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Customizing the In-Store Experience to Meet Shopper Preference
1. Customizing the In-Store
Experience to Meet Shopper
Preference
Claire Quinn, National Shopper Insights Initiatives
Michael La Kier, Shopper Marketing Strategy and Capability
Justin Honaman, National Retail Sales
4. Shoppers have more choices and are less loyal…
More
Formats
80% of growth driven by new
formats since 1980
Less
Loyalty
Grocery Share of Total Retail:
46% 2010 vs. 89% in 1990
(ie. dollar, club, discount)
4"
5. … putting more pressure on store performance
More
Choice
Less
Productivity
Average supermarket carries:
3x more SKU s vs. 1990
SKU s growing 10x faster
than sales per square foot
Source: RNG
5"
6. Retailers and Manufacturers both want more … but
we re negotiating instead of collaborating
Brands want more…
Retailers want more…
Products
People
In Store
Space
Shopping
Trips
Displays
Categories
purchased
Share
Value in
Baskets
8. Customizing
the In-Store
Experience to
Meet Shopper
Preference
• About&Coca*Cola&
• Understanding&the&Retailer&
• Understanding&the&Shopper&
• Designing&the&Experience&
• Best&Prac=ce&Round&Table&
8"
9. Beverages play 3 roles in generating Retail Profit
Example:
Large US Retailer
&
2.9%
Margin&&
Operating Profit as % Sales
on&Sales"
"
&
Financing&
(Float&on&cash)&"
"
2.5x
Services&
(Rent&from&store&in&store:&bank,&beauty&salon,&insurance)"
&
Long&Term&Investment&in&&
Real&Estate"
"
&
Allowances&
7.0%
Vendor Funding as % Sales
(Trade&Promo=on&Allowances,&Rebates&from&Manufacturer)"
"
* Kantar Retail: USA
9"
10. To drive margin on sales, retailers must deliver
both…
Brand Promise:
Drives Awareness, Traffic & Loyalty
Grow
Traffic
More People
in Store
&
+
Drive
Loyalty
Share of
Shopping Trips
+
Build
Basket Value
Categories Purchased
& Value of Baskets
Store Experience:
Builds Basket Size & Repeat
"10"
11. Executing both in a differentiated manner
Brand&Promise&
Differen=ated&Posi=oning,&
&Well&Communicated&
&
Store&Experience&
Strategy((
tailored&for&each&
shopper&&&trip&type&
Placement((
of&Priori=zed&
Departments&
11"
12. Apple combines strategy + placement to deliver
their brand promise in store
Strategy
What to sell
+
Placement
Where to place it
12"
13. Generating the highest revenue per square foot in
retail (in just 10 years)
$5,626 / square foot
>50% growth annually
2x
#2
$2,974 per square foot
13"
14. There are four elements which define their experience
Iconic
Traffic&
Core&
Impulse&
Elements&that&
differen=ate
&
&
Offers&that&drive&
shoppers&to&the&store&
Primary&Product&&&
Services&inventory&
&
Hardware: Ipod, Ipad,
Items&that&Build&Baskets&
&
Store branding & design,
check out experience
using technology
&
New products, opportunities
to sample the technology and
to learn how to use it
"
desktop and laptop
computers
"
Accessories, power
supplies,
service and gift cards
14"
15. Placement of each element plays a unique role in
delivering profitability for all types of trips…
Entrance&
Designed&to&engage&
poten=al&shoppers&&
&
Department&Role:&"
Drive"Traffic"
&
Center&Store&&
Checkout&&
Premium&&&new&products&
&
Broad&appeal&products&&&
customer&support&&
Department&Role:&"
