William&Dusek& &Managing&Director&–February&2015& … · Supermarkets& Drug&Channel&...
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William Dusek Managing Director – February 2015 1
Transcript of William&Dusek& &Managing&Director&–February&2015& … · Supermarkets& Drug&Channel&...
William Dusek � Managing Director – February 2015 1
Overview of DHC CapabiliBes and ExperBse
w OrganizaBon Structure Design w OrganizaBon Development w Change Management
w Sales EffecBveness Assessment w Learning Needs/Competency Assessment w Learning & Development Programs
Strategy, Structure & Planning
ProducBvity & Performance Improvement
w Shopper Insights w Category Management w In-‐Store Research & TesBng w Benchmarking & CompeBBve
Research, AnalyBcs & Insights w Market, Channel & Customer w Trade Spending w Models & Metrics
w Score Carding/IncenBves w CRM/System ImplementaBon w ForecasBng, Planning & ReporBng Tools
w Customer SegmentaBon w Go to Market Planning w Channel & Customer Development w Process Engineering
Supermarkets
Drug Channel
C-‐Store Channel
Office Supply Stores
Department Stores
Electronics Stores
Queuing Research
Front-‐End OperaBons
Mass Merchandisers
Canadian Supermarkets/ Drug/C-‐Store
FRONT-‐END CHECKSTAND EXPERIENCE
FRONT-‐END CHECKSTAND EXPERIENCE
MOST STUDIES INCLUDED
MOST STUDIES FOUND AT
WWW.FRONTENDFOCUS.COM
RESEARCH ELEMENTS
Retailer Interviews
Consumer Interviews
Consumer Focus Groups
TransacBon Level Data
Retail Space Audits
Count/Recount
Best PracBce Development
Benchmark Development
STUDY PARTICIPATION
2 to 4 Manufacturer Sponsors
4 to 7 Retail ParBcipants
Front-‐End Focus* Received Industry RecogniBon
GMA CPG AWARD FOR INNOVATION AND CREATIVITY
“The goals of the project were not driven by the financial targets of Time/Warner Retail, Masterfoods USA and the Wm. Wrigley Company. (They) were to provide insights to (retailers) to help them make befer front-‐end merchandising decisions,
thus driving higher sales and profit across the product categories available at front-‐end checkstands.”
-‐-‐ GMA CPG
* The Front-‐End Focus study conducted by Dechert-‐Hampe & Co in alliance with retail chains across grocery, convenience and drug store channels
RETAILERS FACE A Changing Shopping Paferns
Evolving Purchase Behaviors
CONSUMERS CHANGING
ENVIRONMENT Channels & Formats Compete for
Limited Number of Shopping Occasions
RETAILERS
Range of Categories Stocked Changed DramaBcally
CHECKOUT
Growing at Some Retailers Declining at Others
SELF -‐CHECKOUT
Changing the TransacBon Process TECHNOLOGY
Front-‐End Checkout
LocaBon every shopper passes
Significant source of impulse sales
Influences customer saBsfacBon
Some Retailers Have QuesBonable Front-‐End Merchandising PracBces
Reason For Choosing Checkout Lane*?
The Shortest Line
* Percentage of Respondents Source: Front-‐End Focus Study
PRIMARY REASON FOR PICKING A LANE
0.8%
1.4%
1.9%
3.4%
5.5%
6.7%
7.8%
72.5%
Other
Merchandised Products
Requested by Employee
Near Door
Only Lane Open
Know Checker
Privacy/Scan Myself
Shortest Line
If the Item They Want Is Not Available
1 IN 3 SHOPPERS WALK AWAY What would you most likely do if
the item was not available*?
