FD Buyer: Weis Markets Looking for Vendor Insight
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Dairy Buyer magazine.
When vendors come calling, Weis Markets, based in Sunbury, PA, expects them to come armed with facts and insights, not just opinions.
“It is simply not possible for our category managers to get into every one of our stores on a regular basis,” said Bruno Garisto, VP of center store at the 161-unit grocer. “That’s why it’s absolutely critical for sales reps, whether they live in our area or not, to visit our stores and give us feedback. We are always looking for ways to improve and one of the ways we do this is by being good listeners — we call it aggressive listening. We want to hear about what our industry partners are seeing at our competitors so that we can be better.”
Mr. Garisto is also open to constructive criticism on his stores. He added, “You have to be able to accept that, and to really want insight from the trade. We really want to know how to grow our share and be tactically adept locally, and good trading partners help us do that.”
Steve Davis, director of center store GM/HBC/grocery/non-foods and frozen, added that reps should provide the grocer with completed presentation forms.
“We do a lot with electronic marketing events — “buy two of this, and get that,” he said. “Or we use the rewards program where shoppers get dollars off their next purchase for buying a certain dollar amount of complementary products from certain manufacturers. This has been very successful for us. We are asking reps to come to the party with these types of programs, or something unique.”
Weis Markets is also looking for help in being first to market with new items. Said Mr. Davis, “So we need timely presentation forms way out ahead of time so we can get items into the queue and on the shelf so customers can find them. We need to know when manufacturers are dropping their FSIs (free-standing inserts) so we can have the product available in a timely fashion.”
Discussion Questions
Discussion Questions: What should retailers expect of vendors when it comes to managing their business? What resources that manufacturers have available could be better utilized by trading partners to achieve greater results at retail?
This sounds like what category management was meant to be when it was first devised. Manufacturers bring key insights to the retailer — retailer is more responsive. However, there does seem to be more of a disconnect between the VP and the Director — the former wants actionable information, the latter wants completed forms and more/better deals.
Weis Markets recently celebrated its 100th anniversary, a testimony to success in today’s challenging competitive environment. While retailers should know their markets, manufacturers need to be the category experts. In this role manufacturers have the opportunity, even the obligation of merging their product knowledge with the retailer’s customer insights.
While all channel members are interested in gaining their fair share of the channel profit, collaboration such as that practiced by Weis and its vendors, insures that the latest and best knowledge of the key components to success are shared and implemented. The key to such an approach is growing the pie versus simply looking for a bigger slice.
It’s all well and good for vendors to come to the table with anecdotes and observations, but the real opportunity lies in having those stories backed up by cold, hard facts.
For example, we find that among our retailer and vendor partners, a typical vendor’s year-over-year change in sales is driven largely by the few best or worst performing stores or by behavior changes by a small subset of shoppers. Imagine if the vendor came to Mr. Garisto and said, “We could double our growth at Weis by turning our 10 worst performing stores into average performers. I’ve visited those 10 worst stores, I’ve visited the 10 best stores, and here’s exactly what we can do to turn things around. And by targeting a few key shopper groups with the right offers, we can grow by another 10%.”
Arming your vendors with the right information makes all the difference in the world.
Manufacturers and 3rd party suppliers are already in position with intellectual property and processes to help the retailer better understand their consumers. This has been the case for some years now. Barriers for these alliances materializing have ranged from funds sourcing, cost, and trust. And frankly, many retailers have just not been in position to leverage the learning.
Weis is a pleasant exception to the rule. Their management team has quickly earned a reputation for having the wisdom it takes to ‘know what they don’t know” and to understand the need for cooperation. With that said, brands must understand the need to view a retailer partner’s business holistically, not with the brand level myopia that has plagued some of the past attempts to partner.
Armed with consumer data, brands can help retailers understand categories, customers, and ultimately enhance the customer relationship with both brand and retailer. Kudos to Weis Markets, they are setting the bar high for others to follow.
We dare not forget that even chains with 161 stores are interested in joint business planning and genuine, account-specific support. Weis’ nimbleness in the market has served them well since 1912, for vendors it is certainly worth time and effort to align goals and their programs for mutual success.
I’m of the school that vendors should supply “facts” and retailers should manage their own businesses. The fact that so many categories in so many retailers are “managed” by vendors probably goes a long way towards explaining declining supermarket shares.
Of course, there are significant and shining exceptions to this rule but in the end, the store is the place where retailers live and die and where manufacturers liquidate inventory. What manufacturers are supposed to understand are the dynamics of their categories and broad-based consumer trends. What retailers are supposed to understand are local market conditions and the dynamics of their store.
Whether either, or both parties, live up to their expectations determines the degree of their shared success and/or failure.
Weis is not different from any other grocery retailer when it comes to wanting competitive information. Nor are they different in wanting it from the sales reps calling on them. In fact, the sales reps calling on them are calling on the competitors who also want the same information. All’s fair in love and war.
