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
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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