WinningStrategiesin% Grocery%

Winning Strategies in Grocery June 25, 2015 © 2015 Market Track. Private and Confidential
1
Unique Vision
Opt-­‐in Email Social Media Radio TV (Net/
Spot, Cable, Syndicated) Online Display Cinema Online Video 360o View of what is impac;ng the shopper Outdoor Mobile FSI/Direct Mail Online Websites Trades E-­‐commerce Magazines © 2015 Market Track. Private and Confiden;al Circulars/ ROP 2 Market Track is uniquely posi3oned to offer our clients a 360 degree view of what is impac3ng the shopper
—offering full visibility and insight into promo3onal, adver3sing and pricing ini3a3ves. Our perspec3ve helps clients beDer engage today’s shopper with the right messages at the right 3mes. Questions Addressed
  How do the most successful retailers use promo;ons to drive growth?   How does the use of TV adver9sing compare across retailers and trade channels over ;me?   With the growth of digital adver;sing plaYorms, are feature ads s9ll relevant to leading CPG retailers?   Which categories are best to drive store traffic and which retailers promote them most?   How do successful retailers version pricing by region to compete locally?   Which retailers promote the most and least private label?   How does e-­‐commerce and online customer engagement vary across CPG retailers? © 2015 Market Track. Private and Confiden;al 3 Our Presenters
Mark Detelich SVP Strategy & Solu;ons at Market Track © 2015 Market Track. Private and Confiden;al Michel Janssen Chief Research Officer at Market Track 4 The “Why” behind our study
  Compe;;on for grocery shoppers growing   New entrants into grocery space from non-­‐tradi;onal channels   Shopping behaviors evolving, especially among youth   How has this impacted tradi;onal grocers?   …some s;ll experiencing great success. We set out to understand why. © 2015 Market Track. Private and Confiden;al 5 Key Findings and Trends
  As we examine the most successful CPG retailers, key promo;onal strategies emerge. This study examines what the winners are doing right. §  Promo;ng the Trip-­‐Driving Categories on the Front Page at the Right Price §  Coordina;ng Ad Messaging Across Media Types §  Leveraging Private Labels to Drive Sales and Build Banner Equity §  Understanding the Power and Limita;ons of Digital Promo9ons © 2015 Market Track. Private and Confiden;al 6 Iden9fying the winners What the winners are doing right How do the most successful retailers use promo;ons to drive growth? Retail Strategy Scorecard © 2015 Market Track. Private and Confiden;al 7 Best prac9ces at Kroger, Publix & Save-­‐A-­‐Lot Among CPG retailers, three “winners” emerge with same-store
sales 4.5 times higher than industry peers
Avg. Reported Same-­‐Store Sales Over Past 4 Quarters Retailer Kroger Publix Save-­‐A-­‐Lot 12 Other Leading CPG Retailers* What can we learn from these leading retailers? *12 Others include: Food Lion, CVS, Dollar General, Family Dollar, Kmart, Rite-­‐Aid, Roundy’s, Safeway, Stop & Shop, Target, Walgreens, and Walmart. © 2015 Market Track. Private and Confiden;al 8 +5.3% +5.4% +6.9% +1.3% Key Grocery Retailers
Strategy and Execution - Scorecard
Key Messaging
Stated
Sales
Consumer
Value
Omni-Channel Trip Drivers
Engagement Metrics
Proposition
Winners in Grocery Same Store Sales +6.9% Total Retail Sales (2013)/Average $11B / 7.1M Sales per Store (Parent SUPERVALU) Consumer Percep;on* #40 of 68 (Cubs Foods) Loyalty Programs None Service, Quality, Price Focus on Price above Service or Quality Mass but increasing in Grocery +5.4% +5.3% +0.5% +1.2% $28B / 21.9M $93B / 26.4M $334B / 69.8M $71B / 39.5M #2 of 68 #31 of 68 #67 of 68 #45 of 68 No loyalty card, but personalized Plus Card offers through app None REDcard Focus on Quality and Service above Price Equal emphasis on Service, Quality and Price Focus on Price and Service above Quality Equal emphasis on Service, Quality and Price 2.6 trip drivers 1.8 trip drivers promoted on average 1.1 trip drivers promoted on average $5.13 average unit price $9.73 average unit price Low Prices on Trip Drivers $2.23 average unit price $5.96 average unit price 8.1 trip drivers promoted on average $2.85 average unit price 360 Media Presence Promos across media except ROP Promo;ons across all media Promo;ons across all media Promo;ons across all media Promos across media except ROP Mobile/Apps None Recipes/Meal ideas within App No tablet op;mized app Savings Catcher, Pharmacy, Shopping Cartwheel, Shopping, Lists, In a Snap E-­‐Commerce None Deli Pickup Only Only ships Floral Ships Ships Inconsistent across media types Promotes online ordering for Deli Consistent theming across media Strong on party plarers, pre-­‐ ordered dinners, etc. Consistent theming across media Consistent theming across media Minimal but increasing Minimal but increasing Promo;ng the right items at the 3.9 trip drivers promoted on right ;me promoted on average average No seasonal Seasonal Theming theming Store Prepared Foods None Recipe Inspira;on On website only © 2015 Market Track. Private and Confiden;al Recipes across Print, Recipes through mobile, online No Online and Social, Pinterest presence but rarely in Print 9 Recipes through Online Limited recipes and Social, but through Online rarely in Print and Social Three retailers. Three very different strategies.
