How clear are the building blocks of your category…?
How many of you have played Jenga? For those who haven’t, or those who last played it about 20 years ago, here is a quick reminder. Jenga is played with 54 wooden blocks. During the game players take it in turns to remove one block at a time from a tower constructed of these blocks. Each block removed is then balanced on top of the tower, creating a progressively taller, but less stable structure. Eventually, someone removes the wrong block and the whole tower comes down.
So, apart from a brief trip back to the time when we played proper games, what has this got to do with the grocery retail world? Well, we think many categories are starting to resemble a Jenga tower. Layer upon layer of products, continually being added to. What starts as a clear, stable structure, just like the Jenga tower, becomes a mass of disorganised building blocks.
The shopper faces a wall of products that all look pretty similar. And when everything looks similar, how do you make a choice? Often, whatever is cheapest or on deal.
We think the answer to this lies in deconstructing a category. Taking a step back and properly understanding the key consumer needs or occasions. Segmenting the category according to these needs or occasions. Then identifying which products serve each segment and how much choice we need to give shoppers in each segment.
As we said last week, the range sweet spot is not about more choice or less choice. It is about the right choice. So, how can we deliver this…?
Identify the building blocks of your category – what are the key needs or occasions the category serves? This could be when your products are used (e.g. meal occasion) or why they are used (e.g. to relax, to refresh, to boost) or where they are used (e.g. at home, on the go). What needs is the category currently serving? What needs could it be serving?
Understand the role of each segment. Too many category segmentations end up with a focus on the one or two ‘most important’ or ‘interesting’ segments. Instead they should focus more on the role that different segments play. The role they play for the shopper (e.g. this is my at home breakfast solution, this is my on the go breakfast solution) and the role they play for the retailer (e.g. is this segment about driving volume or driving value?).
Identify the shopper behaviour you are trying to drive by segment. Is this segment about helping shoppers make a quick, repeat purchase or about a more engaging experience to encourage trial of new products? Are you trying to get new shoppers to buy into the segment or get existing shoppers to buy more or pay more? Again, it is not about which segment to prioritise, but about how to drive the right shopper behaviour by segment.
What level of choice do you need to give shoppers by segment? Some segments require more choice, some require less. For instance, you are unlikely to need 20 different instant coffees, but you may need a variety of flavours in coffee pods. What choice are shoppers looking for by segment? Is it brands? Is it flavours or variants? Is it products or pack formats or sizes? You often need to dial up or dial down different elements by segment.
The clearer you can make the segmentation in your category, the clearer it is for the shopper to shop. If every product looks the same, the shopper just buys one. If different products are clearly serving different needs or occasions, then they may buy more than one. That could be worth a lot of money.
So, take a look at your category. Does it look like more like the Jenga tower at the start of the game or towards the end of the game?
Feel free to foward. Have a great weekend and speak to you next week.