4.1%
11.4%
16.6%
25.8%
42.2%
Stop At Another Store To Find Item
Switch To AlternaBve Item Located In Current Checkout
Lane
Change Lane To Purchase Item In New Lane
Buy Nothing Or Delay Purchase
Find Item Elsewhere, Return To Original Lane To Checkout
* Percentage of Respondents Source: Front-‐End Focus Study
Dollar Shares of Front-‐End Checkstand Sales
1.0% 1.3% 1.4% 1.6% 3.0%
16.5%
3.3% 10.8%
18.1% 32.2%
5.5% 9.8% 11.7%
16.0% 43.0%
Nuts Razors/Blades
Snack/Granola Bars Baferies
Salty Snacks
Magazines
Mints Gum
Candy ConfecBonery
Bofled Water Non-‐Carbonated Drinks
Energy Drinks Carbonated Beverages
The informaBon contained herein is based in part on data reported by IRI through its Market Advantage service as interpreted solely by Time Warner Sales & MarkeBng and/or Dechert-‐Hampe & Co. (Copyright© 2013), InformaBon Resources, Inc.). The informaBon is believed to be reliable at the Bme supplied by IRI but is neither all-‐inclusive nor guaranteed by IRI. Without limiBng the generality of the foregoing, specific data points may vary considerably from other informaBon sources. Any opinions expressed herein reflect the judgment of Time Warner Sales & MarkeBng and/or Dechert-‐Hampe & Co. and are subject to change. IRI disclaims liability of any kind arising from the use of this informaBon. Source: tri Front End Research; IRI 52 weeks ending 6/30/2013; DHC Analysis
WHAT DRIVES FRONT-‐END SALES Beverages ConfecBonery Magazines
Front-‐End Power Categories Defined By Key Metrics
MANAGE FRONT-‐END
Source: FEF Study, DHC Analysis
BASED ON CONSUMER BUYING BEAHVIOR
FOCUS CATEGORIES:
• Health Items • Razors/Blades • Baked Goods • Lip Care • Oral Care • Household Products • Audio/Video/DVD • Other Snacks • Beauty Care • Grocery Products • Film/Camera Supplies • Children’s Items • NutriBon/Energy Bars
• Salty Snacks • Baferies/Flashlights • Cookies/Crackers • Nuts/Seeds • Meat Snacks • Giu/Phone Cards • Tobacco Accessories
• ConfecBonery • Beverages • Magazines
High Purchase Frequency
High Impulse Sales
High Front-‐End Sales
High Household PenetraBon
*Checkout carries Magazines, Candy, Gum, Mints, Beverages, Baferies, Film, Razor Blades, and other GM items Source: Front-‐End Focus Study
CHECKSTAND MERCHANDISING
TOP LINE SALES SIGNIFICANTLY IMPACTS
Value of a Checkstand*
Self-‐Checkouts ConBnue to Evolve
Impulse merchandising is very important
Many retailers have embraced self-‐checkouts
Some retailers have removed self-‐checkouts (Albertsons LLC, Big Y, Jewel)
SOME CHAINS USE QUEUING
Vast Majority of Shoppers Believe Queuing Is Faster
HIGH % OF
QUEUING Which lane type do you
prefer*? SHOPPERS PREFER
60%
21% 19%
33%
50%
17%
Queuing Lane
TradiBonal Lane
Does Not Mafer
Queuing Shoppers Non-‐Queuing Shoppers
* Percentage of Respondents Source: DHC Queuing Research
Queuing Approach Influences Impulse Sales
Source: DHC Queuing Research
Total $ Spent % Who Purchase from Front-‐ End
$32.82
$45.85 +40%
34%
42% +24%
Item Number Limits at Checkout Influence Total Dollars Spent
Queuing Shoppers Non-‐Queuing Shoppers
ARE NOT OPTIMAL
ALTERNATING ASSORTMENTS
Not every lane is open
Shoppers do not change lanes to purchase
Limits exposure for key impulse items
Impacts sale of key impulse items
IS EFFECTIVE LED LIGHTING Illuminates the Checkstand Captures Shoppers’ Interest
Increase in Sales with IlluminaBon
*
Source: Mars, Wrigley LED Racks Drive Front End Sales, Progressive Grocer.com, Sept 2015
AlternaBve Checkout Approaches Can Result in Lower Front-‐End Impulse Sales
How can retailers ensure they do NOT lose impulse sales with alternaBve checkouts?
A common approach
IN FRONT OF CHECKSTANDS DISPLAYS
But can have negaBve effects on checkstand sales
Are secondary displays important enough to distract from primary displays?