Kroger Trip-­‐Driver categories promoted on front page with RED Hot Prices Consistent messaging across media types amplifies promo;ons and reaches more customers Frequent use of Run of Press (ROP) ads Increased number of feature ads by 14% in 2014 Broad market coverage, but not Na;onal © 2015 Market Track. Private and Confiden;al 10 Kroger promotions focus on traffic-drivers, Run-of-Press (ROP)
ads, healthy eating, and coordinated ad messaging
Trip-­‐Driving Categories Like Fresh Fruit Promoted on the Front Page with Red Hot Prices Frequent Use of Front-­‐Pages ROP Ads Web Site and Email Support Aligned with Weekly Deals to Amplify Promo;ons © 2015 Market Track. Private and Confiden;al 11 Strong Support for Simple Truth Private Label along with tradi;onal organic and “green” brands. Kroger supports its ad flyer with TV, radio, ROP and web banner
ads – whereas Safeway ad support is much less coordinated
Kroger Atlanta 4/22/15 Circular Animated Online Ad Running 4/22-­‐4/28 On Non-­‐Kroger Web Sites Run of Press (ROP) Atlanta Journal-­‐
Cons;tu;on 4/26/15 Tom Thumb -­‐ Dallas 4/1/15 Circular Tom Thumb Web Page 4/1/15 Online Online Feature Ad Feature Ad ROP ROP No ROP Ad Support Atlanta TV Ad Running 4/22-­‐4/28 TV Kroger offers consistent and coordinated ad support across media types. © 2015 Market Track. Private and Confiden;al Radio Atlanta Radio Ad, 4/22-­‐4/28 “…Fast, friendly checkout, every day at Kroger. 16oz cartons of strawberries are 2 for $3 and select half gallons of Kroger milk are 10 for $10 with Plus Card limit 10, right now at Kroger…” 12 No TV Ad Support TV Like other Safeway banners, Tom Thumb lacks TV and ROP support. Radio Dallas Radio Ad, 4/1-­‐4/5 “…make Ham the star of your Easter meal with Safeway Bone In Spiral Sliced Half Ham $1.69/lb. limit 2 while supplies last. Pick up a 1 lb. pkg of fresh sweet Strawberries $1.25 each.…” Three retailers. Three very different strategies.
Kroger Publix Trip-­‐Driver categories promoted on front page with RED Hot Prices Frequent use of true BOGOs: “Buy one, get one free” Consistent messaging across media types amplifies promo;ons and reaches more customers Circulars feature perimeter departments and healthy meal occasions Frequent use of Run of Press (ROP) ads Promotes Publix JD Power “Customer Sa;sfac;on Award” Increased number of feature ads by 14% in 2014 Increased number of feature ads by 5% in 2014 Broad market coverage, but not Na;onal Dominates Florida market © 2015 Market Track. Private and Confiden;al 13 Publix ads differentiate with strong support for healthy meal
occasions, store-prepared foods, and BOGO promotions
Frequent use of true BOGOs: “Buy One, Get One Free” – NOT get one half price. Ad Flyers Call Out JD Power “Customer Sa;sfac;on Award” Ad Flyers Frequently Include Easy Recipes Ads feature perimeter departments and healthy meal occasions. © 2015 Market Track. Private and Confiden;al ROPs Support Online Deli Orders Using QR Code 14 Three retailers. Three very different strategies.
