Marketing Forum 2010 Executive Summary

www.tcgfmarketingforum.com

MARKETING FORUM 2010E x E c u t i v E S u m m a r y

Tomorrow’s

What Manufacturers and Retailers Need to Know.Consumer.

Winning 2 – 4 November 2010 • Lisbon, Portugal

Marketing Forum 2010 - ExEcutivE Summary2

WHAT IS THE CONSUMER GOODS FORUM? The Consumer Goods Forum (CGF) is a global, parity-based industry network, driven by its members. It brings together the CEOs and senior management of over 650 retailers, manufacturers, service providers and other stakeholders across 70 countries and reflects the diversity of the industry in geography, size, product category and format. Forum member companies have combined sales of EUR 2.1 trillion.

The Forum was created in June 2009 by the merger of CIES - The Food Business Forum, the Global Commerce Initiative (GCI) and the Global CEO Forum. The Consumer Goods Forum is governed by its Board of Directors, which includes 50 manufacturer and retailer CEOs and Chairmen.

The Forum provides a unique global platform for knowledge exchange and initiatives around five strategic priorities – Emerging Trends, Sustainability, Safety & Health, Operational Excellence and Knowledge Sharing & People Development – which are central to the advancement of today’s consumer goods industry.

The Forum’s vision is: “Better lives through better business”. To fulfil this, its members have given the Forum a mandate to develop common positions on key strategic and operational issues affecting the consumer goods business, with a strong focus on non-competitive process improvement. The Forum’s success is driven by the active participation of the key players in the sector, who together develop and lead the implementation of best practices along the value chain.

With its headquarters in Paris and its regional offices in Washington, D.C., and Tokyo, the CGF serves its members throughout the world.

For more information, please visit www.theconsumergoodsforum.com

WHAT IS THE MARKETING FORUM?Each year, senior executives in Marketing and Sales gather to discuss the top-of-mind issues in retail marketing. It is the leading-edge event in marketing that Marketing and Sales Directors cannot miss.

The Marketing Forum offers delegates top-quality speakers, debates, networking and real case studies. The Forum aims to provide practical take-aways and a large diversity of information and insights unique to this event. The Marketing Forum is the only global forum of its kind for retail marketing and sales executives.

Marketing Forum 2010 - ExEcutivE Summary 3

The Marketing Committee

► ARNAUD DE BELLOY, Vice President Global Customer & Sales, NESTLE GROUP, Switzerland (Committee Co-Chairman)

► STEPHEN SMITH, Executive Vice President, Brand Strategy, Marketing and Merchandising, Food Lion, USA (Committee Co-Chairman)

► JONATHAN ACKERMAN, Customer Director, PICK n PAY RETAILERS, South Africa

► ADAM BALON, Founder & International Director, INNOCENT DRINKS, United Kingdom

► CAROLYN BRADLEY, UK Marketing Director, Tesco Stores Ltd, United Kingdom

► DIETER EBBERS, Director Market Research and Media West Europe, HENKEL KGaA, Germany

► ANGELA FRANCOLINI, Vice President, International Marketing & Innovation, MC CORMICK & CO, INC., USA

► MARKUS GISIGER, Head of Marketing Food, MIGROS, Switzerland

► ANTHONY HUCKER, Vice President of Strategy and Business Development, WAL-MART STORES, USA

► MATEJA JESENEK, Member of the Board for Marketing, Format Development and Buying/Chief

Marketing Officer, MERCATOR GROUP, Slovenia

► SHARON JESKE, Director, Operational Excellence, THE CONSUMER GOODS FORUM

► ROBERT KITCHING, Vice President Consumer Marketing Insights Western Europe, UNILEVER, The Netherlands

► MEG LEVENE, Senior Director Global Shopper - Consumer Health Care, JOHNSON & JOHNSON, USA

► FIONA MA, Executive Director - Sales & Marketing, China, SWIRE BEVERAGES, People’s Republic of China

