ECR Europe 2004 Category Management is here to stay

1
ECR Europe 2004Category Management is here to
stay

• 24 May 2004

2
Content
What is Category Management? Miel Janssen,
Accenture Amsterdam
Brushing up the Oral Care Category Anita
Greenwood, Colgate Palmolive Sebastien Levy,
Carrefour
Translate CM into everyday business Sören
Skjalm-Rasmussen, Arla Foods Dennis Lyngso, Arla
Foods
Closure Miel Janssen, Accenture Amsterdam
3
What is Category Management?
What is Category Management? Miel Janssen,
Accenture Amsterdam
4
ECR Category Management
Category Management
Enabling technology
Optimize Assortment
Optimize promotions
Common standards
Electronic data exchange
Optimize New product introductions
Consumer value creation
Performance measurement
Supply Chain
Integrators
Value chain
Stock Management
Collaborative Planning Forecasting
replenishment
Production
Collaboration via internet
E- market place
5
What is Category Management?

• Category Management has been defined by ECR
  Europe as a
• ...retailer/supplier process of managing
  categories as strategic business units,
• producing enhanced business results
• by focussing on delivering consumer value...

6
5 Characteristics of Category Management
Consumer driven
Integral profit
Process oriented
Collaboration
Fact based
7
How has CM evolved to address these challenges?

Benefits
To simplified and web-enabled
eCM
From 250 templates and labour intensive
Day- to Day
CM 8 Step Process
CM
Time
2001
1996
Early 90s
1999
8
From 8-step process...
1. Category definition
2. Category role
3. Category assessment
4. Category scorecard
8. Category Review
5. Category strategies
6. Category tactics
7. Plan implementation
9
...to a simplified Day-to-Day model

• Simplified 80/20 rule
• 4 Phases (25 templates)
• Strategy included
• Collaborative process

Retailer Strategy
Develop Category Plans
1
2
Implement Category Plans
Review Category Performance
4
3
10
From project to process (eCM)
11
What are the business results

• Results (examples)
• Sales increase by 20
• Improved margins up to 5
• SKU reduction by 20
• Reduction of product development time by 25
• Inventory reductions by 15

• How achieved
• Sharing of data
• Focus on whole category
• SKU rationalisation
• Merchandising support

12
Challenges of today

• Poor data availability
• Labour intensive
• Poor in-store implementation and execution
• Openness and trust towards information sharing
• Embed in daily processes

13
Introduction to cases
Carrefour Colgate
Arla Foods

• Use of Shopper insight
• Simplified CM method
• International approach

• Store optimization
• Continuous learning
• Use of Tools

14
Brushing Up the Oral Care Category
Brushing Up the Oral Care Category Anita
Greenwood, Colgate Palmolive Sebastien Levy,
Carrefour
15
Objective
To show how Carrefour and Colgate used Shopper
Insight and a simplified 3 Step Process to
successfully expand the Oral Care Category
16
Colgate Palmolive Company
17
Carrefour Group

• 1 European retailer
• 2 retailer worldwide
• 10,000 stores in 24 countries

18
Presentation Agenda

• A category with tremendous potential
• From shopper insights to In store solutions
• A simplified Process
• Results Next steps

19
1. A category with tremendous potential
Dentists reco.
? per year
20
1. A category with tremendous potential
Dentists reco.
21
1. A category with tremendous potential

• Belgium
• France
• Greece
• Italy
• Portugal

• -Turkey
• Czech
• Switz.

• Brazil
• Mexico

• Colombia
• China

22
1. A category with tremendous potential
Dentists reco.
? per day
3x
? per year
23
1. A category with tremendous potential
Dentists reco.
12 per year
Based on 3 brushings a day with approx 1g of
toothpaste and a tube of 75g.
24
1. A category with tremendous potential

• Belgium
• France
• Greece
• Italy
• Portugal

• -Spain
• Czech
• Switz.

• Brazil
• Mexico

• Colombia
• Poland

25
Presentation Agenda

• A category with tremendous potential
• From shopper insights to In store solutions
• A simplified Process
• Results Next steps

26
2. From shopper insights to In store solutions

• Colgate had found similar oral care shopping
  behavior in countries around the world
• Colgate had a full portfolio of category
  strategies and tactics from already successfully
  implemented around the world

27
2. From shopper insights to In store solutions

• Category pre-planning is very high
• Pure category impulse exceptionally low
• Weak penetration of complimentary Oral Care

Source Colgate Global Shopper insights Summary
28
2. From shopper insights to In store solutions
29
2. From shopper insights to In store solutions

• Toothpaste shoppers make a rapid purchase, driven
  by habit brand loyalty

Source Colgate Global Shopper insights Summary
30
2. From shopper insights to In store solutions
Adult Toothpaste
Mainstream
Problem Solving
Tube
Pump
Tube
Pump
Liquid
Brand
Brand
Brand
Brand
Brand
size
Source Colgate Global Shopper insights Summary
example France
31
2. From shopper insights to In store solutions

• Toothpaste shoppers make a rapid purchase, driven
  by habit brand loyalty

• Few shoppers understand different benefits

Source Colgate Global Shopper insights Summary
32
2. From shopper insights to In store solutions
33
2. From shopper insights to In store solutions

• Toothbrushes are personal purchases
• Shoppers handle 2 products purchase time is x2
  versus toothpaste.
• 60 of decisions are made at the shelf

Source Colgate Global Shopper insights Summary
34
2. From shopper insights to In store solutions
toothbrush
toothpaste
35
2. From shopper insights to In store solutions

• End user is determined before entering the store
• Parents need reassurance
• Children who brush 3x a day grow into adults

Source Colgate Global Shopper insights Summary
Source Colgate Global Shopper insights Summary
2002
36
2. From shopper insights to In store solutions