Kroger Save-­‐A-­‐Lot Publix Trip-­‐Driver categories promoted on front page with RED Hot Prices Frequent use of true BOGOs: “Buy one, get one free”—NOT get one half price Weekly flyers in some markets—
every two weeks in others Consistent messaging across media types amplifies promo;ons and reaches more customers Circulars feature perimeter departments and healthy meal occasions Wide varia;ons in ad flyers from market to market due to decentralized ownership Frequent use of Run of Press (ROP) ads Promotes Publix JD Power “Customer Sa;sfac;on Award” Ads reflect local market demands and preferences Increased number of feature ads by 14% in 2014 Increased number of feature ads by 5% in 2014 Strong increase in feature ad frequency in 2014 vs. year ago Broad market coverage, but not Na;onal Dominates Florida market Many markets focused on Spanish text/Hispanic shoppers © 2015 Market Track. Private and Confiden;al 15 Most Save-A-Lot stores are managed independently from
market to market. Flyer execution varies to meet local needs
Local Flyer Versions to Meet Local Needs Of the 1,330 Save-­‐A-­‐Lot stores, 382 (29%) are owned by SUPERVALU. The remaining stores license the banner and can run their own promo flyers. These 4 Save-­‐A-­‐Lot ads ran on the same week in April 2015. Some markets run weekly flyers while others run bi-­‐
weekly. Most run 2-­‐4 pages. Strong Online Support Save-­‐A-­‐Lot Denver Save-­‐A-­‐Lot Chicago Save-­‐A-­‐Lot Boston © 2015 Market Track. Private and Confiden;al Save-­‐A-­‐Lot Greenville, SC Some markets show ads in English and Spanish. 16 Spending plans across media types Media Adver9sing Trends How does the use of TV adver;sing compare across trade channels? TV spending vs. retail sales © 2015 Market Track. Private and Confiden;al 17 TV ad messaging TV and circular ads rank highest in effectiveness/
ROI overall, yet show less spending in 2015
QUESTION: “Please rank the following promo9onal media by effec9veness/ROI.” Overall Scores/Responses An;cipated Change in 2015 Spend TV 38% Ranked #1 Media
68% Ranked in Top 5 -­‐4.8% Circulars 22% Ranked #1 Media
70% Ranked in Top 5 -­‐1.2% Social Media 8% Ranked #1 Media
59% Ranked in Top 5 +2.2% Websites 8% Ranked #1 Media
49% Ranked in Top 5 +2.4% Email 3% Ranked #1 Media
49% Ranked in Top 5 -­‐1.2% Magazines 8% Ranked #1 Media
54% Ranked in Top 5 -­‐5.5% Newspapers (ROP)/FSI 0% Ranked #1 Media
54% Ranked in Top 5 -­‐3.1% Radio 0% Ranked #1 Media
Despite 24% Ranked in Top 5i ncreased -­‐4.1% Mobile 5% Ranked #1 Media
Online Video/Viral Video 8% Ranked #1 Media
Outdoor 0% Ranked #1 Media
Source: Market Track 2015 Key Issues Survey © 2015 Market Track. Private and Confiden;al spending, mobile 38% Ranked in Top 5 ranks adver;sing among the least 32% Ranked in Top 5 promo efficient types overall. 3% Ranked in Top 5 Recent client quote: “Mobile is the future, BUT… we just don’t see the ROI.” 18 +2.2% +0.2% -­‐3.2% 12 of these 15 leading retailers (80%) increased their TV
spending in 2014
Median Change in TV Spending: +17% CVS, Aldi and Meijer all made huge increases in 2014 ad spending. Kroger TV Spend: Down 4% Publix TV Spend: Up 13% Save-­‐A-­‐Lot TV Spend: Up 24% Source: Compe3track, Calendar Years 2013-­‐2014; Reflects Na3onal TV (Broadcast, Cable, Syndicated) and Local TV across the top 50 U.S. DMAs © 2015 Market Track. Private and Confiden;al 19 TV ad spending is not always aligned with the size of the
retailer
