1

SHOPSHOPSHOPSHOPPINGPINGPINGPING VALUEVALUEVALUEVALUE

2

Shopper Break Out Sessions

BO 1.5 - Shopper is King; is your business ready ?

BO 2.5 - Target Shoppers, Activate Insights

BO 3.5 - “Differentiate or Die”; Shopping driven soluti ons

BO 4.5 - What’s it worth ? Shopping Metrics

3

Click for film

Creating Shopping Value

Usage Value Creation

Shopping Value Creation

CONSUMERCONSUMERCONSUMERCONSUMER

UsageValue

1

Shopping MissionsShopper Segments

Store Choice

TransactionValue

StoreValue

3 2

In-Store

LoyaltyTo-Store

Category ManagementAssortment

Merchandising

5

Today’s session:Shopper is King; is your business ready ?

• Introduction – Sjoerd Schaafsma / Rita Marzian

• In store Shopper Insights – Emilie Coles

• Innovative Shopper Services – A. Theotokis /G Lostarako s

• Future directions Shopper Marketing – V. Belcher/B. Jam es

• Q& A panel

6

SHOPSHOPSHOPSHOPPINGPINGPINGPING VALUEVALUEVALUEVALUE

7

Excerpts GCI Global Score Card (formerly ECR score card)

About Collaborative Shopper Value Creation:

Shopper Targeting Differentiated Solutions

ScoreGeneral Meaning

Identifying clear joint shopper segments by sharing strategies and information with

the purpose of developing differentiated solutions within the context of Joint

Business Plans.

Trading partners collaborate to create unique solutions to meet targeted shopper needs,

creating a bond between the shopper, the store and the brand.

3

Roll-out of implement

ationstarted

Retailer and supplier share and align market, shopper and consumer data to

identify and prioritise joint shopper/consumer segments

The scope of the work has evolved to as many categories as needed to influence the behavior

of the target shopper segment in the marketplace. The shopper recognizes the unique attribute provided by the retailer's

solution.

4Fully

implemented

Clearly defined joint shopper segments agreed and used as the basis for making decisions. Process in place to continuouslyimprove shopper segment knowledge.

System infrastructure and organisation in place to track and monitor this work.

The retailer and manufacturer work jointly defined business plans to interact in a unique way with a set of shopper segments to make them prefer the retailer as a provider for well

defined shopper needs or occasions. The result is a measurably more loyal shopper.

the shopper is king

using shopper understanding to maximise category and brand success

May 2008

By: Emilie Coles, Director - TNS

Structureshopper understanding in the industry

using shopper to influence key business issues

implementing shopper knowledge

Point of consumptionATL

Point of purchase

we know there are three key touch points for our brands…

idea

expression

experience

Point of consumptionATL

Point of purchase

Yet historically we have only really

focussed on two!

Point of purchase is a key touch point!

üMedia fragmentsüMany new products don’t have

supporting TV

time

adop

tion

early adoptersearly majority

late majority

Q2 2008

shopper adoption

The industry has recognised the

importance of shopper

but - we still don’t consider the

challenges presented by the retail environment….

80%shopping is

done in beta mode…sub consciouslow involvement

short term memory15-30 seconds

1 %

5 %7 +/- 2 bits

visual stimuli

sensory buffer store0.5 seconds

unprocessed

visualprocessing

challengecut through

reality check!

what can shopper insight influence?

we can use shopper insight to influence all category levers…

shopper insight

merchandising/layout

range

price/promotion

packaging

NPD

in-store brand activation

salesmarketing

How?

Shopper insight

range

price/promotion

NPD salesmarketing

Merchandising/layoutPackaging

In-Store Brand Activation

through the eyes of

consumers! What do you think to the new pack?

It looks great!

be visible (in the right place)

be recognisable

match the shopping style of that category

3 important shopperconsiderations for packaging….

