Why Revisiting JBP is important?

We are in a challenging economic situation where cumulative trends are creating tension for both retailers and their suppliers:

• Decreased spending power
• Fear of an economic Recession
• Cost increases leading to both inflation and availability challenges

Besides, a few new business drivers have changed during the last years, challenging the existing business models:

• Rise and fall of e-commerce despite heavy investments
• Multiple assortment rationalization
• Lower shopping frequencies and basket value
• Thinner margins for both Suppliers and Retailers

In such a context, JBPs must ensure they address 5 requirements:

1. Flexible Range Management to respond to shortages. quick shopper demand’s changes and maximize the sales of existing SKUs
2. Much higher effective promotion plan to deliver higher returns on investment
3. Integrate the diversity of each sales channel’s business drivers
4. Ensure Shoppers (and their characteristics) are truly at the heart of each decision
5. Your business with the Retailer is B2B, meaning that your JBP must fit in and support their business plans.

Remember that Retailers and Manufacturers are facing similar challenges. A well-planned and executed JBP is one of the difference makers that can promote your company as a Preferred Strategic Supplier. In this article, we share 9 ideas on what you can do to become this Preferred Strategic Partner.

Definition

A Joint Business Plan (often called JBP) is a process that helps retailers, and their suppliers solidify the objectives, the activities they want to execute and jointly monitor to achieve these objectives and their respective conditions for success.  

JBP is not new and has been a well-known practice for years, and is part of Key Account Management Activities, as described below by Bain & Company.

9 directions to revamp your Join Business Plan

1. Align your Mindset
It’s all About the Category and its Shoppers -Not your Brand

Of course, the JBP you are building is about your Brand. But remember: Retailers’ goal is to increase their category sales by increasing Shopper traffic and spending. Your Brand is just a tool. And you want your Brand to be one of the best – if not the best Tool – retailers will use.  
What retailers are looking for when they build their categories plan is:

• Ensure Range completeness, and appeal to all Shopper Groups by Store format
• Product Availability‍
• Attractive Promotions, but not create Promo Picker habits to Shoppers
• ‍Price Image competitiveness compared to other Retailer competitors, not necessarily to be cheaper on all items • Make it Easy for Shoppers to find the products on the shelves (physical or digital)

When reviewing your JBP, ensure you are ticking all these boxes and can substantiate each point.

2. Know Your Retailer better than they know themselves
‍Share their performances in the market

Whatever the strengths and depth of Retailers’ research capabilities, they can’t know everything. Still, retailers feed their decisions with numbers and data. And like their manufacturers, gaining market share is part of their priorities.

Every bit of meaningful and quantified information you can share with retailers about their performances and benchmark, from your own Brands to the categories you service, will have 2 benefits:

• Increase the Retailer’s perception of the value you deliver
• Establish a legitimate and data-based benchmark to substantiate some of the activities and decisions you recommend in your JBP.

Below is an example of calculating Lost Opportunities Values by using other retailers’ performance data.

Such an approach should be applied to other metrics as well: volume, penetration, basket value, promotion intensity, …

3. Put Shoppers at the Heart of the Discussion
Share about your understanding of Shoppers Decision Trees.

Shoppers satisfaction is the end goal for Both Retailers and Brands. Sharing critical shopper insights (from the retailer or from other retailers). Such an approach can bring massive value in building the Category together.  A robust Shopper Decision Tree with well-defined product attributes and the ranking of their importance is one of the most important insights into each Category.

With such insights, Retailers can identify their Range Gaps (and maybe your range can fill some of these gaps), and improve their displays.

Therefore, you can use Shopper Decision Tree insights to share your proposed action plan on  
‍

1. New Items to close Category Range Gap
2. Product Display to ease Shoppers in finding your product on the shelf  

4. Strengthen the fit between your range and retailers’ expectations
‍Make Range efficiencies as the Corner Stone of your Approach.

Shoppers visit stores because they want to buy the products that they want. To state the obvious, the range is the foundation of the Category (as well as the majority of its sales and profitability)

With limited space for each Category, Retailers need to ensure that the selected items being displayed on the shelves deliver an optimal good return space.

It’s therefore critical for you to know what is the effectiveness of your Brand’s range. If your Brand’s sales contribution is higher than your SKUs’ contribution, you are in a good place. When your Brand offers products that are present across several sub-categories, you want to know what your effectiveness by sub-categories (see example below) is

The below chart presents Sales Share (Blue) vs SKU Share (Yellow) by subcategory. The higher Blue over Yellow, the better it is.