► KRISTEN NOSTRAND, Marketing Director, PROCTER & GAMBLE, USA

► SIMON POTTS, Director - Business Development Alliance Boots Health & Beauty

Division, United Kingdom

► NICK POWELL, Managing Director, ENERGIZER, United Kingdom

► PATRICK ROUVILLOIS, Chief Marketing Officer, CARREFOUR GROUP, France

► JEAN RUBENS, Executive Managing Director, CASINO SUPERMARCHES, France

► VANESSA SILVA, Marketing Director, JERONIMO MARTINS, Portugal

► SATORU TANAKA, President, Premium Skin Care, Global Beauty Care Business, KAO, Japan

► ANDRE TORDJMAN, Founder and Managing Director, LITTLE EXTRA (AUCHAN GROUP), France

► JEAN-JACQUES VANDENHEEDE, Director Retailer Insights, THE NIELSEN COMPANY, Belgium

► PATRICK WAUTERS, Vice President North and Eastern Europe, CHIQUITA EUROPE, Belgium

► PAOLO ZAZZI, Europe and Export Customer Marketing Responsible, BARILLA, Italy


Tuesday 2nd NovemberStore Tour Programme

kindly sponsored by


Participants were warmly welcomed by


Welcome Cocktail

kindly sponsored by



Wednesday 3rd November

Stephen Smith, Executive vice President, Brand Strategy, marketing and merchandising , Food Lion, uSa

in welcoming 170 participants from 30 countries to Lisbon, Stephen Smith said the marketing conference was “a unique gathering, in which to share ideas, connect and gain

inspiration.” However, he stressed that the content was based on real examples and case studies: “We try to stay away from the theoretical.”

What’s New about Your Association?Jean-Marc Saubade, managing Director, the consumer Goods Forum

The Consumer Goods Forum is not “one more

association” but rather, the vehicle through which the industry can finally speak in one voice. Launched in June 2009, in New York, with the

fusion of CIES with The Global Commerce Initiative and the

Global CEO Forum, the body aims to drive unified collaborative action

on non-competitive issues. “The CEOs of your companies were sitting on too many boards and going to too many meetings, in which they were talking about the same things,” Saubade explained. “At the same time, the industry is not talking in one voice. We are not in the driving seat.”

The Consumer Goods Forum members have combined sales of EUR 2.1 trillion: an organisation with enormous collective influence. The board of directors brings together the CEOs and chairmen of 25 retailers and 25 manufacturers. The board positions cannot be delegated, so the decisions are made by the people who can “really

get things done”. Driven by its vision of “Better Lives Through Better Business,” the Forum has a mandate to make collaborative work accessible to all companies, for the good of the industry. “We work on things that can only happen when we unite,” Saubade underlined. These include, among others, food safety, sustainable packaging and carbon measurement, stripping cost from the supply chain and information sharing and are arranged under five strategic pillars:

1. Emerging Trends

2. Sustainability

3. Safety & Health

4. Operational Excellence (New Ways of Working Together)

5. Knowledge Sharing & People Development

The Forum is not a lobby but nonetheless aligns itself strategically with lobbying groups in the regions, such as GMA, FMI, ERRT, EuroCommerce and so on. “We still need to influence legislation in various countries,” Saubade asserted. The connection in the regions is made via local Efficient Consumer Response (ECR) groups. The Forum also aligns with GS1: global projects need global standards. The idea is to avoid duplication and pursue a single industry agenda.

Welcome by Marketing Committee Co-Chairman


Setting the Scene for the Forum conference moderator Frances Edmonds, author & Presenter, united Kingdom

“A good name is more to be valued than great

riches,” Frances Edmonds contends. A brand is that

ineffable amalgam of the tangible and the intangible, which

creates influence and value. But that hard work can be ruined in the twinkling of

an eye and “it can all come crumbling down”. BP was one of the most admired companies in the world. Now it is one of the most reviled. What is the cost to its long-term reputation? Toyota had built a reputation for safety. That reputation is now severely damaged. Will the company

be able to rebuild that brand? There is, in all this, a vital need for true transparency. Consumers are demanding it; “If you’re not naturally honest, be honest through self-interest.” Meanwhile, there’s a new business model:

Rising from the Storm Jean-Jacques Vandenheede, Director retailer insights Europe, the Nielsen company,

Belgium

Consumer confidence drives demand. While it

has been generally reported to be low, it has in fact

“followed [economic] recovery, slowly creeping up again” and

consumption volumes are returning. This said, there is still doubt in the consumer mindset. “The consumer is hesitating.” In terms of turnover, large and small supermarkets have been “flat lining”, also, although hypermarkets have suffered in recent times, losing 7% on average over the last few years. “There is a need to reinvigorate the hypermarket,” Vandenheede said. Both market share for all three format types and the number of shopping trips were also flat between 2007 and 2010.

