engage Launches in Africa

engage Africa
engage Africa

Nearly 10 years ago, Mike Anthony (the co-author of The Shopper Marketing Revolution) and I founded engage. Since then engage teams have worked with over 20% of the top 250 consumer goods companies across three continents. Having established have offices in Hong Kong, Malaysia, Singapore and Thailand, we’ve been investigating an African opportunity for over three years.

I’m therefore delighted to announce the foundation of engage Management Consultants Africa with Jason (Frich) Frichol, at the helm. Frich, a South African born and based specialist in shopper and retail marketing, has been working with us to bring the firm’s offering to Africa. Identifying a gap in the African Consumer Packaged Goods sector, Frich recognized the need for our “Total Marketing” concept.

Frich states: “When I started my shopper marketing journey as a director of a FMCG company the return on investment, market share gains and growth achieved by applying shopper marketing were unparalleled in respective categories and territories. The company was mobilized around a shopper-centric approach with heavy investment in training and development of our team. After leaving the company I tried to replicate these results with other brands and businesses, and although the returns have been favorable, they haven’t reached the exponential heights previously experienced. The challenge is compounded by weak turnarounds and poor execution levels due to a lack of inter-departmental synergies. It is mainly for these reasons that I have been lobbying for engage to come to Africa and launch its development and training platforms, which also cover customer management and field sales marketing.”

Our objective is always to provide our clients with tools and tactics that deliver improved efficiency and greater profitability for their businesses. “In a nutshell, it’s all about integrating development solutions and ensuring shopper-centric strategies translate into accelerated returns” says Frich. With increasing formalization of retail in Africa and the burgeoning middle-class, we’re looking forward to participating and engaging in this incredibly dynamic environment.

engage Management Consultants Africa will focus on delivering a broad range of tried and tested training and coaching approaches and bespoke training accreditation platforms as well as engageAssess™ and People First™. engageAssess™ identifies internal opportunities across commercial functions, benchmarks performance and defines the root cause of current performance by assessing over 150 marketing, shopper marketing and sales activities. People First™ is a systematic approach to people development planning which focuses human resource on business priorities through effective organizational design and competency development.

Please contact Frich with any inquiries about our services in Africa.

Category Management 3.0

Sunrise Over SuperiorBelieve it or not, Category Management is now 25 years old. First formalized by Brian Harris in 1989, Category Management has played a significant role in framing relationships between brands and retailers around the world. Like all business processes Category Management evolved in response to changes in the business environment and, as the business environment continues to evolve, so does Category Management. I believe that as we enter the next quarter century of this process’ existence we are about to see some major changes.

The fall of Category Management 1.0

The original 8-step process that Brian created all those years ago was designed to enable brands and retailers to work together. At its heart was the simple precept that if both could collaborate to grow the total turnover in the category, both would benefit from the increased spoils. The process help re-cast the definition and segmentation of categories based on consumer and shopper behavior and to define growth objectives based on the insights this produced. Strategies and plans to realize these objectives where the developed and, at least in theory, committed to.

I remember the first rush of enthusiasm for this process, especially from brands as it offered the potential to respond to the pressures of retail consolidation and media fragmentation by leveraging a wide retail base to market directly at the point of purchase. But over the next 15 years I also saw this enthusiasm deflate. Promised execution failed to materialize, the process was long and unwieldy and retailers proved to be fickle partners. By 2005 ‘doing Category Management’ had been reduced to horse trading over on shelf space and both brands and retailers seemed to have consigned the process to dust heap.

The rise of Category Management 2.0

And yet, the concept of working together to drive better performance at retail was far from dead. Retailers began to replace Category Management platforms with joint business planning approaches. Data from service providers such as Dunnhumby and latterly Australia’s Quantium have added a richness to this process and retailers like Tesco have continued to leverage their supplier base’s thinking by asking leading brands to share ideas to drive the category in open forums.

Concurrently, retailers themselves have taken greater initiative in develop their own category propositions and the process and science of Category Management has in general become more retailer driven. But all of this has felt very much as if the whole field is a period of transition. The major question being, in transition towards what?

The dawn of Category Management 3.0

I believe that Category Management is about to begin a major renaissance as new pressures force major retail chains to re-think their models and as brands wrestle with sluggish growth and meagre returns. The consumer goods industry has been a laggard in embracing technological changes which has often meant that in the last decade, many companies have been slow to embrace the dawn of big data but today the volume and range of available data is about to precipitate a major change in this behavior. Equally big retail is being squeezed by the advance of convenience retail, a ‘shrinking middle’ which sees discounters rising and specialty stores cream the top of the market. And the whole process of developing annual plans and long-term strategies is becoming increasingly pressurized by rapidly shifting market dynamics.

