Ratera & van Galen How to win at Point of Purchase

2010

2

Content

Ratera & van Galen overview

Our services

– Trade marketing strategy based on shopper insight

– Areas of expertise

• Category definition and segmentation

• Optimum category layout: path to profit

• Ideal range

• Promotion

• POS communication

– Methodologies

• In store intercepts/FGD

• Virtual shelf testing

• Video camera work

• Traffic flow monitoring

• Store auditing

Case studies

3

Ratera & van GalenRatera & van Galen (R&G) is an independent market research and retailconsultancy firm working for both manufacturers and retailers across channels.We specialise into:

– Shopper research

– Trade marketing strategy

Our long-time expertise in shopping and decision making behaviour, combinedwith use of the most recent and sophisticated techniques, give us a strongposition in this area.

R&G originated in London, we had previous working experience in France, Holland, Spain, Switzerland and UK and was established in 1998 in Malaysia. Partner offices:

Asia: Bangkok, Dubai, Jakarta, Manila, Singapore, Beijing, Guangzhou and Shanghai

Europe: Amsterdam and Barcelona

We are members of The Ebeltoft Group, a global group of retail expertcompanies that work together on international projects and exchangeknowledge in their fields.

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Ratera & van Galen: The shopper research specialist

This book provides

practical advice about

shopper needs; retail

environments; shopper

trends; shopper

marketing strategies;

retailing relationships;

and effective packaging.

With contributions from:

Paco Underhill

Brian Harris

Herb Sorensen

Toon van Galen (Ratera

& van Galen)

Clients Ratera & van Galen

FMCG

&

related

Banking

Automotive

p PEERLESSPEERLESSp

Clients and partners

HM / SM

C-Store/

mini

markets

Sunshine

Pharmacies

Traditional trade/ sari sari, Chinese Medical Hall, on premise outlets

* Not direct clients: working experience with those retailers

*

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*Shedanvie * *

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Other

channels*

* *

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Solutions to common problems that our clients face

Ideal category definition and grouping: What type of products belongtogether and for what reasons

Optimum category layout: How can we upgrade shoppers to buy more ormore premium goods from our category?

Purchase solutions driven by shoppers’ segmentation

Store layout adjusted to shoppers’ missions

Optimum range per channel

What are key decision factors when people buy this category and how dowe use them more effectively against our competitors?

How do we trigger impulse purchases in store?

Which promotion works best in the category?

Can we optimize the path to purchase communication in order to driveprofit?

What is the path to profit? Can we seduce shoppers to upgrade?

99

Project set up

Gain agreement to conduct

research

Gain shopper insights

Key objective Methodologies

Presentation to retailers

In store interviews

Focus group discussions – FGDs

Store audits & scan data analysis

Traffic flow analysis

Retailer interviews

Workshop with Client teamDevelopment merchandising

strategy

Presentation to retailersGain retailer agreement to

implement

Implementation strategy

Evaluate project and identify

learnings

Client internal process/ post

interviews and measurement

Stage

1. Retailer presentation

2. Data review

Review of all relevant data from

TNS, Dunnhumby, Synovate,

Nielsen and/or other sources

3. Closing the gap

4. Presentation of

findings

6. Selling in to retail

partners

5. Implementation

strategy

7. Post review

Ongoing support to Client

Summarize relevant data to

identify key opportunities and

information gaps

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We track POS

communication

We film shopping

behaviour

We analyze

traffic flows

We

measure

space &

number

of sku’s

We

analyze

scan data

Virtual

shelf

testing

Eye tracking

Focus groups

We observe

browsing behaviour

prior to purchase

We interview

customers at

point of decision

Some of our methodologies

Loyalty card

solutions

Optimize

product and

assortment

We identify

hot & dead

spots in the

store and

in the shelf

Retailer interviews

We follow shoppers from

the beginning to the end

of their shopping trip

Trade Marketing Strategy based on shopper insight

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Trade marketing strategy

2

Shoppers

strategy

1

Category

strategy

3

Customer

strategy

Opportunity assessment

- Identify the definition and the

segmentation of the category based

on shopper needs

- Identify opportunities based on

shopper insights that deliver category

growth

Definition & segmentation Shopper understanding

- Measure POP material’s impact

- Define ideal message at POP

- Define optimum location of POP

materials

- Understand the shopper behaviour

including triggers and barriers for the

category at point of purchase in detail

POP tracking

Channel understanding

- Define excellent in-store execution

standards that will positively influence

shopper behavior

- Shopper behaviour difference by

channel

- POP vision by channel

- Ideal range and merchandisign by

channel In-store vision

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Content

Ratera & van Galen overview

Our services

– Trade marketing strategy based on shopper insight

– Areas of expertise

• Category definition and segmentation

• Optimum category layout: path to profit

• Ideal range

• Promotion

• POS communication

– Methodologies

• In store intercepts/FGD

• Virtual shelf testing

• Video camera work

• Traffic flow monitoring

• Store auditing

Case studies

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Category definition and segmentation steps

Step 1: Category Decision Tree

– What are current decision criteria

– Multi level: first level is by flavour, but what about next level, by pack type, price?