1. Be Visible

It doesn’t matter how fantastic your packaging is, if in the

wrong location,

it won’t be seen!

eye level

is 15-30º

downward

Unless our brand is the best selling product, people won’t naturally

search the top or bottom shelves!

cold

cold

2. Be Recognisable

we

shopusing

colour&shape

3. Match Shopping Style

EngagingShoppers engaged

Searching for on pack information/education

Staple Commodities

Packaging acts as a signpost

High interaction

Understanding shopper behaviour can help maximise the success of all

category levers, including

packaging

Shopper Knowledge

is not the issue

time

adop

tion

early adoptersearly majority

late majority

Q1 2008

shopper implementation

As an industry, we need to

make sure that we use and

embed shopper insight

How?

Stop working in silos…

MarketingPackagingNPDBrand activation

SalesMerchandisingRangePrice/Promos

Shopper!

shopperconsumer

31

insight vs. information?

Information information information

Information information information

Information information information

Information information information

Information information information

Information information information

X

insight

one true insight is more powerful than one hundred pieces of information

Bring shopper data to life!

How?Simplify complex

ideas

use movies to show whatactually happens

Get people to apply learning

SummaryUnderstand the store environment tomaximise the shopper opportunity

Use shopper knowledge to influence all areas of our business

Embed shopper knowledge into theorganisation

to learn more, visit our stand - 17/24

thank you

Value Creation beyond Price The Case of Dynamic Pricing

George LostarakosCustomer Team Leader

Customer Business Development P&G Hellas

Aristeidis TheotokisPhD Student - ResearcherELTRUN Research Centre

Department of Management Science and Technology

Athens University of Economics and Business

Athens University of Economics and Business

Value Creation Beyond PriceCurrent trade Environment :�Shopper behavior changes� Loyalty in brands and stores is shrinked and

markets are commoditised.�Value is the difference between cost and perceived

benefit.

The project was aimed to:�Record current value creation practices

�Map the local market �Analyze and align common business practices

�Provide value creation guidelines

Price is still important!

Value Creation Beyond Price

What is happening today

Value is notnecessarily

linked with price in consumer

mind!

Value Creation Beyond Price

Value Creation Beyond Price

1. Current Business PracticesInterview with Retailers - Suppliers

2. Super Group with ConsumersWorkshop with “innovative” consumers

3. Consumer Survey

Current business Practices- Industry

After Sale

Services

Consumer Training

EDI

Out of Stock Projects

Consumer Research

Signposting

Innovation

POS dataFree Sampling

Consumer Events

Category Management

Shopping Environment

Loyalty cards

Brand Loyalty Programs

Charity Programs

Direct mail Consumer direct line

Suppliers’ Priorities

Category ManagementShopper ResearchInnovationIn store EnvironmentShelf Availability

Current Business Practices - Retail

Proximity

Safe & Clean Environment

Credit Card

Database marketing

Service

POS data

Quality of Fresh Products

In store Environment

Product Assortment

Loyalty cards

In store communication

value for money

category management

Retailers Priorities

Shopping EnvironmentConsumer & Shopper insightsCategory Management

Methodology

�Full day workshop with “special trained” innovative consumers

� Target: Generate Innovative ideas

Super Group Methodology & Results

Results �Up to 100 innovative ideas related

with improved shopper experience

� Sorted by satisfaction rate and implementation feasibility.

• The possibility of get informed dynamically by a display for a relevant promotion when buying a product.

• Dynamically reducing prices of products according to their situation or expiry date (especially for fresh foods)

• Electronic tags in shelf that show clearly and dynamically products’ prices

• An express super-market in store that sells only basic products and can shop quickly

• An automatic vending machine in store that sells all basic products and works 24h/day

• Being able during checkout to order products that I didn’t found on shelf

Super Group Results

Consumer Survey Identity

What the Consumer Wants…

What is Dynamic Pricing ?

