Shopper Management = Category Management evolved
It is a shame that people don’t behave in ways that systems would like them to. But they don’t. It is also a shame that systems developed back in the day when things were simpler, are not always fit for purpose when times change. But they aren’t. The typical ranging, developed in the era of large store dominance, went something like this;
1. We’ll try the product in our largest stores AND THEN
2. If the product performs well we’ll move it down to our smaller ones
3. And so on
In the days when the smallest stores were owned by other people than the majors this worked well. As time moved on people stopped shopping in many of the small stores – and moved into shopping in the big ones. At that time I was involved in many conversations which went “How on earth are we going to get trial of our convenience offerings when there are no convenience stores around”.
This was a very good question. Many grocery brands have been built on trial in other shopper channels. Walkers in the independents are a good example. Growing from Leicester through the Midlands, to the North in chunks, taking out Golden Wonder as they went. J2O first started in the on trade, and moved into the multiples when they had achieved all they could there. Other brands rolled out from doorstep delivery including Frijj flavoured milk. I still very vaguely remember Corona dedicated doorstep deliveries. Local people to people experience is great for getting early trial where serried ranks of product on artificial category shelves lacks cut through.
Let’s move on 10 years. Here growth is coming from small scale again or even – in the case of dotcom – one to one. So people can build their own “shopper category”. In fact all the main retailers already build a shopping basket for you. However, ranging into small stores by the majors still tends to be decided in exactly the same way as above.
Meanwhile people, accustomed to a smoothed path to what they want, have turned to retailers expert at managing great value short range product – the discounters. You know what you get, and it is main shop volumes but with shorter ranges.
Convenience stores, where, as an example, dunnhumby data is seriously lacking (low club card usage) suffer accordingly.
You have to ask yourself why club card data is lacking here. I have not heard that this is something Tesco have looked at. But here’s a stab in the dark. Club card carriers in the family don’t shop in convenience stores.- but other members of the family might.
The Shopper Marketers Dilemma
When you are involved in shopper marketing you know that the shopper has missions. You absolutely know that if you make these missions easier they will buy more, and like you better. That is, though, not the ethos of the large store. The large store wants to keep you there so you buy more. They want you to browse the aisle, not run down it.
Category people think in big store terms, they see shopping as top down layered systems that need to be maintained. Shopper marketing people think in terms that fly in the face of some of these approaches. They think about making a mission easier to manage so additional time spent is because people are shopping, not simply confused.
This is the dilemma. Retailers and Sales teams are wedded to maintaining the big store system. This has no room for regional differences. Until recently the Coop, proud supporter of Fairtrade and locally sourced produce dictated that there would be no local ranging of any description. I gather the impetus for this was the lucrative central contracts with the major brands signing up to interesting overriders. Something of a volte face for a brand built on the back of individual local societies.
I spoke to the marketing side of another major convenience chain and I was told that, under no circumstances to raise the issue of local ranging.
However, local ranging is important to people, and this often cuts right across the way that top down works, driving from the “bottom up”. Just like in the “old” days.
This is where different shopping missions offers the chance for the convenience store, whether independent or multiple, to respond best to local needs which have nothing to do with categories, but everything to do with people.
I’m going to tell you a story
I went out of the house yesterday, and my next door neighbour, a man who is showing significant signs of multiple business lunches, came out of the house in brand new trainers and sweats, pressing the key to open his car door. “Hi” I said “Taking more care of your body”. “Exactly”. “Off to the gym”. “Not right at this moment” he said “Hows the diet going then” I asked, “Still choosing one” he replied. “Oh, then your new approach is all about wearing sweats and trainers to walk to the car?”. “I’m breaking my body in gently” he told me.
There is a lot of pressure on companies to promote healthy eating – and employees to address it – as a vital part of a healthier lifestyle.
One of a number of new local segments is people who are into health where they commute. Their meals at home may well be dictated by the family (variations around fish fingers). But when they are with their colleagues they choose to go with easy health options that they buy in and around their local convenience stores. The products may not be healthy per se BUT they are a healthier choice for desk snacking and on the go lunches.
This is, as with the sweats and trainers, in part to do with peer approval. But of course there has been a huge amount of publicity around the importance of low GI and avoiding the high bursts of energy that you get, as an example, from Mars Bars and other sugar and chocolate confectionery.
New product entrants to the market come in rapidly, but make their way very slowly down the chains. You don’t see High Protein Bars, and one of our clients, the Food Doctor only acquired a very high penetration in the face of central diktat, and not because of. Other clients have 30% of their ranging opted for by retail managers. This ranging is a benefit to stores AND brands since products that overperform by 30% or more (a necessary criteria) their market share, actually build a bigger “category” as they become very important to local shoppers.
So the Urban Health sector attitude to Finer Foods is very well removed from people buying full fat-with-added-chocolate-and-loads-of-sugar yoghurt. Look instead for 0% fat with add-your-own-fruit. This is a chance to build from the shopper up.
The Urban Health sector is growing fast. For a guide, the free from sector alone is forecast to grow to £550 million in 2014 – that’s up from £365 million in 2014. Then have a look in Holland and Barrett and check the serried ranks of the high protein products. H&B say they are “bidding to become the UK’s biggest seller of free-from products”. All this from predominantly high street outlets. Greggs have also just announced a new “healthy” range for similar reasons, alongside further record results and an interim dividend to their delighted shareholders. So much for the death of the High Street.
Contrast this with the offering in your local big retailer convenience store.
A Change for the Better
I’m not advocating replacing category management with something else. What I am doing, though, is saying that the name is redolent of a past that has got us where we are. Out of touch.
So lets call it what it should be, shopper (demand) management. And lets look at convenience stores as a hot bed of new ideas. Not a dumping ground for centrally negotiated national contracts.
This way you get loyalty from satisfaction.
This way, too, you don’t need a reward card. In fact you don’t want one. What you need is to look at what will sell in the future, not what might have sold somewhere else, yesterday.
We identify where win/win/win Shopper, Store and Brand opportunity exists. In partnership with the British Population Survey, we also work to identify media and content to reach all sides of these core areas. We work in particular with high growth, high interest brand areas such as health an ethnic.