anderson news company distribution practices kaleidoscope profiling wal-mart meeting february 3,...
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Anderson News Company Distribution PracticesKaleidoscope Profiling
Wal-Mart Meeting
February 3, 2008
Kaleidoscope Consumer Profiling
Kaleidoscope combines– Geography (who lives
around the store)– Market Profile (who shops
the store)– Demographics (details of
who lives around and shops the store)
– Lifestyles (how they spend time and money)
– What magazines they buy Rural Blue Collar
Market Segmentation Is Knowing Who the Consumers Are and How
They BehaveDemographics are the statistics of who you are
– Age– Income– Ethnicity– Education
Magazine purchasing habits also help identify who you are– Do they buy US News and Robb Report.– Do they buy Jet and Ebony
Kaleidoscope uses demographics and magazine purchase data to identify the lifestyles that live in a geographic area
Kaleidoscope also bundles the many consumers into one of 17 descriptive lifestyles
Affluent Family
African American
Rural Blue Collar
MoreExamples
Cincinnati
Analyzing Metro Markets
Middle Class Family 40.0% 60.6%
Affluent Family 11.0%
Golden Years 11.0% 16.4%
Blue Collar 5.0% 7.6%
Middle Class Singles 17.0%
PercentShoppingIn This Store
Percent Living In Store’s Radius
Hispanic Mix 10.0% 15.3%
Other 6.0%
Cluster Group
AffluentFamilies
HispanicMiddle Class
Families
Store Profile Example
These Consumers are not shopping in this store based on Magazine Sales
The Radius around a store depends on Population Density.The more dense the population the smaller the radius
Kaleidoscope Lifestyle
Kaleidoscope Consumer Profiling
Accuracy– 80% Absolute Certainty– 10% A Shade of Gray Off– 10% Needs to be Challenged
by Local Input
Empowering Local Associates– Training– Shared Data– Exception Reporting Affluent Family
Title Ranking Anderson ranks titles to maximize sales for the Retail
Customer– Annual unit sales
– Cover price
Regional titles are managed locally and through our
regional title management tools
New titles are ranked according to its competitive set and
potential as gauged by the purchasing department
Ranks are calculated by identifying a select group of stores that are highly representative of each lifestyle and class of trade.
Ranks are calculated each month using sales from the previous rolling year.
Ranks are calculated for:– 17 lifestyles– 5 classes of trade
Food stores Convenient stores Drug stores Mass market Military
Ranks include sales index calculations that are used for various analysis tools.
Rank Title
1 People
2 Nat Enq
3 Star
4 First
5 In Style
6 Cosmo
7 Oprah
8 Cook Light
96 Motor Trend
104 Arch Digest
145 Essence
181 Ebony
286 Low Rider
385 Jet
Rank Title
1 Nat Enq
2 People
3 Star
4 Wom World
5 Jet
6 Essence
7 Ebony
22 In Style
44 Low Rider
59 Cook Light
158 Motor Trend
409 Arch Digest
AffluentMass Market
African Amer.Mass MarketRankings allow us to insure the
best potential titles are available
Sales Index by Lifestyle
0
20
40
60
80
100
120
140
160
180
200
MCS ASC AFM COL ASN UGY AFR HSP MCF ECH GYR RMC
Car & Driver Automobile Street Rodder Hot Rod
Index Correlation Model
Bipad Title AFM AFR ASC ASN COL ECH FGH GYR HSP MCB MCS MCW RMB RMW UGY Correl3915 CAR AND DRIVER . 179 58 185 192 153 64 90 80 105 67 78 187 118 41 93 1.00
Bipad Title AFM AFR ASC ASN COL ECH FGH GYR HSP MCB MCS MCW RMB RMW UGY Correl3915 CAR AND DRIVER . 179 58 185 192 153 64 90 80 105 67 78 187 118 41 93 1.003920 ROAD AND TRACK . 210 56 231 314 164 71 108 81 123 72 80 228 122 52 103 0.96
47173 HOME ENTERTAINMENT & DESI 505 27 427 489 303 56 120 87 238 91 40 400 303 63 79 0.9610350 REAL SIMPLE 340 88 345 317 309 146 107 173 164 136 203 363 216 82 160 0.953991 ISLANDS 466 56 595 633 357 138 162 185 245 64 143 516 197 93 66 0.953811 BODY & SOUL WHOLE LIVING 456 104 565 582 493 150 28 74 278 161 135 579 333 85 159 0.958193 AUTOMOBILE MAGAZINE . 222 85 287 321 182 131 139 122 165 99 93 332 152 85 128 0.94
34809 MOTOR TREND 140 62 132 172 112 83 83 94 109 89 93 144 117 68 93 0.9410645 IN STYLE . 275 76 374 272 246 108 137 115 163 97 149 405 178 70 98 0.9410049 SI SWIMSUIT . 181 63 218 198 200 93 110 131 130 118 129 208 153 90 96 0.9310095 MONEY 230 103 222 263 151 86 73 140 123 94 129 220 144 58 99 0.931986 HOME 345 77 406 479 244 60 117 206 183 113 131 359 135 98 137 0.93
Topics for DiscussionRetail Is DetailKaleidoscopeOPACOSTARSNew Store ProcessMerchandisingCentral DistributionOpportunities
Optimal Product Assortment [OPA] Snapshot Overview
The OPA Snapshot adds and deletes titles.