“The consumer is an animal of Darwin,” Vandenheede asserted, in that it slowly adapts, rather than opting for rapid or radical change. “Auto-pilot shopping” is the reality of our business. Faced with uncertain economic times, most shoppers, according to Nielsen survey data, shopped at the same stores they always did. This may be in part, Vandenheede posited, because all the grocers had essentially the same offer. Only a minority (not more than 16%) swap stores to benefit from specific promotions. But over-promotion leads to the commoditizing of the low-price offer. The result of this is that the shopper may feel punished when an item is no longer on promotion, rather than feeling rewarded by the promotion itself.

The growth in the hard discount formats has gone hand in hand with increased density. Similarly, the growth in private label is a “structural phenomenon” that has followed the density of organised retail and has not been driven by consumers. But the major consumers of private label are not who we might think. By Nielsen’s measurements, the “super heavy” private brands buyers are more affluent, have a larger household, shop more often and spend more per trip. The inverse is true of “super low” buyers. “Leading brands,” however, “do not lose share to private label. “Retail brands essentially gain at the expense of secondary and small brands,” Vandenheede said.

The other myth that Vandenheede was keen to explode is that the majority of consumers want to shop online. Not for groceries: only 19% bought groceries online over the last three months, his data show.

How Have Consumers Changed and What Does it Mean to Me?

taKEaWayS

1. Battle for value not for price.

2. all markets fluctuate, but the long-term trends are stable.

3. Weathering market turbulence is a better bet than trying to avoid it.

4. consumers change very slowly.


“As a technologist, I’m basically a nerd,” Peter

Hinssen told the conference. “I’ve been a nerd since birth

and I come from a long line of nerds.” But nerds are inheriting

the Earth as technology, once a novelty special interest activity for the

nerd alone, has now become the norm. Technology used to be work-related but is shifting to leisure: “Work is the brief period in my day where have to use old technology,” Hinssen quipped, noting that the original driver of internet traffic was professional file sharing (work). This shifted to the web (information) at the close of the 90s. Now it is video (entertainment). Hinssen cited a survey in which respondents were asked to list their top necessities in life: 4% listed their iPod while food did not make the list. However, we are only half-way along the evolutionary line. “If the last 20 years were about becoming digital, the next 20 years will be about being clever with digital.” Luckily, the first so-called digital natives are now entering the workforce.

Some things to consider, then: content is no longer king. Contact is king. Leverage the power of crowds and take a bottom-up approach. Consumers designing your logo, for example, is not losing control but crucial contact. That said, the mass market is dead. Custom and niche is one key aspect of the new normal. Leverage the long tail: make a little on many sales, rather than a lot on few. Don’t weigh people down with too much information, but make your communications really count.

When it comes to information, “people will ingest zero length and infinite depth”. But despite these advances, Hinssen has a number of bones to pick with business and industry, which is not advancing in step. “The world has gone network. So why are businesses built in silos?” Why does Google have a banking license in 27 countries? Because “people don’t need banks, they need banking”. Lastly, why aren’t businesses listening to their nerds? Steve Sasson, a Kodak employee, invented the digital camera in 1975. Kodak was not pleased with this category killer and kept Sasson in the basement while it sold silver-based film. “You have a lot of Steve Sassons. Your job is to release them.”

The Consumer is Changing. So what? Belinda Youngs, chief marketing Officer, Sobeys inc., canada

NEW ruLES

1. there is zero tolerance for digital failure: Gmail going down now makes cNN news.

2. technology doesn’t have to be perfect, that is to say of optimal performance, just “good enough”. mP3s and Notebooks are examples of the success of “good enough” technology.

3. Now you know: total accountability needed.

4. abandon absolute control.

Technology is changing. The internet is no longer

about web pages: it’s a platform for collaboration.