In summary, you will always want to measure your Brands’ effectiveness in 2 perspectives:

• From a sub-category view, to identify potential new items or items to remove
• From a Brand view, to benchmark your Brand with the competitors  

Below is the action summary for each

5. Fish in pounds where Fishes are
‍Focus on your Targeted Shoppers

The end of Covid19 restrictions in most markets generated a massive return of shoppers to stores. At the same time, the current economic recession has pushed shoppers to decrease their spending. More than ever, Promotions have become the major tool to entice shoppers and win as much share of wallet as possible.  

In this context, traditional mass promotions might not always be the best option: they impact the margin of both Retailers and Brands. Additionally, the return on investment they deliver (in sales, in penetration, in basket growth…) is not optimal.

Therefore, targeted promotions or campaigns can be an attractive alternative to consider for both parties. A collaborative approach using Loyalty data can be easily setup as soon as both agrees on:

•  Which customer segment to target (you want both to focus on big spenders)
•  Which products to select (you don’t want their promo selling price to be too much higher than the average selling price)
•  Which mechanics to choose

6. Make each planned campaign count
‍Be more precise and quantitative about the objectives and the tactics you choose  

In addition to the standard financial KPI you can assign to your campaigns, understanding how shoppers respond to your brand activities can also be very valuable.  

The first thing you want to do is to be crystal clear on what you want the campaign to achieve.
Do you want to drive traffic to your brand (i.e. acquire new shoppers, even if they don’t spend much, so you can work with them again later)? In that case, penetration and number of transaction growth will be important to measure.
‍Or
Do you want to drive spending to your brand (i.e. existing shoppers will spend more)? In that case, the number of items purchased as well as the average selling price of the items purchased will be important to measure.

Once you have solidified your objectives, the 2^nd thing you want to do is, with your retailer, ensure that the mechanics you will select will support your campaign objectives.

7. One size doesn’t fit all
‍Strengthen the offer by channel to gain Shopper wallet share.

One shopper could shop for all the store types. However, they chose the store format differently based on their shopping mission.  
Multi Format Retailers is an excellent place for your brands to please the different Shopper Types. You can drive the commercial offers for

– Family shoppers to do one-stop shopping in Hypermarkets
– Household buyers in Supermarkets
– Conveniences Shoppers in Convenience stores

The more you study about each channel’s shopper behaviors, the more you can build collaborative tactics that will deliver results.  This channel-based approach should ideally be applied to each of your Brand’s sales drivers.

Below is an example of the offer’s differentiation by channel

8. Give meaning & Purpose to Business Reviews
Make it collaboratively and ensure it delivers a Win for the Category

Remember that for your retailer counterpart, his or her performances are assessed on the Category growth, not your Brands’ growth. In their perspective, a great JBP is on which clearly explains and details how the Category is going to be (positively) impacted.
This fact should be the beacon that drives your approach at each stage of the JBP, from the analyses of past performances to measured deliverables you expect to achieve with your proposed strategy and tactics.

“Them, us, fit and action” is the structure to be systematically applied.

An obvious recommendation: the review of each of the retailer’s business performance you address in your JBP is factual, not judgmental.

9. Leverage technology in the meeting room to accelerate & improve Decision Making
Don’t be stalled because you didn’t have the right numbers.

Each of the actions you will propose must be legitimated by numbers. Some of the actions will be agreed, some adjusted, some challenged, some rejected. The point is that for all the arguments you will make, they also need to be supported by data if you want to have a chance to influence and convince.
You can prepare some of the objections in advance ,identify some of the decisions you know will be a hard sales. But you can’t prepare them all.
Still, you must be ready to provide supporting numbers and analyses at any time. So, bring your online category management tool with you and run, jointly, all the analysis and diagnostics you need in no time. Decide. Move to the net point.

Below is an example of a category diagnostic tool

For more than a year now, Assortment Rationalization has become a priority for many retailers. The frequent change of customer behaviors and the fear of a recession looming are being translated in a noticeable decrease in spending. This decrease in spending can be measured by both a decrease in volume as well as a decrease in the variety of products purchased, dragging the profitability per square foot down. Consequently, for cash flow and cost purposes, reducing the number of products in ranges – mostly in physical stores – is on top of retailers’ agenda. While it undoubtedly makes business and customer sense, the way it is designed and implemented can have either the effects of surgery with a chainsaw or laser-precise incisions.

