Category Management Best Practice Award Winners

Press enter to search
Close search
Open Menu

Category Management Best Practice Award Winners

By Mike Troy - 09/28/2016

Category management was a major breakthrough when it arrived on the retail scene some three decades ago. When it did, merchandising and assortment planning decisions became fact-based, and all facets of the shopper experience benefited. Business results improved and rapid adoption among retailers and suppliers quickly followed.

The category management framework served the industry well, but the industry changed. The competitive landscape changed and intensified, and consumers became more diverse and demanding. Shopper behavior really changed thanks to digital innovation, which meant the path to purchase was no longer linear.

Category management changed too with the introduction of CatMan 2.0. It is now more holistic and far-reaching inside organizations, encompassing disciplines ranging from shopper marketing, consumer insights, pricing and promotion to supply chain, e-commerce and in-store execution.

There has been a dramatic re-invention of the decision-making framework that first revolutionized retail. Retailers and suppliers are leveraging new sources of information and collaborating like never before. To recognize the efforts of those taking category management to new levels, Retail Leader and the Category Management Association created the annual Best Practice Awards. Nominations were accepted during a several-month submission process earlier this year in five categories including shopper insights, collaborative business planning, custom assortment, omnichannel and shopper marketing. The winning entries, three for each category, are featured on the following pages.


Collaborative Business Planning



1. Dr Pepper Snapple Group and Walmart

The Snapple brand was born in the Northeast and it enjoys especially strong market share in the region. In fact, shoppers have such a strong affinity for the brand that if it is unavailable in the ready-to-drink segment, roughly two thirds of shoppers will walk away from the category, leading to lost sales.

Armed with that insight and other details regarding purchase behavior and overall market performance, the Dr Pepper Snapple Group began working with Walmart to develop a joint business plan to drive growth. The companies established five major goals to identify and quantify brand performance opportunities and worked cross-functionally with sales, shopper insights and regional teams.

In addition to quantifying the brand opportunity in the Northeast, Dr Pepper Snapple Group and Walmart determined the relative size of the brand's distribution gap, a key insight because Walmart was underperforming the overall market with Snapple brand products. In addition, the companies quantified the importance of the Snapple brand to consumers, determined which packages required increased distribution and established recommended placement of packages on Walmart shelves.

By increasing distribution of key products and pack sizes most desired by Snapple consumers who were already shopping Walmart stores, the companies improved performance and demonstrated the benefits that can be derived when trading partners employ an insights-driven approach to joint business planning.

2. Procter & Gamble

With growth languishing in the $8 billion oral care category, Procter & Gamble recognized an opportunity to work with retailers to develop strategies to drive growth with key segments. For example, P&G research showed that 80 percent of consumers are willing to pay more for a product that delivers a healthier mouth or whiter smile. Trends toward health consciousness and beauty/socialization among category consumers are driving consumer willingness to pay more for improved performance and benefits. These consumers are 45 percent of the shoppers, but 60 percent of dollars, demonstrating the disproportionate value they represent, as evidenced by $1 billion in total category growth the past five years attributed to shoppers paying higher dollars per use.

To capitalize on these insights, P&G developed a demand driven strategy to drive growth in the electric toothbrush segment. The company increased dentist detailing, upgraded the shelf presence and accelerated holiday efforts.

3. Advantage Solutions and Aunt Millie's

As category captains of the commercial bakery business at Strack & Van Til's 38 stores in northern Indiana and Illinois, Advantage Solutions and Aunt Millie's developed a strategy to increase customer traffic and improve transaction and sales trends.

Extensive research was conducted to determine shoppers' pain points in the bread and buns category and determine an optimal aisle flow. The companies further leveraged shopper insights to develop a new shelving strategy that improved the shopper experience. There were also refinements to the assortment that leveraged the role of breakfast and premium products in building incremental sales. The result was an easier to shop layout organized by daypart, an expanded super-premium offer and greater seasonal emphasis.

Competing bread brands were also involved in the effort, as Advantage Solutions and Aunt Millie's took a holistic view of the category.


