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Honeywell CEO is having a sweet year

BY CSA STAFF

MORRIS TOWNSHIP, N.J. — Honeywell chairman and CEO Dave Cote has been named CEO of the Year by Chief Executive Magazine. Cote will be featured on the cover of the magazine’s July issue as well as on ChiefExecutive.net.

The award recognizes the transformation of Honeywell under Cote’s leadership throughout the past decade. During that time, Honeywell has increased sales by 71% to $37.7 billion and has consistently outperformed the S&P 500 during that timeframe.

Today, Honeywell is a global company, with 54% of sales coming from outside the U.S. versus 41% 10 years ago. Since 2003, Honeywell has made more than 75 acquisitions and 50 divestitures.

“It’s a great honor to be recognized as Chief Executive’s CEO of the Year,” said Cote, who was nominated by his peers. “I’m proud of Honeywell’s performance and the terrific returns we’ve provided our shareowners. We’ve transformed Honeywell into a global growth company, led by common initiatives, behaviors, and processes. Our ‘One Honeywell’ culture has been a powerful piece of our growth story because people are our ultimate differentiator. Our portfolio has evolved from a largely manufacturing base to today where half of our business comes from software development. Our focus on seed planting and re-investing in our businesses, products and services will continue because it’s working. We’ve achieved a lot throughout the past decade, but I’m even more excited about our future because the best is yet to come for Honeywell.”

Cote was appointed by President Obama to serve on both the bipartisan National Commission on Fiscal Responsibility and Reform (commonly known as the Simpson-Bowles Commission) and the U.S.-India CEO Forum. He’s been a leading voice and Steering Committee member of the campaign to fix the debt and is widely quoted by top-tier media on how debt reduction must continue to be our top priority to grow the U.S. economy at a pace that will create new jobs. In addition to debt reduction, Cote’s outline for an American Competitiveness Agenda includes energy policy, free trade, infrastructure, math and science education and tort reform.

Chief Executive Magazine is proud to recognize Dave as CEO of the Year,” said Bob Nardelli, founder and CEO of XLR-8 and a member of the magazine’s selection committee. “He has led a remarkable transformation at Honeywell, executing on a vision and rebuilding trust and credibility throughout the past decade. Not only is Dave a respected leader in the business community, but he is also a leading voice for business in Washington.”

Nominations for CEO of the Year were garnered from the magazine’s 124,000 readers. The 10 most frequently cited nominations were evaluated and a winner was voted upon by a peer Selection Committee consisting of CEOs from leading global corporations.

“Receiving the honor of CEO of the Year is very rewarding,” concluded Cote. “I’m confident that Honeywell’s future performance will further validate Chief Executive Magazine’s selection.”

Cote received the Corporate Social Responsibility Award from the Foreign Policy Association in 2007, the Distinguished Achievement Award from B’nai B’rith International in 2011, the Asia Society’s Global Leadership Award in 2012 and the Peter G. Peterson Award for Business Statesmanship from the Committee for Economic Development in 2012. In 2013, Cote was recognized as one of the World’s Best CEOs by Barron’s magazine, and honored with the Corporate Leadership Award by the TechAmerica Foundation.

Cote’s selection as 2013 CEO of the Year will be celebrated at an event hosted by Chief Executive in partnership with NYSE at the New York Stock Exchange on Thursday, July 25.

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Shopko announces winners of annual scholarships

BY CSA STAFF

GREEN BAY, Wis. — The Shopko Foundation has announced the recipients of its Teammate and Family Scholarships for the 2013-2014 school year. The foundation awarded $75,000 in scholarships to 30 students in 10 states.

The Shopko Foundation annually awards post-secondary scholarships to Shopko employees and their dependent children. The $2,500 scholarships are awarded through a competitive process based on a student’s academic record, leadership, community activities, honors and goals. Recipients were determined by an independent selection committee made up of educators and administrators from Wisconsin colleges and universities.