Victims of Rationalization?

Over the last 8months, several manufacturers and distributors were feeling a bit bitter on howsome of their Brands’ product ranges had been brutally reduced without priorinformation or consultation. Their challenge was not necessarily that thenumber of their Brands’ skus was reduced on shelves, but rather that theselection of the removed products was not optimal and ales opportunities werelost. The most frequent feedback we heard – and confirmed through a deep divein their range performances – was

• Medium performance skus were removed even though their distribution was not optimal
• The products performances analyses were sometimes done across all channels, preventing each channel specific shopping mission to be considered
• The Range Effect was being impacted every time only one SKU of that Brand was remaining on the shelf
• The Unit of Needs were not systematically considered (like in Tesco’s famous business case: Anchovies might have very low sales performances, but if they are purchased by the top 10 spenders of a sore, it becomes a problem)
• The strategic directions of the Brands were ignored (for example, a brand might want to push a specific variant of a product, even though it doesn’t perform well today)
• The Previous equilibrium of share of assortment was broken

And to the point of certain manufacturers, the rationalization impact on the category was sometimes affected as well.

How does Assortment Rationalization Work?

The idea behind rationalization is simple: if customers don’t buy a product, there is no need to have it on the shelves. Once again, it makes complete sense. The challenges come from the fact that the retailer has literally tens if not hundreds of categories to rationalize across several channels. As time is of the essence, the retailers’ teams do not always have the luxury of allocating enough time to doit as well as they – or you – wished.

The rationalization exercise is like a major Range Review: it usually starts by setting up objectives and principles.

Rationalization measurements

To drive the rationalization exercise, the retailer is going to select measurement targets. When the rationalization is complete, these measurements must be achieved. The most frequent are: Total number of skus or linear meter. The impact of sales, profitability and inventory will validate the best options.

Rationalization principles

Once the objectives are solidified, retailers are then going to apply, for each category and each channel, a certain number of principles (we can also call them constraints) that will guide the algorithm first – and the category managers – in the final decisions. The most frequent constraints are:

• Minimum sales quantities
• Facing by product type
• Number of products variants & number of products by variant
• Number of Brands
• Number of price points per selling price threshold
• …

Once these constraints are recorded in the algorithm; the machine will propose a list of items to keep or remove store by store. The final validation is often done by the Category Managers. Commercial agreements are often considered at that stage.

5 Actions to avoid being a Victim of Rationalization?

The rationalization exercise itself cannot be avoided. It creates similar benefits to manufacturers as it does to retailers, from supply chain to delivery, merchandising and return costs. There are XXX things to do adapt smartly to the reduction of your Brand’s range:

1. Be informed about both the objectives and principles of the exercise. It will enable you to run your own calculations and projections
2. Solidify the definition of “Non-Performing Items”
3. If you can’t run the calculations, ask how many skus you can keep
4. Propose your own skus choice and substantiate your selection with numbers
5. Maintain your existing share of space – even with less SKUs – and propose supporting activities to maintain it

4 Ways to make your Brand win through Assortment Rationalization?

When your relationship with your favorite retailer are collaborative, you have normally been informed in advance about the rationalization exercise and when it will take place.
Of course, the 4 actions mentioned above will need to be executed. But you can do more than this.

Easy Approach: Anticipate

When you know what the measurements are selected and their target [ e.g.: we need to reduce the number of SKU by 40%], using simple POS data, you can:

• apply these 40% to you range
• Count the number of skus you will have to remove
• Select the critical skus you want to keep and ensure they are out of the agreed definition of non-performing items.

Professional Approach: Propose an Assortment type by Cluster

The approach is like the Easy approach, with one additional parameter in your selection of sku: baskets details. You will support you selection by integrating what is specific to each channel:

• average spending by customer
• number of items per basket
• Items penetration

This will help you ensure that the items you select to remain on shelves match shoppers’ expectations.  
Brand’s aspiring to become Category Captain will do the same exercise on their competitors’ Brands and submit their selection as a suggestion.

Expert Approach: Propose an Assortment by Store

In addition to theProfessional Approach, the Brand’s own constraints must be added in thealgorithm. For example: number or type of flavor, associated purchases, packsize, price level, …

In each approach, it is recommended to run a simple projection that will measure the proposal impact on sales, concerned Brands’ effectiveness and inventory.

