Communications Manager

Ché McGann, ECR Community

[email protected]

65

mailto:[email protected]



ecr community webinar

Documents