"The Shopko Foundation is committed to promoting healthy lifestyles and educational opportunities for our neighbors in all the communities where we serve," said interim CEO and Colo.O Mike Bettiga. "We understand that, more than ever, education is the pathway to opportunity. It is our privilege to recognize these outstanding students and support them as they build the foundation for fulfilled and productive lives."

The following students were awarded scholarships:
• Miranda Brown (Greenville, Wis.)
• Kenneth Musial (Conover, Wis.)
• Jenessa Buseman (De Pere, Wis.)
• Caitlynne Naughton (Neillsville, Wis.)
• Katie Callahan (Twin Lakes, Minn.)
• Tyler Nehring (De Pere, Wis.)
• Kaleesha Diefenderfer (Lakewood, Colo.)
• Kimiya Nourian (Salt Lake City, Utah)
• Jaren Dyreson (Glenwood, Minn.)
• Hannah Oberle (Lincoln, Neb.)
• Emily French (Dubuque, Iowa)
• Mikael Paulik (Rochester, Minn.)
• Alexandra Grathen (De Pere, Wis.)
• Elysia Rodriguez (Freeport, Ill.)
• Danica Gullicksrud (Onalaska, Wis.)
• Jacob Schmitz (North Branch, Minn.)
• Landon Isabell (North Platte, Neb.)
• Rebecca Schnier (Rochester, Minn.)
• Megan Johnson (Edgerton, Wis.)
• Samuel Smukowski (Green Bay, Wis.)
• Sarah Joosten (Cameron, Wis.)
• Chloe Stockheimer (Green Bay, Wis.)
• Grace Kenny (Wayne, Neb.)
• Anastasia Thesing (Lewiston, Minn.)
• Bailey Klawitter (Livingston, Mont.)
• Kayla Walsh (Whitelaw, Wis.)
• Ashley Limesand (Sanborn, N.D.)
• Madison Walters (Kalispell, Mont.)
• Kaitlin Martin (Kingsford, Miss.)
• Ellen Western (Rice Lake, Wis.)

Founded in 1962 and headquartered in Green Bay, Wis., Shopko is a $3 billion retailer that operates more than 330 stores in 21 states throughout the Midwest, Mountain, North Central and Pacific Northwest regions. Retail formats include 134 Shopko stores, 176 Shopko Hometown locations, 5 Shopko Express Rx stores and 18 Shopko Pharmacy locations. The Shopko Foundation is the retailer’s charitable arm supports established nonprofit organizations with a proven record of success in maintaining solid, critical programs or innovative new organizations and programs supported by established nonprofits or successful leadership. The foundation issues grants to support organizations or programs that help citizens of all ages maintain or improve their physical health and help students succeed in school and become self-sufficient adults.

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The efficient way to win the week

BY CSA STAFF

Every week, retailers unleash significant advertising and promotion efforts in the perpetual competition to engage shoppers, drive trips and grow sales. Annual retail sales and market share are the result of the competition that played out in the preceding 52 individual weeks, and many companies highly value “winning the week.” But some weeks can be much more competitive than others, creating challenges for retailers also facing strong pressures to be efficient and limit costs. Based on our research, there can be significant differences in the share of budget needed to dominate advertising in a specific category for different weeks. By comparing weekly share of voice relative to weekly share of budget, retailers can determine if they are maximizing their investment.

In fact, by aligning the share of voice and share of budget metrics with weekly sales and promotional lift analysis, retailers can identify weeks that may yield a greater return on their advertising and promotion investment, rather than concentrating on weeks that may seem strategic for purely seasonal or competitive reasons.

Each year, retailers spend billions of dollars on advertising and promotion. In 2012, retailer advertising increased 4% versus 2011 across 18 media monitored by Kantar Media (e.g., television, internet, radio, newspaper, magazine and outdoor). Retailer promotion also increased during this period with retailer participation in free-standing insert (FSI) coupon pages increasing 5% and digital coupons distributed on retailer websites increasing 50%. As the retail advertising landscape becomes even more crowded and competitive, it is critical that retailers understand whether their strategies are achieving maximum impact. Weekly variances in tactics provide an important perspective that helps retailers truly understand which shoppers, categories and trips were being targeted by their competitors.