Secondary Displays Significantly Reduce Time Spent Viewing the Primary Displays
Source: Time Retail Inc./Indiana University Eye Tracking Research, 2013
No Blockage
1.81 sec 67%
4.16 sec 97%
6.12 sec 100%
4.69 sec 98%
5-‐Hr Energy Block
4.99 sec 99%
2.89 sec 96%
0.7 sec 27% 6.73 sec
100%
0.9 sec 1%
Kind Bar Block
3.88 sec 100%
1.04 sec 87%
0.6 sec 28% 9.63 sec
100%
0.84 sec 7%
Total Primary Display Viewing 24.9 sec 13.2 sec 10.6 sec
Total Checkout Unit Sales % Change
NEGATIVELY IMPACT TOTAL CHECKOUT SALES
SECONDARY DISPLAYS
5-‐Hr Energy Secondary Display
Kind Bar Secondary Display
Source: Time Retail Inc./Indiana University Eye Tracking Research, 2013
ENCOURAGE FRONT-‐END
MULTI-‐ITEM PURCHASING
% Front-‐End Buyers Purchasing
Front-‐End Buyers Buying MulBple Items 40%
Most Common Front-‐End Purchase Combo
ConfecBonery Beverages
60.5% Single Item
26.8% MulBple Items Single Category2
12.7% MulBple Items
MulBple Categories1
Source: Front-‐End Focus Study 1 4.1% ConfecBonery & Beverage; 1.5% ConfecBonery & Magazines; 1.0% Magazines & Beverages 2 12.5% ConfecBonery; 5.5% Beverages; 5.0% Magazines
DRIVE MULTI-‐ITEM PURCHASING
TIE-‐INS
IS HERE NOW MOBILE Mobile devices deeply integrated
* Are Smartphones Making Us Less Impulsive, priceconomics.com, Sept 2013; Shoppers’ ‘Mobile Blinders’ Force Checkcout-‐Aisle Changes, bloomberg.com, Mar 2013
How are shoppers using Smart Phones?
What merchandising approaches work as Smart Phones become integrated into how shoppers check out?
Shoppers less impulsive Mobile blinders Digital is the future
FACTS
48% USE/WOULD LIKE TO USE A
SMARTPHONE IN THE STORE4
50% SMPARTPHONE USERS WHO WILL USE
MOBILE WALLETS WITHIN 5 YRS5
56% AMERICAN ADULTS WHO
OWN A SMARTPHONE1
70% SHOPPERS WHO USE A
SMART PHONE IN A RETAIL STORE2
53.2 M U.S. MOBILE COUPON USERS3
Sources: 1. Pew Internet Project; 2. ForeSee 2013; 3. eMarketer 2013; 4. Cisco 2013; 5. Carlisle & Gallagher ConsulBng Group
SMARTPHONE
SCANIT! APP
Both magazines and total checkout sales liu when shoppers have more opportuniBes to buy magazines
Placing magazines both in-‐line and end-‐cap maximizes sales
Source: FEF Study. DHC Analysis.
BEST PRACTICE
Magazine Sales/$MM ACV Index Total Checkout Sales/$MM ACV Index
94 96
111
In-‐Line Only
Endcap Only
In-‐Line & Endcap
In-‐Line Only
Endcap Only
In-‐Line & Endcap
92
98
114
Total checkout performs befer when coolers are in-‐line even though endcap coolers also liu sales
Locate pass-‐through beverage coolers in-‐line at regular checkouts BEST
PRACTICE Beverage Sales/$MM ACV Index Total Checkout Sales/$MM ACV Index
89
105
In-‐Line Only
Endcap Only
105
97
In-‐Line Only
Endcap Only
Source: FEF Study. DHC Analysis.
Recognize value of front-‐end to store sales & profits
Manage front-‐end as a department with dedicated manager
Focus on power categories that drive front-‐end sales & profits
ConBnually research consumer shopping habits & aztudes toward front-‐end merchandising
FRONT-‐END KEY STRATEGIES
Seeking manufacturer sponsors & retail parBcipants
Contact Bill Dusek � (847) 559-‐0490 � bdusek@dechert-‐hampe.com
DHC Planning a New Front-‐End Research Study
Omnibus study with many sponsors
First study = supermarkets
New research components w Eye tracking w Impact of mobile technology
