Understanding the buyer perspective is critical to the success of our clients; however the buyer’s side of the equation has received minimal attention – nobody has officially asked buyers what they want. Our goal is to change that. There is an incredible amount of client-side investment in programs based on assumptions with too many guesses being made on such a fundamental cog in a client’s business. Further, most of the relevant data being utilized was either dated or focused on the U.S. Marketplace The following study was conducted with McWhirter & Associates to commission a proprietary Canadian focused research study with Retail Buyers of CPB and OTC products. For a full version of the report please contact us.

1. Executive Summary - Retail Buyer Study
How to Become a Buyer’s Favourite Vendor
Presented By: Armstrong Partnership
Research By: McWhirter & Associates

2. Why Conduct a Retail Buyer Study?
y y y
• Understanding shopper marketing is critical to the success
of our clients; however the buyer’s side of the equation has
received minimal attention – nobody has officially asked
buyers what they want
buyers what they want
• There is an incredible amount of client‐side investment in
programs based on assumptions with too many guesses
being made on such a fundamental cog in a client’s business
• Further, most of the relevant data being utilized was either
dated or focused on the U.S. Marketplace
• The study was conducted with McWhirter & Associates to
The study was conducted with McWhirter & Associates to
commission a proprietary Canadian focused research study
with Retail Buyers of CPG and OTC products
• The following slides are a summary of the full more detailed
presentation

3. Study Background

4. Retail Buyers Surveyed
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• Work for a range of retail chains, with sizes ranging from 3 or 4 locations up
to chains with more than 350 locations
• Buy for an average of 118 stores
• Two‐thirds of the Buyers interviewed buy products in both CPG and OTC
categories.. On average, they personally purchase products from 5 categories
On average, they personally purchase products from 5 categories
Packaged Goods 60%
Beverages 58%
OTC medications 52%
Cosmetics, health and beauty 50%
Confectionary
y 44%
0% 10% 20% 30% 40% 50% 60% 70%

5. Executive Summary

6. Best & Worst Vendors
• “Best” vendors are set apart based on the service they provide
– To some extent this traces to the personality of the vendor reps, but beyond
that it is linked to a feeling that the vendor is providing helpful suggestions to
the retailer to improve their business
• The “Worst” vendors are also identified based on (poor) service
– Thi i li k d t
This is linked to personality issues, poor communication, delivery concerns
lit i i ti d li

7. Optimizing Vendor Presentations
p g
• Retail Buyers offer a number of suggestions to Vendors who are preparing a
presentation:
– Focus on products that “fit” with the Buyer’s retail strategy
• Explain how the product will grow my business
– Bring more data on pricing and profitability numbers
• Explain profit margin availability
– Bring the product itself, not a picture
Bring the product itself, not a picture
• Focus on the products, not the company or employees
– Come prepared
• F
Forecasts, trends, consumer insights, marketing and ad plans
t t d i i ht k ti d d l

8. Other Opportunities for Vendors
pp
• On average, Buyers rate their vendors’ understanding of their business strategy
to be only a 7.8 out of 10:
– This clearly indicates an opportunity for vendors to become better
This clearly indicates an opportunity for vendors to become better
informed in this area and to tailor their presentations to highlight their
understanding of the retailer’s business
• Buyers’ advice for vendors competing with private label products is to:
– Maintain an attractive price point
– Differentiate on quality, brand name, varieties, packaging, format, size or
other variables
– Support the brand through advertising and promotions

9. Retail Buyer Attitudes
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• Price is the #1 concern Buyers have when assessing a vendor presentation:
– Their highest agreement (94%) is to the statement that the retail
Their highest agreement (94%) is to the statement that the retail
environment is becoming increasingly cost competitive
• g p y g y g( p
A substantial group of retail buyers agree that they are seeing (or expect to
see more) changes in the retail environment driven by innovation and
technology:
– Increased importance of at shelf visual dynamic displays (87%);
Increased importance of at‐shelf visual dynamic displays (87%);
Innovative product design (83%); and Innovative package design (75%)
– More third‐party merchandising teams (65%)
– More prominent usage of Smart phone QR codes in the next 6 months
(62%)
– Shoppers will increasingly use their Smart phones to access product
information while they shop by 2012 (56% agree)

10. Thinking Forward to 2012
g
• Retail Buyers are clearly aware that economic and competitive factors will
impact the retail environment over the coming year
– On the competitive front retailers face greater competition from mass
On the competitive front, retailers face greater competition from mass
merchandisers / discount / dollar stores
• Target, Walmart and Costco were each identified by name
– Economically, the costs of goods is increasing, as are operation and
Economically, the costs of goods is increasing, as are operation and
transportation costs
• Most buyers surveyed are not overly concerned (yet) about Target’s entry into
Canada
– Those from Ontario most often express strong concern
• This is consistent with (May 2011) news reports that 45 of the first 105
Canadian Target stores will be located in Ontario

11. TO RECEIVE A COPY OF THE FULL
REPORT CONTACT:
JOHN ARMSTRONG
john@armstrongpartnership.com
416.444.3050 x 229