categorystrategy

Data analysis is the new retail arms race. Smart retailers have moved beyond the concepts of location, market positioning, and product segmentation to now focus on the effective utilization of data. Retailers once knew their customer base personally, but grew beyond that into far-reaching corporations. Consumer goods manufacturers, seeking to get closer to consumers, embraced analytics and category management to take control of the retailers’ shelves. Here’s a look back at how those manufacturers and retailers began using transactional data and consumer research and where we are today.

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Welcome!

Categorystrategy.com is a conversation about consumer packaged goods, retail, and related technology. It is my attempt to document what I have learned and observed in retail and CPG, and to offer some new insights. I spent eight years in the consumer packaged goods industry working with retailers, analyzing data, and developing technology solutions for a retail sales force. I have worked with some great people along the way, had successes and failures, but most of all developed a genuine passion for the industry.

I have spent the last four years in the technology industry in sales and channel management roles. It’s my goal now to get back into consumer products and return with a new set of skills. I am going to share my job search with a focus on some interesting things I have learned about networking, resume preparation, mentoring, changing industries, and interviewing. I am thankful to those who have helped me along the way and hope to give back in some way by sharing useful information here.

This is a soft launch right now and I will be working the kinks out as I go. So let’s get started.

- Scott Magoon

When I worked a retail territory at Kraft I felt like I owned the brands. I wasn’t just their representative; I was their champion, their protector. I defended their shelf space and launched offensives against the territory of competitive brands. But most importantly I had that emotional attachment to them. I liked them.

Previously I had had a retail analysis job in a sales office. There the products were just numbers on page after page of retail results. I always liked the physical boxes and would collect samples of new items to display around my desk. And I was always surprised that those who had the responsibility for the brands seemed to care less about them than I.

I first noticed this when I observed that the Beverage division manager kept referring to “RKA.” That’s Regular Kool-Aid, the small envelopes of Kool-Aid that you mix with water and sugar. To me that’s a valuable brand and an important product for the company. But to everyone responsible for it, it was just RKA. Like everything else it was measured in pounds sold.

If we enter a time when brands decline in prominence, I will place the blame on the employees who “own” those brands. Do you care about your company’s products? Do you like to use them? Or are they just SKUs with monthly sales goals? It’s hard to have a successful category strategy when you’ve abandoned your products’ most enduring characteristic – their brand identity.

I consumed Kraft brands because I was proud of my company. I tried new products from our competitors because I wanted to know what I was competing against. I thought like a consumer. I believe that employees should feel passionate about their company and its products and brands. And companies need to create a culture that enables that. More focus on the brand and the overall strategy and less on process, procedures, and short-term targets. No one is going to care much about RKA, but they might get behind the idea of “owning the summertime” with Kool-Aid. If that environment does exist then it falls to recruiters and hiring managers to bring on the right mix of people who have that passion. And to them I say, keep looking. We’re out here.

I’ve been fortunate that most of my jobs have had a field component that enabled me to work outside the office. To me the customer environment is my classroom. All of my major career accomplishments began with direct customer contact in their own environment.

If you are in an industry with a retail component you have a fantastic opportunity to understand consumers – observe them in the retail environment. They will tell you nearly everything you need to know about product assortment, pricing, packaging, shelving, and merchandising by their actions. Other industries have to pay a fortune for the type of market research that’s readily observable by retailers and consumer packaged goods manufacturers.

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Dear Grocery Retailer,

I believe that retail environments are designed to send a message. From the overall look of the store to the lighting to the arrangement of products on the shelf, it all says something to the customers. Well, I’ve spent a lot of time in your stores and I think I have figured out the message you are trying to send to me. That message is, “We’re greedy.”
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I am a pathological resume tinkerer. My resume has a high degree of word churn. Everything except my name, employers, and job titles has changed in the past few years. The entire format and every word of description. I am constantly searching for the ultimate resume for my job search goals and have a few new ideas to share.
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Here’s an idea…

My wife just spent an afternoon at Dream Dinners. It’s a service where one assembles meals, pre-selected from a menu, using supplied ingredients and instructions. Everything is included at each meal station including the storage bag to freeze it in and the heating instructions. She went with a friend and had fun, but also freed up a significant amount of future meal preparation time. The meals are each priced like an entrée at a nice restaurant, but they serve four to six people. Factoring all that in it seems like a pretty good deal to me. I’m just wondering why I had never heard of this before and why she had to drive to the other side of town to do it.

And I’ve got an idea….

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The Apple Store is one of my favorite retail environments. It’s bright, open, and cleanly arranged. The limited selection of products is very approachable. The people are very helpful. But, most interesting are the features in the back of the store. Each Apple Store has a “Genius Bar” staffed by experts who can answer your questions and fix your Mac. It even has a red phone that’s a hotline to Apple headquarters in Cupertino, CA. Next to the Genius Bar is the theater area where free workshops and demonstrations are held.

Apple Stores are profitable, but their real goal is to bring the Mac experience to retail traffic areas. And with these unique features they have created a retail destination, not just a store.

I make a lot of trips to my local Super Target and buy a wide variety of products there. I’m a fairly self-sufficient shopper and tend to research things before I buy. But sometimes I have questions about various products and leave without purchasing them. So, here’s an idea. Why can’t Target have its own equivalent of the Genius Bar?

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One of the most important concepts I will discuss here is that of solutions. I believe that consumers do not buy products and services as much as they buy an end result. They buy ingredients, but they want meals. They buy a video game, but they want entertainment. Knowing what’s needed and what’s important are the keys to designing a solution that a customer will buy. Whether my job has been in sales, analysis, or channel partner management, I have been a solution designer.

The way to turn a product into a solution is to incorporate value for the customer or end-user. Here are my ideas about a value chain and how products become solutions…

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In 1999, I was a member of the Charlotte, NC Company of Friends. Our national coordinator, and “Social Capitalist,” Heath Row was touring the South visiting several COF groups to learn about local activities and meet members. It was billed as “Fast Company magazine’s search for the New Economy in the Way New South.” Below is Heath’s online journal entry of his visit with me.

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Sept. 23, 1999

[…] it was a straight shot in to Charlotte, where I met up with Scott Magoon, a technology specialist for Kraft Foods, which has a regional sales office tucked in the back of an office park south of the city almost to the South Carolina border.
Scott worked for Kraft for three years as a market analyst and sales representative before moving in to IT. “I’d be happy if I changed jobs every year,” he says. “I like trying different things, and it’s easy to stagnate.” Since moving to Kraft’s Charlotte office from Chicago, Scott’s been working on a couple of change efforts. One, he’s currently deploying new laptops to the region’s 120 sales reps.
“It’s the biggest project I’ve had in my life. It’s huge,” he says. “Coordinating everybody is the biggest challenge. They’ve got to mail their old computers in. We’ve got to mail the new computers to them. And they’ve got to be home when they arrive.” Other than the deployment, technology training is a big part of what Scott’s working on. Instead of teaching people how to use a new tool such as Excel, Scott interviews people to learn what they need to do - and then he teaches people how to do it most productively using the tools at hand. “I always want to think of a new way for people to do something,” he says. “But skill levels vary so much, and some people just want to do things the same way. I want to teach people how to use the technology to be more productive, but I’ve got to get over the hurdle of, ‘I don’t have time because I’m too busy.’”
While I expected to spend some time with Scott to learn what he’s working on and learning, I did not expect the 14-person roundtable he’d organized with the regional manager and other Kraft staff based in Charlotte.

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