#bAhead!

Dear Readers,

Industries and business models are being disrupted by digitization and consumer behaviour is changing at an incredible speed. Technology is at the core of everybody’s life, which leads to an almost endless amount of data that needs to be managed. But what is the value of this influx of data and how can you make use of it?  Just as important: How fast can you draw insights and conclusions from this data to build and develop your brand? How can you “bAhead”?

We say: The right knowledge is key and it needs to adapt extremely fast to an ever-changing environment! This includes meaningful insights that allow you to make the right business decisions and succeed in highly competitive markets. The value of knowledge is beyond providing descriptive data. It is about integrative prescriptive analytics and recommendations.

The value of knowledge was also at the center of this year’s GfK Insight Summit, our key client event in Germany. Together with speakers from Huawei, Philipp Morris, Vodafone, L’Oréal and innosabi, our experts presented to around 200 guests how our new automated GfK end-to-end platforms and advanced analytics help to answer their key business questions. “I didn’t know GfK could do that!” and “Absolutely inspiring and fascinating!” are just two of the most common reactions that certainly refer to our new data analytics tools and solutions.

For your reference, our expert speakers have wrapped up the key messages of their presentations in short articles for this eJournal. I hope you are enjoying these contributions.

Would you like to learn more? Please contact our experts directly.

Six challenges you are facing

We agree: Unleashing the power of smart data integration is as much a technical as an organizational challenge. There are six challenges to face:

• Manage data growth: you have to find ways to connect the diverse data sources and to filter them in a way that your relevant data does not only coexist but speaks with each other.
  
  
• Generate actionable insights – fast: the value of data depends on your abilities to provide it fast and agile in order to support decisions while they are being made.
  
  
• Provide expertise and an organizational setup: internally, externally, vertically – you have to decide on how you want to install data integration and analytic capacities in your organization and workflows. 

• Manage data quality and cleansing: you need to be aware that the greater part of your investments in data quality will go to cleansing and only a smaller fraction to analytics.
  
  
• Integrate and synchronize data: don’t miss the opportunity to instrumentalize smart technologies and collaboration with artificial intelligence to automate vast parts of integration, synchronization, cleansing and analytics.
  
  
• Enable scaling: the competence to understand and use the possibilities and power of data will have to spread throughout the entire organization.

Four proficiency dimensions that separate the wheat from the chaff

From more than 600 German marketeers, we learned what they require from a data analytics solution. Their four most important needs were Data Quality (27 %), Relevance (24 %), Fast & Easy Delivery (22 %), and a Compelling Visualization (15 %).
Meaning: Besides data quality (avoiding a garbage-in-garbage-out-dynamic), delivered information has to provide actionable insights that usefully support marketing decision making – exactly when a problem needs to be solved, preferably delivered in a highly intuitive and flexible way.

Foundation for the next generation of GfK data analytics design

Matching marketeers’ requirements with GfK solution design for Consumer Insights and Marketing Effectiveness, we found interesting room for evolution in all four dimensions:

• We integrate market sales data (e.g. from GfK’s retail panels or other market currency data providing sources) in each and every solution.
  
  
• We set up a connected data lake across key business questions where data seamlessly speaks to each other across solutions, ultimately yielding an integrated suite of ecosystem solutions.
  
  
• We invest in data pre-collection so that clients can derive their insights at the moment their business question comes up.
  
  
• We deliver insights via highly intuitive, 24/7 accessible dashboards.

GfK Consumer Insights Engine: Innovative solution design in practice

One of our ecosystem solutions that follows our new solution design paradigm is the GfK Consumer Insights Engine (CIE) for technical consumer goods.

It does not use a single data source to answer single business questions but sets out with an integrated design combining multiple data sources each allocated upfront to specific business questions without any overlapping and always including POS data from GfK’s very own retail panels.

• Designing CIE, we started off with a key business question: who buys what, where, and why - which can be broken down into a number of subsequent questions along the consumer’s journey towards purchase.
  
  
• We then selected four main data sources to answer each business question: POS data as the foundation to provide an accurate picture of the market realities; Consumer Journey Surveys to understand purchase decision-making processes – and learn about effective ways to attract and convert potential consumers (i.e. touchpoint strategies); Online Behavioural data to reveal how to best place the brands and products in a web informed and e-commerce driven world; Online Review data to understand purchase criteria and deliver the best experiences and also during product usage making sure to be in the pole position for repurchase.
  

• GfK CIE presents key results on one highly intuitive and accessible landing page – delivering instant insights on a brand’s strengths and weaknesses along the consumer journey, all the way from purchase trigger to early usage. With one click, clients can dive deeper into identified weaknesses in order to derive immediate actions – and planning – with regards to product, price, placement, promotion, and messaging.
  
  
  
  
• Taking the Smartphone manufacturer Huawei as example, CIE data showed that the consideration of their brand in Germany was doing fine, while sales conversion and brand loyalty during repurchase were running behind their key competitors. Diving deeper into this opportunity space, Huawei learned what brands considerers and former customers turned to instead, as well as their demographic profile and feature preferences. Based on these insights, Huawei focused their messaging even more strongly on camera features and knew exactly who to target in order to increase both conversion and retention rates.

