Efficient consumer response

Date of publication: June 15, 1994

Company: Nielsen

Author: James Rose

Abstract:

The purpose of this presentation is to discuss a new movement that will affect consumers world-wide in the next few years. It is an area where research is at the very heart of decision making in companies. This movement is called Efficient Consumer Response. While ECR is, at the moment, primarily a US grocery strategy, the parallels between the US and European grocery business are strong. ECR therefore, definitely has interesting and far-reaching implications for European business. The presentation looks closely at ECR and the role research and technology can play to mould ECR into the form best suited for the pan-European marketplace. ECR links the entire consumer goods chain into a mutually beneficial partnership. The immediate tangible result of ECR is better pricing. This is a direct product of a leaner, faster, more responsive and less costly supply chain. It necessitates manufactures, distributors and retailers working closely together to bring greater value to the consumer through better products, better assortments, better in-stock service and more convenience. The ultimate goal of ECR is to achieve a flexible, consumer driven system in which all parties work together to maximise consumer satisfaction, minimise cost and increase profits. Making ECR truly effective is that fact that it is scanner driven. An EPOS (Electronic Point of Sale) system is the most sophisticated data gathering devise ever invented, giving information which is both precise and fast. The presentation gives examples of this and expands on the development of new technologies which arc making this information easily and quickly managed. ECR grew out of the successful implementation of Quick Response, a concept developed eight years ago by the textile industry. Over the past eight years, the concept of Quick Response has evolved and expanded into ECR. ECR has four main strategies: increased productivity of space and store inventories; increased efficiency of store inventories; increased productivity of both trade and consumer promotions and increased productivity of all activities associated with product introductions. Research can play a critical role in each of these strategies. It is just a matter of time before ECR gains wide spread acceptance and usage throughout Europe. The research industry needs to be well prepared to take maximum advantage of this so we can be in a position to reap the benefits of a more efficient distribution, culminating into having the right product at the right time, at the right place.

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