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Stop & Shop and Unilever Share Customer-Centric Plan

An increased number of stock-up trips and more Center Store traffic were the results of a promotional effort launched by Stop & Shop and Unilever. Representatives from both companies detailed the secrets of their shared success at the Grocery Manufacturers Association/Food Products Association's Merchandising, Sales and Marketing Conference, held here earlier this month. Unilever

Colorado Springs — An increased number of stock-up trips and more Center Store traffic were the results of a promotional effort launched by Stop & Shop and Unilever.

Representatives from both companies detailed the secrets of their shared success at the Grocery Manufacturers Association/Food Products Association's Merchandising, Sales and Marketing Conference, held here earlier this month. Unilever was recognized at the show as the 2007 GMA/FPA CPG Innovation and Creativity Award winner for its efforts.

“We wanted to rebuild ground when it came to increasing stock-up trips by leveraging our customer database,” said Stephen Vowles, senior vice president of marketing for Stop & Shop Supermarket Companies. “Stock-up occasions comprise a smaller number of trips, but they make up a huge percentage of net dollars.”

The retailer's loyalty database captures information related to purchases made by between 60% and 70% of the 10 million households that shop its locations each week.

“It gives us a fire hose of data,” said Vowles. “Through partnerships with a number of manufacturers and IRI [Information Resources Inc.], we've spent a lot of time trying to become a customer-centric retailer.”

Unilever shared Stop & Shop's vision.

“We talked to shoppers about their routine, and they said they'd convert to stock-up trips if we made shopping simpler,” said Burt Palmer, team director at Unilever.

The average customer's basket consists of goods totaling $31, he noted, but the average ring of a shopper's basket that contains at least one Unilever product is $78.

“That insight proved to be even stronger when we took a look at the customer segments that we chose to focus on” with this promotion, said Vowles.

The retailer identified six segments of customers and zeroed in on the four it felt were most strategically significant to its business.

They included discerning diners, quick-fixers, good lifers and traditionalists, he explained.

Stop & Shop also classifies each of the baskets brought through its checkouts into one of seven trip types: emergency, replenishment, fresh fill-ins, need a meal, great sale; stock-up and institutional trips.

“In terms of people coming through our stores, there are a huge number of emergency trips, but the dollars they represent are actually small,” noted Vowles. “At the other end of the spectrum is the stock-up trip.”

To help build such excursions, Unilever customized for Stop & Shop shoppers a freestanding insert that it had been distributing nationally.

“We created quite an achievable $15 hurdle, where if the customer met it by purchasing featured products, they'd receive $5 off their next trip,” said Vowles. “We added products from Georgia Pacific and SC Johnson to ensure a significant breadth of product that the consumer could feasibly stock up on.”

To help consumers simplify these stock-up trips, the trading partners distributed store maps highlighting featured products' sections to shoppers' homes. Stop & Shop's “best shoppers” and those who had been neglecting its HBC section were targeted.


The retailer also set up department destinations where featured HBC, grilling, laundry, home and pantry items could be found.

“We added stanchion signs to designated areas of the store, along with rip-off shopping lists that made it easier to find products in the store,” said Vowles.

With customer convenience in mind, Unilever also launched a stockkeeping-unit rationalization effort. It focused on hair care and skin care products, which collectively comprise over 2,500 SKUs and have historically displayed low levels of growth.

“It was painful for Unilever, but we decided to set this up the way the consumer uses it,” he said. “The biggest brands are Pantene, Dove, Suave and L'Oréal. We were looking to make a statement on those brands so the consumer could say, ‘Yes, I can see it there.’”

Unilever was rewarded for its less-is-more approach. In the six months following its reset, Stop & Shop's HBC department showed positive growth.

“I lost a couple of hair care brands, but in the end, all of my brands are returning more positive numbers than they would have had I kept the others,” he said.

Both trading partners were pleased with the outcome of their joint promotion.

“Results were fantastically good,” noted Vowles. “We run [promotional overlays] on a relatively regular basis, but this is the most successful one we've ever done. We achieved 7.6% penetration, which is more than three times our usual average.”

Stop & Shop achieved its objective of increasing stock-up trips.

“There was a very strong shift from basket size prior to the promotion,” said Vowles. “If before, a shopper purchased from just one relevant category, they purchased two or more during the promotion.”

The most dramatic sales increases were made by discerning diners, good lifers and quick-fixers.

“The highest lift was evident amongst the top segments — where we thought it'd be,” noted Vowles. “The fourth segment is the traditionalist; they don't skew as strongly to Unilever products, but we can see they were a key driver as well.”

Unilever achieved the biggest sales spike in two years as a result of the promotion. Further, “In the weeks following, cannibalization was nonexistent,” noted Palmer.

Vowles was also pleased that the improvement represented incremental sales.

“These were real sales, so we weren't just switching from one brand to another, which is our usual protest,” he said. “It was important that this worked out for both Unilever and Stop & Shop, because we wanted this to be replicable. We did something that was truly customer-centric.”

TAGS: Marketing