The discussion was organized by Chutipong Benjasatkul, the CEO of Italent, on 23 November 2022 in Bangkok.
Below are the questions and answers that were addressed during the discussion. Frederic Etienbled, CEO of Hypertrade, was the guest of Chutipong.

Question 1: What did you see change on the several retail markets HPT is servicing?
Across the markets we serve, while each has its own specificities, we identified 5 major common trends

a. Retailers’ Range rationalization
b. Brands’ new approach to shelves effectiveness
c. Change in Shopping Behaviors (Frequency and basket)
d. Increased usage of CRM and Personalization to not only drive traffic and spending,but also improve Customer Engagement ROI
e. Post-covid decline of online for CPG. In is interesting to see that today, at least in the US, Stores have become again the new the strongest media channel is now stores, with an audience almost double than digital audience.

Question 2: What do you see as the main challenges retailers need to solve?
In addition to rising costs and economic slow down, I believe retailers need to address 5 key challenges

a. Availability of course
b. Cash Flow, due to oversized ranges and lower comsumption
c. Profitability (heavy investments to drive traffic & basket and rising costs)
d. Omnichannel complexity & decline in digital commerce, where they did heavy investments
e. Capabilities & competencies’ Gap

Question 3: What are the common solutions you see retailers implementing?

Each retailer – each company – has of course its own priorities. Still, what we can see is that there are certain priorities that can be found across several retailers, whatever their size. In addition to a deeper integration of technology into the supply chain and ordering more specifically (availability and cash-flow increase), we can see 3 main trends.

a. They are working hard on Range rationalization, to optimize distribution, shelf-space, cashflow and availability. This include the setup or improvement of their current clusterization.

b. They are accelerating Data driven Category management, to not only improve the ROI of each decision in terms of products, promotion, and pricing, but also to increase Teams’ efficiencies. As strange as it may seem, retailers are not always the most advanced companies when it comes to digital transformation.

c. They are looking at all options to improve Suppliers’ collaboration with different objectives in mind: 1) engage suppliers’ capabilities more in their category strategies; 2) build customer engagement strategies; 3) automate as much as possible the creation of all document & information needed in the business relationship.

Question 4: In this context, what are the opportunities for Suppliers?

When one thinks about sales, we know that there are several sales technics used in B2B. There are for example the SPIN (Situation, Problem, Implication, Need Payoff) approach, the Solution Selling Approach, Gap Selling, etc…,

All these approaches have one point in common: they focus on identifying the pain of their customers and then propose solutions to not only cure the pain, but also deliver additional value at the category level

The key opportunity a crisis like this can offer is to elevate your relationship with retailers to a strategic level: support and anticipate their pain and challenges, and highlight the value your solutions can bring. For example,

a. Follow the rationalization trend and anticipate reduced, range and focus on what sells well
b. Be pro-active on your Brand’s distribution optimization
c. Systematically integrate Shoppers insights in your recommendations to ensure your strategy will address their specific needs in terms of traffic or spending
d. Help retailers identify and capture:

i. the category opportunities they can’t see due to a lack of time or resources
ii. The channel opportunities they can’t see due to a lack of time or resources

If we come back to basics sales training, it is about re-starting the conversation with a question: How can our Brands help you achieve your business objectives, implement your strategies and address some of your challenges?
The ideal stance would be: “After analyzing your data, our understand is that your have Opportunities A & B, and need to address Challenges 1 & 2. Is correct? I believe we can help”.

Question 5: What are your recommendations to Suppliers who want to capture such opportunities?

Building on our experience working with manufacturers, we could summarize this in “Embrace the collaboration opportunities to become a strategic partner”, with all the benefits a strategic partnership can deliver on range, distribution, promotion, display and innovation.

