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It comes as little surprise, but is nevertheless telling: Retailers continue to dominate the balance of power between North American retail trading partners, according to Kantar Retail's 2014 Category Leadership Benchmarking Study, which further highlights the growing need for co-created, customized, long-term category growth strategies and activation plans based on deep shopper and consumer insights.
Results of Kantar Retail's 2014 Category Leadership Study, which benchmarks the strategic role and importance of category leadership from both a retailer and manufacturer perspective, are based on input from more than 450 retailers and manufacturers.
Retailers Seek Customized Solutions Based on Shopper Insights
Among the key highlights of the study – the last of which was published in 2011 – finds that retailers are no longer looking for manufacturers to bring them fully-vetted products and solutions, but are instead asking their manufacturer trading partners to come to the table with ideas grounded in shopper insights. Moreover, the readiness to co-create programs and innovations customized to meet the unique needs of the retailer’s shoppers is also key in the latest report.
Over the past five years, Kantar Retail team leaders have seen a shift with trading partners from a focus on category management to category leadership. Internal capabilities to translate analytics and shopper insights into action have grown dramatically in the past five years, which has translated into a 121 percent growth in the all-important shopper insights function – most notably with retailers’ marketing expertise.
"As retailers grow their internal shopper insights and data management capabilities, we find that manufacturers are expected to bring even more unique insights to get a seat at the table," said Michelle Constant, VP at Wilton, Conn.-based Kantar Retail. "They now have the opportunity to bring their own expertise from outside of the stores, where retailers may have limited visibility and knowledge."
Shopper insight ownership and thought leadership were also highlighted in this year's Kantar Retail Category Leadership Study, particularly in the areas where the balance has shifted positively in the retailers’ favor. Accordingly, key recommendations made by the study for successful category leadership include:
• Understanding consumer wants, discovering shopper insights and building category growth to drive opportunities
• Guiding the way to a better shopper experience, supported by actionable shopper insights
• Sharing new information, ideas and processes to deliver results
• Thinking long term about driving future growth, by setting a vision for the category, as well as a plan to activate against the vision in the near and long term.
The discovery and sharing of insights for the “average shopper” were also highlighted as being no longer meaningful for retailers, and therefore no longer sufficient to drive category leadership. Consequently, retailers will need to look across key shopper demographics and targets, including Hispanics, Millennials, Boomers and low-income in light of overall findings which depict that category leadership can no longer be supported by one cohesive strategy but rather a customized, retailer-specific and localized in-store solutions platform.
Looking ahead to 2020 and beyond, the study predicts there will be no single winning retailer or format, which will in turn challenge manufacturers and retailers to rethink their strategies in working together and ability to effectively deploy the right resources for success.
Read more about Kantar Retail’s two-fold recommendation for an ever-changing landscape in its 2014 Category Leadership Study Executive Summary found here.
Kantar Retail, which tracks and forecasts more than 1000 retailers globally, is part of the Kantar group of WPP.