Dynamic Pricing = Item-level Price Discrimination

A modern practice…

But also traditional…

Dynamic Pricing as an Innovative Retail Service

�Perishables discounting based on “sell by” date

�Dynamic Pricing as a value adding consumer service

� Identify factors and situations that affect consumer perceptions

Dynamic Pricing Project is funded by Dynamic Pricing Project is funded by ICIICI-- Unilever Research Grant Unilever Research Grant

Athens University of Economics and Business

The Dynamic Pricing Project

We ask consumers to choose…

We test…

• Different levels of discount – (30-50%)

• Different days to expire – ( 1-3 days)

• Different consumer segments – ( Price / Quality

consciousness)

• Different Countries– (Ireland and Greece)

Milk 1 Litre

Chicken Breast 500 gr

Pre-cut salad 250 gr

1,38€ 0,98 €

4 days 2 days

6€4 days

4,2€2 days

1,85€4 days

1,3€2 days

And they chose…

Alternative Product Attributes

Rate the products…

Importance of Product Attributes

�Price is not the most important�Expiration Date has importance for consumers�CSR and Quality Guarantees could enhance Dynamic Pricing

The Effect of Shopping Trip Type

Determinants Of Consumer Reactions To Dynamic Pricing

Category-related factors

Product Risk (functional, performance and physical)Stockpiling – Stop the aging process (Category Characteristic

Brand-related factors

Brand TrustBrand Loyalty

Store-related factors

Store TrustStore Loyalty

Situation-related factors

Shopping Trip TypeDay of the week

Consumer-related factors

Price ConsciousnessQuality ConsciousnessShopping FrequencyAverage Shopping QuantityExpiration Date Perceived Risk

Response to Dynamic Pricing

Buy the near-to-expiration-dateBuy the “Fresh”Other

Enabling Technology

Intelligent Integration of Supply Chain Processes and Consumer Services based on Unique Product

Identification in a Networked Business Environment(EU FP6: ST-5-034957-STP)

Pilot Study• Time: May- June 2008• Retailer: METRO ( MyMarket) Greece • Supplier: Vivartia / ∆ΕΛΤΑ• Category : Milk

A “Real-World” Case

MyMarket Store Sepolia, Athens

Shelf-Talkers

Package with Sticker

Stickers with new barcode

Conclusions

Added value can be created beyond price if the consumer needs is the centre of every stage of new

service design process

THINK SMART OR JUST LET CONSUMERS DO IT FOR YOU

Thank you!

lostarakos.g@pg.comGeorge Lostarakos

Customer Team LeaderCustomer Business Development

P&G Hellas

a.theotokis@aueb.grAristeidis Theotokis

PhD Student - ResearcherELTRUN Research Group

Department of Management Science and Technology

Athens University of Economics and Business

For more information and survey results:www.eltrun.gr & www.smart-rfid.eu

Today’s Best Practice, Tomorrow’s New World:Future Directions forShopper Marketing

Vicki Belcher Bob JamesOxford Strategic Marketing

© Oxford Strategic Marketing 2008

Shopper is Big News!Why?

Drives Growth

Competitive Advantage

Increased Investment

BUT… is it in the bag???

SHOPPER!!!Daily Blurb

© Oxford Strategic Marketing 2008

OxfordSM & ECR Europe Shopper Marketing Study

Why?Why? To identify opportunities, challenges & future dire ction for Shopping Marketing across Europe

What?What? On-line survey & interview with Head of Customer Ma rketing or Insight

© Oxford Strategic Marketing 2008

Manufacturer Respondents estimated share of Marketing Investment 2004 – 2010

Digital

Fastest growing spend area!

Shopper Marketing

8%8% 12%12%2%2% 2%2%

© Oxford Strategic Marketing 2008Base = 14 companies, The Journey To Strategic Shopp er Marketing, OxfordSM May 2008

Engaging shoppers in last 30 metres or “first momen t of truth” is critical

Why this enthusiasm?