To break this down into action steps, we see 4 directions to make this happen

• The 1st one is a challenging one as it refers to a mindset: Make more efforts to understand not only retailers, but also the person in front of you, their job, their challenges. You need to speak their language

• The 2nd one if that once we decide to speak the Clients’ language, it implies that we are able to measure performances, successes and failures with their own metrics. Their metrics must become part of your KPI. What is success for you can be assessed very differently by them. This direction is critical to enable your company to embrace the Collaboration opportunities

• If one decides to place Retailers objectives at the centre of their decisions and positioning, then the 3rd recommendation is to embrace our new data-driven world: use data and analytics to take your decisions and validate your options. There are always lots of reasons to postpone these decisions, but it comes a time when embracing reality is required. Yes, transforming a company into a data-driven organization is not a picnic trip, nor is it done in a day, neither is it impossible. Different approaches exist, depending on each company’s size and maturity. Yes, it is going to take time, people’s energy and money. But Mistakes, approximation or misfires are becoming too expensive. Data should drive the majority of all the decisions that impact Top and Bottom lines of the company. Instinct or intuition are just the icing on the cake to be used very, very carefully

• Last but not least, and as challenging as it might sound, don’t stop investing, but increase your focus on your Return On Investment, and put this ROI at the centre of your joint decisions with retailers. A recent Mc Kinsey paper shared that companies that continue investing during tough times generate on average 37% more sales growth than their peers.

Question 6: Building on your experience with other manufacturers, what roadmap would you suggest?

In the way we look at it, we see 5 main stages, be it for physical or digital commerce:

1. The 1st step is to map and review key commercial decision processes that impact top and bottom lines. Here we are talking primarily about your Range Management, Promotion Planning and Category Reviews. These 3 processes drive most of business decisions and support the main sales drivers.

2. The 2nd Step is to identify, across these processes, where are the “Rules Gap”, meaning the absence of clear quantified conditions and rules that enable to decide what the next actions or decisions should be. At this stage, companies will usually define what actions the alerts’ thresholds will generate, as well as define the corrective actions to be taken.

3. The 3rd step is to identify, in these “Rules Gap”, where are the “Data gaps”, meaning the quantified information or data that should be used to solidify and fluidify the process

4. The 4th Step is to design, across the organization, what would be the optimal process if we had all the data and information required. At this stage, companies can also identify what are the potential missing competencies and tools required to make this optimal process work.

5. The 5th Step is the piloting, including training and monitoring. We reckon embarking on this Journey is not easy as it is necessary. It corresponds to an important part of establishing the foundation required for digital transformation

7. Question 7: What are the main challenges manufacturers will face if they want to start adapting to this new business approach?

From our experience, – and once again each company is unique – common challenges companies face when undertaking this transformative approach are:

Denial: it takes some time, and financial projections, to admit that:

a. There are no other alternatives
b. The investment will deliver one of the best ROI in medium term

Doubt: it is not easy to re-think parts of the company or working habits. Will we succeed? Do we have the right talents? Will the Teams buy in? How much will it cost? Can we afford it? Will I be able to manage this? We have been quite successful so far, why change? These are quite natural and healthy questions to ask.

Fear : a transformation – or evolution – takes time, energy and effort. We are here talking about 3 converging projects: re-aligning working processes, elevating teams’ capabilities and setting up automated technology to make it happen with agility. How will we manage such a journey? What are the risks? Will the teams follow? Are we “ready” enough?…

Resistance: even though we are familiar with the idea that What brought us here won’t get us there. Nobody likes to change. There is an important fear factor here, then often drive resistance at all levels in the Company from Shareholders to Salespeople on the field.

Question 8: What are the most frequent Quick Wins manufacturers can capture when starting this new journey?

There are quite a few:
• On financial perspective, the first benefits manufacturers can capture from using data more effectively is the sales growth thru optimization of their distribution. It can generate up t 5% additional sales. These gains also impact the retailers, which reinforce the relationship:
• Time saving is obviously a major gain
• On the Human side, Teams usually appreciate the fact that efforts will be done to elevate their skills and competencies or compensate a share of the lack of competencies by technology and automation.

Question 9: Can you share a successful Business case of a manufacturer who implemented such changes and what results it delivered?

Yes, absolutely. The company I refer to is a Cookies & Snack manufacturer. The first challenge they tackled was their range Optimization.
Data made them realize that they had to optimize their range: some items were distributed in the wrong channels (it was costing them money for nothing) and that some of their top selling items were not in all the channels they should be (they were losing sales opportunities).
Sales grew and distribution costs decreased. Overall, they could increase their range effectiveness by more than 10% in all channels. Once they rationalized their range management process by Brand and set up the supporting processes, they tackled the promotion challenges.
While they were not challenging promotions investments, their problem was double sided: 1 a large number of promotions were not translated in the expected increased sales and market share, and 2, they had a very limited visibility on the global promotion effectiveness at the retailers’ category level.
Poor planning, products, and mechanics selection were at the origin of these challenges. So they started analyzing their performances and the whole category, established promotion planning and selection rules, and set up a very more detailed approach to promotion performances analyses.
‍
After 6 months, they could improve the Promotion ROI by 20%Now, they are at the stage where joined internal collaboration between Marketing, Insights and Sales teams are now driving decisions for range, product launches, distribution and promotions.

