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Using data to help retailers get closer to customers

PepsiCo’s Pep Worx data and analytics platform used by such chains as Kroger, Dollar General

An advanced data platform from PepsiCo is helping supermarkets and other food and beverage retailers get to know their customers better.

Called Pep Worx, the cloud-based data and analytics solution assists retailers in making more informed decisions on PepsiCo product assortments, merchandising and other point-of-sale areas by identifying valuable shoppers by location.

According to Jeff Swearingen, senior vice president of marketing at PepsiCo, the granular data allows chains to map by store which items to stock, where to place them and what kinds of promotions to offer.

The objective: Help large retailers speed in-store decision-making — from days to hours — and cultivate more personalized relationships with shoppers.

“The corner store that we all grew up with was a place where people gathered and the owner and the manager knew everyone. It was a very personalized experience. Over the last 30 or 40 years, as retail has grown out and the population has grown in the U.S., it has become a bit less so,” said Swearingen (left).

“We wanted to bring some of that magic back to CPG and retail to create an environment where you not only have the scale that we see in retail today but also a little of that personal experience and insight,” he explained. “Pep Worx is an analytics capability that allows us to hopefully create a more personal experience for consumers and be a better partner to our retailers.”

The Pep Worx suite includes about 10 applications, led by such tools as Most Valuable Shopper and Most Valuable Store.

“Those tools allow us to identify the shoppers in the U.S. who we believe will be most interested in a particular brand, innovation or marketing idea and to identify the stores that we believe will be the best fit,” Swearingen said. “Just about everybody knows our brands and loves the things that we make, but people all have their favorites. If we can do a better job using those capabilities to connect people with their favorites, they reward us for that.”

Purchase, N.Y.-based PepsiCo — whose brands include Pepsi, Frito-Lay, Quaker, Lipton, Tropicana, Gatorade, Mountain Dew, 7Up and Aquafina, among others — uses Pep Worx in-house to zero in on valuable shoppers and then works with its retail partners to bring its brand programs and innovations to life at the store level.

“And we do this in a way that will best match those consumers with the retail environments where they shop,” Swearingen said.

For example, Pep Worx helped PepsiCo identify 24 million households from its data set of 110 million U.S. households that were the best fit for Quaker Overnight Oats, a single-serve cup of dry oats soaked overnight in milk or yogurt in the refrigerator to provide a healthy, cold breakfast cereal by the morning. The company then mapped these households against shopping venues — both brick and mortar and online — where these consumers were most likely to shop.

“We were able to launch the product using very targeted media, all the way through targeted in-store support, to engage those most valuable shoppers and bring the product to life at retail in a unique way,” Swearingen said, adding that these priority customers drove 80% of the product’s sales growth in the first 12 weeks after launch.

“We have worked with many retailers on this [Pep Worx] and saw a genuine interest in, first, trying to better meet consumers’ needs and then unlocking granular growth,” he said.

Michael McGowan, vice president of merchandising insights and activation at The Kroger Co.’s 84.51° shopper intelligence unit, said his firm leveraged Pep Worx’s Most Valuable Shopper and Most Valuable Store tools, along with its own data set, for customer analytics, activation and communications.

“Pepsi is a good example of where we had some shared philosophies about using data to make the best possible business decisions,” McGowan said. “The work that we did with them on most valuable shoppers kind of bridged knowledge that we both had in that space and led to some really powerful discussion about how to bring their new products to market in a way that made it very relevant for the Kroger customer.

“We believe that a personalized experience with our customers that can be data-driven is something that will set us apart from a competitive perspective,” he added.

Larry Gatta, senior vice president and general merchandise manager for Dollar General Corp., said Pep Worx has helped provide a sharper picture of what’s going on with customers at its approximately 15,000 stores in 44 states.

“As we operate in numerous communities around the country, we know there is no one-size-fits-all approach to meeting our consumers’ needs. With the initial support of PepsiCo’s insight and analytics capabilities, we are beginning to segment the market at the store level,” Gatta explained. “This helps ensure we have the right product, merchandising and marketing solutions for our shoppers while driving growth and loyalty for our business."

Swearingen noted that Pep Worx’s insights are customized not just to the retail channel but also to the store format and location.

“One of the things we think is foundational is just having the right brands and the right products in the right stores. Internally, we do about 170,000 custom planograms a year — which is a pretty big number — where we look item by item in each store to make sure we’re optimizing the assortment for that store,” he said. “Doing these custom planograms allows us to understand how we space those items in a way that best fits each store’s profile, best works with the customer profile of that store and combines with their promotions to engage customers in a way that’s uniquely motivating.”

That includes identifying product affinities to hone merchandising of items most often purchased together and make it easier for shoppers.

“Getting the perimeter of the supermarket right is incredibly important,” Swearingen said. “So we spend a lot of time with retailers advising on how we can optimize that, in terms of driving affinities and maximizing the potential of each week.”

In today’s intensely competitive CPG and retail sectors, marketers of all stripes must respond quickly to the data-driven insights they uncover, he noted. “Moving with speed is so incredibly important these days. The ability to move at the pace of the market and to keep up with consumer change is critical.”

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