As a consultant to manufacturers, mostly small and medium size brands, I am emphatic about making sure my clients are completely prepared to have the right discussion with retailers days before they arrive. My clients will be armed with knowledge about the retailer itself, the retailer’s own broader business models and strategies, and specific category knowledge for their products and brands. And yes, IRI and Nielsen are often included for category historical purposes, and to evaluate recent trends; however, I will vigorously encourage both my clients and the retailer to take a peripheral view and also a view out the front window, and not rely entirely on the rear view mirror.
The manufacturer’s opinions have little value, however, “vision” is a completely different type of asset and it needs to be backed up with facts, reason, and lots of planning that can be laid out for the retailer with regards to advertising, marketing, business development, budget, projections, and expectations.
Retailers today have a reasonable expectation that their vendors share information, insights and shopper solutions with them.
However, most vendor representatives are ill prepared for this duty. Either the information is hidden away somewhere at corporate, or it is not available in a form or focus that relates to retailers, or it is in the form of information, not actionable insights.
It is not enough to collect and distribute information. Vendors need a strategy and a plan to develop key shopper insights, communicate them in a relevant and actionable way to their retailers, and help to execute them at retail.
I truly believe manufacturers can in fact provide many of the resources needed to move the needle in the right direction for their retail customer if their own teams were better aligned. The sales rep should be the most well rounded and prepared person for connecting all the dots from shopper marketing, category management, sales planning, in-store merchandising, and promotional activity. I see too many manufacturers being disconnected in getting a clear plan to the sales organization. Too many silos of information that are not coming together during the week in preparation for “game day.”
While acknowledging the concern about biased use of information by CPGs, most agree that shared insight is a critical foundation for spotting opportunities and issues, be it new product positioning, addressing laggard stores or promoting items to the right audiences. However, few retailers are systematically sharing shopper insights with their vendor partners. Kroger is well known for this practice via dunnhumby’s “Shop” reports, albeit at a substantial price. Only the largest retailers can afford the analyst-heavy approach Kroger has taken. And, success among the largest has been limited relative to Kroger.
Networks are beginning to emerge that will make the process effective and more affordable. They will consistently merge product definitions and metrics across retailers while ensuring that the retailers’ customer identities are carefully protected.
What retailers want in such a network is an element of control whereby their marketing strategies can be employed with their direct customers, as opposed to selling in-store “real estate” to brand dominated promotion firms. It’s quite possible to integrate that best interests of CPGs and retailers based on giving shoppers the experience they desire.
Relying on anyone else to do the analysis and bring the facts abdicates responsibility for managing the business for both retailers and manufacturers. The best discussions occur when BOTH retailers and manufacturers bring facts, analysis, and insight to the discussion. The resulting joint strategy is more likely to fit the consumers who frequent that retailer and buy that manufacturer’s product.
Vendors have information that most keep quiet about. First is the products’ primary consumer characteristic vs. the retailer’s target market. Second is the stores condition with opportunity identification. Third is local market knowledge for all channels.
Weis Markets has superb loyalty among their shoppers. Based upon the BIGinsight Monthly Consumer Survey, they enjoy a Net Promoter Score of +36.6% compared to the average grocers score of +31.3%. In addition, their customer maintains that they have been a Weis shopper most often for 12+ years, pointing to greater longevity than 10.4 years for other grocers.
In addition, the Insights indicate that Weis holds customers within the store, with strong cross-shopping patterns, as well as cross-channel shopping behavior — health & beauty aids, snack foods, frozen foods.
Weis is opening up the door to manufacturers and CPG concerns to work with their merchandisers and marketers to build on this loyalty. With Weis’ solid customer base (average household income of $65,649, an index of 118 compared to the general population), this presents opportunity for both parties. Weis’ customers cross-shop other retailers, just as other grocers are offered that challenge. Aldi, Sam’s Club, Walmart, Target, Giant, Giant Eagle, etc., would welcome even greater numbers of visits. By helping Weis understand how their merchandise and marketing mix can boost share of wallet when customers are away from their stores, CPG firms can fulfill expectations of this solid regional grocer.
Dave Carlson touched on the thought that came to my mind when I read this — how much data/information is Weis giving to their suppliers?
‘Sharing’ is a two-way street. Too many retailers, in my experience, want analysis and insight from their suppliers, but won’t give enough data to allow the supplier to create those insights.
Listening to insight is important. Managing the insight acquisition, translation and infusion is critical to auctioning your knowledge. Here are a few quick thoughts on best practices for retailers:
Require that all insights involving syndicated data is analyzed using retailer category hierarchy, NOT the CPG company hierarchy. (For example, the way the retailer defines frozen desserts, not the way numerous vendors might.) Initiate and require sample and analytical protocol adherence. Identify the right KPIs and initiate scorecards requiring each vendor display the basic data similarly with the same defined computations. Too many retailers do not use share data, I would include a share of wallet metric. Comp sales and profits are not enough to really understand what is going on.
TNS 360, Nielsen, IRI and internal metrics data should all be utilized in planning and tracking performance. Likewise, they should all be scorecarded.
I hope this helps. I am shocked that retailers are not already doing this. Shame on the retailer that blindly listens. Shame on the c-suites for not demanding insight driven decisions. You will get what you measure and reward. Garbage in means garbage out.