Location, Location, Location

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Location, Location, Location! Measuring Feature
Display Effectiveness
March 1, 2005
2
Importance

• Manufacturers spend about 12 or 25 billion a
  year in trade promotion in the Grocery channel
• As many as 80-90 of all trade promotions do not
  provide positive ROI 1
• Much of the huge promotional budgets are devoted
  to Display and Feature activities 2
• A minor improvement in promotion effectiveness
  can have a significant effect
• 1 Accenture trade promotion study
• 2 University of Chicago study

3
Promotional Activity in U.S. Grocery

• Which vendors are driving display activity

4
Promotional Activity In US Grocery

• Approximately 14 Of Total Dollars are Sold in
  Presence of a Feature
• 235 Billion in sales 35 billion sold in
• in presence of feature

The Top 20 Categories for feature
activity comprise a diverse group. - 4
Beverage - 4 Frozen - 3 Household Goods - 4
Shelf Stable Foods Most manufacturers would have
a need for additional feature data
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Basic Promotional Output

• Most feature and display data measure
• What was the increase in sales from my feature
  and or display?
• Did I have more features and displays than my
  competition? What was the impact on sales and
  share?
• Was my feature/display price higher or lower than
  last year? How did that affect incremental
  sales?
• ...but this is only part of the picture

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Feature Measures Overview
Kevin OMalley IRI InfoScan Product Management
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Promotion Significance

• In order to generate the intended consumer
  response and trade ROI, more detailed information
  on feature content and impact is needed

Not All Features Are Created Equal!
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Current Feature Tracking

• IRI currently collects two basic pieces of
  Feature data
• Presence of Feature? Yes or No?
• Size of Feature? A, A, B or C?
• A is a feature with a retailer coupon,
  regardless of the size of the ad
• A, B and C refer to the size of the ad only.
• A, B and C grades do not refer to the page of the
  ad or if there is a picture.

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Current Feature Tracking
Dominance Template
A At or Above A Curve gt8 sqr inches B
Between A and B Curves 2-8 sqr inches C At or
Below B Curve lt2 sqr inches Ad dimensions are
approximate
6
5
4
A
Inches
3
B
2
1
C
1
2
3
4
5
6
Inches

• Ad location does not affect the score. Front
  page is not worth more than page 3.
• The same template is used for all Grocery, Drug
  and Mass Merch chains.
• All primary, secondary and tertiary ads are
  collected.

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New Feature Attributes Product Description and
Features

• IRI is expanding its Grocery, Drug and Mass
  feature collection to include the following
  additional attributes
• Presence of Picture
• Location (Front, Middle or Back page)
• Presence of Price Multiple/Multiple
• Purchase Quantity Limits
• Quantity Must Buys
• Buy/Get Deals
• Reported as ACV by condition measures
• Measures are integrated into current custom
  database, and reported for all products, for all
  Grocery, Drug, Mass geographies

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Location

• ACV Front Page Feature
• ACV Middle Page Feature
• ACV Back Page Feature
• IRI will not capture information on the specific
  page number in the ad on which the product
  appears (e.g. page 2)

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Price Multiple Feature

• ACV w/ Price Multiple Feature
• Avg Units per Price Multiple Feature
• Avg Price per Price Multiple Feature

These are both price multiple features. The
units measure will take into account all price
multiple features in the geography. Avg Units per
Price Multiple 2.5 Avg Price per Price
Multiple 3.42
Not reported in databases. Available in AIG
analyses only.
13
Feature Limit

• ACV w/ Feature Limit
• Total Number of Units, Feature Limit

• The Coke Classic, Diet Coke and Sprite 12 packs
  will be coded as having a limit.

Not reported in databases. Available in AIG
analyses only.
14
Must Buy Feature

• ACV w/ Must Buy Feature
• Total Number of Units, Must Buy Feature

In this feature event you must buy X amount to
get feature price.
Not reported in databases. Available in AIG
analyses only.
15
Buy/Get Feature

• ACV w/ Buy/Get Feature

Feature deal depends on buying X item to get the
same item free.
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Benefits of Enhanced Feature Attribute Tracking

• Invest in only the most efficient ads Is it
  better to buy 1 picture feature or 2 non-picture
  features?

• Track compliance and performance against trade
  calendars

• Negotiate with retailers for the specific feature
  ads you want, using fact-based analysis Which
  brands drive category volume when featured?

• Understand which retailers are providing higher
  quality ads (eg. front page) and how that affects
  brand performance

• Benchmark your feature support and content
  against other key brands Who receives the most
  front page features?

• Understand the drivers of feature success Does
  putting quantity purchase limits affect sales?

• Incorporate into Advanced Analytic studies to
  understand the price point and feature
  attribute(s) that maximize incremental sales and
  ROI.

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ApplicationsPicture Feature Understand drivers
of sales performance
Chocolate Candy Brand Halloween 2005 vs. 2004
CVS
Walgreens
CVS and Walgreens both increased Feature support,
but CVS had more picture features, driving share
increases in the 2005 season
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Pictures and Front Page Features Provide Greatest
Lift for Cozy Soup
Increase in Volume
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Moderate/High Value
High Value
Front Page
Pictures and Front Page Features Provide Greatest
Lift for Cozy Soup
Picture Feat Front page 184.2
Picture Feat Front page 129.5
Middle Page Buy/Get 134.1
Middle Page Feature Limit 33.1
Picture
No Picture
Middle Page
Picture Feat Back Page Buy/Get 74.1
Picture Feat Back Page Must Buy Feat 54.9
Back Page Feature Limit 33.8
Low Value
Moderate/Low Value
Back Page
20
Cold Beers Volume Share (31.6) outpaces that of
Strong (23.5)Front Page Feature Support
Driving Share of Category
Beer Ad Feature Location Grocery Retailers in
Mid-West Sales Territory IRI 13 Week Ending
9.26.04
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Display Express Insights Overview
Steve Frenda Mosaic Infoforce
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A Strong Retail Marketing Strategy Has Never
Been More Important