In this world we are increasingly ready for Category Management 3.0 – a new way of for brands and retailers which fully leverages today’s technology.

Category Management 3.0 will be ‘always on’

The Category Management processes of the past were ‘one shot’ projects that required extensive joint working to define a mid-range plan. The future of Category Management is one where plans are constantly refined and updated to respond to the latest data. This will more closely emulate the real world of retail where small adjustments are made constantly and targets are reviewed and recalibrated weekly, if not daily.

Category Management 3.0 will be focused on one shopper in one store

The Category Management processes of the past looked at ‘the shopper’ in ‘the store’ as if both were homogenous. In future Category Management will leverage micro-targeting of shoppers and adjust individual stores to address their needs. Oh and the ‘store’ is unlikely to be a purely physical environment as retailing bridges to online to offline world. What this means is that the shopping experience will begin to feel more personalized and tailored especially in on-line environments. This will be married with changes to physical retail environments where ranging and promotion calendars will become more responsive to geography, day part weather and the aspirations and behaviors of shoppers in the locality.

Category Management 3.0 will apply the most appropriate tools (not just the sexiest)

Category managers have always used point-of-purchase tools. In the nineties these were confined to range, merchandising, price and promotions. The category managers of the future will have a much broader set of tools influence shopper’s behavior. Some of these will be super-cool innovations but in the end they will all revolve around delivering the right product availability to the right shopper with the right message in the right media and supported by the right offer. Category managers will be able to blend tools to meet the demands of each shopper they serve. So shoppers who respond to digital tools will be served these but equally shoppers who need personal attention or just simply products that are easy to find will benefit also.

Category Management 3.0 will be machine-led

The first Category Management processes I led involved extended meetings, spreadsheet calculations and a lot of judgment and inference. This will be unsustainable in the future – data sets and complexity will exceed the processing power of humans and the limits of group work. In order to respond efficiently and effectively and constantly optimize delivery algorithmic models and machine brains will be essential. Decision making will have to become more automated which will create challenging requirements for human capital in the future. Higher levels of talent will be needed both in retail and in manufacturing and different types of skills will be become essential. Data analytics and interpretation will become key competencies in both environments as concurrently the need for creativity and strategic thinking will increase.

Category Management 3.0 requires the re-invention of brand and retail relationships

This is perhaps the area which will require the greatest level of effort from retailers and manufacturers. It may be an unfair observation to make, but I don’t believe that the last decade has hailed any improvements in the relationships between retailers and manufacturers. At best god relationships have been maintained but at worst poor relationships have deteriorated. The behaviors of both parties in the commercial transactions seem to have worsened and Tesco’s current woes serve as a clear example of the consequences of this.

For major brands and their retail customers this must change!

The commercial viability of both parties depends on their ability to service shoppers better, if they fail, shoppers will go elsewhere it’s a simple as that. Brands should be much more cognizant of the behaviors of their shoppers and the roles retailers play. Retailers should be much more aware of the value and role that brands play in enhancing shoppers’ experience. Both must embrace that retail is not a zero-sum game and that through effective collaboration profitable growth is a sustainable outcome.

New Year, new Category Management

As we enter a new year and a new quarter century of Category Management, I’m personally interested in how the industry can advance its ways of working and its utilization of technology to deliver this. I’d like to invite readers to post their thoughts and opinions on the future of Category Management and to collaborate with me to shape this change so please do get in touch.

Image from http://www.flickr.com/photos/chefranden/11675446966/in/photostream/

Three simple in-store strategies to drive impulse

Driving impulse
Impulse merchandising

I recently spent a few weeks in the UK and as always I trawled the local superstores looking for in-store strategies to share. In the past I’ve headed straight to the aisles of Tesco, Sainsbury and Asda, but as price competition continues unabated and all three battle with challenges from hard discounters and online alike, I found little that would inspire the global reader.

In mild desperation I turned my attention to seeking out examples of really-well executed but simple strategies. One thing UK retailers seem to be doing really well is driving impulse. Here are three tried and tested approaches that work, with some more current examples of their execution:

Simple in-store strategy 1: Use the queue

 

Impulse merchandising
Use the queue

UK retailers are increasingly turning to self-serve payment points. This is changing the queueing environment as lines become consolidated. Retailers like WH Smith, BP Connect and Marks and Spencer are responding to this by creating ‘queue zones’ which segregate shoppers who are checking out from those in the main store. These ‘queue zones’ are excellent environments to drive impulse purchase, offering a space for shoppers to top-up their baskets with extra treats that boost store profitability. Brands in impulse categories can capitalize on this space by optimizing their position on shelf, creating engaging communication devices and by creating offers to increase purchase weight.