• Once actions have been implemented, CIE enables quarterly tracking of their effectiveness. That gives room to test different options, course-correct if needed, and get information on how your performance throughout the purchase journey evolves, quarter by quarter.

1. Take good care of the in-store navigation and experience
   While fast moving consumer goods (FMCG) are purchased on autopilot 90 % of the time (meaning low product involvement and that you have to optimize visibility and brand recognition at the POS), it is different with tech & durables: Consumers shop these products with their conscious mind turned on, involvement is high. They always read the labels before they buy (52 %). They yearn for easy to understand in-store displays (34 %) and information at shelf (36 %). They are seeking personal assistance and the advice of a sales person (40 %), and the majority are influenced at the POS (68 %). So do make their journey information lean, supportive, and a pleasant experience.
   
   
2. Collaborate with partners to meet and exceed customer expectations
   But how do you make the right selection and mindfully streamline your assortments for the profit of you and your customers? It is not something to do on your own: Manufacturers and retailers need to collaborate closely and find a common data currency to pave their way for efficient joint category and trade spend planning and assortment optimization.
   
   To date, this type of collaboration has not yet gained traction. Each side is driving their own research resulting in isolated action planning and data pools. Integrating the two worlds, sustainably, is often very time-consuming and adds confusion rather than clarification. Yet, here is where we find relevant keys to meet and exceed customer expectations.
   
   It works for P&G and Douglas
   Douglas and Procter & Gamble worked together to develop a catalogue of recommendations for product range and placements for men’s fragrances. The principles “less is more” and “collaboration trumps” proved to be reliable: As they reduced the number of items in the product range on a conjoint database by 15 %, turnover increased by 10 %.

    It works for Coca-Cola and Edeka
   Together with Edeka, Bell Packaging Europe and !nBev, Coca-Cola optimized and downsized their assortment on a store level – provisioning individual stores with specific configuration structures for drinks. Compared to the classical beverage departments in control stores, this new category management concept produced a 9 % sales increase.

3. Combine the best of two worlds: GfK KADR
   Collaborative category management is the future – and is where GfK Key Account Data Reporting (KADR) can help you. The integrated data analytics tool combines POS data for a full market view and combines it with tactical and actionable insights on the performance of your product segments or retail assortments.
   
   Our KADR compares sales figures of your products or assortments with the corresponding overall market to identify opportunities for growth and development of the category jointly with your retail partner.

• As the brand, you could easily identify which retailer is, for example, selling significantly fewer big screen TVs than the average – and reveal growth opportunities for both of you.

• As the retailer, you could easily see that TVs in the highest price bands account for a larger percentage in the market than in your store – whereas a mid-price segment is eating up your store space. Together with brand manufacturers, you might want to discuss how to modify to increase opportunities.

 GfK KADR can also:

• quantify what extra revenue you would earn if your segment(s) performed as well as its market sector(s)
• benchmark your price positioning, volume development, and the gaps at retailer or brand to learn how your top sellers (and your competitors) are represented and how you could optimize

Challenge 1: Trim your distribution channels to provide the experience of borderless shopping

Brands and retailers have to be aware that consumers are less patient, less loyal, and have shorter attention spans. They do not want to wait or have the time for long lasting information processes. They want simple access and instant satisfaction, regardless of day and time, where they are or what channel or device they are connecting through.

 Their dictum „I. Want. It. Now.“ is a game changer in distribution, with mobile boosting convergence and blurring the borders between channels:

• Today, one third of all e-commerce for technical consumer goods in Germany is realized by traditional retailers.
  
  
• Half of all global shoppers agree that their mobile device is becoming their most important shopping tool.
  
  
• 28 % of online shoppers already purchased a product at another retailer on their smartphone while still in the store.

Winners are those that excel in leveraging the potentials of hybrid retailing concepts, blending on- and offline touchpoints seamlessly, bringing in mobile devices as natural means of interaction, purchase, and pushing technology enabled experiences along their journey.

Challenge 2: Tap the magic of micro moments

With digitization, enabling blended experiences and consumers organically tapping the best of both worlds, today’s customer journey is more agile than ever. Pushing purchase decisions to one or another product is happening in a matter of few seconds. From research to recommendation, to experience, to promotion, you have to cross paths with your customer repeatedly – creating as many positive micro moments as possible to win the trust you need when it comes to conversion.

Challenge 3: Embrace digitization and customer interaction along the whole product lifecycle

Digital products are able to interact continuously with their clients. They can manage replacement and complementary purchases. Consequently, the purchase journey can be dramatically shortened or fully automated. Think of appliances like washing machines that are able to autonomously order detergent whenever needed. As much have digital assistants and what we call “conversational commerce”: We ask Alexa, Cortana, Siri, Bixby, you name it. When in search of a new toaster you will find that the “true helpers”, whose job it is to make your decision simple, easy, and instant, will not confront you with shortlists longer than two items. It is either this one or one other product, which makes it indispensable for brands and retailers to transform sales strategies.  