Drive"Loyalty"
&
Department&Role:&"
Drive"Loyalty"+"Basket"
Accessories&&&Services&
&
&
Department&Role:&"
Drive"Basket"
First&Posi=on&&&
&
Ac=va=on:&"
Ac=va=on:&"
Bring"people"in"store"with"a4racMve" ConMnuous"sampling"on"top"end"
communicaMon"announcing"new" products"while"waiMng"for"assistance"
products"
"
"
&
&
Ac=va=on:&&
Core"offering"with"mulMple"price"
points"to"drive"transacMons"and""
technical"support"to"upsize"purchase"
&
Ac=va=on:&"
Sell"lower"price"point"accessories"
and""addRon"services""
"
15"
16. In grocery, the same structure applies to profitably
deliver the brand promise
Strategy
What
Categories
+
Placement
Where
Locations
16"
17. Product categories play different roles …
Iconic&
Elements&that&
differen=ate&
Traffic&
Solu=ons&for&everyday& Items&that&block&a&loss&
of&a&sale&
needs"
&
"
Core&
"
Impulse&
Elements&&
that&drives&profit&
"
High Penetration
Variable Margin
High Penetration
Low Margin
Low Penetration
Medium Margin
Low Penetration
High Margin
Differentiators like signature
categories, store services, or
price leadership
Milk, Bread,
Eggs, Produce
Cereal, Spices, Salad
Dressing, Paper Products
Cheese, Wine,
Magazines,
Confectionary
17"
18. … and placement plays a unique role in delivering
profitability across all types of trips
Entrance&
Perimeter&
Center&Store&&
Location Role:
Drive Trial
Location Role:
Drive Traffic
Location Role:
Drive Loyalty + Basket
Departments:
Produce
Departments:
Deli, Meat, Bakery, Dairy
Departments:
Beverages, Food, H&B,
Household items, etc
Store*in*Store&
Checkout&
&
Location Role:
Drive"Basket
Departments:
Impulse Zones, Services
18"
19. Grocery brand promises come to life through the
holistic experience
Brand Promise:
Highest quality natural
and organic food
Store&Experience&
Brand Promise:
Save people money and
help them live better
Superior&Quality.&Fresh&Des=na=on&
Price&Leadership&
Iconic&Elements&
Organic"Produce,"Fresh"Food,"
Flowers"in"1st"posiMon"
Price"CommunicaMon,"Special"Offers,"
PromoMons"in"1st"posiMon"
Traffic&
Organic,"milk,"seafood"
Milk,"bread"
Impulse&
Wine,"cheese"
Seasonal"items"
Core&
Dry"Grocery,"Frozen"Food"
Health"&"Beauty,"Household"Products""
19"
20. Customizing
the In-Store
Experience to
Meet Shopper
Preference
• About&Coca*Cola&
• Understanding&the&Retailer&
• Understanding&the&Shopper&
• Designing&the&Experience&
• Best&Prac=ce&Round&Table&
20"
21. Great Merchandising Starts with Great Shopper
Insights
Insights
Path to Purchase
Look of Success
Macrotrends&
Channels&
Retailers&
Shopper&Targets&
Category&Strategy&
Trip&Missions&
Beverage&
Occasions&
In*Store&
Ac=va=on&
21"
22. To Understand How People Shop, We Must
Understand How They Live
Current Macrotrends Affecting Shoppers
Wide*ranging&
economic&downturn&&
Increase&in&“non*
tradi=onal”&
households&
Aging&U.S.&popula=on&
Increased&U.S.&
immigra=on&
Extended&work&hours&
&&growth&in&dual&
income&households&
Increased&awareness&
of&behavior*related&
illness&
Environmental&values&
mainstream&and&
personal&
22"
23. Who is the Shopper?
They are Not the Same as Consumers
Shoppers
Consumers
buy
our brands
drink
our brands
23"
24. And in Specialty Retail, shopper segments
accommodate preferences.