The first generation to have grown up in a digital world has a

different value set and is now joining the workforce and the consumer market. Society

is changing. Brands are no longer believable to consumers. But “Judy in Detroit” (as a proxy for peer and network review and recommendation) is believable. “Social media got Barack Obama elected,” Youngs claims. McCain raised USD 27 million in campaign funds using the traditional routes. Obama raised USD 55m online. More profoundly, society is moving from the hierarchy to the network. Hierarchies work on command and control. Networks function via collaboration. Youngs says we have moved on from the ages of agriculture, industry, and even the information age. The 21st century is about experience. So what do consumers want in the age of experience? Youngs says they want speed, authenticity, transparency, community, customization, grass-roots innovation, networked workplaces and social responsibility. To

get the most out of this, build a community, create an open, transparent dialogue and promote collaboration and sharing.

What does this mean for Sobeys? The supermarket is a chore, where the traditional market is an experience. To recapture that, stores need to inject “the magic of theatre” and deliver experiential stores. The retailer is attempting to “trend away from traditional marketing” and towards “instructional selling”, with more story-telling and education, such as recipe tips, or information about how the food is produced. It also means moving to customer-led planning, by gathering shopper insight.

“Canada is a long way from recovery,” Youngs admits. “We’ve trained customers to buy on deal and we’re finding it hard to come back to EDLP.” Despite a very cautious consumer, some forces remain strong: two thirds of the population is obese and ethnic migration is the principal source of population increase. “Specialist ethnic formats are changing the market complexion,” Youngs said. Sobeys has yet to define its post-recession value equation, is “still figuring out” how to create experiential food shopping and the optimal offer for the “ethnic consumer”. But it’s working on it.

The New NormalPeter Hinssen, managing Partner, across technology, Belgium


25 Years Innovating Customer RelationshipsLuis Moutinho, chief Executive Officer, Sonae mc, Portugal

Since 1985 Sonae’s success has been based

on its obsession to keep in step with changes in the habits

and routines of Portuguese people, to democratize

consumption, understand its customers and deliver more value.

Delivering both convenience for those who need to be quick and leisure spaces to encourage people to linger have been key. Once price and variety are assured, the consumer turns to aesthetics. It’s about providing a better store experience, which leads to greater engagement. More than anything, consumers want choice and control in the way they shop: “Customers want to be treated as unique and to

be offered relevant, targeted propositions.” Sonae has addressed this with its formats Continente, Modelo and Modelo Bonjour, along with its specialized non-food retail formats, like Worten (electronics), Modalfa (apparel) , Sport Zone (sporting goods) , Zippy (kids wear), Book It (book store) and Área Saúde (pharmacy or health & beauty). Some 87% of Portuguese families also have the company’s loyalty card.

However, none of this would be possible without the company’s strong sense of belonging to the communities where its stores are present. Sonae has launched 20 projects concerning environmental and social sustainability, has created 32 parks totaling 16,000 square metres of green space across the country. Sonae’s Producer’s Club partners with 250 local suppliers and offers technical help. Finally, entertainment events such as the Mega Picnic Modelo, in which 110,000 customers came to listen to popular singer Tony Carreira.

The Consumer is Changing. So What Does it Mean to the Retailer?Mark Price, managing Director, Waitrose, united Kingdom & member of the Board of Directors, the consumer Goods Forum

As a premium retailer with a brand based around

“all-round quality food” and a price perception in line with being

the Queen’s official supermarket of choice, Waitrose was experiencing

slow organic growth. With a low operating margin, it was hard for the retailer to expand beyond two stores a year: “We were basically outbid by everyone else,” Mark Price said, adding that Waitrose only managed to enter a new market when the town itself encouraged the entry because it wanted the Waitrose brand. Nonetheless, in the ten years from 2000, Waitrose has moved from a GPB 1.9 billion business to a GBP 4.5 billion business, while operating profit and margin have increased from GBP64 million and 3% respectively in 2000 to GBP267 million and 6%. “Tesco has 7%, Asda and Sainsbury’s have 3%,” Price asserted.

