Consumer Insights

"The Consumer goods industry has taken the tools of Category Management and syndicated data as far as it can.  The key to innovation and growth is understanding the consumer." 

--- Joe Bourland, Vice President, ConAgra Foods, speaking at Consumer Goods Technology Conference, October 2005

 

Consumer Insights requires a triangulation strategy, according to Philip C. Bonanno, President, The Americas Management Ventures Inc.  The three sides of the triangle are panel and demographic data, point of sale data, and shopper loyalty data.   Only with all three elements can the manufacturer quantify the impact of their products and promotions to the retailer. 

For the retailer's core shopper, the supplier must show that they can increase store trips and/or basket size.  For the non-core shopper, the object is the draw the consumer to the retailer. 

From panel data, we can easily determine a shoppers retailer preference.  We can then identify co-purchase opportunities, where a promoted product leads to an additional purchase.

From shopper loyalty data, we can determine micro-marketing opportunities. 

From point of sale data, we can determine promotional effectiveness. 

A complete strategy must combine all these elements and the historical benefits of category management.

 

Household Panel Data

Household panel data presents (in our opinion) an underutilized opportunity for manufacturers to gain insight into consumer behavior. Retailers today are demanding performance from their suppliers not only in price, merchandising and in the supply chain but in providing insights into the consumer. This is not just to help a retailer manage a category, but to help them manage their entire business.

E&J Gallo and Sons runs a highly effective trade promotion campaign:

"When there is wine in the basket, 80% of the time, the basket is bigger."

This conclusion is easily derived from panel data and gives the retailer a clear merchandising opportunity.

Panel data provides 3 actionable measures:

As the size of the panels increases, the identification of shoppers as 'core' and 'non-core' becomes more useful. (Core shoppers make 50% or more of their purchases at one retailer). Identifying to a retailer the reasons why their core shoppers ever shop at the competitor is of great value. This is doable, at least at a high level by combining panel data with consumption, promotion and out of stock information.

 

Category Management

The definition of Category Management is a retailer/distributor/supplier process of managing categories as strategic business units, producing enhanced business results by focusing on delivering consumer.

Category Management typically consists of six interrelated components. Strategy and Business Process are considered essential and are the "core" category management components. The remaining four are called enabling components due to their vital role in assisting strategy and business process; scorecard (for strategic business unit performance), organization capabilities, information technology and collaborative relationships between trading partners.

Ironbridge's expertise is in the enabling component of information technology.  Net-Bench is the answer to Category Management whereby it manages vast amounts of data, timely and accurate data acquisition, organization/analysis and the conversion of data into actionable information.  Net-Bench is fundamentally a data-driven, fact-based, analytical-intensive business intelligence solution for retailers, distributors and suppliers.

Source: The Partnering Group/ECR 1996