Craig Hodnett, SVP of Client Solutions, talks Best Practices.
Best practices generally save time, money and lead to better results. For CDTs, I’ve learned to evaluate “best practices” through a rather narrow lens. In my experience, best practices in CDTs are those that best simulate the shopper’s real world experience.
My 30+ years of experience in category management and sales, partnering with shopper research suppliers to build CDTs, has taught me that the best research partners are those that place significant emphasis on how three critical market factors disproportionately influence the efficacy of a CDT. They are:
- Speed: The rapidly changing shopper
- Need: Segmentation with various occasions and need states
- Innovation: In retailers with a smaller footprint
Most CDTs are based on three years of historical data. In other words, traditional CDTs look backward, not forward. While historical perspective has merit, today shoppers’ needs, wants, desires and even beliefs can change quite rapidly. The beer category is a great example. Craft Beers drive a disproportionate amount of growth in the total beer category. For certain shoppers in certain categories, “newness” is intrinsic to their shopping decision. Building trees from historical data is a poor methodology for a category such as this.
Historically, CDTs have been built in isolation. But if a category is driven by a strong set of occasions or need states, another best practice is using a phased process to address situational purchasing. Again, using the Beer Category, there are buying occasions based on need states that drive beer purchases (for example a Super Bowl game watch party). A key question might be whether an occasion based on need states is strong enough to warrant how both assortment and shelf arrangement should be built.
Innovation at retail is at a record pace and shows no sign of slowing. Yet retail square footage is shrinking as growing numbers of consumers are returning to city urban centers with smaller available retail space. Retailers build smaller stores for time-starved shoppers that want convenience in their return to Urban. The question that looms for Innovation is if they deserve shelf space in smaller store formats. Being able to quickly and easily place new product concepts into the CDT process matters. Doing so, even before bar codes are established, might be the difference between success and failure.
Grounded in shopper behavior and attitudes within the context of the retail environment, DI’s best practice CDT provides forward-looking recommendations rather than a simply historical analysis of prior purchasing.
Craig Hodnett is SVP, Client Solutions.
He can be reached via email firstname.lastname@example.org or call (706) 416-0039.