As the financial crisis unfolded, the key to improving the numbers was moving from a margin business to a volume business: driving increased sales by offering lower prices. The principal risk here was brand damage. Waitrose customers buy into the premium positioning, confident that they are buying high quality and the health and lifestyle aspirations that come with that. So it was critical to make the move without alienating existing customers. To hit its profitability target, Waitrose needed 5% volume uplift. It attacked its price perception by reducing some outlying prices: “We reckoned that our customers didn’t know the price of bin liners, so we had charged 60% more for ours. We brought these kind of prices down.” Next, the retailer increased

promotional activity, including offering free delivery online. The third step, which “surprised a lot of people,” was to introduce a new entry-level own label range: Essentials. “Not cheap, or economy – it’s about letting the consumer understand where they trade into Waitrose.” Next, Waitrose reinforced its top tier, the Prince of Wales’ gourmet organic brand Duchy Originals. Waitrose thus offered consumers both the chance to trade in from other supermarkets with Essentials and trade down from restaurants with Duchy. Waitrose also introduced a Tesco price match campaign on 1000 branded products. Consumers perceived Waitrose as being 29-33% more expensive than Tesco, when in fact, it is only 2-3% higher-priced. The final piece was to increase its communication by advertising its points of difference. “We want to own the weekend … and teach the nation how to cook.” Two celebrity chefs were the faces of this campaign: Delia Smith emphasized the everyday, while Heston Blumenthal reinforced the aspirational. Their recipe-based weekly adverts drove volume and brought in half a million extra customers (with the lion’s share switching from Sainsbury). The operation brought a volume uplift of 7%, ahead of target. Costs were offset by GBP 50-60 million in operational efficiencies.

Price sees the various measures as giving more people access to the brand. “We were prepared to take a margin hit to get volume. The team has been courageous; they dared to take a risk because they felt they could.” Responding to a question about culture change from Jean-Marc Saubade, Price conceded that he had needed to make “some changes to the board, as not everyone was prepared to change so quickly”. But he added: “If we hadn’t done it, we would have been in deep trouble.”


We are at the end of the zero sum game. It is

no longer appropriate for business to be dominated by

“I win, you lose” mentality. In the age of networks, what is needed

is a more collaborative approach. This is not simply about parallel working or

shared information; it is about achieving more than you could alone. True collaboration brings better ideas, faster solutions and a genuine commitment to make things happen. “This is the biggest deal in the way we work since the internet.” However, changing mindsets can take time. You have to beware of defensiveness and “watch out for the experienced idea killers” who temper innovation with comments such as “It won’t work because …” Rather, you need to look with a beginner’s mind, because the beginner still has endless possibilities. “Too many adults have limiting beliefs about creativity,” Hanson says. “Adults fear the judgment of others.” This can lead groups to quickly concurring on the first idea that comes to mind and pursue it at all cost. But it is imperative to explore as many options as possible. There

are two types of people, Hanson claims: innovators and idea builders. Innovators are vital, but those who can take new ideas and develop them further are also indispensable in the collaborative process. Hanson, whose company consults on collaboration within companies, has set out a number of principles for achieving this:

1. Set expectations.

2. Be clear on your goal.

3. See the benefits of a diverse perspective.

4. Don’t become defensive.

5. Look with a beginner’s mind, not an expert’s mind.

6. Explore as many options as possible.

7. Build on ideas.

8. Listen.

9. Don’t get attached to an outcome.

10. Make the first move.

Global Marketing e-tailing Challenges and Solutions for Marketers Niall McKinney, managing Director of utalkmarketing, former chief marketing Officer,

Europe, Lastminute.com, united Kingdom

Online shopping: access used to be slow, there was

limited choice and we were all a bit nervous about putting our

credit card details into a website. But now that these original barriers

to adoption on the consumer side have been removed, e-commerce is coming of age.

Or, at least, it is outside of FMCG, McKinney says. Half the world’s population now has mobile internet. The benefits are visible: Ocado derived 5% of all sales from mobile devices within three months of adoption. Pizza Hut’s home delivery app made USD 1 million in its first month. Is grocery missing out? Here are some tips on growing e-commerce in the 21st century:

1. Data is the new Intel Inside: without it you can’t start a relevant conversation with your customer.

2. One-to-one communication is vital: up sell, tempt them back. Ryanair, the “king of cross-sell” derives only a third of its purchase value from ticket price.

