Pavel Císař (Plzeňský Prazdroj): We spent almost a year just figuring out what we wanted to do with the data. Without this phase, it would have been useless to us

"Collaboration and data sharing across the company were so critical at first that we built two new departments because of it. On the other hand, however, we created the basis for further future digitalization of Prazdroj," describes Pavel Císař, the scope of the preparatory phase and the more challenging beginnings.

Ivana Karhanová: What is the ultimate goal of brands? To understand consumer behaviour. And that changed during the pandemic. Consumers are buying less often, faster, and spending more per purchase. So, where there used to be felt, we now have data. Or rather, Plzeňský Prazdroj has them. Therefore, our guest in the studio is Pavel Císař, Commercial Excellence Manager for the Czech and Slovak Republics. Hello.

Pavel Císař: Hello.

Ivana Karhanová: Let's start by explaining how Plzeňský Prazdroj came to start measuring secondary exposure.

Pavel Císař: It started a long time ago, in 2018 when Prazdroj was doing very well. I'm not saying it's not doing well now, but we were doing very well at that time, and we said we couldn't accept that.

Ivana Karhanová: That you are doing well?

Pavel Císař: Yes, we are doing well now and coming to terms with that feeling of satisfaction. So we started looking for what we could do better. First of all, to get ahead of our competitors, because they never sleep, and at the same time to get ahead of ourselves. So we educated ourselves on how we could meet consumer demands. We realized that we didn't know much apart from a lot of research and our know-how. We have nothing data-driven and fact-based. So we said, let's measure what exposure works best within retail. So we kicked off the whole project on that. We thought: it could be that we put a student behind a carton of cans and have them keep a tally of how many people walked by the display and how many bought something. But it's still not the correct data, and it's relatively hard to draw factual conclusions. So we were looking for a technology solution that would measure that continuously and give us honest answers. We then evaluated the exposure based on that.

Ivana Karhanová: You are now measuring and testing secondary exposure. What all had to precede that on the Prazdroj side before the first data reached you?

Pavel Císař: Many people will say that Plzeňský Prazdroj is a huge company, a colossus that has been around for hundreds of years. It's true, but only partially. The first thing that preceded it was a change of mindset - that we use different tools that we haven't used before and have to trust them. So we had to set that up within ourselves.

Ivana Karhanová: That's honestly one of the hardest things for me.

Pavel Císař: Exactly. It was about convincing everybody that we were doing the right thing. We have many departments: the insight department, the commercial finance department, the whole commercial sales side, or my department, the procurement side of things. We also had to learn how it was done IT-wise when we did that. We were faced with a decision where either we take everything on our shoulders (which is very complex) or find a partner to help us somehow "pre-grow" the data to get insights and improve the know-how from it. We went that route and left some of the data work to our supplier.

Ivana Karhanová: You said one interesting thing - someone has to "pre-digest" the data for us. On the other hand, to do that, you have to know at that moment what questions the data should answer. What questions were you asking, or what did you need to get answered?

Pavel Císař: Here, I would appeal to anyone who will be involved in this, whether a retailer or a supplier. We've spent almost a year figuring out exactly what we want to answer, what the benefit is going to be, what the change is going to be at the end, who's going to be working with this internally, how are we going to then externally share this with our customers, directors and so on. And this is critical. Saying why do I want to do this, what do I want to achieve by doing this. Having data is nice, but it's utterly useless if you don't know what to do.

Ivana Karhanová: The team or the number of involved people was probably quite large... Where did the clashes of opinion come?

Pavel Císař: I hope my colleagues won't pillory me from Prazdroj. :-) I'll go back to the beginning. It was probably the biggest project I have ever experienced. We connected most of our departments, except for the production department. We had to brief the sales reps as well. The merchandise replenishment guy had to know how to treat the equipment and work with it. We call the project internally BSI (Best Shopper Insight), and the biggest challenge I see is combining the knowledge from the teams gained through various studies and research with the data we get from in-store meters. The friction points come in - what carries more weight, our know-how and the research we've done through the agency or the data, and how it complements or sometimes contradicts each other.

Ivana Karhanová: What did you come to in the end?

Pavel Císař: You have to use common sense. Not everything we measure is telling because there are many influences around, and we started tracking them. We have set up a measurement methodology that already has it straight into it that the sales reps are recording the influences around the measurement palette for us. So we can eliminate them, and that gives us more accurate data. To simplify it, it was setting up the process to be sure that the data was telling the right story.

Ivana Karhanová: And the collaboration of the teams across the company, that is, providing the data that needs to be linked to the data from the store, that was fine?