– Work out in detail what to do with smaller varieties, non standard pack sizes, cartons

Step 2: Assessment current category presentation

– Right location in store, adjacent categories

– Current layout shoppers likes & dislikes

– Find barriers in purchase process

– Sales and profit performance total category and for client

– POS material performance

Step 3: Develop and test new options

– Develop merchandising options, CDT is the base, use other key criteria:

– Shoppers rating

– Sales and profit driving

– POS material performance

Step 4: post testing

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Range tools

Range check via store audits and scan data analysis

Substitution analysis

In store quantitative assessment

Qualitative assessment via FGD’s

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Target the right shopper:

– Shoppers that buy another brand currently and are interested to change at regular

price

– Shoppers that use different brands and are open to become more loyal

– Shoppers that do not know your product yet

Use the right promotion:

– Multi buy, purchase with purchase, direct price off, every type has it’s different impact.

Aiming the same price off at all shoppers all the time has no proven impact on long

term sales but minimizes the profit

Who is the right target shopper for a promotion?

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The majority of promo spend is aimed at those that will

not switch to your brand

A combination of scan data analysis and shopper interviews will tell us

which part of the sales increase is really incremental and where it comes

from

% o

f s

ho

pp

ers

b

uyin

g

Subsidy existing buyers

Temporary buyers

Some of these might stick

with my brand

after promo

Temporary buyers

Brand A Brand A

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POP tracking

Recommended POS ad for each part in path of purchase

based on recall and phase of shopping trip

OUTSIDE STORE

Out of Sight

Out of

Category Zone

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Content

Ratera & van Galen overview

Our services

– Trade marketing strategy based on shopper insight

– Areas of expertise

• Category definition and segmentation

• Optimum category layout: path to profit

• Ideal range

• Promotion

• POS communication

– Methodologies

• (In store intercepts/FGD)

• Traffic flow monitoring

• Virtual shelf testing

• Video camera work

• Store auditing

Case studies

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100% & above- passing

90% - 99%

60% - 69% 20% - 29%

50% - 59% 10% - 19%

80% - 89% 40% - 49% 9% - 0%

70% - 79% 30% - 39%

% Passing

Shopper’s path in minimarket: hot spots near entrance,

many locations are never visited, shopper path is

inefficient

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Eye tracking glasses

This methodology is engaged to better illustrate the buying process of a

typical shopper, including which material or signage the respondent looks at

and for how long

Respondents are asked to wear special glasses* before entering the store /

aisle

The glasses then record their eye movement from the moment they enter

the aisle until they exit the aisle

*With 2 built in cameras, one pointing inwards to track the iris and another one pointing outwards;

Crosshair in the video footage will show where the shoppers are looking at

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Virtual shelf Re-creating a virtual shopping experience

Virtual shelf testing is a technique that is gaining popularity fast because it

generates savings in cost and time. It allows to test the purchase impact of

different shelf and pack options

What can be measured

– Choice / preference: Which SKUs are being put into the

shopping cart?

– Findability: How long does it take the individual respondent

to find a target SKU? How is findability affected by positioning

on the shelf, by surrounding competitive SKUs?

– Impact of marketing / communication: How is the purchace

probability influenced by (print) ads, TV commercials,

availability of a coupon etc.

– Changes in line-up: Cannibalization through line-extensions, effects of delisting

SKUs, loyality after relaunch of line-up

These studies are done using software from Harris Interactive Germany

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Content

Ratera & van Galen overview

Our services

– Trade marketing strategy based on shopper insight

– Areas of expertise

• Category definition and segmentation

• Optimum category layout: path to profit

• Ideal range

• Promotion

• POS communication

– Methodologies

• In store intercepts/FGD

• Virtual shelf testing

• Video camera work

• Traffic flow monitoring

• Store auditing

Case studies

24

Shampoo example

BeforeConditioners on the

top, illogic range

Small bottles

Medium bottles

Big bottles at the

bottom

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New

grouping

by variant

Conditioners

next to matching

shampoo

Matching

conditioners for

all variants

After: Optimised range of conditioners and grouping of

shampoo by variant with matching conditioner next to it

Sales +13%

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Proposed planogram test leads to 22% higher

category sales and much more for the initiating brands

With this research the case to retailers to change the layout is compelling:

– Bring category flow in line with shoppers growth path to more expensive oils

– Explain benefits of different oils at point of purchase (demo’s, leaflets)

– Give consistent and better location to specialty oils across stores and retailers

– Use sub category signage to facilitate cross purchases and to stimulate experimenting with

different oils

– Develop cross promotions

– Range rationalization

– Optimum space per SKU

Refined oil Blended oil Soft oils

Refined oilBlended oilSoft oils

BEFORE

AFTER

Thank you

In case of any questions or enquiries

please contact Ratera & Van Galen

Ratera & van Galen Sdn Bhd

52-3, J 27/70A

Desa Sri Hartamas,

50480, Kuala Lumpur

Malaysia

Tel: 60 3 23008630

Fax: 60 3 23008631

www.rateravangalen.com

info@rateravangalen.com