Custom assortment



1. Cloetta/RARI

Swedish confectioner Cloetta was having a problem with the way stores displayed its pastilles. The breath-freshening chewable candies are mostly sold at checkout counters, and an in-store surveillance service reported that only 11.5 percent of stores maintained those counter planograms in compliance with Cloetta's instructions.

Cloetta worked with a consulting firm, Retail Academics Research Institute (RARI), to test improved planograms. The new design featured tilted shelves and cassettes to hold the packages, in effect creating an extra shelf's worth of space. Improved lighting was added to trigger impulse purchases.

Cloetta and RARI tested four planogram configurations: the old one; one that placed the product in cassettes close to the beginning of the checkout line; one that placed them there, but without cassettes; and one that put them in cassettes close to the cashier.

RARI used eye tracking to measure shoppers' reactions to the different planograms. It also analyzed sales results and did in-store interviews. RARI found that placing the product near the beginning of the checkout line worked out best. That placement drew attention to the product sooner, made it easier for the shopper to navigate the checkout shelf and understand the difference between pastilles and gum, and generally increased awareness of pastilles as a category in shoppers' minds. Putting the packages in cassettes made shoppers feel like there was more to choose from and enhanced the perception of quality.

The planogram that put the product in cassettes at the beginning of the line increased sales in the test stores by an average of 15 percent. There was also ancillary lift for other products, like gum, in the checkout line, of 11 to 14 percent.

2. Dr Pepper Snapple Group

At convenience stores, sales of carbonated soft drinks (CSDs) involve an interesting paradox. Non-cola, or "flavored," drinks now make up 57.9 percent of total CSD sales. However, only 15 percent of cola drink purchases in c-stores are impulse buys, vs. 30 percent of non-cola drinks.

Most c-stores merchandise cola products in the middle of the cooler, called the "strike zone." But Dr Pepper Snapple Group concluded that, given the disparity in impulse buys between cola and non-cola drinks, it would be better to put the "planned" cola products closer to the bottom and the more impulsive non-cola CSDs in the strike zone.

Dr Pepper Snapple Group pitched this concept to c-store operators by calling it the "Flavor Zone." The results were a 6 percent rise in sales for flavored products and, perhaps surprisingly, a 5.7 percent lift in cola sales.

3. Target/Advantage Solutions

Frozen bread sales were leaving Target cold. The category was trending downward 16 percent in sales dollars, and there was little shopper conversion or repeat purchasing. Assortments were not consistent across geographies or specific to store size or location.

Target partnered with Advantage Solutions to revamp its approach to frozen bread. Advantage worked with Target to identify individual market preferences both in categories (such as biscuits in the South) and in branded leaders (such as New York Texas Toast in many Central and Eastern markets and Pepperidge Farm in the West). In the end, 19 geographic segmentations were finalized and implemented. Total SKUs in each assortment were recommended for optimal space based on pack out and velocity.

The category discipline paid off, with sales up 31 percent over the previous year, and item velocity rising in double digits.


Omnichannel



1. Mondelez International and HMT Associates

Playbook is a proprietary platform designed and built by HMT Associates to drive growth and maximize omnichannel shopper marketing activation beyond its top tier customers, efficiently and effectively. It's a comprehensive turnkey online resource tool for planning, developing and activating shopper marketing programs against key scale and brand initiatives, partnerships and consumer/shopper solutions.

Mondelez International, the maker of Nabisco products such as Oreo cookies and Ritz crackers, used Playbook to develop incremental shopper programs and drive a 4.7 ROI.

Nabisco was the official Cookie and Cracker sponsor of the 5 Seconds of Summer (5SOS) "Rock Out With Your Socks Out" 2015 North American tour. HMT Associates leveraged Mondelez International's sponsorship of the 5SOS tour to drive total market activation, providing retailers the opportunity to tie into this property and execute exciting BTS promotions featuring Nabisco Multipacks.

Through the Playbook online hub, HMT Associates efficiently armed Mondelez International customer teams with tools they needed to develop successful shopper programs, including pre-approved, activation-ready shopper marketing solution campaigns and creative templates, and Program Activation Decks with consumer/shopper insights and key promotional content to create an impactful sell in-store and excite retailers about the campaign.

