Store Level Segmentation for CPG

Challenge

For this iconic beverage company, basic outlet/store-level segmentation could not provide the level of differentiation required to achieve assortment, inventory, and shelf planning objectives.

Solution

  • Daugherty helped develop an entirely new strategy, approach, and three year roadmap for customer, store, and outlet level segmentation based on advanced, multi-dimensional, dynamic segmentation leading practices.
  • Over three-dozen outlet-level characteristics are used to build optimal FMOT plans for over ten different merchandisable differences.
  • Simulated how insights would drive both new actions and business results, and planned and launched a pilot executed across 65,000 stores.
  • Captured new data integrated with sales performance data, merchant data and syndicated data and established a phased plan to move from static segmentation through to dynamic and predictive analytics.

Business Result

After roll-outs to over 100,000 outlets, a several percentage gross margin increase has been realized by only addressing a portion of the merchandisable differences/opportunities including:

  • More targeted sales programs
  • Optimized pricing and trade promotion spend
  • Improved return on equipment investments/placements