CPGmatters: Focus on Shopper Engagement Paying Off for Kimberly-Clark
By Dale Buss
Through a special arrangement, what follows is an excerpt of a current article from the monthly e-zine, CPGmatters, presented here for discussion.
Befitting its status as a leader in the CPG business, Kimberly-Clark is helping its retailer partners do a better job of hooking shoppers in their aisles. But that doesn’t mean that chains always like what they are hearing from Kimberly-Clark – or act on it.
Take end-caps, for example. Recently, Kimberly-Clark did some “tagalongs” with consumers at various supermarkets and mass-market retailers and found that shoppers have very different preferences for aisle-end real estate than most store managers do.
“The shopper would like to see them be more like a Macy’s window, where end-caps engage them and pull them down the aisle and are related to what you actually find in that aisle,” Mary Goggans, director of customer development for Kimberly-Clark, told CPGmatters. “But retailers are using them for promotion and to push a lot of volume.” Among other results, Ms. Goggans said, is that “consumers feel confused and like they need to go from end-caps back to the aisle to make sure what the best prices are.”
Yet when it comes to end-caps, store executives are resistant to any message of change from Kimberly-Clark, even after the company has used its advanced virtual-reality system in Neenah, Wis., to help its retailer partners figure out what really pleases shoppers. “They think all of their space is too precious” to use it to merely indulge consumers,” said Ms. Goggans.
Kimberly-Clark’s accompaniment of actual shoppers is just part of one beefed-up aspect of its shopper-engagement apparatus: improvement in in-store metrics.
“We’ve been doing first-of-its-kind research to measure department equity in the store: what shoppers are saying about a ‘store within the store’ compared with what the retailer would like them to say about it,” Ms. Goggans explained. The “tagalongs” provide qualitative research while Kimberly-Clark also crunches quantitative conclusions.
For instance, Kimberly-Clark, among other things, advised Safeway to put its baby wipes and baby toiletries together, and pull strollers, car seats and other baby-goods hard lines closer to baby-care products. Significantly higher sales during the test verified Kimberly-Clark’s ideas about improving shopper engagement.
Other retailers also are beginning to benefit from a two-year-old initiative Kimberly Clark calls the Indispensable Partner program. But this isn’t as easy as it may seem.
For one thing, nearly every retailer would like to get account-specific help in engaging shoppers, but truly meaningful innovations in this area remain at a premium. And Kimberly-Clark really wants to focus on helping its biggest partners.
“We’ve had to prioritize our customers based on several variables, including growth potential – as well as their own [shopper-engagement] capabilities,” said Ms. Goggans.
And what does Kimberly-Clark get in return? “An ongoing partnership,” Ms. Goggans says. “We might get more than our share of displays or get our fixed ad fees waived. Or we’re invited to the table when they’re looking at a new marketing campaign. We’re going after joint goals.”
Discussion Question: Do you think vendors bring a fresh perspective to shopper engagement at the store level? What type of changes would you expect if they became more involved? Do you agree that consumers are looking for more aspirational messaging (i.e., Macy’s windows) at supermarkets rather than primarily promotional stances?
I do believe that suppliers like Kimberly-Clark can offer greater insights into shopper interests and creative alternatives to category merchandising and displays. It makes sense for moms with young children to want to “cluster shop” all of their baby needs in one location…and it is good for Kimberly-Clark as the “splash” of visibility in the store draws moms to that area. More visibility…more sales for K-C.
End caps and their use involves measuring a lot more than shopper desire and creative alternative use. End caps typically hold DSD product and are serviced by the vendors (like Coke and Frito Lay) which insures that high turn products stay in stock and that the labor to keep them replenished is paid for by the supplier. End cap fees are also a profit generator for stores who get the money “up front” and are built into retailers financials. Is K-C ready to DSD and service the end caps of baby products they recommend? Not likely, so stores need those questions handled along with the shopper preference data that K-C is doing well in supplying to them.