24"
25. Understanding Shoppers by Individual Store
Enables Tailored Assortments
Store s
Shopper DNA
• Right Brand
• Right Package
• Right Occasion Message
• Right Price
• Right Place
25"
26. Three Elements of Shopper Behavior Strongly
Influence Store Design
Why they Shop
Mission &
Occasion
Where they Shop
How they Shop
Navigation
Speed
26"
27. The Shopper s Trip Mission Drives Behavior
Time
Money
Family
Self
Speedy Fill-In
Bargain Hunting
Household
Stock-up
Browsing
Urgent Item
Everyday
Savings
Just-In-Time
Meals
Immediate
Consumption
Source: Landmark Study,
2010
27"
28. Beverage Occasions Can Inspire In-Store Shopper
Messaging
A Day in the Life of a Consumer
1Source:
Beverage Digest Fact Book 2009 for 2008 Data; Total US – All Channels – Bottle/Can/Fountain
Note: NARTD definition excludes Tap Water, Coffee, Powdered Soft Drinks and Milk
28"
29. They Drive The Shopper s Beverage Choice and
Purchases…
Weekends/
6 AM
7:30AM
10:30 AM
12 NOON
3 PM
5 PM
6 PM
9 PM
Vacation
Breakfast
at Home
On The Go
Break at
Work &
Study
Eating
Out
Break at
Work &
Study
On The Go
Meals at
Home
Relaxing at
Home
Leisure
Away
Activity
Consumption
Occasions
Beverage
Need States
Associated
With These
Activities
Trip
Missions
Sensory
Pleasure
& Food
Enhancement
Routine
Refreshment
Energy/
Stimulation
Having
a Good Time
Health,
Beauty &
Nutrition
Household
Stock-Up
Energy/
Stimulation
Immediate
Consumption
Speedy FillIn
Sensory
Pleasure
& Food
Enhancement
Energy/
Stimulation
Having
a Good Time
Immediate
Consumption
Routine
Refreshment
Sensory
Pleasure
& Food
Enhancement
Comfort &
Relaxation
Routine
Refreshment
Having
a Good Time
Health,
Beauty &
Nutrition
Just-InTime Meals
Just-InTime Meals
Household
Stock-Up
Speedy FillIn
Classified"R"Internal"use"
Immediate
Consumption
Household
Stock-Up
Health,
Beauty &
Nutrition
Speedy FillIn
Just-InTime Meals
29"
29"
30. Store Navigation Patterns Help Determine
Optimal Placement of Points of Inspiration
Entrance
Traffic is counter-clockwise around perimeter, shopping back to front
30"
31. Navigation Patterns Vary by Shoppers Trip Missions
Percent visiting
> 1/4 of store
Stock Up Trips
88%
20 minutes +
Routine Trips
28%
10-20 minutes
Quick/Fill In Trips
< 10 minutes
Each map represents a single trip and does not represent a dominant
pattern
1%
31"
32. Understanding Shopping Pace Can Also Inform
Placement
Buy Time™!
Slow!
Fast!
Start of!
Trip!
Trip Progress!
End of!
Trip!
Shoppers are more open to new information or !
complex messaging earlier in their trip
"
Source: Supermarket PathTracker
Study, 2005!
32"
33. Merchandising Objectives Can be Tailored by Trip
Mission
Merchandising Objectives
Stock Up
Trips
Routine
Trips
Quick/Fill In
Trips
Improve main aisle navigation
and center store tie-ins
Placement in key perimeter
areas, e.g., Deli and Endcaps
Inspire Impulse purchases
near Checkout and key
destination areas
Each map represents a single trip and does not represent a dominant
pattern
33"
34. Eye Tracking Research Provides At Shelf Insights
• Color blocking increases
the visibility of most
frequently purchased items
– Increases shopability &
sales
– Provides Navigational
Signposts
Eye-Track Heat Map*
• Strong positive correlation
between visibility and
purchase consideration*
*Source: Perception Research Services
**Source: PRS, The Wharton School, University of Pennsylvania
34"
35. Busy Shoppers Are In and Out Quickly
• 58% of Trips are Less Than 20 Minutes
• Over half of trips visit less than 1/4th of store
Quicker Decision Shoppers ( 0 – 3 minutes)
" In/Out of store as quickly as possible
" Immediate Need / specific item
" Inspire the impulse purchase by leveraging
Front-end/Checkout and Impulse Zone placement
Early Progression Shoppers (3 – 10 min.)