• Shoppers are channel nomads, seeking better
  values
• Shoppers need help and information
• Shoppers want variety but are confused by it
• The retail environment is cluttered,
  confusing, poorly executed
• Retailers experimenting with re-making image
• Manufacturers spend significant to have
  access to a marketplace for unprecedented array
  of new products, healthy options, innovative
  ideas
• Mass media is disintegrating
• The chaotic intersection of these objectives
  calls for in-store display, shelf and perimeter
  merchandising leadership as never before

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Retailers are Re-building Identity with Perimeter
Merchandising That Excludes CPG Manufacturers
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Retailers are Re-building Identity with Perimeter
Merchandising That Excludes CPG Manufacturers
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What is Display Express Insights (DEI)?

• A total store display measurement database that
  helps clients solve RETAIL EXECUTION AND
  COMPLIANCE issues such as
• Comparing your total category performance vs.
  other categories
• Understanding retail execution promotion display
  performance within the week of the event
• Knowing the quality and location of your displays
  8 Locations
• Monitoring your competitions display performance
  and compliance
• Comparing display performance across 100 Key
  Retailer buying points
• Finding additional display space throughout the
  store for your category

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Display Express Insights Total U.S.
Supermarkets Avg of Category Displays per
Store per Week

After a steady climb through 02 and 03, we see
only a 1 increase vs. YAG for the last 12 weeks
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Display Express Insights Key Retailers Avg
of Category Displays per Store per Week

12 wk chg vs YAG -2.6

12 wk chg vs YAG 11.3
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In 2004, The Top 7 Top Displayed Categories Lost
Share of Total Store Display Total Supermarkets
Supermarkets Share of Displays Top Categories
Pt. Chg vs YAG

• BIG WINNERS
• Fringe Categories
• Secondary Manufacturers
• Clutter

Source Mosaic InfoForce Cross Category Display
Database 04 vs. 03
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In 2004, Only 2 of the Top 10 Displaying
Manufacturers Increased Share of Total Store
Display Total Supermarkets
Supermarkets Share of Displays Top Vendors
Pt. Chg vs YAG
Only 2 of 10 top displaying manufacturers grew
display share in 2004
Source Mosaic InfoForce Cross Category Display
Database 04 vs. 03
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Areas of the Store Collected

• All Display Locations Collected
• Lobby
• Front End Cap
• Back End Cap
• All Other End Cap
• Perimeter
• In Aisle
• Promotional/Seasonal Aisle
• Shipper

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Kroger December Ads for Pop Tarts
Atlanta
Cincinnati
Detroit
Denver
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of Stores DisplayingWeekly Trend Key Kroger
Divisions

• Display Quality
• of Stores With Front End Cap
• King Soopers 35.3
• Cincinnati 28.6
• Michigan 23.1
• Atlanta 82.7

Major Ad Week
11/21
12/5
11/7
12/19
1/2
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Campbells V-8 Juices 45MM Circ CouponDropped
Sunday 8/15/04
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Campbells V-8 Juices of Stores
DisplayingWeekly Trend Select Key Accounts and
Total U.S.
For warehouse delivered products, coupon / ad
display tie-ins normally range from 25-50. For
DSD products, display tie-in for front page ads
is in the 60-98 range.
Coupon Week
7/4
9/5
8/15
7/25
9/26
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Shippers - Top Categories in Supermarkets - of
Stores with Weekly Presence and of Shippers per
Store per Week
Stores w/ Shippers
Shippers per Store
13 Weeks Ending 9/30/04 Source MIF Display
Express
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Key Accounts - of Shippers per Store per
WeekAccounts ranked in order of current year
display activity
All major supermarket accounts are down vs.
previous year displaying shippersbut shippers
represent approximately 20 of total CPG displays
13 Weeks Ending 9/30/04 vs YAG Source MIF
Display Express
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Branding Throughout the Supply Chain
Strong Execution

• Todays consumer wants
• Clarity and relevance
• Messages that make sense
• New solutions

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In-Store Branding Opportunity Lost
Lost Opportunity

• There are over 1,000,000 shippers and in-aisle
  displays in U.S. Supermarkets weekly.
• While the number is down slightly vs. YAG,
  there are approximately 28 manufacturer shippers
  and 20 in-aisle (often cut case) displays per
  store per week.
• Are you maximizing your brand image and impact
  with these key display opportunities.

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Conclusions
Trading Partners must maximize in-store marketing
and merchandising for new and existing products

• Manufacturers
• Continue to strive for
  excellence against the 4Ps
  
  Product, Price, Promotion, Place
• Establish a new connectivity with consumers and
  consider their lifetime value
• That connection must transcend that which is
  delivered through the retailers
• Trading partners must work together to drive
  resources against innovation in field marketing
• Retailers
• Currently have a valuable bond with consumers
  that must not be squandered exploit your brand
• Can have a pivotal role in encouraging
  manufacturers to develop their retail marketing
  and in-store advertising

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Recommendations

• Quality retail execution can make or break
  success
• Must determine which KPIs will drive performance
  for your brand, products or stores
• Set standards for retail field organization
• Measure performance inspect what you expect
• Make results transparent throughout organization
  - ASAP
• Offer tools that are accessible and easy to use
• Focus limited field resources on categories or
  stores with biggest opportunity gap