Conclusion: on the one hand, you say that growth in current times requires more agility for quick and efficient responses in a short time period. On the other hand, you are recommending evolution and changes, from mindset to working processes and tools, that require a longer-term approach and ROI. How do you manage this antagonism between Short and Medium Term?

It is an excellent question. I was reading last weekend another white paper from Mc Kinsey saying that while it was critical to be agile and hyper-reactive to fast changing customer behaviors, it was also worth considering a new approach to Managers’ incentives by creating multi-year incentive schemes.
What I believe we all know as businesspeople and managers in this room today, is that it takes time to get the company ready to embrace change. In other words, we need to invest time and effort to be able to save time and gain in performances. When we look at the future, and even now, we are all aware that data and digitalization are only to gain more importance.
And that we need to build and develop the capabilities to maximize their usage. We are also aware of the fact that the more we delay our decisions to move towards this data and digitalization direction, the more difficult it will be to make these changes happen. The short-term imperative is to start now, and the medium term imperative is to plan carefully a step-by-step roadmap.

On a personal note, I believe the Formula for Change summarizes the mindset quite well. It says that Change can happen only if the driving force is stronger than resistance. And the driving force is made of 3 components: The awareness of the difficulties, The vision of what a better future can be and the first steps to move towards its.
The Long term is the Vision, and it concerns the whole company.
The short term – and the gains we mentioned earlier – are the first steps we can do to move forward with Sales & Marketing teams, bringing them closer to a quantified understanding of Shoppers and the actions required to address behavior changes.

Shopper Insights must be integrated into each Category, Brand or Sales Strategies: they are just critical for every Teams. In this blog, we provide a simple and practical approach to understand these insights, decode their meaning and translate them into practical actions. A must-know for Sales, Category, Marketing and Insights Teams

Step 1: Identify My Brand Challenges

Objective

• Identify if we have traffic challenges by using the Number of Baskets KPI
• Identify if we have spending challenge by using Value per Basket KPI

Methodology

• Select the periods to compare
• For Traffic challenges identification, we will be comparing My Brand’s Number of Baskets
• For Spending challenges identification, we will be comparing My Brand’s Value per Basket

Identify Opportunities

• Conclude whether I have the challenge in Traffic or Spending

Step 2: Identify The Scenarios

Objective

• Identify why my brand lost shoppers: lost to other brands, or category Traffic decreased, or store traffic decreased
• Identify why Shoppers spend lesson my brand: spend less oncategory level or store level

Methodology

• Review brand switching to identifycompetitors who gained my Shoppers
• Review category & store traffic, whichimpact my brand’s penetration
• Review Shoppers’ wallet share & valueper basket, which has consequences onmy brand’s spending

What needs to be done

• Identify what impacts my brand’s performance: traffic or spending
• Which competitors caused my brand to lose its Shoppers
• What amount are my shoppers ready to spend to purchase this type products

Step 3: Select The Right Action Plan

Objective

• Gain my Shoppers back
• Drive my brand’s traffic
• Increase my brand’s spending

Methodology

• Review my brand’s promotion performance & activities
• Review my brand’s innovation & newitems
• Review my products’ availability &visibility

What needs to be done

• Build up solid promotion plans: drive traffic or increase spending
• Launch new items
• Propose cross merchandising: display or selling

About Retail Blinks

Retail Blinks is a series of short, simple and practical insights and guidelines for retailers and manufacturers on how to improve business performances with data.

How to Create a Winning Customer Segment

Many countries are sadly in a dire situation.
‍
Bringing back shoppers to (physical or digital) stores is critical during the lockdown as well as after the lockdown.

Because each customer is different, your CRM tool needs to help you build offers tailored to their different behaviours.

Here are some ideas on how to use your CRM to create a winning customer segment-product fit:

Customer Segment Selection

Of course, customer selection must be consistent with the expected objective.

For example:
‣ Basket variation-based segmentation
‣ Frequency variation-based segmentation
‣ Category share of wallet-based segmentation

Your CRM will tell you the financial weight of each segment so you can select.

