Collaboration Gap Narrowing,
But Much Work Remains
By James Tenser
There’s evidence of progress when it comes to retailer-supplier collaboration on category management. But there is much more that that can be done to bridge the gap, agreed trading partners from both sides of the collaborative divide.
“Leave your brand shoes at the door,” advised Bill Bean, Director of Global Shopper Marketing Insights & Trade Research for Colgate-Palmolive. “Talk about the category, not the brand. Once that happens, just about everything magical happens.”
Barry Thomas, Director of Global Category Management for the Coca Cola, Co. added, “Move beyond the category to the entire aisle. Any work you do in the aisle has to be in context of the retailer’s view of category management.”
Thomas and Bean were participants in an all-star panel discussion at a category management conference recently in Bonita Springs, Fla. The event was produced by the Institute for International Research (IIR) with support from CPG CatNet, the trade association. CPGmatters was the official media sponsor of the event.
The panel, titled, “Bridging the Gap between Retailers & Suppliers,” was moderated by Alex Sodek, vice president, research solutions of Decision Insight. Other panelists were Susan Stege, director of category management for Dean Foods, Tim Cano, pricing analytics & corporate brands, Bruno’s, and Greg Mertes, merchandise manager, dairy products for Wal-Mart Supercenters.
“Collaboration can be like herding cats for regional brands,” said Stege, whose company leads the fluid milk category overall, but with a large portfolio of local labels. “Very strong performers naturally want to do their own thing. We are trying to move toward a more collaborative form of category management, based on three simple points: work together; join forces; and pool resources.”
Colgate’s Bean observed that the current trend toward more customized assortments seemed to be presenting practical difficulties for retailers. “Manufacturers are presented with the same sort of issues related to customization. How can we provide that without it costing more in practice? This trend toward optimization presents us with a problem for execution. I’m not sure if anyone has solved that yet.”
He added, “We shouldn’t allow our inability to execute to dictate that the supply chain is the only way to solve the problem.”
Thomas suggested that activity-based costing might help trading partners meet this challenge, “But it’s difficult to do. We need to show what items drive real economic value and profit.” He cited Tesco as a retailer that has shown interest in “brands and SKUs that help them with their equity.”
Bean agreed, “We look for factors that are not just driven by a pricing model. Often a big one is the role of the product in supporting the retailer’s brand.”
“I think all supermarkets are looking at rationalization based on its meaning to the consumer,” said Bruno’s Cano.
“We need clarity around roles,” added Thomas. “For example, where the shopper marketing function overlaps with category management.”
Asked to identify the biggest barriers to working together, Cano
said, “From my perspective, retailers are really positive about collaboration, but struggle with managing time efficiency. Knowing what suppliers bring in ahead and making sure it’s relevant to
them. Bring in relevant information that retailers can understand
and decipher.”
Added Wal-Mart’s Mertes, “In our experience there are different methods of category management. A lot of it is intentional. Companies A, B and C may offer opinions that are based on different key performance metrics. One emphasizes consumer insight; one profitability; another presents a turn model. So the buyer has to decide. We don’t get mad, we get challenged.”
Mertes continued, “In chilled juices, Tropicana versus Minute Maid will present different approaches that serve their interests. But Wal-Mart 101 is ‘never run out.’ We also know we can’t run out of Sunny Delight on weekends, despite what either model says.”
An area of collaboration where the industry has attained a track record of success is the supply chain, panelists agreed. In some instances, however, supply chain optimization may be at odds with certain category goals.
Said Cano, “From a retailer’s perspective, we own the supply chain and sell through. We want to be a sales-driven organization.” He added that Bruno’s is looking for ideas to cement its relationship with consumers.
“Our ability to trust the mechanics of the supply chain is perceived as a mutually defined benefit with pretty high upside,” said Bean. “It’s not unusual to visit the warehouse or ride along on a truck.”
He added, “It’s much less usual to collaborate on a strategy or deployment of soft dollars that are not so immediately measureable. The data are routinely viewed as proprietary. So it takes a lot more trust to work together where less is known and stakes are perceived to be higher.”
Observed Sodek of Decision Insight, “We’re not as good at marketing as we are at supply chain.”
Dean Foods’ Stege agreed. “On the marketing side it is much harder to realize those benefits. Partly because we are not bridging the gap within our own companies between functions.”
Added Bean, “As retailers, we find it easier to collaborate with vendors than with people within our own companies. I believe that’s often true for retailers too.”
How to Develop Presentations
That Drive Better Results
By John Karolefski
So you think you can produce effective category management presentations that drive results? Well, maybe you can and maybe you can’t. But you can always learn a thing or two, right?
That’s the message from Greg Orth, director of revenue management at The Hershey Company. “Sales can be lost due to poor presentations,” he said.
What is challenging for presenters today, he explained, is the fact that the CPG world has become very complex and there is so much data.
“The buyer/seller relationship that used to be relatively simple has become quite complex given the overwhelming variety of data sources and in-depth analytics needed to drive business and insights,” he said. “The successful analyst will be the individual who can most clearly cut through the data to make specific recommendations that drive results and engage the consumer to make those decisions based on the clear-cut and to-the-point findings from the analysis.”
According to Orth, success depends on taking the in-depth analysis and putting it into a presentation that clearly articulates the few key points without being too detailed, and allows the recipient to fully understand the complex analysis in a few key slides. A proper presentation outline consists of:
- Agenda Tell listeners what you’re going to tell them
- Key Message Convey the main takeaway
- Recommendation Tell listeners what they should do
- Body Points To support the recommendation
- Key Message Tell the listener what you told them.
“Delivering the presentation effectively to the recipient across the desk or in a stand-up delivery is as important as the content contained within the slides. Even though the information might be right on target, not being able to explain it so the recipient can understand it can cause you not to get the results you are looking form,” said Orth in a presentation at the category management conference recently in Bonita Springs, Fla. The event was hosted by the Institute for International Research (IIR) and officially supported by CPG CatNet, the trade group.
He listed the three rules that guide excellent presentations:
(1) Legs Rule Can be understood by a third party who got the original presentation(2) 30-Second Rule Any slide needs to be understood in 30 seconds or less(3) Six Slides Rule Any point or recommendation should be communicated in six slides or less. “Success is the ability to filter the mounds of information and deliver it in a manner that customers can understand and act upon,” he said. For example, each slide should contain:
- Title stating chart’s key takeaway (KTA)
- Main body supporting KTA should convey one idea or point
- Source of any data used helps maintain credibility.
According to Orth, establishing and adhering to presentation standards and guidelines can improve productivity and increase business results. He offered these tips:
- Common template does not constitute standards
- Strict rules needed on certain company requirements
- Guidelines need to be established for best practices
- Standards need to be delivered top-down from management
- Training helps gain commitment
- Practice makes perfect.