3. Long tail: this is not about best-sellers. Hold no physical inventory and expand the range of what you sell: “you will profit from the 80% of stuff that doesn’t sell so much”.

4. Interface counts

5. Participation: there are 40 million consumer reviews on Tripadvisor. “When consumers are making a purchasing decision, they want to hear from other consumers.”

6. Optimise relentlessly: Amazon does this. “Recognise the power of numbers and people who can work with numbers.”

Adapt or DieMiles Hanson, chief Executive Officer and Founder, the collaboration company,

united Kingdom

Two Different Marketing Approaches to Win Tomorrow’s Consumer: High-Tech vs Simplicity


The Magic of the Dabbawala UnfoldedManish Tripathi, chairman, Dabbawala Foundation, india

The key to the stunning efficiency and negligent

error rate (one in six million) of Mumbai’s unique dabbawala

service, according to Tripathi, is the deeply-instilled belief of the

largely illiterate force of deliverymen that, by carrying home-cooked lunches to

Mumbai’s affluent businessmen, they are serving God. Tripathi believes that being accountable to a divine authority is both more important and ultimately more effective than an MBA, for which qualification he holds little respect.

The service is driven by demand from Mumbai’s office workers, who prefer a home-cooked meal as both cheaper and safer than eating out at lunchtime. Its delivery chain is ruthlessly efficient. Meals are cooked at home during the morning “by wives or sisters” and packed into a tin (or dabba). Each dabba is marked with a colour code, which indicates,

without language, the delivery address and rail station, along with the return address. The tins are then collected punctually by a local dabbawala. The system has no time or sympathy for late preparation: “get rid of bad customers,” Tripathi advises. If the women are late, the dabbawala won’t wait for them. If they are consistently late, they will be ejected from the service. The collecting dabbawala takes his haul of dabbas to a local sorting office, where they are grouped according to delivery area and packed onto trains. At each station, the relevant batch is handed over to a local dabbawala, who will make the delivery, often on foot or by bicycle. Every dabbawala is paid the same salary, regardless of his function, which Tripathi believes fosters cohesive teamwork. The whole service – which sees 5,000 dabbawalas transport 200,000 lunchboxes every day, is carried out, rain or shine, using virtually no modern technology. Finally, Tripathi says the service does not advertise and does not need to, as it serves a genuine consumer need.

Question & Answers

Marketing Forum 2010 - ExEcutivE Summary14 Marketing Forum 2010 - ExEcutivE Summary14

Networking Dinner Hacienda Quinta do Torneiro

kindly sponsored by

Marketing Forum 2010 - ExEcutivE Summary 15Marketing Forum 2010 - ExEcutivE Summary 15


Jerónimo Martins’ Runaway SuccessEduardo Cid Correia, chief Operating Officer, Jeronimo martins, Portugal

Can retailers export a global model as a pathway

to growth? The non-food retailers can, Eduardo Correia

says. Zara, Ikea, Swatch, for example, operate the same way

everywhere. In food, however, this is not possible. Respect for regional differences is critical. “We have to think local,” he sums up. What Jeronimo Martins can export is its passion for food. When it acquired Biedronka in Poland, the retailer, which operates the Pingo Doce banner in Portugal, found an entirely different set of cultural parameters: small houses with little storage, significant budgetary restrictions, a lack of confidence in organized retail, a more pragmatic and price-sensitive consumer. To learn, Jeronimo Martins surrounded itself with local people and carried out intensive benchmarking of the market, analyzing consumer tastes, ambitions and convictions. A key step was developing “true partnerships” with Polish suppliers: 95% of Biedronka’s assortment comes from Polish suppliers. To eliminate the inflexibility typical of multinationals, “we had to create a new model that was not in our DNA,” Correia says. Today “the leadership of Biedronka is unquestionable”.

Meanwhile, in Portugal, the company faced competition from discounters. It had dismissed the threat as a different segment, but now realized it had to take action, as like-for-likes declined. It worked on dropping prices, rationalizing assortment, developing private label, investing in fresh as a USP. “We became more efficient and innovative.” It moved into prepared foods, something the discounters could not offer. Between 2008 and 2009 Jeronimo Martins increased sales 7% by value, compared to 5% from Sonae and Auchan. Meanwhile, Lidl, Carrefour and Metro moved into negative growth.

