CPGmatters: Who Do You Trust? Retailers Look to ConAgra

Discussion
Jul 30, 2009
John Karolefski

By John Karolefski

Through
a special arrangement, presented here for discussion is a summary of
a current article from the monthly e-zine, CPGmatters.

In 2006, ConAgra
Foods was a novice at shopper insights. Today, it is leveraging those
insights to develop in-store marketing programs with key customers and
to activate sales.

“In 2007, we
started to staff teams for shopper insights and shopper marketing. We
started building some disciplines. What are some processes we need to
do? Who do we need to work with in our key accounts? What are some things
we can be doing to increase our penetration in those key accounts?,” Tony
Washington, director of shopper insights and analytics for ConAgra, recalled
in a presentation at IRI Global Summit recently in Las Vegas.

Mr. Washington
and his colleague, Julie Oser, manager of shopper marketing, are part
of the account-specific team assigned to Safeway. ConAgra has teams dedicated
to other major grocery chains, including Publix Super Markets, Kroger,
Supervalu and Wal-Mart.

To operate
more effectively, ConAgra consolidated four departments under the umbrella
of Integrated Customer Marketing. Coming together were Shopper Marketing,
Shopper Insights, Category Leadership and In-Store Marketing. The key
principles of the department’s multi-functional teams are:

  • Speed: Simplifying
    everyday processes to do them more efficiently
  • Collaboration: Deploying
    cross-functional teams
  • Accountability: Helping
    customers grow.

Retailers like
Safeway are concerned about retaining shoppers, according to Mr. Washington.
He remembers telling Safeway that if they could only retain half of the
shoppers in the lower-income segment, they could realize almost $300
million.

“We also identified
where those folks were going,” he said. “Almost 80 percent of them were
going to a combination of grocery, mass and club stores. Understanding
where shoppers are going can help develop strategies to keep those shoppers.
For instance, if you find out that you’re losing a lot of shoppers to
mass and club, then you need to think about [stocking] larger packages
that those retailers sell and you typically don’t.”

One program
developed for Safeway involved families spending time around the table;
that is, eating more at home. ConAgra executed a meal solution at Safeway
called Stock up and Save. “Safeway needed to have [products] organized
in a way that shoppers could find them easily. Right items, right price.
All of the items you need are right there. Just by making it easier for
a shopper to shop, we saw a big increase in sales.”

Other ideas
executed successfully were a meal solution for Cinco de Mayo and a Nostalgia
theme throughout the store.

Ms. Oser was
quick to point out that the in-store programs involved more than just
ConAgra products.

“We want to
show Safeway something they can trust and believe in,” she said. “We
want them to see us as a consultant and partner. If we just go in with
our ConAgra hat on, we are not really helping the shopper.

“Build credibility
with retailers,” she advised. “That is what has worked for us.”

Discussion Questions:
What benefits can a vendor provide around shopper insights programs that
a retailer may not be able to? What are the challenges in making such
collaborative shopper insight research and consequential in-store programs
work?

Please practice The RetailWire Golden Rule when submitting your comments.

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8 Comments on "CPGmatters: Who Do You Trust? Retailers Look to ConAgra"


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Joan Treistman
Guest
11 years 9 months ago

This article shows how ConAgra is using its core competencies as an advantage for its retailers. Helping retailers increase overall revenue and loyalty to their store is a benefit that is recognizable and creates a strong and enduring partnership between the manufacturer and the store.

Con Agra has the resources and insights that cover many retail variations. When they integrate that knowledge with the specifics regarding Safeway or another retailer, it’s a home run for all. The retailer has to focus on its core business while ConAgra can aggregate its experience of many retailers. It’s apparent that ConAgra has the ability to align their shopper insights knowledge with merchandising creativity.

There are winners all around: ConAgra, the retailers and the shoppers. Bravo!

Ben Sprecher
Guest
Ben Sprecher
11 years 9 months ago
The ConAgra story points to a couple of key factors in any successful retailer-manufacturer collaboration: Communication, Prioritization, and Resources (we call this the “CPR of collaboration”). Communication starts with data sharing, but it goes beyond that–both the retailer and the manufacturer have to be explicit with each other about their goals. Only by knowing that shopper retention was a core issue for the retailer could ConAgra factor that into their program design. Regarding Prioritization, both organizations need to focus on making the collaboration successful. For ConAgra, that meant some internal reorganization and building multi-disciplinary teams. For Safeway, it meant that they had to work with ConAgra and put effort into implementing the programs well. Finally, each side needs to engage the needed resources to execute successfully. Historically, chains’ tight margins have meant that they have fewer resources to contribute to joint projects, so the brands have needed to pull most of the weight. Also, archaic technology has often imposed a practical bottleneck on how much data-driven analysis can be done, since the retailer’s IT or… Read more »
Bruce Vierck
Guest
Bruce Vierck
11 years 9 months ago

Retailers know who is shopping their stores and what they want to be to those shoppers. But they don’t have the resources to dig deep to understand shopper behavior in each store category. That’s the value that brands like ConAgra are bringing. The challenge continues to be the integration of brand research and strategies with retailer research and strategies.

Good work is being done here, but more is needed, including retailers identifying a smaller number of consequential programs on which they want to focus and collaborative planning processes that include not just retailer category management but marketing, visual merchandising and operations.

Ralph Jacobson
Guest
11 years 9 months ago

ConAgra has the ability, but even more important, the fortitude to execute upon the insights they are gathering on shoppers. If only more CPGers would look at what they are doing, the value for the entire supply chain would be enormous.

Sandy Miller
Guest
Sandy Miller
11 years 9 months ago

Joan Treistman is of course on target. The notable thing to observe is Safeway’s willingness to permit new ideas to be implemented.

Roger Saunders
Guest
11 years 9 months ago

The best of retailers know that they are at the “power center” in terms of being in touch with the Consumer, and “how,” “when,” and “where” the consumer is at the moment of engagement with products. Those same talented retailers know the value of having leading manufacturers, like CONAGRA, linking the “where” (other channels), “why,” and “what” (other items tied to purchases).

That collaboration, and focus on the consumer, can only lead to a smoother operating marketplace. CONAGRA has it right!

Jerry Gelsomino
Guest
11 years 9 months ago

Vendors understand better than anyone how their products are used, connected with other products, when and why sales are changing, and what the customer needs to know to make an informed buying decision regarding their product–on a global scale. They have the time and resources to do a deep dive on the relationship between the consumer and the product.

The retailer knows best the customer who is coming in the store and the segmentation of customers across the chain. Merging the knowledge of both groups makes for powerful insight. Cooperation, collaboration and leaving self-serving agendas is needed here. Together,they can serve the customer better or make changes necessary.

Yes I expect to see more partnering between vendors and retailers, particularly in the more visionary companies.

Shilpa Rao
Guest
11 years 9 months ago
Vendors have better understanding of their products and they have a deep understanding of which segment of shoppers would buy their product. Vendors also have a better understanding for which market/ area their certain line would do well and which would not. Retailers can leverage these insights on decisions on assortment, pricing and promotion. Vendors like P&G & ConAgra invest heavily on customer research through sales analytics, consumer panels and so on. They also provide inputs to customer decision trees and others, which for a retailer is a little complex, bearing in mind the plethora of categories and product lines offered. However, retailers need to use their discretion to differentiate between facts and self serving objectives. For example, a retailer I worked with had a decision tree from the vendor which recommended that diapers and training pants should be merchandised together for profitability. However, when an independent research was carried out for that retailer, it was found that customers shopped training pants and diapers in a completely different way. As Jerry Gelsomino pointed out in… Read more »
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