Simple in-store strategy 2: Site it right

Secondary display
Site it right

Secondary locations have been a common strategy brands for years but few optimize secondary sites effectively (see Mike’s blog). Here’s a really great use of secondary siting for a product that would probably be lost on a regular shelf. This works because as a flavoring for regular mineral water the secondary site reinforces consumption.

Simple in-store strategy 3: Nail the display

Seasonal merchandising
Halloween display

Off-shelf display is a regular order of business for most brands but so often displays on gondolas do little to arrest shoppers. This Halloween-themed display is a great example of how to create stopping power. There’s a number of impulse options that shoppers in this Marks & Spencer Simply Food store would probably add to their basket during the season. It’s effective because it’s sufficiently far into the store whilst being visually impactful. Pumpkin anyone?

The key – outstanding in-store execution

All of these examples are cited because they are great at driving impulse both for the product and the retailer but they’re also, on observation, consistently well executed across the retail base. It’s clear that significant time, effort and expense has gone into ensuring that plans have been carefully drawn up, equipment has been efficiently designed, manufactured and delivered and store managers have been well briefed.

The casual observer might imagine that these ‘simple strategies’ are easy to execute – they’re not. For brands who really wish to capitalize on the impulse opportunities modern retailing offers I would offer a few words of advice:

  • First set a clear behavioral objective – define what additional consumption you want to create and think carefully about how the behavior of your target shoppers needs to change to drive this. Be clear about where this behavior will happen and what needs to be done to deliver the change.
  • Second share the upside with your retail partners – retailers are rightfully retrospect about throwing themselves behind impulse initiatives: They have to deliver economic benefits as well as resonate with the strategy the retailer is following. Successful propositions illustrate how the brand is likely to deliver against all relevant factors.
  • Third keep it simple – in retail, if it can go wrong, it will go wrong! Pair back the concept to its essentials and then communicate what is needed, where and when, clearly and concisely to everyone.

Does this ring true for you? If so share your experiences below.

It’s time to integrate consumer, shopper and digital marketing

integration-puzzleAges ago I wrote a blog suggesting that digital marketing did not yet mean shopper marketing. Back then digital marketing was all about getting positive word-of-mouth whilst shopper marketing was about delivering the best experience in-store and both were very, very different to consumer marketing.

But since I wrote that commentary the world has changed somewhat: mobile makes constant communication a reality; it’s now well-accepted that an awesome digital campaign is not measured in ‘likes’ but in buys and retail has become ‘omnichannel’. Today it’s increasingly difficult to draw hard lines between behaviors of consumers and shoppers and it’s impossible to ignore the role of digital in influencing both.

Companies have also changed since I wrote my original article. Most consumer goods businesses we work with have invested in headcount to build shopper and digital teams. However, these teams often seem to be treated as entirely separate entities from the consumer marketing team and that, to me, is a mistake.

Consumer marketing and shopper marketing should not be separated

A marketer’s mission is to drive the consumption brand. This is done by tapping into consumer’s needs and desires, unlocking consumption occasions and constantly enhancing the usage experience. But no product can be consumed unless it is first bought by a shopper. This means that the requirement to change consumer behavior is inextricably linked to the need to change shopper behavior. Separating the process of developing consumer strategies and shopper strategies increases the probability that the link between the two will be broken leading to inconsistencies and inefficiencies.

Digital is media not marketing

I don’t get why ‘digital marketing’ needs to be a separate school of marketing. I see clearly the value of being able to direct highly targeted communication and the major benefits of measurability; I fully get the complexity of honing content to ensure the right messages reach the right people at the right times and I understand that there are a bunch of skills required to make this work brilliantly that I don’t have.

BUT this is just as true in traditional advertising.

I don’t call advertising “marketing” because I recognize advertising as a tool that marketers use to get results. So I’m confused as to why digital needs to be a separate function of Marketing and as to why it needs to be separate from traditional consumer marketing or to shopper marketing. To me digital tools are equally valuable in marketing to consumers as they are in marketing to shoppers, so surely treating digital as a separate discipline will ultimately also lead to incoherence too, won’t it?

Consumer, shopper and digital are all “Marketing”

I hope that it won’t be very long before the terms ‘consumer marketing’, ‘shopper marketing’ and ‘digital marketing’ cease to exist. Traditional consumer goods marketing is changing to take on a broader view of the discipline that recognizes that modern consumer brands must market not just to consumers, but also to shoppers and to retailers. None of these tasks is possible without the use of digital platforms.

Each of these tasks is of equal importance and all require both strategic consistency and executional specialization to be successful. However the requirement for executional specialization should not determine the structure of the marketing organization. As the world becomes more inter-connected, marketing strategies and organizations must also become more integrated. In short consumer, shopper and digital marketing must all become “Marketing”.