Thursday 4th NovemberPortuguese Success – at Home and Beyond Borders

Innovation, Creativity and Marketing Ingenuity Paulo Pereira da Silva, cEO, renova, Portugal

“Did you ever have any pleasure in toilet paper?”

Asks Paulo Pereira da Silva. He thought not. That’s why he

decided to go to market with a daydream he had in Las Vegas

and start producing premium priced jet black toilet paper. This worked surprisingly well and other primary

colours followed. Da Silva believes Renova is the first company to turn this unglamorous, functional product into a fashion statement. Now it sells in up market retail areas and design stores, with a striking and colourful approach to merchandising and display. Da Silva has targeted “now places” such as airports, malls and Ikea, as well as

dead spaces, which can be turned into “brand spaces”. Despite the success, achieved entirely by a radically different approach to marketing, da Silva doubts the idea would have seen the light of day if someone other than the CEO had been the source of it. “Beware of self-censorship,” he cautions.

“It’s difficult to have a new idea,” he continues. New ideas come from a child-like, open state of mind: from daydreams, as his had done. We don’t, however, tend to work in places that encourage this or are at all conducive to it. That’s why at Renova, the innovation team is at the core of the company. “I wanted to make happen a love brand with sexy products even if it’s only about toilet paper,” da Silva summed up. He suggests we all do likewise.

taKEaWayS

1. We sell real food for real people.

2. We develop markets with customised business models.

3. consumers tell us what to do: we do that and more.


Multi-channel Retailing and the Pursuit of the Ever Changing Consumer

In 1994, Tesco already had a multi-channel offer. It was just that, since the extra channels were telephone and notepad

or fax, these channels offered limited help to consumers and were inefficient to run. “The internet came to our rescue,” Ian Crook said. The following year, Tesco went online: a rather functional interface “with a spreadsheet behind it”. In 2010, Tesco believes it is the only profitable online grocery retailer in the world. Having mastered online, Tesco finds its customers are demanding ever more options, such as mobile apps and drive-in services. Tesco Click & Collect addresses this need. With a seamless multi-channel approach, you can afford to rethink

the role of stores. They can also act as showrooms for products only available online. But for it all to work, not only do the operations need to be seamless, but the marketing must be too. The word “multi-channel” is already defunct, Crook says: “Consumers don’t shop by channel. They shop like a pinball machine. There may be ten touchpoints, but the consumer sees them all as part of one Tesco experience.

Winning Tomorrow’s Consumer

Ian Crook, marketing Director, tesco.com, united Kingdom

Paloma Perez said multi-channel retailing was the only sensible response to a consumer who is equipped to “find

out what I want, buy it how I want and get it where and when I want”. Only 5% of visitor’s to the retailer’s website make an e-purchase. But the rest are still making purchasing decisions by using the site and 90% of web visitors visit a store in the

next 15 days. The key is to provide an extended store experience, to manage and deliver on the before, the during and the after.

Paloma Perez, marketing Director Hypermarket, carrefour Spain

If Anthony Hucker admits that Walmart in the US is “somewhat behind the UK when it comes to home delivery,” he doesn’t

discount its importance. The new Site-to-Store concept functions exactly like Tesco’s Click & Collect. The brand can also be leveraged outside the controlled brand environment: Walmart has mobilized 19 influential bloggers – dubbed the Walmart Moms – to speak to and for other consumers, through the “millions of other moms that compose their combined readership”. Walmart can use their position as

influencers to gain insight into consumers. Walmart has been experimenting with new formats: “We were really good at big stores in little towns,” Hucker said. “But not so much at small stores in big towns.”

Anthony Hucker, vice President of Strategy and Business Development, Wal-mart Stores inc., uSa

In the following panel discussion, Ian Crook said if companies do it the right way, they can boost loyalty with multi-channel.