2014 TV Ad Spending / Retail Sales 0.60% 0.56% 0.52% 0.50% Amazon.com, the site known for online retailing, spends the most on TV rela;ve to U.S. sales. 0.41% 0.40% 0.30% 0.19% 0.20% 0.14% 0.15% 0.10% 0.12% 0.10% 0.15% 0.11% 0.06% 0.00% Source: Compe3track, Calendar Year 2014; Reflects Na3onal TV (Broadcast, Cable, Syndicated) and Local TV across the top 50 U.S. DMAs. Annual Sales from Na3onal Retail Federa3on © 2015 Market Track. Private and Confiden;al 20 Unlike many retailers, Amazon ads oyen promote their own products like Kindle. 0.12% 0.10% 0.04% 0.04% Examples of the Market Track’s Advertising Influence Model
(AIM)
Awareness – Builds brand equity without showing/
promo;ng product directly. (Know our brand.) Considera9on – Promotes brand or product without lis;ng specific arributes or offers. (Consider our brand.) Preference – Promotes arributes or advantages of a product. (Prefer our brand.) Purchase – Promotes a specific offer for a limited ;me. (Buy our brand today.) © 2015 Market Track. Private and Confiden;al 21 Leading retailers commit over 73% of their TV spending to
“Purchase” and “Preference” ads
“Purchase” ads with a specific offer: 61% of Kroger Ads 26% of Publix Ads 2014 TV Ad Spending $450 MM $400 MM $350 MM $300 MM $250 MM $200 MM $150 MM 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 61% 26% $100 MM $50 MM $0 MM Source: Compe3track, Calendar Year 2014; Reflects Na3onal TV (Broadcast, Cable, Syndicated) and Local TV across the top 50 U.S. DMAs © 2015 Market Track. Private and Confiden;al 22 Among top manufacturers, 68% of their TV spend is focused
on “Consideration” compared with only 10% for retailers
“For the last 8 years Purina
ProPlan has been the nutrition
of choice for every Westminster
best in show winner.” 100% 80% Manufacturers 60% “Eating Activia twice a day for 4 weeks may
help reduce the frequency of minor digestive
issues like bloating, gas, discomfort and
rumbling. It works or it's free.” Compared to retailers, manufacturer ads are focused much more on Considera;on and less on Purchase. 40% 20% 0% General Mills Kellogg's Hershey's Coca-­‐Cola Purina Source: Compe3track, Calendar Year 2014; Reflects Na3onal TV (Broadcast, Cable, 23 © 2015 Market and tChe onfiden;al Syndicated) and TLrack. ocal PTrivate V across top 50 U.S. DMAs Campbell's Kray Dannon Clorox Company Dr Pepper Growing number of print ads Feature Ad Support Across Retailers Are feature ads s;ll relevant to leading CPG retailers? Top promoted categories © 2015 Market Track. Private and Confiden;al 24 Under-­‐
promo9on of key products Print ads are as important as ever. Many leading CPG retailers
increased their use of feature ads in 2014
2014 Feature Ad Count Change vs. 2013 90% 80% +81% Despite the emergence of digital coupons, social media and mobile promo;ons, tradi;onal print ads con;nue to grow at major CPG retailers. Save-­‐A-­‐Lot, Kroger and Publix are increasing ads AND increasing same-­‐store sales. 70% 60% 50% 40% 30% 20% +19% +16% +16% +14% +14% 10% 0% Source: FeatureVision, CY-­‐2014 Vs. Year Ago © 2015 Market Track. Private and Confiden;al 25 +13% +13% +7% +5% For the average CPG retailer, RTE cereal represents 1.33%
of total feature ads – but much less at some retailers
RTE Cereal Share of Total Retailer Ads Ingles Raleys Marcs These retailers are most commired to promo;ng RTE Cereal. 3.26% Genuardis Fred Meyer 2.28% Kmart Associated 1.85% Lowes (Food) 1.84% Marsh 1.83% 0.74% Superior Grocers 0.75% Walgreens 0.76% Shoppers Food Whse 0.76% Rite-­‐Aid 0.79% Carnival 0.82% HEB 0.83% Target 0.84% Fiesta 0.84% Big Y 0.84% U.S. Average Source: Market Track, Calendar Year 2014; Includes 107 U.S. CPG Retailers Running >30 Flyers Per Year © 2015 Market Track. Private and Confiden;al 26 0.50% Market Basket These retailers may be unaware that they under-­‐
