THINKING RETAIL

ADAM BLAIR

STAMFORD, Conn. -- Nicholas Trivisonno wants to expand how retailers see ACNielsen, and vice versa.

"In the past, we treated the retailer as a data source," said the chairman and chief executive officer of the global market research company. "But we have redefined the term 'client' to mean not only manufacturers but also retailers."

Trivisonno believes the expertise ACNielsen can provide to retailers is even more valuable than the cash the company pays for their raw data. "The real value-added occurs when we can provide insight. We can talk about trends and causal factors, and we can counsel clients about changes in consumer attitudes and behaviors," he told SN in an interview at the company's headquarters here.

ACNielsen's desire to expand its role with retailers from data buyer to insight vendor is fueled by many factors. Like its manufacturer client base, retailers are increasingly becoming larger, multinational entities, although Trivisonno emphasized that ACNielsen works with both large and small retailers.

In addition, fast-changing consumer-behavior patterns, new shopping options and blurring category and channel lines are putting a premium on reliable, useful information.

"Consumers have a lot of choice these days. They have more disposable income and less disposable time," he noted. "That leads to a lot of different things, like on-line ordering and more out-of-home meals purchased."

ACNielsen, which is marking its 75th anniversary this year, provides a combination of product-movement data, detailed census information and shopper insights derived from its 52,000-household consumer panel, as well as the modeling and analytics services to put all this data into perspective.

One key area where ACNielsen can make a significant difference is in maximizing the power of retailers' frequent-shopper data. "We're working with retailers to show them how we can combine our consumer-panel information with their frequent-shopper data to look at some trends and help them do targeted marketing," said Trivisonno.

He acknowledged that the process is not as simple as it sounds. For one thing, many retailers concerned about their customers' confidentiality are reticent about sharing their customer-loyalty data with anyone. Another issue is that the demographic information in retailers' customer-loyalty databases is often too limited to be helpful.

"We need to get the demographic data richer," he said. Retailers need to learn about each customer's household size and its composition, including the presence of pets, children or older people, as well as income levels, lifestyle and interests, Trivisonno said.

The type of targeted marketing this would allow is what's needed to move frequent-shopper programs beyond their current level. "The loyalty programs today are driven primarily by discounts -- they're price programs" that don't encourage actual customer loyalty, he said. "Shoppers open their wallet and have four, five or six 'loyalty' cards.

"[Frequent-shopper data] is an area that really hasn't been harnessed, and one that will be extremely important," he added. "It may, in fact, help drive manufacturers and retailers closer together."

Closer relationships with manufacturers will be necessary not only because consumers have more choices but because the nature of retailing is changing. "As retailers combine categories and category definitions blur, shelf space is going to become a lot more valuable," said Trivisonno. "The products that are going to be shown are going to shrink."

Another benefit that ACNielsen can provide retailers is market comparisons based on retailer-specific, retailer-defined custom trading area's. The company's ability to tailor its offerings to specific clients is another way ACNielsen can act as a liaison between retailers and manufacturers.

On the corporate level, ACNielsen will begin offering global account monitoring and management services, already available to multinational manufacturer clients, to retailers beginning next year. "This is an account manager who acts as a resource and a liaison, and is involved in identifying needs and communicating to people so they understand the client's objectives," said Trivisonno.

The company has seen significant growth during the past two years, following its spinoff in November 1996 from Dun & Bradstreet. "Since the spinoff, we have been able to increase our share price more than 80%," said Trivisonno. "The underpinning of that has been the turnaround accomplished in the United States."

He acknowledged that the company is still in the throes of a turnaround in Europe, but he expected it to be completed in the next several months.

ACNielsen is already a major presence internationally, providing varying levels of market-research services in 100 countries around the world. "There aren't many more countries we need to be in from a footprint standpoint," he noted. "But in places like the former Soviet Union, China, India and Pakistan, it's still a small business.

"I see us further establishing ourselves in the emerging markets, and that type of further establishment also brings in with it new products and services," he added.

To a certain extent, ACNielsen's growth is limited by a market's technological development levels. For example, while product scanning is the norm in the U.S. supermarket industry, the incidence and penetration of scanning is much less in Western Europe, said Trivisonno.

"To the extent scanning becomes more prevalent there, we will keep pace with that," he added. "We'll be able to collect much fuller, richer, more complete data, that we can then mine, model and do comparisons with, as we do in the U.S."

Trivisonno believes that ACNielsen's growth has to be built on a solid foundation of customer service. "Once you deliver the basics of retail measurement, and deliver them accurately, consistently, and in a timely way, that's when you can develop new products," he added.

Trivisonno has ambitious plans for the company's growth, both in the United States and globally. "We want to grow our top-line revenues faster than the [market-research] industry average, which we think is about 6% annually," he said.

"We'd like to expand our margins to at least 10% by the year 2000, and into the low teens within the next five years," he added. "And from an employee standpoint, we want to be considered one of the best places to work in the world."

For ACNielsen to accomplish these goals, Trivisonno believes the company needs to prove itself, especially to retailers. "We have to earn the perception that we can help [retailers]," he said. "We can help them deal with the information they provide to us, because that data is just enormous. We can get them focusing on what's important and providing insight.

"We want to be recognized worldwide as the premier professional-services firm in market research," he added. "With retailers, we still have a long way to go, but we're focused on it and are putting a lot of effort into it."