It is a snapshot of what will fit on the rack at the time it is approved.
Every snapshot is saved for three years so we can evaluate decisions.
We run OPA 2-3 times annually on each store
Optimal Product Assortment [OPA] Snapshot Overview
The OPA Snapshot combines the title list for each Lifestyle of the store.
This creates a high to low list unique for that store that only has authorized titles for that store.
When this snapshot is approved, the most productive titles not in the store are added and the titles that less productive are deleted.
Each store can have a custom Expansion Factor to meet retailer-desired merchandising and turns.
OPA SnapshotLifestyle Lists
On the left are the ranks for an Affluent Mass Market and an African American Mass Market. Take a moment to notice the differences.
Also notice that the top titles remain in the top of both lists. These checkout titles remain in most stores.
The Snapshot builds a custom list by combining each list weighted average of that store’s lifestyles
The result is a title list for the store that is customized for that store’s shoppers.
Arch Digest104
Essence145
Jet385
Low Rider286
Ebony181
Motor Trend96
Cook Light8
Oprah7
Cosmo6
In Style5
First4
Star3
Nat Enq2
People 1
TitleRank
Arch Digest409
Motor Trend158
Cook Light59
Low Rider44
In Style22
Ebony7
Essence6
Jet5
Wom World4
Star3
People2
Nat Enq1
TitleRank
AffluentMass Market
African Amer.Mass Market
Motor Trend127
Arch Digest266
Jet195
Low Rider165
Ebony94
Essence75
Cook Light34
In Style14
Wom World8
Star3
People2
Nat Enq1
TitleRank
Store SpecificRank
At the time the snapshot is taken the rack data is critical. The length and shelves are used to calculate how many titles fit on the fixture– Length of Rack– Shelves– Pockets– Multiple Fixtures
Look right at how many titles are chosen (Rank = # of titles) for slight changes in rack data
Rank Title
1 Wom World
2 Nat Enq
3 People
4 TV Guide
5 Star
6 Globe
360
410
420
430
440
500
580
600
650
700
Blue CollarMass Market
20’ 12 Shelves
20’ 14 Shelves
32’ 12 Shelves
36’ 12 Shelves
Facing Formula: ML Length (in Feet) x Shelves x 1.5
OPA Snapshot Rack Data
OPA SnapshotExpansion Factor
The Expansion factor Determines how many more titles to send than will fit on a full faced rack.
What to do with the extra titles
– Overlap part of the fixture
– Turn the lowest sellers
– Fill in holes left by prematures
or sell outs
Rank Title
1 Star
2 People
3 Nat Enq
4 Wom World
5 Cosmo
6 TV Y Novelas
430
450
475
500
520
550
600
650
700
Hispanic
0% Expansion
10% Expansion
20% Expansion
60% Expansion
Title Cut-offs based on a 24 foot, 12 shelf mainline
Optimal Product Assortment [OPA]
Snapshot OverviewThe Base for a new title is
calculated on sales of competitive titles in the same store.
Titles that are identified for deletion are kept if they meet the sales check. The sales check is calculated by using 75% of the store’s median sales.
The store presented to the right has a cut line drawn at 520 titles
Adds and Deletes are determined based on their sales ranks– Truckin’ is Added to store based on annual
sales (notice frequency) Trucks is Deleted from store.
The sales check is determined for each store based on their mainline median.– Robb Report is kept because its sales are
greater than the sales check of 2.75. Another title will be removed.
Rank Sale Title
1 Woman’s World
2 Nat Enquirer
3 People
4 Globe
5 Family Circle
6 Country Weekly
300
350
400 New 1.0 Truckin (Monthly)
450
520
530
550 1.0 Trucks (Bi-Monthly)
600
650 3.0 Robb Report
Max Titles
Golden Years
OPA SnapshotCut Line/Sales Check