CPGmatters: Coke Launches ‘Shelf-Savvy Marketing’ to Boost Sales, Create Value at Shelf
By John Karolefski
Through a special arrangement, presented here for discussion
is a summary of a current article from the monthly e-zine, CPGmatters.
“As marketers, our role is to make this brand special – not just on
the street, but also in the store, truly creating unique experiences,” Darren
Marshall, vice president of global customer and shopper marketing at Coke,
said in a presentation to retailers last month in New York at the 99th annual
convention of the National Retail Federation.
Mr. Marshall said connecting with shoppers effectively calls for partnering
with retailers to create value collaboratively. “What we don’t do enough
of – and we’d love to be able to get your help with – is differentiating the
packages, the price points, and the occasions within a retail store.”
He listed the seven habits of highly effective shelf-savvy marketers:
Balance: Create a balance between love and value. “It’s one thing
to build a brand, but if you’re not making commercial value out of that as
well, there is really no need,” he said.
Prioritize: Decide among the many opportunities such as geographies,
categories, occasions and shopping missions. “We’ve got to be strategic
about what we’re doing, going after the things where we’ve got not only the
biggest opportunity but the biggest set of capabilities to bring it to life.”
Portfolio: Think about how people are interacting with your portfolio,
whether it’s a portfolio of brands, banners or store formats. “We have
450 brands across the world. We cannot cram 450 brands into every store in
every geography. We’ve got to be able to make decisions and think about things
in terms of what is going to be the best mix for those shoppers.”
Segmentation: Group shoppers into similar traits and behaviors. “As
marketers, it’s our role to be able to understand what motivates people and
how those motivations are different.”
Differentiation: Create distinct brands. “We differentiate brands.
We’ve done it for a long time and we’ve created very distinct different brands.”
Interruption: Capture people in the store. “Only 30 percent of
the people are going down the beverage aisles these days. As shopping patterns
continue to evolve, that’s going to decrease even more because there are more
[shoppers] who are very focused on going in and going out. We’ve got to be
where they are, which means not just stacking high with big displays. It means
being very strategic about where we’re placing things throughout the store.”
Occasions: Make the brands relevant when people are buying the product. “Whether
it’s lunch at home with friends or it’s at a football game, bringing brands
to life in a situational type of environment is really the magic of how brands
truly live and breathe in our everyday lives.”
Mr. Marshall said it’s important to create “context” in the store
because it creates demand. The in-store experience must be something different
and special – maybe unique.
“It’s about making connections with our shoppers because we’ve got to
be able to turn shoppers into buyers or else there’s no economic value created
for anyone. If we forget that, then we’re lost,” he said.
Discussion Questions: What do you think of Darren Marshall’s seven habits
of highly effective “shelf-savvy” marketers? Which are most critical
for effective in-store marketing? Is there anything you would add?
Great points! Very true and relevant. However, from my experience, I would say getting retailers to take a proactive approach to innovative product placement and display is like trying to convince PETA to hold a beefsteak fundraiser.
I find retailers tend to be complacent except when it comes to someone else picking up the tab.
Extremely good, tactical actions to take for their field sales force. This is a great effort to leverage the world’s most valuable brand. Other CPGs could learn from this. I can’t imagine any drawbacks to this approach. I like how this is very executable. No in-the-clouds strategy.
I would agree with all of them except Interruption. It’s not about interrupting anymore, it’s about facilitating. I just recently watched the movie “The Fifth Element,” and it has a perfect example of a facilitation moment. Bruce Willis’ character arrives at the posh hotel. The hotel staff that had escorted him is showing him the room. He says, “I need a tuxedo for tonight’s performance” and she presses a button and a rack of clothes pops out of the wall. Willis smiles in exactly that way that every retailer and every brand wants their customers to smile: a smile that says “Wow. I’ll be your customer for life!”
It’s about anticipating customer needs so that you’re already in position when they realize they need it–that’s not an interruption, and it’s a much faster way to that customer’s smile.
Coke is smart to focus more closely on where customers are, beyond the traditional TV screen. It’s a sign of progress to see the company begin to measure sales value as part of its marketing efforts.
Some of these “habits” include basic branding (i.e., “differentiation”) so in terms of true customer-centricity, what about the habit of integrating a call to action to drive opt-in (e.g., tactically this would translate into joining My Coke Rewards) to extend the in-store investment to an ongoing addressable away-from-the-store relationship?