However, if they mess up one channel, they can damage loyalty at the rest. It has to be seamless. Hucker agreed that it was about execution: “If you do one badly, 99 will suffer.” Paloma Perez said customers would be ever less loyal in the future, but Carrefour was winning new customers through multi-channel. Crook agreed, saying Tesco’s Click and Collect service was bringing in new customers. Crook added that there was a

danger of rewarding customers for being disloyal, by offering advantages for them to come back. Hucker said that retailers were not the only ones who needed to look at multi-channel. Procter & Gamble was testing a pop-up store in Manhattan, he said. Indeed, collaboration is needed between retailer and manufacturers to make multi-channel effective. Asked whether there was the danger of friction here, Hucker replied: “yes, but friction creates warmth”.


The Make-up Factor – Learnings from a Market that Grows during Economic CrisisGuy Farmer, country manager, L’Oréal, Portugal

Make-up is a reliable source of profitable growth in

times of economic difficulty, Guy Farmer argued. The global colour cosmetics market turned over EUR 31 billion in 2009; it has been a “dynamic motor”

with continuous growth up of to 5% a year since 2005. In

short, when everything else was shrinking, make-up continued to grow.

The reasons are manifold: first of which is the phenomenon beauty professionals call “the lipstick factor”. Women who buy make-up do so to cheer themselves up, to feel more confident and boost their self-image. In times of uncertainty these needs are not diminished; if anything, they increase. Secondly, constant visible innovation and fashion drive existing customers back for the latest thing, while growth comes from the addition of new users, as the category pushes into new points of sale.

However, with the fragmentation of TV audiences, the store is now the key driver of awareness. Manufacturers must work closely with retailers to get the most out of this trend. L’Oréal worked with dm Drogerie Markt in Germany in a bid to make the chain “the destination for make-up purchases and total cosmetics”. The companies saw that dm customers were not brand loyal, so the number of brands was reduced, on the assumption that consumers could be persuaded to switch. The physical space saved was used to increase merchandising of top sellers and showcase innovations. The stands were redeveloped to be more seductive and sticky, providing more education and communication around use and benefits. Dm’s cosmetics business has grown by 40% and make-up by 50% in the three years since the programme began.

Working Together to Serve the Consumer



New Ways of Working TogetherJim Flannery, managing Director, customer Development, Procter & Gamble, uSa

Ignacio Gonzalez Hernandez, commercial and merchandise Director Group, carrefour, France

Alberto Moriana, vice President, Global customer Business Development, Procter & Gamble, France

The industry has been talking about collaboration for years, and yet today’s supply chain is still full of waste. Stores carry too many SKUs and

too many of the wrong ones: inventories are too high and yet out of stocks persist. Trading partners continue to focus on business minutiae instead of shoppers. New Ways of Working Together (NWWT) is a Consumer Goods Forum initiative lead by the CEOs and chairmen and seven manufacturers and seven retailers. It is not a set of rules or best practices. Rather, it is a process and a framework for getting things done via collaborative work. The goal is to eliminate supply chain disruptions and enable growth, arranged under four headings:

Jim Flannery, managing Director,

customer Development, Procter & Gamble, uSa

Ignacio Gonzalez Hernandez,

commercial and merchandise Director Group, carrefour, France

Alberto Moriana, vice President, Global

customer Business Development, Procter &

Gamble, France

1. Focus on the consumer

2. Connect our business

3. Prepare our people

4. Share our supply chain

An example of the NWWT approach to joint corporate priorities would be the vaccination campaign by Pampers, Unicef and Carrefour. Implemented in 15 countries, the campaign offered one vaccine for each product bought, with coordinated media and in-store exploitation. The sharing of CRM data allows collaborations on specific categories.

One such project between Gilette and Carrefour saw 390 000 razor samples were offered across France, Spain, Italy and Belgium via the Carrefour loyalty card program.

Key to success is the definition of common objectives, where two teams share the same KPIs. Preparing people includes changing the culture from transaction-driven models to the creation of joint value by better serving the shopper. “It’s critical to learn how to work in a multifunctional way. We cannot continue to work in silos.”


For more information on the Marketing Forum: www.tcgfmarketingforum.com

Marketing Forum 2011Do not miss the

11th - 13th October 2011 BARCELONA

Thank you to our sponsors for their valued contribution to the Marketing Forum 2010: