Baby Boomer Segmentation:

the potential demand. The result is improved operational
execution, reduced out-of-stocks, fewer overstocks,
enhanced promotion performance and better inventory
management.
Step 1: Consumer profiling
The consumer should be the first and last consideration of
any consumer-centric initiative and the C.O.D.E. approach
is no different. Products do not buy themselves, just as
shelves do not mysteriously empty by themselves. While
price reductions, competition, brand equity, slotting and the
like all influence purchasing, the common denominator is
the consumer.
It is only appropriate then, that the C.O.D.E. approach
starts with consumer profiling. There are various types
of consumer profiling information available, from panel
purchase behavior to attitude and usage studies to focus
groups. Traditionally, point-of-sale (POS) data has been
utilized to tell us “what happened” but not who drove it.
Through consumer regression profiling, it becomes
possible to create a sales-weighted store profile by
estimating future consumer demand for products based
on historical sales data.
ACNielsen Homescan & Spectra recommends utilizing
panel data to determine category and brand breaks, and
Opportunity Finder solutions to “consumerize” product
movement data, enabling retail-specific and item-specific
store profiles. This approach yields granular analyses down
to the SKU level. The analyses become retail-specific, based
on the retailer’s own data, which adds power to the recommendations.
Regardless of source, consumer profiles can be
used individually or in combination to formulate step one
of Cracking the Retail C.O.D.E.
Step 2: Opportunity gapping
Are you leaving sales on the table? If so, how much? What
“Opportunity gapping provides
an indication of how much the
category could grow tomorrow if
I could fully execute, instead of only trying to
capture my fair share of yesterday’s volume.”
needs to change to convert potential and lost sales into reg-
–Michael Himmelfarb, VP of Marketing
ACNielsen Homescan & Spectra
ister rings? Opportunity gapping quantifies the opportunity
cost to each store for missing the mark two ways—either
with consumers or on the execution level. While fair share
gapping is a common practice to determine if a brand or
product is getting its expected share of the account or market
pie, what if you could estimate how big the slice would be?
Consumer profiling is the first step in executing the
C.O.D.E. approach, but without action it just becomes
“nice to know.” In order to quantify opportunity, matching
the consumer profile to the known shoppers of an account
is critical. The degree of sophistication can vary from profiling
your consumer and identifying a common trait within
a retailer (i.e., matching high income consumers to a high
income account like Whole Foods), to scoring an account
at the store level based on the most volume-predictive
consumers, also known as the Spectra Demand Index.
In essence, while Step One determines your consumer’s
fingerprint, Step Two matches it to an account’s fingerprint—or
even better, an account’s store-level fingerprints.
Now you have a basic roadmap for tomorrow’s volume.
44 Fall/Winter 2006