Darren Marshall points out some key factors that both retailers and manufacturers need to be addressing in his seven points. I am a bit thrown by the label of it being “Shelf-Savvy” as I am not certain that it captures the specificity of shelf activities as much as it is a more global look at marketing (for both the retailer and the manufacturer). Regardless, the points are all valid and worth consideration and inclusion.
Good perspective on challenges facing marketers–focus is critical here in gaining collaboration with retail partners. Interruption is the first step, with only 30% of shoppers headed to the soft drinks and beverage area, often located at very back of the store. Then, working with retailers to differentiate with packaging, shelf set, and occasion–these are the opportunities.
The clear message is, know where your shoppers are, what they want, stand out on the shelf, and continually work on the best way to connect with them. And more important than ever, find more effective ways to work with retail partners to develop loyalty with a clear, well-executed strategy.
Great points all! I especially like “portfolio” since the best brands understand that retailers are managing a portfolio of brands (including private labels) and that they should be taking that approach as well. Therefore, rationalization isn’t a death knell, it’s an inevitable brand cycle, and private label isn’t the enemy, it’s one of many “positions” that expand and contract according to each retailer’s total store and categorical goals for a given window of time.
Well thought out points. These 7 habits are useful for all brands and retailers as they look to optimize the in-store experience. Are they shelf savvy habits or 7 habits for shopper marketing? Regardless, the points were excellent and well thought out. In particular I liked “Interruption” since it has the biggest opportunity to help not only the CPG, but the retailer.
Finding ways to move your brand out of its traditional placement location is key and also very difficult for these reasons:
1) Compliance at retail
2) Cost
3) Program options other than traditional TPRs
4) Retailer interest – Does it ultimately benefit the retailer as well?
5) National scope and acceptance.
The key is finding programs that help overcome these hurdles.
I don’t understand the Interruption point. If only 30% of shoppers are going down the beverage aisle, then the whole concept of the beverage aisle needs to be re-evaluated. Are retailers going to place various brands throughout the store? I don’t think so. Healthier beverage choices are placed in some strategic locations such as near fruit juices and sometimes within produce, but where do you place carbonated soft drinks and the huge volume that most stores carry other than the beverage aisle or end-caps? Maybe, I am missing something.
With regard to “Interruption” I’m having bad flashbacks to the days of ill-starred Coke CEO Doug Ivester.
Mr. Ivester wasn’t satisfied unless a consumer had many, many separate “opportunities to buy” Coke in a supermarket. I could be off a bit in my recollection, however, eleven is the number that sticks in my mind.
What Mr. I didn’t grasp was that his eleven opportunities to buy meant that at least some of those opportunities (e.g. placement) in the store came at the expense of other, often quite profitable, products.
The bottom line is that one brand’s ‘interruption’ strategy is another brand’s ‘we’re being preempted’ perception/reality.
The question at the end of the day, as is so often the case, ought to be “Are we as a retailer making things better for the customer, as viewed by the customer?”
Jee Whiz guys, it just isn’t that hard. In 1977 I ran a division of Shasta Beverages and I had guys who detailed retail and called on wholesalers. All of those guys could set a shelf to maximize sales on an account by account basis. They were so good that they would bet each other that they could increase the sales of a flavor by repositioning it on the shelves in their territory. I actually had to jump into the picture and weight flavors to insure that high profit exclusive flavors got treated favorably in the games.
Say whatever you want about planograms, but chains will allow any rep who is respected to play with his set. Later on, when I was with Coke, their guys had less latitude and the game was more share than profit, but every route salesman I knew set his shelves to avoid OOS and adjusted them at least weekly. Heck, all of these guys were on commission/bonus programs and it could make a huge difference in their take home.
I guess things have gotten so dumbed down now that someone has to hold a high school graduates hand all the time to get anything done. I long for the days when working with a rep was a training exercise. You had enough time with them to talk about why things were done a certain way and if they didn’t understand they could ask questions. Some of them really pushed back and we even had bets as to whose system worked best and, yes, I lost a few. BUT, we learned and built business and relationships and had fun.
How much fun is one having making a list at headquarters and then wasting ten million employees’ time and efforts learning “the List” only to discard it in 24 months when Darren is promoted/fired/goes to work for another company, whatever?
I guess if you want to see intelligent shelf management in action you probably have to go to central or South America where the mantra is to get it out there, merchandise it well and sell, sell, sell! We have become so sophisticated that we actually think that words are more important than action. Show me has always been 10 times as powerful as tell me. But you can’t show anyone anything when you are behind a desk.