" Items for a specific meal create cross-promotion
opportunities
" Replenish items low on / out of
" Beverage placement in key perimeter areas
such as Deli and Endcaps
Total Store Shoppers (20+ min.)
" Stock-up variety grocery / household items
" Satisfy needs/wants of family
" Improve main aisle shopper navigation and tiein other center store categories
HIGH
DENSITY
LOW
DENSITY
HIGH
DENSITY
LOW
DENSITY
HIGH
DENSITY
LOW
DENSITY
35"
36. Leveraging A Full Range of Insights is Key to
Great Merchandising
36"
43. Better:
1. User-friendly
2. Brand love
3. System value
4. Glocal
5. Sustainable
Design makes
stuff better.
COCA-COLA / Global Design / CONFIDENTIAL / 2010
44. Global Design Agenda:
1.
2.
3.
4.
5.
Define strategic value
Create clear standards
Design modular systems
Develop our capability
Measure effectiveness
COCA-COLA / Global Design / CONFIDENTIAL / 2010
45. Four factors influence shopper behavior in any
type of store design
1.
Offer&the&Variety&Shoppers&Seek&
2.
Connect&With&the&Right&Occasions&
OCCASIONS
3.
Deliver&Shop*Ability&Through& Points&of&
Inspira=on &In&Store&
POINTS OF
INSPIRATION
4.
Influence&and&Inspire&Purchase&Behavior&
MESSAGING
VARIETY
45"
46. Inspiration Is Created By Providing Relevant
Shopper Solutions Based On How They Shop
Salty Snacks
Source: 2008 PRISM Study
Beverage
Aisle
29%
Teas/Juices/Energy
= POINTS OF INSPIRATION
Water
Bread
&
Bakery
55%
Sparkling
Frozen Fo
ods
Frozen F
oods
Frozen
35%
Deli
50%
Produce
70%
Promotion
Zone
95%
% of Shoppers Who Visit Specific area Of Store
Classified"R"Internal"use"
46"
47. Water
Sparkling
Frozen Food
s
Frozen Food
s
Salt
y
Teas/Juices/Energy
Sna
cks
Effectively Leveraging Beverages Across The Store
Opens Opportunities To Connect With Shoppers And
Drive Sales
Deli
Occasion Based
Approach
Segmented
Merchandising
Packaging
Solutions
Strategic Bundling
& Adjacencies
Identifies highest
value investment
opportunity based on
consumption occasion
Maximizes shopper
relevant assortment for
each store
Provides occasion
relevant & shopper need
based packages to drive
consumption
Cross-category, shopper
based solutions through
alliances with national
brands;
Insights-Driven Category
Adjacencies
Sustainability
Providing leadership
in Corporate
Responsibility &
Sustainability
Irresistible Shopper Experiences
A jointly developed, customer specific framework
for clarifying priorities and providing direction for
in-store execution
To drive larger baskets, higher dollar ring and
greater penny profit
47"
58. 5
questions
…to keys to effective
supplier/retailer
partnerships
How does my Retail partner
generate profits and what is my
role in making that happen?
What elements define the
retail experience?
Who is the Shopper and
what is important to them?
How do we create solutions
jointly to unlock value with
shoppers?
What are the Execution
Capabilities and Limitations?
58"
60. Customizing the In-Store
Experience to Meet Shopper
Preference
Claire Quinn, National Shopper Insights Initiatives
Michael La Kier, Shopper Marketing Strategy and Capability
Justin Honaman, National Retail Sales
