Item Product Reporting In Micro Markets And Beyond – It’s A 'Brave New World', Or Is It?

For a recent Automatic Merchandiser article that talked about top-selling products in the micro market, AM contacted major suppliers to find insights on individual companies’ top selling items in the micro market environment. While General Mills was offered the same opportunity, we passed as there is so much to learn before we can really know or give guidance on what are top turning items, even within our own line.

While this may seem counterintuitive to many, I would point out that much of what we sell today in both the micro market and vending segments could be much of a self-fulfilling prophesy; meaning we sell what is there, and without doubt some items sell better than others, but it’s not a holistic view. In most other channels including grocery, c-store, club and more, operators build product assortment based on consumer sales data. We too have to develop ways that allow shopper preference to guide product selection. In an effort to market specifically to the micro market audience, General Mills recently ran a test with several key operators that offered new product concepts targeted directly to specific consumer types in the micro market environment. “Project Huxley” with a nod to the author, Aldous Huxley who wrote the novel, Brave New World, spoke to profound change, something the vending world is enjoying today with the emergence of micro markets. But as an industry we have serious work to do if we are going to indeed become retailers and control our destiny.

As an industry we are still trying to get a footing on how product turn information will be gathered and in turn shared back to the stakeholders. I recently had discussions with NAMA executives, as well as reporting agencies, to understand their position on who should lead this important initiative; they agreed that without robust, transparent reporting, the micro market opportunity will never reach its full potential.

As mentioned, many other channels benefit from having timely turn data from collection and reporting providers like IRI, Nielsen, etc. It provides actual results and measurements and allows for the identification of trends across a broad spectrum of outlets and all suppliers. Like other manufacturers, we at General Mills use this information to make recommendations for the primary benefit of the store owners; when they execute proven category management methodology, we all win. In addition, by understanding how price point variation, product placement, market layout, promotional activity, off-shelf merchandising techniques and more all contribute to the velocity results, suppliers can then apply that learning and products, in general, evolve to meet the needs and desires of the consumer - again, a win for everyone. Today, that reporting protocol doesn’t exist as micro market providers and operators alike are still flushing out who owns the information and whether it should be made available.

In my view, this is backward thinking. The micro market opportunity has already caught the attention of many large and capable retailers. They recognize that if micro markets are successful, their customer base and shopper frequency erodes. These are very savvy retailers who currently execute and know how to report, gather and use the information to make informed decisions on what items make their way onto the shelf.

While I would not portray category management as rocket science, I would say I believe it takes trained resources to properly dissect and interpret all the trends and nuances to gather meaningful insights. Because this takes considerable resources and capital investment, most retailers partner with key suppliers to get it right. As one of these suppliers and one that is often escalated to what is referred to as “Category Captains,” we take the category management process and principles to heart as we know that to have any insights or products considered, they have to be nonbiased, letting the data speak for itself. When applied, with only an eye to helping operators maximize their selling space, the operator wins, but more importantly the consumer’s voice is heard and product evolution and solid space management are the result. If we, the vending community driving the micro market opportunity, don’t come up to speed with robust reporting practices quickly, we will be at a disadvantage.

So, as an industry we have some hard decisions to make. We are very much at a crossroads if we are to prevail in this “Brave New World” known as micro markets. Solid work has been done by micro market providers/developers, operators, suppliers, distributors, NAMA and industry experts alike. They have positioned us all to enjoy the benefits of retailing to this emerging game-changing industry. But make no mistake, we will be hurt if we don’t adopt robust transparent reporting protocols quickly and begin making product selection based more on science than recommendations.   

 

Mark Kelley is an industry veteran known for leading innovation and change in the vending industry. Working at General Mills as a region manager, he is the recent winner of the prestigious NAMA Allied Member of the Year award and talks to the need for transparent reporting in the micro market segment.

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