Collaborative

Consumer Relationship Management

Building Differentiation

through

Mass Customization / Relationship Marketing

-7.9

-6.0

-3.8

-1.7

0.3

0.6

• Germany

• U.K.

• Italy

• Spain

• France

• U.S.

Many markets experience deflation in grocery prices......

•Absolute change in real grocery prices, 1993-2001•% Constant money

Source: WEFA (National Statistics Institutes and OECD)

‘Collaborative CRM’ answers key business questions....

• HOW to improve shopper and consumer understanding, and translate it into winning market strategies

• HOW to move from mass marketing into mass customisation into relationship marketing; and WHY.

• HOW to differentiate beyond Price

Recognizing that CRM strategy is only one of several possible business differentiation strategies...

Mass / Scale / Price

Business Differentiation

Strategy

Individuals / CRMSegments / Loyalty

CRM area

Mass Segment customized Individual relation

Mass

SegmentCustomized

Individual

Relation

Manufacturer Driven

Work most attractive

segments with retailer

Depending on both

sides’ consumer

strength

Traffic creators

Manufacturer driven

Optimize personalized

consumer value offer in

Retailer

Long-termIntegrated strategy

Retailer drivenCherry picking of

manufacturers offers

Retailer driven

Personalized shopper

value offer

Retailer selects

offer for segments

Collaborative strategy for

relevant segments

Manufacturer driveninsights into lead consumer needs

C-CRM Area

Retailer Strategy

Manufacturer Strategy

Manufacturer-Retailer Relationship types (based on Consumer Relationship types)

Example Tesco:Walking away from your competition….

Mainstream 22%Family type mealsPopular brandsKids products

Finer Foods 18%“Foodies who are time poor, money rich and choose everyday luxury items”

Price Sensitive 16%Cost conscious customers who tend to buy cheapest on display

Traditional 17%“Traditional housecraft with time to buy and prepare ingredients”

Healthy 18%“Organic shoppers, fruit and vegetablesweight watchers etc”

Upmarket24%

Mid-market53%

Cost conscious23%

Convenience 9%“People on the go who haven’t time or inclination for scratch cooking”

Affluence

Age

Based on deeper shopper and consumer understanding......

Why should ‘Collaborative CRM’ become a priority for ECR Europe ?

Definition of Collaborative CRM by ECR Europe:

“Collaborative CRM is an integrated ECR demand management

strategy, which helps manufacturers and retailers to jointly

recognise and value consumers’ / shoppers’ individual needs,

and tailor their offers to them.”   

Doesn’t Collaborative CRM compete with Category Management ?

Phase 1Up-front strategy phase, performed across all categories, allowing a retailer to effectively manage all (~200) of its categories.

Phase 2Development of the

category plan.

Phase 4On going tracking and review of the implemented category plan by retailers and suppliers ensures that the jointly agreed targets are being met.Automation of this phase will truly bring the process into a day to day environment .

Phase 3This phase focuses on in

store implementation.Additional implementation

guidelines are included within the planning phase

thereby increasing the likelihood of

implementation success.

RetailerStrategy

DevelopCategory

Plans

ImplementationReview

ECR Europe Collaborative CRM ROADMAP

STRATEGIC ALIGNMENT-Scope

-Methodologies-Stakeholders

-Choices on resources-Rules for collaboration

ASSESSMENT-the business challenge

-state of capability-state of mind on cooperation

With trade partners

CRM ENABLING COMPONENTSOrganization

Communication channelsData

SystemsCOLLABORATIVEBUSINESS PROCESS:

SEGMENTATION

SHOPPER KNOWLEDGE BUILDING

OBJECTIVE SETTING AND KPI’s

JOINT BUSINESS PLANNING

IMPLEMENTATION

MONITOR

LEARN/IMPROVE

The deliverables• Increased Store AND Brand Loyalty through increased Consumer

Satisfaction

• Less waste and more effectiveness of marketing and promotion spending through more targeted marketing programs

- today more than 70% of promotion spending delivers less than 20 % of promotional volume uplift…

• Improved margin mix, reflecting the place of price in the hierarchy of needs for different shopper segments.

sustainable profitable growth

through

shopper focused differentiation

sustainable profitable growth

through

shopper focused differentiation

• Our FMCG industry needs to re-gain consumers’ share of wallet (life)

• Collaborative CRM is a key demand strategy to facilitate value added market differentiation, and therefor FMCG growth.

• To break away from current confusion around CRM, ECR Europe needs to steer codification and harmonisation of CRM process, data definitions,and tools across our industry.

• Currently available tools and data are not used appropriately …by lack of insight on how to use them to create value. (loyalty card data, shopper and consumer research, coupon systems, direct mail …) ECR Europe to facilitate development/sharing of ‘Best Practices’

• To drive business acceptance and ‘ownership’ of CRM; out of hands of consultants and I.T. providers.

• The Business cases for Berlin demonstrate growth results from 15% up to 200% on total store to category level.

IN SHORT: ‘TO SERVE CONSUMERS BETTER.......’

Why should ‘Collaborative CRM’ become a priority for ECR Europe ?