3 out of every 4 store visits are effectively a waste of time and money

How you can cut costs & dramatically improve your field marketing ROI today and tomorrow

Why I am here

To help you

• Focus your field marketing investment to those stores / outlets / branches with the greatest

potential to improve your ROI by:

• Generating up to 20% increased sales revenue during periods of promotional activity

• Giving you better insights into your customer or your channel

• Enabling you to implement better through the line activity and in-store activations

• Improving the performance of your field sales / merchandising teams

• Diageo– UDV– Guinness

• Charles Wells• Scottish Courage• Interbrew• Seagram• Matthew Clark• PepsiCo Drinks• Constellation Wines• Weetabix• Danone Waters• Ferrero Rocher• Kronenbourg

How I know what we are telling you

• Twinings• Nabisco• Nestle• CPC• Sara Lee• Frito-Lay• Hershey• Golden Wonder• Aunt Bessie's• Campbell's• Leaf Confectionery• Warner Lambert -

confectionery• Walkers

Snackfoods• Masterfoods• General Mills• Centura Foods

• Colgate-Palmolive• Levi’s• Gillette• PZ Cussons• Procter & Gamble• Spalding Sporting

Goods• Elizabeth Arden• Reckitt Benckiser• Imperial Tobacco• Gallaher plc• Philip Morris• SCA Hygiene• Dunlop Slazenger• Interflora• CoMag• Buena Vista• Frontline• McCain

• Distribution, availability, visibility and promotion are all critical to getting the product in the shopping trolley

• Leaving in-store performance up to the retailer and your field marketing team is tempting – it’s hard, it’s complex, and how can you calculate the return for your effort anyway?

• The easiest and “safest” solution for most brand owners is to direct their resources to the stores with the most “risk”, those ones with the highest sales

• This kind of thinking is expensive………….. whether it’s because your in-store activity isn’t being properly implemented, or because it is

• Up to 75% of stores are compliant when visited, meaning 3 out of every 4 field force visits are a waste of time and money

Typically 80% of sales potential is in only 55% of stores – so why call on those that don’t justify it?

This is what we found from a recent effectiveness audit for a leading broker's sales force supporting a major FMCG brand stocked in Woolworths and Coles with a potential sales value (size of prize) of $24 million per annum

▼ 14% of stores received fewer calls than was agreed with the brand owner ▲ 22% of stores were called on more often than agreed (sometimes much more often!) with no discernible sales benefit ■ Over 3 months, 300 stores received 2 visits in one day – according to the visit data. Why?•There was no correlation between number of visits made and sales volumes achieved. Of stores with 10 or more visits over an 8 week period, the top had an average weekly sales value of $71,000, the bottom an average sales value of $8,000 •In Woolworths 80% of the additional opportunity (size of prize) was in just 42% of the stores visited. In Coles 80% of the size of prize was in just 38% of stores visited•Effect of sales visits on promotional sales in one Woolworths promotion:

- Group of stores receiving 7 or more visits achieve a 154% uplift - Control group of stores not visited at all achieves a 180% uplift! •In 278 Coles stores, we found that the product had not been scanned at any time in the 13 week launch period. •But visited Woolworths stores performed better than our non-visited control group – they started scanning the new product several weeks earlier on average

It’s a big problem, but it can be fixed

• Most brand owners have no measure of the ROI on the Field Marketing investment.• Promotional uplift varies for a variety of reasons

– Distribution & availability issues inhibit sales! – Nature of the promotional offer itself – Mix of products & their responsiveness – Compliance - dates, products, displays – Propensity of the shoppers to respond to the offer, according to socio-

demographic mix of the catchment consumer

• Intelligent analysis of store level EPoS data combined with field marketing information

about their in call actions can highlight the gaps and direct resources only to those

stores requiring a fix, cutting coverage costs and dramatically improving the ROI of

your field marketing effort

How we analyse and drive ROI

• Compliance gaps reviewed against classic sales drivers (DAVP)• All stores in the retailer estate included• Each gap is identified at a sku level, valued in the context of its potential contribution (lost sales) &

modified according to the total value of your sales in that outlet • DAV gaps are assessed based on most recent data available• Promotional gaps forecasted using predictive modelling tools based on historic performance of your

brands in each specific outlet – highlights late starters, early finishers and ‘basket cases’!• Stores segmented according to total potential to increase sales• Resources are then allocated or reduced/removed accordingly