promote RTE Cereal. 1.33% 0.42% 0.74% 1.90% 1.89% 0.02% Brookshires 2.01% Kings U.S. Average Smiths Marketplace 2.00% Haggen Missed Opportuni;es 1.33% Kellogg’s represents 1.73% of total retailer ads on average –
but some retailers severely under-promote Kellogg’s products
Kellogg’s (Corp) Share of Total Retailer Ads Homeland 3.37% Marsh 3.36% Food Lion 3.08% Winn-­‐Dixie 3.05% Bi Lo Aldi 0.00% Smiths Marketplace 0.03% Fiesta 2.95% Ingles Super Fresh 2.49% Giant -­‐ Landover 2.46% Stop & Shop 2.43% Waldbaums 2.39% Pathmark 2.37% Raleys Dierbergs Fred Meyer 0.41% Carnival Yokes 0.51% 0.61% 0.76% 0.84% Market Basket 0.91% Target 0.93% Food City (Phoenix) 0.95% King Kullen 0.95% 2.37% Shoppers Food Whse 0.98% 2.37% Hy Vee 0.98% 1.73% U.S. Average Source: Market Track, Calendar Year 2014; Includes 107 U.S. CPG Retailers Running >30 Flyers Per Year © 2015 Market Track. Private and Confiden;al 0.32% 0.37% Kmart 2.62% Missed Promo Opportuni;es HEB Minyard 2.75% Giant -­‐ Carlisle U.S. Average 27 1.73% Top trip-­‐
driver categories Trip-­‐Driving Categories Which categories are best for driving store traffic, and which retailers promote them most? Seasonal trip-­‐
drivers © 2015 Market Track. Private and Confiden;al 28 Retailers leveraging trip-­‐
drivers We asked shoppers which categories they tend to buy when
promoted. Here are the top “trip-driver” categories
Survey Ques9on: For your weekly grocery shopping, what items would you consider buying if you saw them on sale? (Select all that apply) Always Fresh Fruit Most of the Time 56% 30% 57% 27% Fresh Vegetables 51% Chicken 33% 59% Milk 23% Bread 46% Cheese 45% 33% Eggs 47% 29% Toilet Paper 45% 29% 47% 26% Beef 43% Ground Beef 28% 40% Cereal Average Category 34% 21% 31% 22% Source: Market Track 2015 Shopper Insight Series; Grocery Survey, Top categories among 114 choices © 2015 Market Track. Private and Confiden;al 29 86% of shoppers say they are likely to buy fresh fruit when promoted. Trip-driving categories vary throughout the year.
These categories are most effective for summer holidays
Survey Ques9on: For the holidays/events listed below, what would you consider purchasing if it were on sale? (Select all that apply) Rank Typical Week #1 Fresh Fruit Memorial Day/July 4th/
Labor Day Back to School Ketchup/BBQ Sce/Relish Granola/Nutri;on Bars #2 Fresh Vegetables Hot Dogs Cereal #3 Chicken Beer Peanut Burer/Spreads #4 Milk Mustard/Mayonnaise Cookies #5 Bread Charcoal School & Office #6 Cheese Soda Oral Hygiene #7 Eggs Borled Water Juice #8 Toilet Paper Hot Sauce/Other Sauce Paper Towels #9 Beef Lighters/Matches Shampoo/Condi;oner #10 Ground Beef Disposable Dinnerware Toilet Paper Source: Market Track 2015 Trip Drivers Survey, Top categories among 114 choices © 2015 Market Track. Private and Confiden;al 30 Survey result reveal the top trip-­‐drivers for these holidays: •  Back to School •  Christmas/Hanukkah •  Cinco de Mayo •  Easter •  Halloween •  Mem Day/July 4/Labor Day •  Mother's/Father's Day •  New Year's •  St. Patrick's Day •  Super Bowl •  Thanksgiving •  Valen;ne's Day Informed retailers understand which categories to promote on key seasonal weeks. Many retailers are missing opportunities to promote trip
drivers on the front page
Top Trip-­‐Driver Categories Fresh Fruit
Fresh Vegetables
Weeks of Front Page Grocery Retailer
Ads
Retailers Promo;ng Trip Drivers with Front Page Ads Grocery Retailers Missing Opportuni;es to Promote Trip Drivers. Weeks of Front Grocery Retailer Page Ads