Kimberly-Clark’s alleged innovation doesn’t seem to have helped its stock. Over the past year, it declined about the same as the S&P 500, about 15%. The company would benefit by improving its product innovation. K-C needs an innovative breakthrough like P&G’s Swiffer. P&G stock is up about 4%, a difference of about 19 percentage points compared to Kimberly-Clark.
Absolutely! They bring a unique perspective and insight to the retailer. More communication is key here.
Given the current market dynamics and pressures, especially for grocery retailers, it is surprising they aren’t more receptive to the emerging field of manufacturer-based consumer insight research. The stable of regional and super-regional market leaders (i.e. Publix, Wegmans, Meijer and the like) are almost certainly integrating such valuable business intelligence into their strategic plans. The road to being a a high performance operator starts in having the courage to embrace new ideas.
Wider perspectives and market research should be listened to. The industry generally needs to differentiate and improve. The focus should be on the customer and if K-C can help in this then it should be listened to. It’s a clever move from K-C and demonstrates its value and helps build loyalty.
Vendors can bring a fresh perspective to retailers if their efforts are not just self-serving to promote their products. Research that truly focuses on what consumers are telling them is key. Then retailers and vendors can work together to find ways to better meet consumer needs in the marketplace. There is certainly room for improvement here.
Retailers should be the experts in how and why consumers shop their stores. In many instances they don’t collect the information or expect manufacturers to pay for it. Manufacturers have stepped in to fill this gap. Frequently they have insights that could greatly benefit retail. Retail should listen. The better the shopping experience, the more loyal the consumer. The more loyal consumers, the greater the sales and profits.
Sharing this kind of information is what meaningful collaboration is all about. Each company collects and analyzes consumer data. None of those efforts create identical information and insights. By sharing insights about what consumers want, how consumers shop, and what consumers purchase provides better insight about consumers. With better insights, changes can be made resulting in better sales for both parties.
Manufacturers bring a perspective that retailers simply don’t have. CPG in particular has legacy research and marketing expertise that can be invaluable to many channels. Shame on retailers if they don’t take advantage of their insights.
It’s not shopper engagement-it’s store layout research. You are not engaging the consumer with this kind of activity, you are finding out how to maximize cross-category purchasing, which we’ve been doing for years (perhaps with less success than we like). And yes, manufacturers should be the experts that bring a fresh perspective.
This is a win/win for both K-C and the retailer. Retailers get busy and tend to look at things holistically. By working with the CPG vendors, they can zone in on greater improvements enabling greater profits for both. Absolutely, I think every retailer should listen to greater ideas for profits. A closed mind will result in fewer profits.
It’s kind of sad that CPG is more willing to be innovative around in-store experiences than retailers. Not just K-C, but many CPG companies have a ton of ideas for how to make in-store better for shoppers, and in turn better for retailers and the brands they sell. But they run into the wall of retailer resistance–sometimes overt, like the end-cap example, and sometimes not so obvious, like when store managers are incented or compensated on efficiency measures that get in the way of working with suppliers for the consumer’s benefit.
I think a lot of things about the way grocery relationships in particular are structured need to change. I thought for sure that Sarbannes-Oxley would bring about some of that change, but I guess it hasn’t, really.
Manufacturers have a significant ability to help retailers with shopper engagement and satisfaction. A retailer cannot be an expert in how consumers shop in every category in the store.
The use of virtual reality simulation and extensive in-store research is growing, but still tends to be limited to partnerships between the most sophisticated vendors and the the largest retailers.
It is the dissemination of that learning to the general marketplace that is truly needed.
This example of Kimberly-Clark’s retail perspective certainly will help many “reinvent” the shopping experience. Actively engaging customers is an essential ingredient to retail success.
I applaud their efforts and have seen similar evidence of renewed collaboration between suppliers and retailers–all with an eye toward customer satisfaction and the consumer experience. Our own 360° store assessment service similarly provides a fresh perspective to retailers. And for those accepting the input, sales are increasing.