Challenge 4: Play globally and cross-collaborate

Besides matching connected consumers and turning POS into digitally enriched experience spaces, one more challenge will have to be addressed: Digitization is happening around the globe at a breakneck speed but varies heavily in different regions and categories. The sales value share of smart products is, for example, much higher in the Far East than in Germany. New competitive scenarios are evolving. Today, roughly every 10^th tech product sold in Germany is a Chinese brand. So do break boundaries, go for co-creation and agile development and push new competitive scenarios and digital ecosystems. Take the driver’s seat!

First steps first: Our focus on 5 fields of future-proofing solutions

• Foresight: Remodelling proven surveys to stay ahead of tomorrow’s trends
  GfK TrendKey and GfK FutureBuy are two long-standing global surveys that we have intensively reworked and brought up to date. The former to capture changing realities in new life style segments that have come up with sustainability, digital et al. The latter to learn how shoppers’ attitudes, behaviours, and touchpoint usage are evolving – in order to manage portfolios categories across different sectors and pre-estimate reactions in new markets: 18 categories, 35 countries – instant access.   

• Speed: Establishing new platforms for seamless data flow from survey creation to insight delivery
  With our new end-to-end survey platform, we offer cost-efficient and fast delivery of answers to specific questions – flexible, modular, and with a higher quality, based on pre-scripted questionnaire modules. Additionally, with the redesigned GfK eBUS we provide answers to ad hoc questions based on a multi-client study with large samples, delivering turnarounds in just one week.   

• Targeting: Providing the data you need to identify the target groups for future growth
  GfK Roper Consumer Styles is another long standing global study that we have brought up to date to reflect the changes in consumers´ values. Between “enjoying life” and “safety”, “experience” and “simplicity” are part of eight new lifestyle segments now reflecting what is ruling today’s consumers’ worlds.  For a more customized segmentation tailored to your needs, our new Leading Edge Consumer (LEC) metrics provide the relevant information for identifying new target groups for future growth.

• Disruption: Uncovering new business opportunities in saturated markets
  Are you faced with market volumes and decreasing sales? Want to know how to reposition your category and brand to instigate growth against the current? Successful brands disrupt – by taking into account their heritage as well as future drivers of their category. In the GfK Opportunity Map, we combine holistic data on category (how it ticks from a consumer perspective and where it is heading) and brand dynamics (what are the key drivers and how does your brand perform on these) to map your opportunities and come up with actionable recommendations for growth.

• Behavioural plus passive: Leveraging insights from different data sources to maximize actionability
  As brand communications performance measurement and analysis are changing from “action planning” to “holistic and integrated recommendations”, we had to redefine which data sources to use and how to enrich brand relevant information with unstructured digital data from multiple sources such as online reviews, social media or open-ended answers. With the help of AI or machine learning we can now identify main topics and how important they are with “system 1 & 2 analytics”: the rational left brain absorbs what products or features consumers talk about – the emotional right brain expresses what products or features most matter to them,  prompting a completely new way of approaching marketing communications and action planning.

From a delisting threat to a proactive discussion of product range optimization on a shop level

Imagine you’ve received a phone call from a client’s category manager who wants to talk about her not so well performing product range in their store – of which your brand is a part.

As you are responsible for ensuring distribution and availability of your products, that could hit you hard – unless you could prove that your brand is not at the core of the problem. Instant, relevant, and focused GfK Business Analytics could save you here.

• Wouldn’t it be nice to have a retail panel data based report at hand showing you what she might want to know? For instance, what top performing shops in her channel are doing in regards to shelf size, shelf attribution to different product types, or shelf share of specific brands, so that you could most likely foresee her next move?
  
  
• What if you were even able to consult your client based on additional insights you may have (that she doesn’t)? For example by letting her know that the best performing 10 percent of shops (turnover per item on shelf) work with larger (not smaller) category sizes and choose to list more, not less of your products?
  
  
• The easiest would be if you had figures proving that shops that list your SKU instead of your competitor’s simply earn more than others – and then show this retailer how much more margin he would make with your item on his shelf.

From price war to efficient stop losses and compensation

Next, assume you checked your promotion database and saw that a competitor has launched a major promotion. 

Responsible for steering a sell-out with promotion support to match planned sales, you would probably want to know who will cause the stress, how relevant the effects will be, and what your best option would be: keep still or counteract by price reduction, a prominent second placement, a leaflet campaign or something else?

• Our leaflet data will help to identify which products are subject to a competitor’s promotion right now - at how many outlets, by which retailers and with which discounts.

• With a Pricing Simulator visualizing cross-price elasticity calculated based on GfK store level sell-out data, you can learn that this competitor’s promotion can be expected to cost you a fifth of your favourite product’s sales, in volume and value – if you do not react.

• You could then recognize that reacting with a 25% price reduction on your own product would neutralize this negative impact on your sales volume – but at a cost of an additional sales value decrease of 10%!

From here, your next steps in counteracting and compensating will be a question of your specific preferences:

• Would you do nothing and bite the bullet?
• Would you go for price reductions (to keep up with sales volumes) taking the hit on the additional revenue decline?
• Or would you go for some increased visibility instead (e.g. through a leaflet campaign) to improve your results and avoiding a price war?