What can we learn from a retail supermarket study conducted 20 years ago? Plenty, I think. But to be fair, I will need to prove that point to you, given how much has changed in our industry last two decades. Before I embark on that mission, let me take a step back and give you a brief review of the history and the scope of The Marsh Super Study. It was a foggy day in 1990, probably a Tuesday, as they make for the best foggy days….when yours truly, then an eager young supermarket marketing director for Marsh Supermarkets, was called into company CEO, Don Marsh’s office. I was introduced to Mr. Jack Lewis.
Jack was president of Marketing Resources, a fairly accomplished retail consultancy. Jack had credentials out the whazoo. He had been editor of Progressive Grocer Magazine, marketed the Marlboro Man for R. J. Reynolds, had even known Sonja Henning, the great European skater. But more relevant to the discussion that day was perhaps Jack’s most important accomplishment of all. In 1960, as editor of Progressive Grocer Magazine, he had managed the only complete macro study in the history of the supermarket industry, The Dillon Study.
The study’s tagline was “Where Sales and Profits Come From”. Jack was a very smart, charming guy, and I could sense quickly that he had convinced Mr. Marsh that we were about to engage in project that was totally “outside the box” for most retailers. It was time for a Dillon Study update. That is, we were going to measure everything that moved in our business at Marsh for 15 months…..and get this, actually share it with the industry, the world, and (gasp) even our competition. Fast forward to 1993. With the help of industry notables such as Michael Sansolo, Bill Bishop, Brian Harris, publisher Dick Hofler and many folks from Marsh and Information Resources, Inc., we accomplished the task. The Marsh Super Study was communicated in a special edition of Progressive Grocer Magazine along with a series of articles in consecutive issues in 1992 and on into 1993. We not only measured many forms of sales and profit, we leveraged IRI’s Apollo Space Management tool, and added metrics for spatial performance as well. A precursor to Activity Based Costing (ABC), we deployed Direct Product Profitability (DPP), to understand which departments and categories were truly providing net profit and which were not. We didn’t stop there. We were among the first to track shoppers as they shopped through the store, measuring traffic in each department, in each aisle, and what was purchased on each trip. We looked at promotion overall, and how each end cap performed. Demographics were included as we reported on the composition of shopper behavior by gender and age group.
I was fortunate enough, thanks to Don Marsh, his son David, and Jack, to travel the world over the next few years presenting findings and encouraging more study… in places like Nice, France, Tokyo, and Dublin, Ireland. Jack and I became fast friends over the years. I consider him to be more than a mentor, in fact, he is more like family. He is retired now and living near San Diego. But even in retirement he still has the same passion for the supermarket business today as he did when he fostered creation of the Dillon Study in 1960! He had a vision for the supermarket industry. He felt strongly that the industry needed to work collectively when we could, with the best information, science, and analysis available, so that brands and retailers could improve the way they go to market. I am proud to say that we accomplished that to some extent, as a portion of the study was given the honor to become a case study at the Harvard School of Business.
On the other hand, since it’s publishing in 1993, we have only scratched the surface of the myriad of data and resulting implications of The Marsh Super Study. To that point, in the coming months, I will re-introduce some of the key findings of the “study” and draw some conclusions from the results that actually have application in today’s retail environment. It should be very interesting, but more than that, it is the right thing to do. mh