Imposing a threshold 15 to 1 ROI on a database of 1600 stores provides a call file of 883 stores (55%) but retains 80% of the potential sales increase

Improving ROI at store level

Ranking by percentage uplift addresses variations due to store size, but still….???

Drilling down

Late start, early finish and lack of availability half way through= poor performance

Example 2, high uplifts, but inconsistent

Was the product in the store?……

Was the product in the store?…..

Reasons for variations

Past performance for future returns

Prevention vs cure

Action plan depending on compliance

For example, 3 visit stores have biggest potential to improve here

Beyond in-store compliance…

• Many other reasons for store level under-performance – Low consumer demand / too few target consumers

in the catchment area of the store– High concentration of other grocery outlets in the

immediate vicinity of the store– Poor category position in this specific store – lower

than expected shopper traffic

– Other local or store specific reasons • The start point is to segment the stores according to

your own assessment of consumer demand for your brands*

*20:20rdi works with GMAP as its exclusive partner for socio-demographic profiling

Start point– analyse areas of strong potential consumer demand and allocate those consumers to small post code sectors

• We start by mapping consumer demand by postal sector using

– TGI (Nielsen) survey data for your brands

– FES data– Census data– Cameo Socio-demographic profiling

specific to your brands• Highlights groups of consumers more

likely to be using your brands• We map them geographically in 57

Cameo groups or types (top line summary of 10 super groups shown below)

We then use powerful gravity modelling tools to allocate your target consumers to the retailer’s stores

• Store catchment areas defined by drive times, consumer profile & proximity of competitor outlets

• Forecasts total # of consumers likely to visit each store

• Also predicts how many of those will be your customers - % of profile consumers in a particular store

• Highlights underperforming stores which will receive priority action

• And also over-performing stores which represent ‘Best Practice’

Example – Luxury Ice Cream in Multiple Convenience store group

Insight enables targeted deployment of a range of marketing tools – and also some decisions about where not to invest

Local PostersExperiential

eventsCoupons

SamplingNew POP

units

Staff training & incentives

No POP renewal

Store Estate map

• Combining EPoS data, promotional history & consumer demand information we can build store classifications that enable the brand owner to select the appropriate customer activation tool to drive penetration, sales & category share

• And the same data sets allow us to track, measure and refine the approach as we see the results come through

• The benefits are compelling – in simple terms we can reduce trade spend and increase sales!

Want to know more?

Easy Next Step - look for quick wins

• 20:20 RDI runs a proof of concept workshop where we take 12 months of EPoS data, review the impact of major promotional activity, run the model and demonstrate the missed potential

• The objectives of the workshop are:– To analyse the impact of 3 recent promotions within a single retailer– To look for differences and similarities in executional compliance at

individual store level across the 3 events– To examine the opportunities offered by the differing sales drivers

within the retailer(DAVP)– To calculate a potential Size of Prize (SOP) associated with the retailer

right now– To stimulate cross functional debate around the findings– To create hypotheses around the causes of the findings– To demonstrate the benefits associated with mining store level EPOS

• The deliverables will be:– Analysis of 3 promotions– ‘Rogue Store’ analysis– ‘Best Practice Stores’ review– Promotional compliance Size of Prize– Distribution gap Size of Prize– A cross functional team motivated to challenge the way they currently

do business

What data do we need to run a workshop?

Simple really…………

For more info on 20:20 RDI or to arrange a proof of concept workshop, contact Liz Rowell at Red Ark. +612 9437 1377liz@redark.com.auwww.redark.com.au