Retailer• Competition

• Strategic Positioning

Consumer/Shopper•Well informed

•Hard to reach via traditional media

Manufacturer• Brands go

Global

• Local Marketing evolves

… BUT up to 5,000 marketing messages per store trip!© Oxford Strategic Marketing 2008

EVERYONE wants to win…

4.2

3.6

4.3

Will deliver CompetitiveAdvantage in 3 years

Can deliverCompetitive Advantage

Today

Is a Key SuccessFactor

Average Agreement Score*1 = Strongly disagree 5= strongly agree

© Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

Q: Across the industry, Shopper Marketing….

And no-one wants to miss…

4.2

3.6

4.3

Will deliver CompetitiveAdvantage in 3 years

Can deliver CompetitiveAdvantage Today

Is a Key Success Factor

Q: Across the industry, Shopper Marketing….

Average Agreement Score*

1 = Strongly disagree 5= strongly agree

© Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

Whichever part of the world you’re in…

US data: Capturing a Shopper’s Mind, Heart & Wallet, Deloitte & GMA Nov 2007

Shopper Marketing is a Source of Competitive Advantage

Today in 3 years

3.7 4.1

3.6 4.2

Shopper Marketing is a Strategic Enabler of Growth

53%

Shopper Marketing is supported by my Company’s Leadership

4

9

3

8

2

8

2

12

02468

101214

Digital2004

Digital2010

Shopper2004

Shopper2010

US EU

% of Manufacturer Marketing Investment

© Oxford Strategic Marketing 2008

Strongly Disagree=1, Strongly Agree=5% of companies agreeing..

% of companies agreeing..

EU data : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

77%

42%82%

So, we’re all agreed. It’s very important & we’re going to spend lots of money on it…

……But But -- On What Exactly?On What Exactly?

“Category

Management on

steroids” Mfr

“Understanding & knowing how to speak

to customers in different formats” Rtlr

“A business strategy, to win

at the moment choice by

satisfying shopper needs in a

category context” Mfr

“Making our business retail fluent” Mfr

“Enhancing our brand equity in

store” Mfr

“Integrating what we do at

point of sale with our

broader marketing effort”

Rtlr

© Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

Q: How do you define Shopper Marketing in your compa ny?

© Oxford Strategic Marketing 2008

Why is there no common definition & understanding?

© Oxford Strategic Marketing 2008

Shopper Marketing is a journeyShopper Marketing is a journey ……

…….varying definitions reflect progression from .varying definitions reflect progression from executionalexecutionalto strategic to strategic

Excellence at Point of Purchase

� Merchandising

� Promotions

Offer Placement

� Channel

� Ranging

Define & develop future offer

� Innovation

� Total shopper experience

ExecutionalFocus

Channel/ Format Focus

Strategic Focus

Retailers & manufacturers:

� Different start points

� Different agendas

� Different pace

OxfordSM’s Definition of Shopper Marketing

The capability to drive growth through insight-led,

shopper-based demand creation & fulfilment

© Oxford Strategic Marketing 2008

Before starting any journey, it’s a good idea to know where you’re heading

“ Our Vision is that Shopper Marketing will not be a function or department but a capability and way of doing business – everyone will be focussed on shopper” Mfr

Few companies have a clear vision for Shopper Marketing, with some notable exceptions….

© Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

Even with a vision, it’s not easy!

Why?Why?

© Oxford Strategic Marketing 2008

“Investment hard to justify vs. traditional spend”

“External agenciesnot geared up”

“Cuts across organisational structures & decision procedures”

“Current talent pool and experience bank is thin”

Wake Up Call for manufacturers:

retailers are further down the track

Hybrid Customer Shopper & Consumer Experience is Scarce

2.7

2.1

2.8

2.4

0 1 2 3 4 5

Shopper Insights are applied effectively

Voice of Shopper heard as well as Voice ofConsumer

We harness all shopper data sources

We have sufficient Shopper Marketing talent

© Oxford Strategic Marketing 2008

Significant Capability Gaps

Average Agreement Score*

1 = Strongly disagree 5= strongly agree

* Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

Q: In my business…

Talent pool & experience are thin, especially for suppliers

“It can take a year to fill a

role”