Chicken
Grocery Retailer
Milk
Weeks of Front Page Ads
Grocery Retailer
Weeks of Front Page Ads
Carrs
King Soopers
Randalls
Safeway
Tom Thumb
Vons
52 Weeks
52 Weeks
52 Weeks
52 Weeks
52 Weeks
52 Weeks
King Soopers
Winn-­‐Dixie
Carrs
Kroger
Weis
52 Weeks
52 Weeks
51 Weeks
51 Weeks
51 Weeks
Kroger
Albertsons
HEB
Acme
Associated
51 Weeks
50 Weeks
50 Weeks
49 Weeks
48 Weeks
Albertsons
Kroger
Safeway
Frys Food Store
Frys Marketplace
44 Weeks
44 Weeks
30 Weeks
28 Weeks
28 Weeks
U.S. Average
45 Weeks
U.S. Average
41 Weeks
U.S. Average
32 Weeks
U.S. Average
12 Weeks
Dierbergs
Hy Vee
Pick N Save
Publix Sabor
Market Basket
Giant Eagle
Publix
Food 4 Less
Price Chopper (KC)
40 Weeks
40 Weeks
39 Weeks
38 Weeks
37 Weeks
32 Weeks
31 Weeks
21 Weeks
21 Weeks
Minyard
King Kullen
Big Y
Dierbergs
Giant Eagle
Market Basket
Food 4 Less
Price Chopper (KC)
Publix
Publix Sabor
31 Weeks
30 Weeks
29 Weeks
28 Weeks
24 Weeks
22 Weeks
17 Weeks
16 Weeks
3 Weeks
2 Weeks
Hen House Market 11 Weeks
Kings
11 Weeks
Cub Foods
9 Weeks
D & W
9 Weeks
Publix
9 Weeks
Yokes
9 Weeks
Haggen
7 Weeks
Publix Sabor
7 Weeks
Price Chopper (KC) 2 Weeks
Trucchis
1 Weeks
© 2015 Market Track. Private and Confiden;al 31 Harris Teeter
Meijer
Weis
Donelans
Food City (Phoenix)
Hy Vee
King Kullen
Shoprite
Tops (Food)
Apple Market
Bozzutos IGA
Ultra Foods
3 Weeks
3 Weeks
3 Weeks
2 Weeks
2 Weeks
2 Weeks
2 Weeks
2 Weeks
2 Weeks
1 Weeks
1 Weeks
1 Weeks
Pricing Trends Strawberry price wars How do successful retailers version pricing by region to compete locally? Versioning creates local price bailes © 2015 Market Track. Private and Confiden;al 32 …and it’s not just strawberries Larger chains optimize feature prices to compete locally
Walmart Indianapolis Kroger Indianapolis Examples of ads running April, 2015 Giant Eagle Columbus Meijer Columbus Marsh Indianapolis Walmart Cincinna; Aldi Cincinna; Meijer Louisville © 2015 Market Track. Private and Confiden;al Kroger Louisville 33 Kroger Cincinna; Meijer Cincinna; Kroger Columbus And it’s not just strawberries…
KROGER DALLAS 04/08/2015 $0.77 Each KROGER ATLANTA 04/08/2015 $1.50 Each WALMART, DETROIT 04/05/2015 $1.98 Each PUBLIX ATLANTA, 04/12/2015 $2.50 Each MEIJER, DETROIT, 04/05/2015 $2.00/Lb. © 2015 Market Track. Private and Confiden;al 34 HEB DALLAS, 04/08/2015 $0.87 Each Specialty Private Label Private Label Which retailers promote the most and least Private Label? Retailers promo9ng Private Label most/least © 2015 Market Track. Private and Confiden;al 35 Amazon’s impact on CPG Private label continues to evolve – from NBEs (National Brand
Equivalents) to specialty brands that allow retailers to differentiate
  Gourmet / Premium § 
§ 
§ 
§ 
Sam’s Choice (Walmart) Marketside (Walmart) Gold Emblem (CVS) Archer Farms (Target)   Environmentally Conscious §  Bright Green (Safeway) §  Earth Essen;als (CVS) §  Greenwise (Publix)   Pet §  ‘Ol Roy (Walmart) §  Pet Pride (Kroger) §  Pet Central (CVS)   Organic / Healthy Ea9ng § 
§ 
§ 
§ 
§ 
O Organics (Safeway) Ea;ng Right (Safeway) Simple Truth (Kroger) Simply Balanced (Target) Central Market (H-­‐E-­‐B)   Exclusive/Licensed § 
§ 
§ 
§ 
§ 
§ 
  Value §  P$$T (Kroger) §  Shoppers Value (SUPERVALU) © 2015 Market Track. Private and Confiden;al 36 Urbini (Walmart) Berer Homes & Gardens (Walmart) Persil (Walmart/Henkel) Circa (Walgreens/Eva Mendes) Nuance (CVS/Salma Hayek) C9 (Target/Champion) Leading brands now monitor which CPG retailers promote
their own private brands over their suppliers
