Applying CatMan 2.0 to Target Confectionery. May 15, 2017
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1 Applying CatMan 2.0 to Target Confectionery May 15, 2017
2 CatMan 2.0 Framework Category Assessment: Who buys the category and why? How is the category performing?
3 We research along the entire path to purchase Total Confection Demand Purchase Need/Trip Retailer/Outlet Selection Store Shopping/ Navigation Item/Quantity Selection Demand Segments Confection Missions Retailer Selection Drivers Purchase Location Insights Purchase Quantity Drivers
4 Hershey s approach is to be an indispensable consultative partner to our retail customers Definition Insight Driven Performance Develop compelling strategies to achieve customer financial objectives Shopper Mindset P&L Mindset Understand customer financial objectives and value creation levers Understand shopper behavior drivers Tactical Excellence Effectively employ analytical tools to drive superior tactical solutions
5 Target Confectionery Background Confectionery has historically performed very well at Target, especially seasonal candy Target s share of candy sales across xaoc has consistently grown, driven in part by exclusive items Target has identified candy as a Signature Category obe famous with Guests odrive sales obe a clear market leader Signature categories are expected to drive improved Guest experience, traffic, and loyalty
6 Target Confectionery Background In 2016 there were several key personnel changes on category desks In addition, Target s SVP for Grocery departed 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 In 2016 category performance lagged vs. total store, and lagged vs. competitive set Causal Factors otraffic oconversion oless Promotions/Displays
7 Target Confectionery Background Hershey s Category Advisor Team and the Target Candy Buying Team agreed on need to elevate discussion around improving category performance In late 2016 we aligned on an initiative to restart growth and build a long-term strategy for success o Educate internal Target KDMs on the role and importance of the category o Leverage insights at a higher rate o Implement Best Demonstrated Practices with regard to planogram creation, adjacencies, merchandising, etc. o Provide a scorecard to assist internal decision-making in awarding promotional and ad space o Bring joy back to the candy shopping experience
8 Assessment What & Why CatMan 2.0 Framework Category Assessment: Who buys the category and why? How is the category performing?
9 CatMan 2.0 and Target Confectionary Action Plan 1) Guest Research Path to Purchase Consumer Decision Tree Step 1: Navigating the Aisle Improving Noticeability and Engagement tactics will drive shoppers into aisle Step 2: Finding the right Items Step 3: Choosing the Items USAGE OCCASION (by Segment) PACKTYPE CHOCOLATE OR SWEET? (Flavor) BRAND When the product sought is not available, shoppers will: KEEP FLAVOR, SWITCH BRAND KEEP BRAND, SWITCH FLAVOR BUY NOTHING LOOK IN ANOTHER AREA OF STORE WAIT UNTIL NEXT VISIT SWITCH PACK SIZE GO TO ANOTHER STORE Almost half of shoppers WILL WALK AWAY from the aisle if desired candy is not available
10 CatMan 2.0 and Target Confectionary Action Plan 2) Playbook Compiled insights and category data in support of: Gaining Target leadership support Communicating role and importance of category Winning more promotions/displays Training new team members 3) Accelerating Candy Growth Initiative Opportunity Framework and Pillars Aligned on Problem Statement and Opportunity Statement Project management to deliver on each pillar of growth PILLAR 1 PILLAR 2 PILLAR 3 PILLAR 4 IMPROVE COLLABORATION and INFLUENCE DECISIONS ALIGN PHYSICAL/DIGITAL MAXIMIZE ASSETS IMPROVE GUEST EXPERIENCE
11 CatMan 2.0 and Target Confectionary Action Plan 4) Category Metrics and Scorecard All major performance metrics included; adding internal metrics for all KDM Priority Success Metrics Sales $ TBD TBD TBD 2 Market share TBD TBD TBD 3 Profit TBD TBD TBD 4 Rate TBD TBD TBD
12 CatMan 2.0 Next Steps 1H 2017 Buying Team and Advisor Team are aligned on role of the category for shoppers Working to educate all KDMs on role of category and its importance to sales, margin, and loyalty CatMan 2.0 process included leveraging Shopper Insights and research to insure we have up-to-date Guest data, including demographics, CDT, and store clusters Ongoing Aligning support model to new organizational structure Continuing education of leadership Continue to refine the data set to remain on-point regarding key trends and insights Leverage all of the above against the online environment to insure a seamless Guest experience as they shop the endless candy aisle
13 Target Confectionery and CatMan2.0 Questions?
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