© Oxford Strategic Marketing 2008

• Can translate Strategy into Action

• Is Brand & Retail literate

• Savvy on Shopper Insight

• Sees & acts on whole Shopper Journey

• Creative & Analytical

Shopper Marketing cuts across current organisation and procedures

2.5

2.2

0 1 2 3 4 5

well measured& evaluated

wellunderstood

acrossfunctions• Ownership & responsibility are blurred

• Budgets are ill defined

• Companies believe they under invest

• AND chronic lack of measurement

© Oxford Strategic Marketing 2008

“I spend too much time in turf wars, arguing over who’s paying” Mfr

“If we see an opportunity, we just get on with it” Rtlr

“Calculating ROI for in-store work is really tricky….we lack the tools” Mfr

Average Agreement Score*

1 = Strongly disagree 5= strongly agree

* Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

Q: In my business, Shopper Marketing is…

Show me the Money! What’s happening to Investment?

• Investment in Shopper & Digital primarily from traditional ATL

• Store becomes a new “Marketing Medium”

• Implications for agency skills sets

• Financial & Shopper metrics required to determine in/out of store investment choices

© Oxford Strategic Marketing 2008

“ I need a one stop shop - an agency who understands this holistically” Mfr

“We are starting to making judgements about the commercial return, getting more disciplined &

accountable” Rtlr

* Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

70

38

38

0 10 20 30 40 50 60 70 80

Traditional Media

Consumer Promotions

Retailer Promotions

Q: When considering % allocation of marketing inves tment 2004 - 2010 for..

% of respondents forecasting decline*

Dialogue & Co-operation is Vital!

3.7

2.7

0 1 2 3 4 5

will besignificantlybetter in 3

years

is currentlygood

Q: Co-operation between manufacturers & retailers o n Shopper Marketing…

1 = Strongly disagree 5= strongly agree

Average Agreement Score*

* Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

• Some relationships are still too transactional – focus on deal vs. value add

• Skills issue at both Account Manager & Buyer level

• In store activation - control vs. creativity

“ Too often it’s linked to trading…IF we hit our numbers, THEN we can do this

nice stuff together” Rtlr

“There’s a handful of retailers who get this – they can see the value of insights” Mfr

© Oxford Strategic Marketing 2008© Oxford Strategic Marketing 2008

The journey of a thousand miles starts with a singl e step

I

Set Breakthrough

Vision

55 ss

II

Build Effective Ways of Working

III

Generate, Share

& Apply Insights

IV

Hardwire Shopper into Core Process

V

Retailer & Supplier Strategic Dialogue

Tactical, ad hoc Strategic, Sustained

So, how do I start on the Journey to Strategic Shopper Marketing?

aislesaisles

Where next for Shopper Marketing?

TrendTrend ImplicationsImplications

Retailers & Suppliers seek partners who understand & can activate at broader level

From granular, category approach to full store & shopping mission focus

Focus on Shopper acts as catalyst for organisational transformation

Redefinition of roles between sales & marketing, local & global

Shopper will help design tomorrow’sInnovation as well as optimise today’s brand plan

Voice of Shopper heard more broadly and deeply within companies

“We want insights to be the motor of innovation” Rtlr

© Oxford Strategic Marketing 2008 * Source : The Journey To Strategic Shopper Marketing, OxfordSM May 2008

To accelerate your own progress on the Journey To Strategic Shopper Marketing, download Key Findings from the Survey

at

www.oxfordsm.com

from 2 nd June 2008

The Journey to Strategic Shopper Marketing

Top Ten Findings of a Survey Conducted on Behalf of ECR Europeby Oxford Strategic Marketing

Participants PreviewMay 2008

ShopperMarketing

© 2008 Oxford Strategic Marketing. All rights reserved