Category Fit

For your selected segment, let your CRM analyze its customers behaviours and tell you which categories will be best to be promoted.

For example:
‣ Penetration based ranking
‣ Share of wallet-based ranking

Product Fit

For your selected category, ask your CRM to give you at least 2 options:

‍‣ Product penetration-based selection
‣ Past promotion shares of wallet-based selection

Your CRM should give you the sales forecasts so you can optimize your choice.

All this can be easily done in Ulys Customer Intelligence SaaS Software

Ulys Customer Intelligence SaaS Software is a Customer behaviours Analytics platform designed by retailers for retailers.

About Retail Blinks

Retail Blinks is a series of short, simple and practical insights and guidelines for retailers and manufacturers on how to improve business performances with data.

Driving Effective Promotions is a difficult task

And it can be quickly conflictual. Our “3 Layers Approach” can help. Here is how it works.

20 years ago, in Tokyo, sitting in front of the Coca-Cola Japan Team, I was asking them for a huge discount on a purchase price so I could compete with some of our competition’s weekly “Chirashi”.

To my Big surprise, they said “Yes if we can agree on a 3 layers promo plan”

I have since kept these 3 promotion layers as a guideline when building a Promotion Plan

Number Promos, duration and frequency by layers will always vary.

And the “everyone needs to get a Win” will always strangthen sales and collaboration.

Retail Shorts

Retail shorts is a series of practical practice sharing Hypertraders could learn, capture, implement and monitor across the diversity of our Clients.

Hypertrade is a Retail Data Collaboration Platform that provides tech, data and continuous retail experts support to turn your teams into Champions.

The last time a new generation came into play in the retail world, a lot had to change to accommodate to Millennials’ needs. The change wasn’t easy but it came together. Now, the Gen Z are shaking up the market, which means a new wave of change is required.

Gen Z ages can be defined as an overall cohort as 7 to 21year-olds. But for the sake of the world of retail, this article will be focusing on the individuals, within that group, with purchasing power.

Overall, Gen Z have always lived in the internet world and don’t know one without. So their shopping preferences will naturally be located there. Apart from this no-brainer, there are a few things Retailers should know in order attract and seduce Gen Z.

Not so long ago, Category Captainship (the opportunity for a manufacturer to drive a retailer’s category) was a costly activity reserved to the happy few. Because of the resources it required on both sides, very few manufacturers were able to undertake them, and even few retailers were able to manage them.

Today, progress in Big Data is setting up a new deal.

What Resources Category Captainship requires

In the first stage of a Category Captainship project, the main resources required to kick off the project and give it a meaningful direction were Data, Skills and of course People. Data are used to understand the category performances and the shopper behaviors that drive these performances. The skills are the analytical talents required to make some sense out of the collected data to extract the opportunities each category contains. People, of course, include the retailer’s Category Manager, its Data Team, as well as the Manufacturer’s Category Development Team, Insights Team and Key Account Team, who jointly drive the Project.

In the 2nd stage of the Captainship, even more talents were required to translate these opportunities into Activity Plans (range, distribution, price, promotion, displays)  that will positively impact Shoppers Behaviors on the whole category.

In the 3rd stage, just before the execution and monitoring of the Category Plan, it is also not rare – though not always necessary – that the retailer and manufacturer agree on specific new assets.

Then the 4th stage requires constant monitoring, iterations between retailer and manufacturer to adjust and fine tune the Category Plan.

What are the Challenges

Beyond the potential costs of assets, the main challenge of a Category Captainship – for both retailer and supplier – are time and skills. Both are often lacking –  or assigned to other projects – on both sides.

Some of these challenges are:

• Retail analytics
• Category & Shopper analytics
• Data crunching & Management
• Data management

Consequently, only major players have been able so far to run such projects.

And this is a shame in the sense that a Category Captainship is maybe the best collaboration opportunity there is! Manufacturers can share about their deep understanding and expertise in a category, its consumers, trends, as well as its industrial and R&D know-how. And of course, present their brand strategy, new items, communication planning and brand messages they want to communicate to shoppers.

What changes make Category Captainship much easier?