Integrating consumer, shopper and digital marketing

When Mike Anthony and I wrote our book “The Shopper Marketing Revolution”, our hope was to create a model that effectively integrates consumer, shopper and customer marketing. Perhaps it’s time we wrote a new edition to reflect the changes that have happened since we finalized the text early last year. However, I still believe that marketers that can clearly define which consumers they are targeting, what shopper behavior they want to create and where that behavior can be created have a fighting chance of creating a truly effective marketing mix which will drive financial returns.

I believe what’s now essential is that organizations embrace the ideas that consumer marketing and shopper marketing are simply “Marketing” and that digital is part of the marketing process. CMO’s should recognize that their teams are responsible for the ‘total marketing’ of their brands and that requirement for specialist capability does not necessitate the creation of organizational silos.

If you feel the same way (or if you passionately disagree!), please do share your thoughts here.

5 Essential Shopper Marketing Skills

Five Essential Shopper Marketing Skills
Five Essential Shopper Marketing Skills

Are you building a shopper marketing team and struggling to define what you’re looking for? Perhaps you’re looking for a role in shopper marketing and you’re not sure if you’ve got what it takes? In a relatively new discipline, finding skilled and experienced ‘shopper marketers’ can be tough. So what are the essential shopper marketing skills that make a great ‘shopper marketer’ and where do you look for them?

Shopper marketing is marketing

The first principle to grasp is that shopper marketing is a business process which seeks to change shopping behavior in order to drive consumption of a brand. Like other forms of marketing, the process identifies a target segment, sets objectives for behavioral change and defines a marketing mix to deliver these. Like other forms of marketing, it is multi-disciplinary drawing on a broad understanding of the business issues facing a brand and; like any marketer, potential ‘shopper marketers’ need a number of fundamental skills to be successful.

Essential shopper marketing skill 1: The ability to create insight

If you read my blog last week, you’ll have seen that shopper insights can be commercial game changers so the ability to find insights in data is a ‘must have’. Shopper marketers need to have a keen sense of where business growth opportunities might exist and be able to develop hypotheses about these. They need to have the patience to sort through a variety of data sets to find evidence to validate these hypotheses whilst demonstrating their creativity in finding proxies and alternatives when no direct data can be found. Once they’ve found proof that an opportunity exists great shopper marketers can evaluate these opportunities, showing how their realization contributes to the company’s objectives as well as those of its customers.

Essential shopper marketing skill 2: The ability to segment

Shoppers are real people, just like you and me. Since we are almost certainly different, so are shoppers. The ability to segment people who buy a brand in a meaningful and measurable way helps shopper teams target effectively. The same skills help define relevant retail environments in which invest. Great shopper marketers demonstrate an ability to seek out relevant differentiators upon which to base their segmentation and an ability to balance complexity and practicality so that the whole business can act on their conclusions.

Essential shopper marketing skill 3: The ability to prioritize

Marketing is both complex and expensive and since all companies work within limited resources (though some more so than others!), the ability to define what not focus on is always valuable. This is perhaps more true in the field of shopper marketing as the level of complexity can be exponentially greater as one considers finer segmentations of shoppers and channels (imagine having to create specific campaigns for every shopper segment in every channel and for every brand). Knowing how to define the fastest path to growth and excluding the difficult and the low-value ensures effort, energy and investment flows to the places they are needed.

Essential shopper marketing skill 4: The ability to plan

I mentioned that shopper marketing is multi-disciplinary: Successful campaigns depend on the actions of practically every part of the business. Shopper marketers who can demonstrate their understanding of who is required to do what, when in order to achieve specific and measurable objectives are a valuable commodity.  What marks a great shopper marketer out though is a sensitivity for the needs of external parties and retailers in particular to ensure things get executed.

Essential shopper marketing skill 5: The ability to communicate

Shopper marketing as a function rarely sits at the heart of the business – we’ve found shopper teams in marketing teams, digital teams, as sub-sets of trade marketing teams (bizarrely) and in sales teams. Many of the guys and girls we work with manage multiple stakeholders and the best are true chameleons – finding common ground with finance experts, sales reps, digital teams and retail buyers alike. Wherever the team sits, the ability of its managers to ‘sell’ the value of their objectives and secure agreement to action against plans is key.

Shopper marketers are marketers

By now many of you should be asking what the difference between a marketer and a shopper marketer is and the true answer is ‘very little’. The same skills that make a marketer successful are the ones that will make a shopper marketer shine. Sure shopper teams need to understand the differences between consumer behavior and shopper behavior. Of course they need be more aware of the trade than their consumer or digital peers. But point to any truly successful marketer and ask yourself if they don’t these traits too.

If you’re thinking about where to find the next member of your shopper team or you’re thinking about making the move for yourself, these essential skills are the ones you should be building on and if you need help, feel free to get in touch.