• A specific kids area with Educational text

37
2. From shopper insights to In store solutions

• Dental education activities in and out of store

38
Presentation Agenda

• A category with tremendous potential
• From shopper insights to In store solutions
• A simplified Process
• Results Next steps

39
3. A simplified process

• Carrefour had already started to develop a
  process to rapidly deploy global best practice

40
3. A simplified 3-step process
41
3. A simplified 3-step process
Global pre-work
Analysis and Implementation framework
Tool box
42
3. A simplified 3-step process
Global pre-work
Virtual store
Tool box
43
Presentation Agenda

• A category with tremendous potential
• From shopper insights to In store solutions
• A simplified Process
• Results Next steps

44
Carrefour Spain
45
Carrefour Spain
46
Carrefour Spain
47
Carrefour Spain

• Exceptional growth versus benchmark category

48
Carrefour Argentina
49
Carrefour China
50
Carrefour Mexico

• Oral Health care month

Source Retailer data in volume vs previous month
51
Next Steps

• 4 Steps to a Healthy Smile
• being tested or rolled out
• in 18 countries

52
Key success factors

• Shared conviction
• Dedicated resources
• Total Oral Care expertise
• Complimentary geographical coverage
• Shared communication tools
• Global solutions pick list

53
CM in practice at Arla Foods
CM in practice at Arla Foods Sören
Skjalm-Rasmussen, Arla Foods Dennis Lyngso, Arla
Foods
54
Translated Category Management into everyday
business
55
Arla Foods in the world
Canada USA Brazil Argentina Denmark Norway Sweden
Poland Germany Holland UK Italy Greece Spain Franc
e Malaysia China Japan Korea Saudi
Arabia Bangladesh Finland United ArabEmirates
56
Knowledge Sharing
Supplier
Retailer
Chain
KAM
Buying
Knowledge Sharing
Selling
Buying
Store
57
Business Development

• Win for stores Win for the suppliers
• The category is increased. The category is
  increased / larger sales
  share
• - volume - volume
• - value - value
• - loyalty - loyalty

58
Future role of the sales representatives
Merchan- diser
Salesman
Consultant
Developer
New activities
59
Variable Profit
60
Ranking Analysis
Category Sales Efficiency
Kategoriens salgseffektivitet
Menu
Tilbage
1,80
1,60
1,40
1,20
1,00
Average Sales pr. Customer
0,80
0,60
0,40
0,20
0,00
Butik 3
Butik 2
Butik 5
Butik 7
Butik 1
Butik 8
Butik 9
Butik 6
Butik 4
Butik 29
Butik 12
Butik 13
Butik 16
Butik 22
Butik 14
Butik 21
Butik 26
Butik 24
Butik 28
Butik 15
Butik 30
Butik 20
Butik 27
Butik 23
Butik 10
Butik 19
Butik 18
Butik 11
Butik 17
Butik 25
Butikker
61
Individual Plans based on ranking
Sales efficiency in shop
6.00
X
5.00
description 1
4.00
X
Description 2
3.00
2.50
Description 3
2.00
X
Description 4
1.80
Description 5
62
Quadrant Analysis
Category Turnover
Tilbage
Menu
2,00
Stores
1,80
1,60
1,40
Århus
1,20
Average Sales per Customer
1,00
Vejle
0,80
0,60
København
0,40
Ålborg
0,20
0,00
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
63
Quadrant Analysis and Solutions
Category Turnover
Vejle
Århus
Average Sales per Customer
København
Ålborg
64
Quadrant Analysis and Solutions
Category Turnover
Average Sales per Customer
65
Supplier ? Retailer
Category Development
Buying
Store
Selling
Buying
66
Future role of the sales representatives
Technology tools
Key figures
Competence
Communi- cation
67
TrainingThe Dairy Academy
68
Results
69
(No Transcript)
70
Chain ? Store
Category Development
Buying
Store
Selling
Buying
71
The Challenge
Sales Efficiency
Objective
Average profit in Category
X
Stores
N
1
72
From Consumer Motives to Business Motives
Category Advisor Chain
Category Management
KAM
Buying
73
The Challenge
Business motives
Consumer motives
Strategy
Trade Marketing strategy
Trade Marketing KAM
Issues and opportunities per category
Issues and opportunities per chain
Marketing
Goals/Objectives per chain
Goals/Objectives per category
Action plan per chain
Action plan per category
Action plan per team
Field Sales
Effort plan per district
Effort in store
74
Business Motives as defined by ARLA
75
Joint Category Management
Category Advisor Chain
Category Management
Marke- ting
KAM
Buying
76
Cockpit
77
The Toolbox
Category Analysis Toolbox
78
The Toolbox
79
The Toolbox
80
Results
PROFIT
Optimized Processes And Quality Across
Departments
Optimized Processes And Tools with Promising
Potentials Related to Joint Category Management
COST
81
Promotion Planning
Brand Level
Category Level
82
Moment of Truth
Consumer Marketing (pull strategy)
SUPPLIER
CHAIN
STORE
CONSUMER
Moment of Truth
KAM
Field Sales
Trade Marketing (push strategy)
83
Closure
Closure Miel Janssen, Accenture Amsterdam
84
Recap
Carrefour Colgate
Arla Foods

• Use of Shopper insight
• Simplified CM method
• International approach

• Store optimization
• Continuous learning
• Use of Tools

85
Key learnings

• Proven methods for simplified approach
• Understand how consumers shop
• Part of daily processes
• Tools available
• Shared learning

86
Developments towards the future

• Collaborative CRM (from macro to micro)
• Use of new enabling technologies
• Continuous data sharing
• Continued focus on promotion effectiveness

87
Where can you find more information?
ECR Website
Seminar Program
ECR Bluebook
Accenture Stand
88
Questions
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?