Technology has not solved all the challenges, but it eased quite a few:
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• It has never been easier to get and crunch data: Sales & Shoppers insights are now automatically built
• Data are accessible from anywhere, making monitoring a breeze, from Category Global Performances down to each branch and Channel
• Assortment, Promotion and New Items planning and forecasting models enable easy scenarios and planning
• Range modeling tools enable suppliers to build several optimal assortment and their impact on sales and inventory not only for their Brands, but also for the competition
• Space Planning Tools are able to translate assortment selection in optimized displays Collaborative project management tools enable Teams on each side to drive the project efficiently

It is an important paradigm shift: the whole crunching and analytical  part of Category Captainship projects can now be easily managed and automated!

What Opportunities?

Category Captain Ships can now be viewed under a completely new light. Such projects still require planning and communication abilities – and definitely some vibrant Merchant Spirit !  – but with less resources.

Here are some of the ingredients that will make your next Category Captainship a success:

• Clear and quantified objectives and KPI
• Clear and quantified guidelines from the Retailer (boundaries the manufacturer cannot overstep)
• Simple and precise Timeline with stages and alignment points• Continuous access to Data
• Operational Category & Shopper Management platform shared between retailer and supplier
• Agreed Reporting Templates (that is then automated)

TOOLS WE LOVE

When we help Clients on Category Captainship projects, we like these tools

Collaborative Project Management: Trello
Space Planning: We like IWD and OpenCatman for their simplicity and very affordable price
Category & Shopper Management: Ariane from Hypertrade Of Course!

Happy future Captainships !

Do you need help or advice on how to plan and execute your future Category Captainship Projects?

For months, the world has unfortunately been experiencing an accumulation of unprecedented and simultaneous  social, environmental, economical and human challenges. For retail players, and maybe even more  for medium size and local players in developing markets, current concerns on top of the agenda today  are practical: from how to get products on shelves to how to get customers to spend more.

It makes sense that Business Owners  are much more concerned about how to solve the current, practical issues rather than reshaping their Merchandising or Category Management Teams.

Still, there are 3 reasons – with impact on both short and medium term –  why the current period is actually a favorable time to plan how to leverage the power of data and analytics.

Prepare for the Future

Difficult times always end. And when they end , all hands are on deck to capture growing trends: ordering, negotiating, recruiting, training…. Cutting trees when the fireplace requires wood is rarely a good timing.

As the activity is slowing down, this is actually the best time to map the changes we want to see happening. From data to team assessment to organizational design, from tool selection to criteria of success and ROI, these are the best times to do it. When the trends are back to growth, chances are that everyone will be too busy to satisfy customers to embark on a new project. On the contrary, a strengthened team, well equipped and well trained, will do miracles. And if the trends remain what they are, the gains in efficiency, margin and cash flow will create a better tomorrow.

Doing nothing might turn out to be costlier than a potential wrong choice.

Now is The Right Time

This is often in difficult times that we can evaluate our strengths as well as our limitations. When limitations are  acutely experienced, they also invite us to study them a bit more than usual, quantify how much they cost, and estimate how much further we could advance and progress if they were solved.

This process itself creates a positive dynamic that helps look forward. A limited ERP is the opportunity to move to the Cloud, a limited talent pool is the opportunity to give more space to capabilities development in the future and prioritize knowledge transfer, rising costs of data experts and Tech Specialist is the opportunity to investigate the benefits of expert solutions, etc.

Considering and working on the project will, by itself, create  a few wins. Among them: A clearer understanding of the solution and the practical deliverables  the organization requires, a mapping of the next organization capabilities improvement and prioritized alternatives to current limitations.

And as a few Team members will probably be associated with this project, the  motivation’s “halo effect”  it will generate is a real gift during challenging times.

Now is the right time to consider bringing Category Management to your next level for your Teams and Customers, and be ready for the next – and probably different – waves of growth.

Hypertrade is a category management solution provider that specializes in helping  retail players Teams in developing economies make sense of their data. The value we deliver is as much in the tools we set up as in the knowledge and expertise we transfer to Teams throughout execution.

Since our inception ins 2015, our Innovations have always been driven by suggestions from both Retailers and Manufacturers.We have been developing almost all suggestions so far, and they have proved very valuable for the all parties.Looking a few years back, all these innovations have focused on 3 main points:

• Increase efficiencies

• Accelerate Digital Collaboration and decision making

• Improve understanding of ShoppersFor 2021, we are calling on you again:

what innovations would like to see: Merchandising, Shoppers Analytics, Range & Promotion Planning…thank you to let us know!