Pavel Císař: We needed to build two new departments because of it. :-) During that time, we found out that we can't shuffle the data around and have everybody comment on it. So we built a department that is "business intelligent". That is, people who only work with data and evaluate it. Then there's the insight team that glues the reproducible part, the other research, and our historical know-how. Then there's a transformational department that will give it a superstructure. How else to use the data in the future to be a little bit more digitally progressive.

Ivana Karhanová: On the other hand, you have created the basis for further digitalization of Prazdroj.

Pavel Císař: It's a start. It's been four years since we got the idea, but things are still evolving, not just now with Adastra, but the overall mindset that the company has. I'm so happy that it's going well, that every new person that comes in is already coming in with that "wow" that Prazdroj is doing these things.

Ivana Karhanová: Is there anything where you got burned?

Pavel Císař: Yes, I have to say that we got burnt. You need to choose your partner very well. We were a little bit quicker thinking initially; we felt that we would be able to do it quickly, we would measure, some of it would fly, and we were done. But, no, we had to stop and think it all through again: Why are we doing this, what are the benefits, what does the partner have to deliver, how often, where does the data flow, in what form... This all had to be thought out in accurate detail. As I said, it took almost a year - ten months to get this done.

Ivana Karhanová: Tell us what you used to replace the data you have now.

Pavel Císař: Feelingology - that's my favorite word. I don't want to offend anyone. I don't think it's wrong. It's just the way it was: we use research through agencies, the agency employs a person who stands there and either qualitatively asks someone or quantitatively draws something, and it's a standard process.

But let's get into the actual person who is in-store and has to ask somebody. As I always say, everyone is different. If he's an introvert, he's trying to make money. He's not going in there because he enjoys it. Maybe some do, but mostly it's about wanting to make some money. So he'll ask somebody, he thinks he said it that way, or he thinks maybe that person would answer that way, and he'll include that in the survey. Then there's a person on the agency side who processes it. There are usually experts there, but they're already working with some degree of the person's feelings who collected the data. They process it again with some of their know-how and sense and interpret it all to Plzeňský Prazdroj. We, in turn, draw conclusions based on our know-how and feeling. This is the whole principle of feelingology, and it bothered me slightly.

Mainly what I think is quite crucial is that there was no continuity. We always did the research at some time when we wanted to or when the agency could. It was out of context. If you're researching flavored Birell, which sells better in the summer months, and sales are significantly affected if it's raining the week you're doing the research. Even the appetite to buy these products is very much involved. Because of the continuity of measurement - over the summer, out of summer, in seasons, we have linked data to the weather - we can eliminate fluctuations and errors.

Ivana Karhanová: Before the podcast, you said you needed to measure the entire customer purchase journey. That means you need to measure where they're buying, what products they're buying, what form of exposure they're getting, and who they are. Do you have all that data now?

Pavel Císař: Not all of it yet. We have the purchase path described. We know how a person moves, where they buy best from secondary exposure. At the same time, we've intentionally placed some of those exposures closest to the primary section, so we also know how they work there. We have refrigerators, and we understand how they fit in, either by performance or within categories. We don't yet have the answer to "who is it." That's still to come, and we want to go up to the level of one-to-one marketing. Focusing on the person and making a tailored offer to them, but we're not there yet.

Ivana Karhanová: How do I imagine it in the case of beer in the supermarket?

Pavel Císař: It's such a buzzword - omnichannel. I describe it at Prazdroj that if I need to buy something from the brewing industry somewhere, I want to find it where I am, in the package I need, at the price I need. That's where we're trying to get to. We don't segment to the level of the customer, the supermarket, the hypermarket, but we go down to the individual house level. If I know whom the shopper lives in an area, I also know where there is a newsagent, a smaller shop, a supermarket around, and because of that I can set up and prepare a good offer and assortment. I will give one example for all of them. There's an Albert supermarket on Můstek right in the metro. It is characterized by the fact that it is possible to buy there in the boxes where we usually stock the supermarket. Can you imagine purchasing a crate in that Albert and lugging it through the metro? I don't think so. There's a different way of buying. That's something that we're addressing now, and that's what the data is helping us do.

Ivana Karhanová: So I need to put in a six-pack that the customer picks up and goes.

Pavel Císař: Exactly. There's a different buyer need there.

Ivana Karhanová: What happens with the data in Prazdroj then? You have already developed some insight over them, that's one thing, but then you still need to take them and confront them with what's going on inside.