Retailers do not control their relative weekly “share of voice,” which is the result of their level of advertising and promotion activity as a share of total competitive activity, and is thus impacted by how much competitors spend. However, retailers do control their weekly “share of budget,” which reflects the allocation of their advertising and promotion activity throughout the year. Comparing share of voice versus share of budget may uncover more efficient advertising and promotion opportunities that avoid some of the head-to-head competition vying to win the shopper’s attention.

To illustrate relative efficiency based on these share metrics, Kantar Media analyzed more than $2.5 billion in retailer advertising and promotion activity that occurred in 2012 across 26 leading retailers.

Our research shows that weekly share of voice may have a significant impact on weekly shoppers, trips and sales, since by dominating the promotions seen by shoppers in a given week retailers can encourage more trips to their specific stores. In 2012, the mass channel had nearly $1.5 billion in advertising and promotion activity, which represented 55% of total share of voice within this analysis. The mass channel was followed by the food (21%), drug (17%), pet (5%), value (1%), club (1%) and convenience (fewer than 1%) channels. However, share of voice increases substantially for each of these channels during key weeks.

For example, the week ending December 3, 2012 — a critical time during the holiday shopping season — was the top week for the mass channel. Mass merchandisers spent more than $60 million in advertising and promotion activity during this week, representing a 72% share of voice and resulting in an index of 131 versus the 55% weekly average. This $60 million represented more than 4% of total annual advertising and promotion budgets for the retailers in the mass channel during this week, resulting in an index of 229 versus the weekly average. In comparing these two metrics, the mass channel more than doubled its weekly share of budget to realize about a 30% increase in share of voice. While winning such an important week may seem critical to many retailers, it’s clearly an expensive initiative and smaller companies or those who need to restrict their budgets thus may wish to seek out less crowded times during the holiday season.

In comparing share of voice across channels, it is interesting to note that none of these channels has the same top week. In fact, the top weeks align with different promotion periods throughout the year. Some of these weeks clearly correlate to significant holidays — such as food’s high spend prior to Thanksgiving, or mass focusing spend on “Black Friday” week, but others are less clearly correlated to traditional retail seasonal trends. Additionally, only the club channel has the same top week based on share of voice and share of budget (week ending May 28, 2012). The remaining channels allocated a greater share of their advertising and promotion budgets during other weeks, but did not achieve the same share of voice as in the top weeks in our research.

Looking beyond total retail spend, additional trends can be uncovered by analyzing weekly share of budget at the product category level for specific retailers. For example, the wireless phones and services category was the most frequently mentioned category in Walmart’s advertising and promotion activity in 2012. Walmart’s support for this category spiked during the back-to-school season and the winter holiday period.

In comparison, the apparel category was Target’s most frequently mentioned category with consistently strong weekly support throughout the year. Additionally, five of Walmart’s top 10 categories were food-related while Target’s top food-related category was its produce department which ranked 20th overall in 2012.

Retailer-specific analysis provides insights into which categories may be of strategic importance throughout the year versus which categories may be of tactical importance during key weeks. Retailers and manufacturers may work together to align weekly retailer advertising and promotion activity with brand marketing support to achieve the greatest combined “brand influence” with their shoppers and consumers.

By understanding the relationship between share of voice and share of budget, retailers can drive greater efficiencies in their spend. A retailer may increase their share of voice in an individual week either by increasing their advertising and promotion investment or by redirecting activity from another week. Looking beyond where competitors are spending to see which weeks are actually delivering the best results is critical to not only efficiency but also effectiveness.

Dan Kittrell is VP of account solutions with Kantar Media

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