The Center of it All
March 1, 2005
The Center of it All
I recently attended the Reinventing CPG and Retail Summit hosted by Information Resources Inc. in Miami. Not only was the Florida conference a welcome break from a Chicago winter, but it provided some interesting insight into the consumer/retailer relationship and how it affects beverage — and all consumer packaged goods — manufacturers.
An important theme of the conference was “consumer-driven” merchandising. I know, telling you your business is about consumers is a little like telling you it’s about beverages. Not exactly breaking news… But speakers at the Summit relayed several ways that manufacturers and their retail customers can better put consumers at the center of their efforts.
One is by recognizing that shopping behavior is no longer about demographics but about “trip missions,” or the many different reasons for shopping. Sometimes a store trip is about preparing for a specific meal, sometimes it is about stocking up for the week, other times it is for grab-and-go consumption. We’re used to thinking about those separate trip missions when it comes to specific retail outlets — supermarkets vs. convenience stores, for example — but as the lines between retail outlets continue to blur, it’s important to think about them when it comes to every outlet.
Romesh Wadhwani, chairman of IRI and founder and managing partner of Symphony Technology Group, said the CPG and retail industries have “overused the word consumer,” and their efforts, particularly in regard to managing supply and demand, are “completely unreflective of consumers.”
Category management also is in need of an overhaul, he said. The methods used today have changed little in more than 20 years, and give lip service to consumers, but not action.
“It puts the retailer at the center of the universe,” he said, pointing out that category management puts more emphasis on the convenience of the retailer than understanding why and how consumers shop.
In a separate session, Diageo Vice President of Consumer Planning and Research Jim Mosley gave examples of how his company has taken a consumer-centric “total beverage alcohol” approach to its business. Rather than attaching brands and categories to demographic profiles, Diageo has determined that the same consumer often buys different products on different occasions. The important thing is not to know that a particular consumer is a beer or spirits drinker, but that a beer brand and a spirits brand can have the same personality attributes and be appealing to the same consumer in different situations.
That realization, Mosley said, helps Diageo’s sales and distribution team sell the right brands to the right accounts and helps restaurants and bars understand why certain brands will perform well in their establishments. But he conceded the concept has been much easier to translate to the on-premise business than off-premise.
IRI, of course, hopes companies will use its own products and services to solve these retail management issues. Nevertheless, they might be worth pondering as a way to better focus your efforts and perhaps even improve your relationships at the retail level. BI
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