2013 Private Label Share of Total Retailer Ads 2014 Marcs 38.1% 37.8% Hen House Market HEB Aldi Harris Teeter Hannaford Big Y Hy Vee These retailers promote the most private label – poten;ally at the expense of their suppliers. Family Fare 33.4% Ultra Foods 33.0% Key Food 30.4% 1.9% 5.9% 6.1% 7.0% Superior Grocers 7.8% Donelans 7.8% Fiesta 7.9% 28.7% 26.6% These retailers can leverage their track record of promo9ng their suppliers rather than promo9ng their own private brands. Genuardis 25.7% Homeland 8.3% Safeway 25.6% Minyard 8.7% Target 25.3% King Kullen 9.2% Centrella 9.7% Yokes 9.7% Met 9.8% Smart & Final 24.6% Kroger 24.3% Ingles 24.2% Food 4 Less 24.2% Dillons 23.6% U.S. Average Private label represents 18.1% of U.S. circular ads – down from 18.6% in 2013. Walmart 10.2% Carnival 10.5% U.S. Average 18.1% Source: FeatureVision, 107 Leading CPG Retailers © 2015 Market Track. Private and Confiden;al 37 Private label represents only 10% of Walmart feature ads – far less than the U.S. average. 18.1% Amazon’s grocery Private Label “Elements” expands a
growing list of CPG strengths
  Amazon’s CPG Strengths & Differen9ators   Challenges Faced by Amazon CPG Business §  Convenience: Delivery, Dash Buron, etc. §  Name recogni;on: Trusted, high-­‐traffic e-­‐retailer §  Developing Private Label grocery brand “Elements” §  One-­‐stop shop for consumables, durables §  Partnerships with local shops & restaurants §  Highly developed online experience §  Same-­‐Day Delivery Markets Limited to Few Zip Codes §  Compe;;on from Instacart, Peapod, Other Services §  Google Developing Compe;ng Grocery Service §  Media Cri;cal of Amazon “Dash” Burons §  High Grocery Prices at Amazon §  Poten;al Supplier Conflicts §  Drone Delivery? © 2015 Market Track. Private and Confiden;al 38 The importance of online Online Customer Engagement How does e-­‐commerce and online customer engagement vary across CPG retailers? Comparing online presence © 2015 Market Track. Private and Confiden;al 39 Approach to measuring online Online shopper engagement remains a challenge for most CPG
manufacturers and retailers – with decisions often driven by fear
Why Compare Retailers Based on Their Shopper Engagement Online? •  While grocery delivery remains a very small percent of sales, retailers acknowledge the role of digital, mobile and social media in keeping shoppers engaged online. •  Digital promo;ons are a growing revenue stream for retailers – even if revenue is shiying from print ads. •  Fear is a driver for some retailers. For example, many retailers developed mobile apps before developing a mobile website (which studies show is much more important). © 2015 Market Track. Private and Confiden;al 40 In the digital age, successful CPG players relentlessly monitor
online shopper engagement capabilities
Mobile/Apps
Retailers show a wide range of shopper engagement via web sites, email, mobile, and social media. Retailer
Mass
Walmart
Target
Kmart
Meijer
Drug
Walgreens
CVS
RiteAid
Groc
Kroger
Safeway
Publix
Stop & Shop (Ahold)
HEB
Mobile Android Site? App Rating
Retailer
Android Installs
Mass
Feature Ad Execution
Walmart
Yes
4.4
10,000,000 -­‐ 50,000,000
Target
Yes
3.9
5,000,000 -­‐ 10,000,000
Kmart
Yes
4.0
1,000,000 -­‐ 5,000,000
Food % of HBC % of Meijer
Yes
4.0
500,000 -­‐ 1,000,000
Retailer
Circ's/ Year Ads/Mkt/Yr
Ads
Ads
PL % of Ads
Drug
Mass
Online / Loyalty / Social Media
Walgreens
Yes
4.2 28.2%10,000,000 -­‐ 50,000,000
Walmart
117
7,065
33.3%
10.1%
CVS
Yes
4.5
1,000,000 -­‐ 5,000,000
Target
70
10,428
23.7%
15.4%
25.3%
RiteAid
Yes
4.0
500,000 -­‐
Kmart
58
15,752
11.5%
15.3%
14.3%1,000,000
Shopping Online Loyalty Twitter Groc
Meijer
122
19,579
43.4%
13.6%
18.1%
Retailer
List?
