SCDigest editorial staff

The News: The latest study from market researchers and consultants Cannondale Associates used a new approach to segment retailers into four categories: routine replenishment, big shops, experience makers, and quick shops.

The Impact: The report predicts continued changes in the share of the consumer’s wallet, with traditional grocery stores seeing the biggest decline, and offers strategies for consumer goods companies to better serve retailers in each category.

The Story: Cannondale Associates and partner Lightspeed Research surveyed a large number of consumers to assess their perceptions of various retail channels and “banners.”

Based on this research, a new framework for positioning retailers was developed, offering four base categories from a consumer’s perspective:

• Routine replenishment: shoppers make frequent trips and like wide, consistent selection
• Big shops: consumers spend a lot per trip and like bulk offerings
• Experience makers: shoppers spend less time there but like unique products
• Quick shops: fast in and out, low sales per transaction

The report offers the following chart positioning many retailer banners along these four categories, based on consumer perception:

Source: Cannondale Associates

The report also notes the challenges for traditional grocers, predicting that by 2011, grocers will have lost a total of 20 points of market share to supercenters, club stores, and even drug and dollar stores.

What are the recommendations for manufacturers/suppliers based on this new approach to segmentation?

• For Routine Replenishment retailers: Focus on assortment planning; customize products and packaging; look for opportunities for innovative story layout and shelving configurations
• For Big Shop retailers: provide product and package size variety; partner to create convenience sections and improved store layout
• For Experience Maker retailers: Focus on unique product offerings; add mainstream, high end consumables
• For Quick Shop retailers: Add more mainstream convenience foods; partner to develop customized offerings

There is a lot more in the report, which can be requested from Cannondale Associates (Redefining the Retail Landscape). Though it’s light on direct supply chain impact, there’s some good perspective and data for any retailer or consumer goods company.

Does this new segmentation make sense to you? How can understanding retailer segmentation help suppliers think about offerings and supply chain services? Let us know your thoughts.