stephen schueler: non-food as a business engine
TRANSCRIPT
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Non-food as a business engine in
Russian RetailStephen Schueler
Procter and Gamble4 Feb 2011
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P&G IN RUSSIA
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Who wants to increase your market share?
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What determines your ability to drive market
share?
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Your shopper!Top drivers to increase your
market share:
Attract New
Shoppers
Attract New
Shoppers
Build Loyalty of Existing Shoppers
Build Loyalty of Existing Shoppers
Win with High
Spenders
Win with High
Spenders
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WHY NON-FOOD
CATEGORIES ARE
IMPORTANT TO WIN WITH
SHOPPERS?
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1.Non-Food has strong potential with
your existing shoppers
food Dairy 59Juice 49Cheese 44Biscuits 46
non-foodHand Dish 28 Fem Care 31Shampoo 32
Dentifrice 34
Size of the prize = 400 mln.$ Size of the prize = 400 mln.$ for HM channelfor HM channel
% of store shoppers buying category in this store (Hypermarkets)
% of store shoppers buying category in this store (Hypermarkets)
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2. Non-Food helps shoppers to choose
your store for Bulk Shopping
Bulk shopping Refill shopping
Laundry & Home Care Bakery
Coffee & Tea Milk& Dairy
Shampoo & Shower Fruits & Vegetables
Toilet Paper & Towels Soft drinks& Juices
Fem Care Cheese
Oral Care Fresh Meat & Poultry
Fresh Meat & Poultry Snacks
Cheese Toilet Paper & Towels
Soft drinks & Juices Coffee& Tea
Fruits & Vegetables Oral CareNon-food categories are highlightedNon-food categories are highlighted
Top powerful categories that define
shoppers’ satisfaction by the store:
Value of Bulk trip = 4.7x Value of Refill trip Value of Bulk trip = 4.7x Value of Refill trip
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How to leverage non-How to leverage non-food food
to win with Your to win with Your ShopperShopper
Three Business Ideas:1. Improve Shopping
experience in Beauty Care.
2. Leverage Innovation in Non-Food − Attract new Shoppers− Get disproportionate
share by being first with new items.
3. Win with Young Families – Heavy Spenders
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… win her manImportance of: Russ
iaWE
Being attractive to men, %
90 41
Having stylish feminine clothes, %
89 57
She needs to be beautiful to… She needs to be beautiful to…
1.1. Russian consumers are Russian consumers are “Thirsty for Beauty” “Thirsty for Beauty”
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P&G is committed to P&G is committed to develop Beauty develop Beauty
business in Russiabusiness in Russia• Plays in 12 out of 13 Beauty Categories
• Market leader in 5 out of 12
• Focus on Category Development to drive basket size
HAIR CARE EXAMPLE:
Conditioners /Treatments – significant growth Potential vs. Shampoo behind increase in penetration and consumption.
• Plays in 12 out of 13 Beauty Categories
• Market leader in 5 out of 12
• Focus on Category Development to drive basket size
HAIR CARE EXAMPLE:
Conditioners /Treatments – significant growth Potential vs. Shampoo behind increase in penetration and consumption.
45 5288
335
0
50
100
150
200
250
300
350
Penetration CDI
CONDITIONERS
SHAMPOOS
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P&G is P&G is committed to committed to
develop Beauty develop Beauty business in business in
RussiaRussia
• Conditioner/treatment driven innovation
• Trade Across through Shelving by collection: co-location of Shampoo/Conditioners/ Treatments
Category Turnover growth + 13%,
Category growth up to 6 %
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Beauty Categories are the most Beauty Categories are the most sensitive to shopping atmosphere sensitive to shopping atmosphere
and new innovationand new innovation• Beauty Department Objective within Food retailer: Create better Shopping Environment:• Enjoyable/emotional• Spends more time/ browsing • Trying new things
• Beauty Department Objective within Food retailer: Create better Shopping Environment:• Enjoyable/emotional• Spends more time/ browsing • Trying new things
Diapers
Fabric Softeners
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2. Attract new shoppers via 2. Attract new shoppers via innovationinnovation
45% of Russian 45% of Russian shoppersshoppers
are experience-driven. This means that they:
• enjoy shopping and like to shop around before making a purchase;• need a comfortable shopping experience;• are driven by new items.
are experience-driven. This means that they:
• enjoy shopping and like to shop around before making a purchase;• need a comfortable shopping experience;• are driven by new items.
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Non-food suppliers are investing Non-food suppliers are investing heavily in TVheavily in TV
creating strong demand for new creating strong demand for new productsproducts
GRPs 30+ 2009 2010
Food 289 655 311 713
Non-Food 705 404 768 122
Non-food advertisers are highlighted
TOP 10 advertisers 2010
1 Procter & Gamble
2 Henkel Group
3 L'Oreal
4 Mars-Russia
5 Unilever
6 Nestle
7 Reckitt Benckiser
8 Danone
9 Wimm-Bill-Dann10 Beeline
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1. In-Store Support – massive in-store communication linked to TV
2. On-line announcement of new product launches/marketing campaigns
Get Disproportionate share of New Get Disproportionate share of New Items!Items!
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3. Winning with Young Families3. Winning with Young FamiliesChild birth is a point of change in Child birth is a point of change in values Now baby is #1, #2 and #3 values Now baby is #1, #2 and #3
spending priorityspending priority
Now she has less time in her new role:
=>she visits less stores and shop more in E-commerce ;
Now she has less time in her new role:
=>she visits less stores and shop more in E-commerce ;
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Spending IndexTotal
RussiaModern Trade
Young parents 113 112Mature parents 120 101Parents with teenagers 106 94Families w/o children 121 97Adults 87 108Seniors 81 86
Families spend more, Families spend more, especially younger ones… especially younger ones…
especially in Modern Trade especially in Modern Trade
GFK, 2009GFK, 2009
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Baby Diapers is the biggest Baby Diapers is the biggest categorycategory
in moms basket in moms basket
GFK, 2009GFK, 2009
• Baby Diapers is the Destination categories for Young Moms
• Shoppers Basket is 4x times bigger in case diapers are in
• Baby Diapers is the Destination categories for Young Moms
• Shoppers Basket is 4x times bigger in case diapers are in Total Basket Spending on Baby,
% in valueTotal Basket Spending on Baby,
% in valueShoppers of Hypermarkets, 1HY 10
Moscow
Russia w/o Moscow
Diapers & Wipes 32,9 42,7Baby Food 27,3 38,2Clothes & Shoes 15,7 5,6Other (incl. toys, cosmetics) 24,1 13,5
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Pampers Charity programPampers Charity program
Partnering with Retailers and leading Partnering with Retailers and leading websiteswebsites
Pampers Charity programPampers Charity program
Partnering with Retailers and leading Partnering with Retailers and leading websiteswebsites
P&G donates 1 vaccine for UNICEF with every purchased pack of Pampers Communication tools: - Internet (mail.ru) - In-Store
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In SummaryKey Partnership Opportunities to drive Non-Food in Food Retailer:Bring in New Shoppers:
•Co-Marketing programs (e.g. Pampers Unisef)
•E-media partnership with ManufacturersDrive Loyalty of Existing Shoppers:
•Drive Basket via regimen Beauty Purchases
•Novelties exploitation in-Store;
•Improve Shopping Experience on BeautyAttract Heavy Spenders
•Win with Young Families by leveraging Diapers as destination category
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Thank you!Thank you!