From the brand's perspective, Playbook not only enabled comprehensive, turnkey implementation of omnichannel shopper marketing programs with over 20 customer teams leveraging the tools provided; it also delivered consistent brand and promotional messaging, elevating programming beyond price alone, in the process. Strategies included POS display, signage, a 5SOS Microsite, a consumer sweepstakes, FSI/circular ads, paid and social media, and concert tour stop activation (signage, sound checks, meet & greets, photo ops, etc.).

Mondelez International's retail customers were more than pleased with its sales results, while customer teams realized invaluable retailer "return on relationship."

2. Powershelf

Powershelf is a digital shelf smart label technology that operates without batteries. It runs on low-voltage energy, delivering real-time pricing, inventory sensor capability, beacon two-way communication, and messaging on interchangeable price tag screens. It provides accurate pricing, compatible technologies for beacon marketing, and sensors and devices that provide inventory alerts to increase product availability and reduce out-of-stocks below the industry standard of 8 percent. Users of the technology rely on available features that include temperature control alerts, to ensure the integrity of frozen and refrigerated products, and LED lighting to further market at the shelf. This system eliminates the need for recycling batteries by allowing retailers to power the labels through solar-powered panels in the store. The elimination of paper in-store price tags, which can number up to 40,000 per store, reduces the wastefulness associated with constantly changing paper labels.

3. Lowes Foods and Unata

Lowes Foods, a family-owned and operated grocery chain headquartered in North Carolina, worked with solution provider Unata Inc. to roll out an online shopping platform that focuses on creating a personalized, one-to-one shopping experience. Lowes' goal was to provide an easy, seamless experience, with capabilities of both click-and-collect and delivery, regardless of channel (mobile, tablet, desktop or in-store). A year and a half after the first store transitioned, customer satisfaction numbers are higher than ever, number of orders and number of subscription guests (i.e. those customers who purchased annual subscriptions to the service) are both at an all-time high, and year-over-year sales are up more than 30 percent. Since Lowes Foods launched its new platform, 89 percent of new users to the platform said it was easy to navigate, 93 percent said it was user friendly, and 80 percent said their search results were accurate.


Shopper insights



1. Pinnacle Foods

The frozen vegetable category is huge at more than $3 billion and household penetration is high at 82 percent, but trends in the business have been heading in the wrong direction. To reverse the situation, Pinnacle Foods undertook a massive insights effort that gave it the confidence to take action to improve the performance of its Birds Eye brand and led to the introduction of new items.

Pinnacle recognized that the primary motivators in the frozen category are convenience and value, but barriers existed related to product perceptions and the in-store environment. Consumers want affordable, easy and healthy-tasting options that appeal to everyone in the household, so Pinnacle developed strategies consistent with its mission of being the trusted partner delivering complete category solutions.

The insights-driven actions the company took centered around a "Taste with Ease" philosophy that recognized shoppers wanted a better experience, products that are nutritious, flavorful, fun, easy to prepare and require minimal cleanup.

A two-pronged approach focused on innovation and experience, dubbed "Froduce," was undertaken that saw Pinnacle launch three major new product platforms including protein blends, flavored vegetables and a licensed offering with top Disney brands. Those offering delivered on the value proposition of making it easier and more enjoyable for consumers to eat more fruits and vegetables every day. Meanwhile, Pinnacle also sought to address the experience deficiencies of the frozen aisle by introducing a new signing package with visual elements reminiscent of a fresh market.

The insights-driven strategy worked, especially with millennials, who were attracted to the frozen category and especially to the convenience and solution-oriented offerings from Birds Eye.

