What’s the most significant change you’ve seen in recent years in terms of customer loyalty, and how does this impact CPGs and retailers?
It’s interesting to consider the power shifts through the decades. First, the brands had all the power. With the right brands in your store you could drive the shopper. Then it shifted from the brands to the retailers. They could drive the shopper by what they were offering and how they offered it. These days, the power is with the shopper. We’re looking to win with millennials and with the convergence of offline and online. We must continue to find solutions within omnichannel.
The most significant shift is that the previously existing correlation between shopper satisfaction and shopper loyalty is deteriorating. So, what has kept the shopper satisfied isn’t going to keep them loyal to the retailer or the brand now. As that correlation gap widens, and it’s happening so quickly, it feels like the impact on retailers’ and manufacturers’ total market will be massive. That’s going to affect what we do from now on.
This “shopper power” means that retailers and CPGs now must work together to create competitive advantages. If you want to remain relevant in the mind of the shopper it’s about getting the “must haves” right (right product, right store, in stock etc.), but the shoppers’ definition of the experience is what will make the emotional connection and, ultimately, lead to where they’re willing to spend their money.
Loyalty data and shopper segmentations will help us define the opportunity but, as an industry, we have to get better at using strategic assessments for long and short-term definitions of where the retailers and manufacturers can win together. What are we trying to accomplish? What can we gain and who is the right partner to do that with? Is it going to be shopping experience over price or is it price over shopping experience? Is it convenience? Is it high-tech engagement? Those can mean different things to different retailers or manufacturers and those strategic assessments can tell us a lot. How you partner across manufacturers and retailers is one of the ways that you can define success and ultimately win in the marketplace.
What excites you most and what concerns you most about the future of category management? You’ve alluded to some of the stuff in your first answer.
For me, it’s exciting because it’s no longer just about optimizing categories and organizing the store for the shopper. Finding new ways to really excite the shopper is no longer a “nice to have.” That’s the fun part of the job. There’s also a challenging part too, as most people in category management are used to working with loyalty data, segmentations and creating new ways to win. Traditionally, in defined category management we focused on brand powers by optimizing. Now, we must become really fluid in exciting the shopper, with whatever that is, be it price or experience or however we get there. That experience is here now, the shopper is already demanding it. They’re defining it for themselves, but the speed at which it’s happening and the speed at which we must become fluid with is our opportunity. It’s a step change in how we think about our go to market, both exciting and scary.
Why did you agree to speak at Xcelerate?
Hey, it’s Vegas, so there’s that (we laugh).
Any time you have an opportunity to meet and hear from people that are working towards solutions — specifically in a shopper-driven environment that is being based around loyalty core data and the shopper — that’s interesting and fun. So, presenting is one part of it, that’s a great opportunity and I appreciate it, but I was more excited about learning from other people there.
Please mention a few key points from your presentation.
We talked about how we’ve gone from optimize to organize to excite, I’m going to base a lot of things around that. There is no one solution any more that allows everyone to walk away with a single answer, so I just want to spend some time talking about how at Kellogg we have successfully and unsuccessfully used shopper data and how that shaped our view on optimize, organize and excite. Ultimately, it’s going to be about how we’ve made the right choices by intentionally disrupting the shopper, and creating experiences and driving loyalty.
Can you give me an example of what you mean by “disrupting the shopper”?
If you think about what a shopper says they want in an experience, it varies by category. When you give the shopper exactly what they want, they say, “I want it organized this way because this is how I shop and this is what I need.” In almost every case, they purchase less, because they can easily find the things that they want to find. They grab it and there’s no disruption to make them see new things. So, it’s about intentional disruption. If I can put other items near the item that you’re going to purchase that will increase your basket. But there comes a point where I disrupt you too much and you’re confused and you buy less. So, there is finding that sweet spot.
Please share something personal or fun or both about yourself?
I have music degrees and originally was a high school band director, but just for a short time. I left teaching and lived in Japan for a year when I was younger, which is where I met my wife. She was teaching for the same company. I don’t know if that is really a fun fact for you.
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