Pavel Císař: Before that, there is the data that we use to answer some business use cases. Those are endless. With the information we have, whatever happens in the market, we can tell if it's a sudden change or a trend. Or we get other data that helps us be more accurate in our assumptions. Once you have that data and it's structured somehow, you can use it at any time to answer other business use cases. And what you may be asking about is the changes themselves. Of course, continuously with that, when we set up a business use case, we're already saying what's the benefit of that change if we find out A, B or C. Part of my department then determines what the buying path is going to be, how we're going to work with the planograms within the fridge or the primary section, what the rack is going to look like...

Ivana Karhanová: Do you see any significant barriers anywhere at the moment across retail to leveraging data more? I accept the premise now that everything is GDPR compliant and no one abuses the data.

Pavel Císař: I would put it in two levels. Retail has gone through a relatively difficult period in the last two years. I think that period would have come anyway. That said, "speed and easy" shopping is here. Covid has accelerated that. People haven't had time to worry about whether something should measure or what it should look like. That's one level. It means I have other things to worry about, which is probably why I don't care who goes to that shelf at that point.
On the other hand, I think some swallows show that we're getting somewhere. The unattended COOP store in Strakonice - I think it's not entirely clear that this is what the future will look like. But it's an indicator that it can be done and that this is the direction where "speed and easy" shopping can go.

Ivana Karhanová: Have you noticed anywhere that the end customers themselves are bothered that you want to have data on their behavior?

Pavel Císař: Not at all. We did a quick survey, and nobody minded. Or at least we're all used to it nowadays. Of course, you will meet someone totally against it, but if we all use Facebook or any other social network, we give much information about ourselves. If I ask you directly if you're bothered by this camera, I think many people will say yes. But if I ask if you've signed up for a camera and it bothers you that we want to know about your buying behavior, nobody minds. Also, one of the things we addressed from the beginning was installing secondary displays and refrigerators so that it wasn't invasive. That worked mainly so that the consumer wouldn't be afraid to touch it or find it strange. I think the vast majority of shoppers didn't register the things that we use.

Ivana Karhanová: How do you think retail will evolve going forward?

Pavel Císař: I think that now retail has to get used to the change it has undergone in the last two years. It means the acceleration of the phenomenon that people are going to the shops less, they want to spend less time there, but they want to have a shopping experience. That's already happening, and many stores are going to pick up on that. I don't expect any significant change. The change that may come is more in consumer behavior from our point of view: where they want to drink the beer, where they want to buy it, and what they want the experience to be. For us, it's critical that we continue to have the HOT and that people get in the habit of going to the pub. We are now faced with whether things will return to some new normal once the restrictions fall away.

Ivana Karhanová: How long does it take to detect a behavior change? That is to say, can you tell if it's just a sudden spike or if there's some disruption that's going to move the whole trend?

Pavel Císař: I would probably advise everyone not to expect a quick solution. This needs to be monitored in the trend, and yes, if we have restrictions or if we close our stores on Sundays, then, of course, we can quickly assess what effect it has on the sales themselves, on consumer behavior. But we use the data more in the long term, where we can see if it's a trend or if it's a sudden fluctuation. At least 4 to 5 months is our period.

Ivana Karhanová: Is there anything you can't tell from the data?

Pavel Císař: That's a tricky question. You can find out relatively everything. It is essential to say what I want to track and write down all the criteria that influence it. If I want to measure how a mixed palette works, I need to be sure that the merchant knows to mix it and how to incorporate it. I have to sift through that information from top to bottom because, in the beginning, we used to get some data that we couldn't use. After all, there was a bug—for example, folding the pallet beyond its height. Merchant, in good faith, puts the fifth floor on the pallet, and suddenly our data was completely messed up.

Ivana Karhanová: Yeah, no one can reach it.

Pavel Císař: Yes. For example. Or there are some tricky things, like one of the shoppers puts a basket on a pallet and suddenly you don't know what happened. It would be ideal to have a camera-weight combination, but at the moment, we only have the weight, so if we have this data and an algorithm, the information is partially degraded. But there's so much of it that it's not a problem trend-wise.

Ivana Karhanová: How do you plan to continue working with measurement and data acquisition at Prazdroj?

Pavel Císař: As I said initially, we need to go further. At the moment, we have started another wave of measurements. One wave of measure is just about validating the result from the first measurement. That means that maybe it will be a kind of endless loop that we will do all the time, allowing us to see the trend. Then, of course, we continue to measure something that we thought and verify whether it is true. Now maybe we're closer to those long-term activations, long-term exposures like shelf programs because we've already established relatively enough with the short-term promotions.

Ivana Karhanová: Says Pavel Císař, Commercial Excellence Manager for the Czech and Slovak Republics at Plzeňský Prazdroj. Thanks for coming to the studio, and see you sometime.

Pavel Císař: Thank you very much. Goodbye.