Facebook Yes
Kroger
4.2
1,000,000 -­‐ 5,000,000
Drug Coupons? Card? Followers
Mass
Safeway
Yes
4.0 49.7% 1,000,000 -­‐ 5,000,000
Walgreens
97
13,289
23.2%
22.5%
Delivery By Category
Walmart
YesCVS Yes
No
643,000 34,979,459
Publix
Yes
3.9 47.9% 500,000 -­‐ 1,000,000
54
10,718
31.9%
16.3%
Target
Yes
Yes
Yes
1,560,000
23,759,703
Stop (Ahold)
No
3.4 51.1% 100,000 -­‐ 500,000
56 & Shop 10,177
29.5%
13.7%
SS Groc HBC -­‐ Paper -­‐ Floral RiteAid
-­‐ Dairy -­‐ Frzn -­‐ Kmart
No
Yes
Yes
121,000
1,468,623 Yes
HEB
3.9
5,000 -­‐ 10,000
Groc
Delivery/ E-­‐
Bev -­‐ -­‐ Mac N Tooth Bath Fresh Gallon Frzn Meijer
No Kroger Yes
No
36,600 1,236,375
114
8,930
73.8%
8.0%
24.4%
Commerce?
Coke Cheese paste Tissue Flowers
Milk Pizza
Drug
Safeway
88
16,950
80.2%
5.2%
25.6%
Walgreens
Yes
Yes
Yes
899,000 14,960
4,382,005 73.5%
190
12.8%
18.2%
Via Shipping
No
Ships Ships Ships
No PublixNo
No
CVS
YesStop & SYes
Yes
256,000
1,529,946 69.5%
hop (Ahold)
52
18,264
11.7%
22.6%
Via Shipping
No
No
Ships Ships Ships
No
No
RiteAid
Wishlist
Yes
715,779
HEB Yes
5247,300
6,701
60.0%
18.9%
38.2%
Via Shipping
No
No
No Ships
No
No
No
Groc
Deli/Bakery Pickup No
No
No
No
No
No
No
Kroger
Yes
Yes
Yes
83,300 1,019,063
Safeway
Yes
Yes
Yes
63,300 1,228,684
Via Shipping
No
Ships Ships Ships
No
No
No
Publix
Yes
Yes
No
168,000 2,357,337
Via Shipping
No
Ships Ships Ships
No
No
No
Stop & Shop (Ahold)
Yes
Yes
No
16,100
259,427
Yes
No
No
Ships Ships
No
No
No
HEB
Yes
Yes
No
102,000 846,276
Deli/Bakery Pickup
Delivery App
Deli Pickup Only
Peapod
Deli/Bakery Pickup
No
No
No
© 2015 Market Track. Private and Confiden;al No
No
No
Ships
No
Delivered Directly From Retailer
No
No
No
No
No
Delivery Via Peapod
No
No
No
Ships
No
No
No
No
41 IOS App Rating (all Versions)
3.0
3.0
3.0
2.5
4.5
4.5
2.5
2.5
2.5
2.0
2.5
???
Savings
Cartwh
Cannot
1-­‐hour
Meat A
Key takeaways Taking Ac9on Opportuni9es for retailers © 2015 Market Track. Private and Confiden;al 42 Opportuni9es for manufacturers Action Steps for Grocery Retailers and Manufacturers
q  Con;nue to use retail feature ads to drive measureable sales and ROI. q  Be aware of each retailer’s regional ad versions to track local varia;ons in promoted prices and products. q  Op;mize your TV ad messaging mix of branding and offers. Opportuni9es for Retailers §  Fine tune your trip-­‐driver promo9onal strategy. §  Learn from the sales growth leaders. §  Iden;fy any categories you under-­‐promote compared with compe;tors. Opportuni9es for Manufacturers §  Know which retailers under-­‐promote your brand and your category. §  Whenever possible, leverage the role of your category to drive store traffic. §  Monitor which retailers promote their own brands more than their suppliers. © 2015 Market Track. Private and Confiden;al 43 Thank You!
Email questions to perspectives@markettrack.com
© 2015 Market Track. Private and Confidential
44