2. McKee Foods and H-E-B

Shopper insights uncovered by McKee Foods revealed that its Zebra brand products were more popular among Hispanic shoppers in Texas than the company's Little Debbie brand. McKee recognized that the Zebra brand had untapped potential because it was achieving strong sales with limited promotion and shelf space. The company increased its promotional efforts with key partners around seasonal events and leveraged in-store displays to generate sales lift that demonstrated the brand's greater potential with Hispanic shoppers. Armed with results based on insights, McKee introduced new items that launched at H-E-B such as Zebra Cake Rolls, Zebra Nutty Bars and Zebra Brownies. The launch was supported with a shopper marketing event, trade promotion and social media support that generated a triple-digit sales lift and help McKee secure commitments from other retailers for the Zebra brand.

3. Kraft Heinz and HMT Associates

The Baker's brand of chocolate tastes great, melts smooth and has a variety of uses — but millennials don't know that. That shopper insight led HMT Associates and Baker's brand owner Kraft Heinz to develop a plan that addressed the demographic group's limited understanding of the brands and its range of appropriate uses. Armed with a small budget, Kraft Heinz and HMT enlisted the aid of influential bloggers to engage and educate millennials about how to use Baker's.

A content-driven promotion was created ahead of the 2015 holiday season that involved a recipe for Turtle Cookie Balls billed as "The Perfect Homemade Holiday Gift." The effort reduced the intimidation factor of how to use the products and tapped into millennials' desire to create a handcrafted gift. The effort generated social media buzz, and a link to an incentive on the Ibotta platform encouraged millennials to buy Baker's.


Shopper Marketing



1. Mondelez International and eometry Global

Walmart, the leading seller of Oreo cookies, decided to let shoppers vote on which of three options would be the next exclusive flavor to appear on its shelves. The choices were Caramel Apple, Jelly Donut or Cookies & Creme.

Oreo maker Mondelez International and Geometry Global organized a campaign that engaged shoppers at multiple touchpoints. Sampling events, in-store POS, a Blippar app tie-in and other tactics brought shoppers into the selection process, giving them ownership and a personal connection to a flavor and the Oreo brand.

Walmart shoppers were encouraged to cast their ballots throughout their purchase decision journey. Pre-store, banner ads and e-mails captured their attention, driving them to the Walmart landing page to decide which Oreo cookie should be exclusively at Walmart in the upcoming year. Social influencers broadcast the details of the vote and got their audiences invested in backing one of three potential winners to build on the excitement.

In-store sampling events captured shoppers' attention and engaged them on iPads at demo stations so they could vote right there. In the aisle, on-pack stickers on 1.7 million Oreo packages educated shoppers on how to cast their vote.

The campaign garnered more than 70 million impressions and hundreds of thousands of votes for 2017's flavor in just five weeks. Cookies & Creme won. Campaign creative interactions topped at nearly 3 percent, exceeding the industry benchmark of 1 percent. Sampling drove demo day lift more than 200 percent on average at supercenters and Neighborhood Markets. Oreo Cookie varieties flew off the shelves, leading to double-digit sales growth and market share gains.

2. Unilever and Sopexa

Maille Mustard from Unilever is a 400-year-old brand, but it's getting a lift from one of the most modern forms of in-store marketing: beacons. Unilever is working with food marketing agency Sopexa and beacon platform inMarket. As a gourmet product, Maille appeals strongly to foodies, and a global study by Sopexa revealed that the majority of American foodies are getting their food information and making decisions online and on their mobile devices. Maille is reaching foodie shoppers further down the purchase funnel right away, as they're in the store, and driving them to the shelf, which will result in an immediate sales lift. In addition, by targeting foodies and blogger types, the brand is capitalizing on earned media. The campaign has already lifted purchase intent.

3. McKee Foods and Ahold

Snack cakes and coffee seem like a natural pairing. That was confirmed by research at McKee Foods, maker of Little Debbie pastries. The research also showed that refrigerated coffee is one of the categories that has had a positive compound annual growth rate and an increase in promotional lift over the last three years. So the Little Debbie team developed a co-marketing plan for Ahold that included Whitewave's International Delight Iced Coffee. The program offer was: Buy three Little Debbie (core) products for $5, and get an International Delight Iced Coffee for free. Little Debbie was able to get display space in Ahold's dairy aisles next to International Delight coolers. The result was strong sales growth, with 60 percent of those who made purchases being new to the category.