Final Word: Seeking a Model of Success
In Greek history, Diogenes was famous for carrying a lantern in the daytime in a vain search for “an honest man.” He was perpetually frustrated. Today’s c-store proprietor is a modern Diogenes perpetually beseeching vendors for shopper insights and being consistently disappointed.
While much of that disappointment lies in that neither vendors nor c-store proprietors understand what an “insight” really is, that is a discussion for another time. A more productive approach for both c-store retailers and their vendors is one in which vendors identify what works and offer these practical solutions, or “success models,” to retailers.
A success model is an approach in assortment, pricing, in-store merchandising or promotion that has been proven to build volume efficiently time and time again. It is tangible, actionable and fact-based. So the challenge to vendors is simple: Identify what has worked in these areas for your categories and present them to the retailer.
Here’s a simple example of a success model: You will sell more cookies off a display that is near the dairy case than if you put the same display anyplace else. Sound simple? Sound logical? Unfortunately, other success models are not quite as simple and obvious as milk plus cookies equals profit. But they will work as well as this time-tested success model.
Listed below are some questions, the answers to which can yield success models that build volume in a high-volume category—in this case, soft (noncarbonated, water, energy, etc.) beverages:
Assortment: What does your market experience reveal about superior assortment approaches under the following conditions:
- In Hispanic or black neighborhood stores
- When retailers focus on rapid, aggressive assortments of new item entries
- Stores stocking larger assortments of noncarbonated, flavored waters or energy drinks
- Stores with unusually limited cooler space
- Stores with a disproportionate share of younger or older shoppers
- Stores with unusually high or low numbers of SKUs
Pricing: What does your experience reveal about pricing, especially between various segments or types of products?
- Are some segment sizes or items unusually priced inelastic or elastic?
- Are shoppers even aware of item pricing for popular volume items?
- What happens to the market share of c-stores with high single-serve margins?
- What c-stores have historically employed lower margins with what effect?
Merchandising: What does your experience reveal about the myriad merchandising and shelf presentation alternatives available in the c-store universe? Are we over-spacing popular high-volume items at the expense of new, slower-moving items, or vice versa?
- What presentation array optimizes the shopping experience based on VideoMining data?
- What c-store offers the most creative merchandising approach to soft beverages?
- What is the most important merchandising lesson you have learned in the past two years?
- What is the ROI of secondary locations of coffin cooler ice chests of soft beverages?
- How can we increase single-serve attachment to salty snacks, etc., by rearranging the gondolas?
- What is the primary lesson learned by comparing small-space to larger-space c-stores?
Promotion: What does your experience reveal about the optimal promotion approach to the category?
- What price points work best where?
- Should we promote entire segments of items simultaneously?
- Should we set aside a special door for promotion of new items?
- Who is doing the best job of pump conversion? How are they doing it?
- What c-store has developed the most effective promotion approach on single-serve?
- What is the optimal combination of single-serve segments for simultaneous promotion?
Retailers, reach out to your vendors and ask for their help with success models.
Gordon Wade is chairman of the best practices advisory board for the Category Management Association. Reach him at gwade@ cpgcatnet.org.