Collaborative Shopper Value Creation

Collaborative Shopper Value Creation is a new area of the Global Scorecard which was added in May 2004. It is a development of the pervious Consumer Value Creation section, and takes into account recent developments in Collaborative Customer Relationship Management (CRM).

Of course, every consumer goods company tries to create value for its consumers by developing products which fulfil a consumer need. We take that as given. Collaborative Shopper Value Creation is a collaborative process involving both a retailer and its supplier(s) in which target shoppers are identified and differentiated solutions are developed in order to create value for these shoppers. These solutions will frequently involve a combination of the products themselves displayed in a way or in combinations which allow the shopper to make informed choices, providing the shopper with information and perhaps providing the shopper with additional services which all combine provide an overall solution for the target shopper.

• Collaborative Information Management - the process of collecting and using information about how people use the products, how they make shopping decisions, and the kinds of other goods and services which they buy;
• Shopper Targeting - the process of identifying which kinds of people the retailer should be trying to attract into the store and to purchase from the category under consideration;
• Differentiated Solutions - the process of identifying and creating differentiated solutions involving a combination of products, information and services which will appeal to the target shoppers in a way that will meet the business needs of the retailer and its supplier(s).

Information can be derived from many sources such as retail point of sale data, market research companies and suppliers. Under Collaborative Information Management, the information should be stored on a common information platform, which should be accessible by all interested parties. Features of a good collaborative Collaborative Information Management system include:

• Web-based system in which the exchange of data is carried out on the internet. Access enabled to all possible data sources (WWS, panel data, POS data..)
• The data format for the data exchange is XML following EAN standards
• Should be is easy to integrate into a B2B environment
• Data from different sources can be accumulated in a common presentation/report

Shopper targeting involves the identification of target shopper groups. These will require a detailed understanding of how shoppers make buying decisions as well as how they consumer or use the product. It will also need a good understanding of the value that these shoppers create for both the retailer's and the suppliers' businesses. Understanding the different needs and wants of different shopper segments will help the businesses to identify specific targets and to meet their needs.

Having identified the target shoppers is now becomes necessary to provide them with differentiated solutions. This means moving away from the traditional category management view which focuses on products and transactions to one which focuses more on solutions rather than products and relationships rather than transactions.

Additional Resources:

IBM point of view: Information management in the age of the ‘Omni Consumer’
IBM White Paper: Integrated data analytics - Executing with precision - 2005
IBM White Paper: Deeper customer insight - Understanding today's complex shoppers - 2004
IBM White Paper: The strategic agenda for customer management in the consumer products industry 2004
Presentation on Customer Value Management presented to ECR Asia in 2002 (7.86 MB)
Video on Relationship based solutions (19MB)
Mars - Sonae case study highlighted in "Consumer Value Management" available from ECR Europe Publications (code 2641)
PricewaterhouseCoopers brochure on Customer Value Management