Observational Research Determines How Consumers Shop

It's amazing that so much emphasis is placed on transactional data and so little on behavioral. Store-intercept surveys have long been known to gauge how shoppers THINK they shop and not truly uncovering the reality. Gaze intercept is not a new concept, although is usually seen as cost-prohibitive. Still, getting a view of what consumers really do (akin to what we can monitor on the internet with data on how long consumers visit a site, how long they stay, where they go etc.) can help create more effective display and merchandising in store.

'webjanet'

One problem with some of the new and old methods is the lack of customer knowledge. The Mass consumer is from days of old. How long someone looks at a display is less important than did they buy. Who looked at the display and what are their buying habits? Did the display influence the buy decision or just make it easier to shop? Unless we can link the consumer segments and past purchases, all we know is the display was interesting.

W. Frank Dell II, CMC, President, Dellmart & Company

Retailers are already so inundated with data that most of it never gets analyzed, at least not before the information becomes stale. Companies have a lot of work to do to realize the potential of the data currently collected before they should expend additional resources for these types of technologies. Sure, my intuition tells me this is a next step in the progress toward delivering exactly what the consumer wants when, how and where he or she wants it. But let's finish drawing out the potential of the technology in place before haphazardly moving on to an as yet unperfected technology.

Ron Margulis, Managing Director, RAM Communications

Frank hit the nail on the head. Gaze Tracking is a great name, but unless you know how the display changed customer behavior, you really don't have much to go on. Would you rather know how long they looked at the display or if they made a purchase? More importantly, wouldn't you rather know HOW the display changed their shopping behavior? Are they new to the category? Did they switch from their normal brand? Did they stock up?

What retailers need is shopper observation technology that monitors purchase behavior AND can link that to the customer's prior purchase behavior. Fortunately, that technology is already in place in many retailers as part of their frequent shopper programs. The data is there, but few retailers are using the customer data to understand the impact of their category management efforts. They analyze the data to identify their best shoppers and what they buy, but they fail to do the work necessary to understand the dynamics of how their category management efforts affect their customer's shopping behavior.

Ken Wyker, President, Circular Logic

There's a real need to better understand shopping behavior by outlet and by occasion, and certainly to understand the factors that cause purchases to occur within those experiences. At the same time, there is a practical limit to how much information retailers can analyze and apply in a cost-effective fashion.

We haven't seen systems in place in the retailers we've worked with to take full advantage of this information. And, I think the reason is that there may not be a strong business case for doing that. The real opportunity here will occur when this analysis and application is highly automated and, therefore, much more cost-effective.

Anonymous

"The real opportunity here will occur when this analysis and application is highly automated and, therefore, much more cost-effective."

Bill Bishop's comment is right on. We have installed a shopper monitoring system (PathTracker) that provides a wealth of information from what shoppers are seeing, where they are going, conversion rates and a whole host of other measures. The key is to spot specific merchandising errors/opportunities and to clearly delineate what FEW actions are appropriate NOW, to increase sales and profits. Our goal is to produce a weekly report for the store manager that says, here are the five things you can do to improve merchandising this week.

Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute

Great responses and discussion so far. But perhaps there is a clue to why retailers don't have the resources in place to analyze and utilize all this data in the nature and number of the respondents to this question.

The majority, if not all, of the respondents so far are consultants, not retailers. WE, whether through our inherent intellectual curiosity or our insatiable thirst for revenues, see LOTS of value in more data. It drives both our ability to provide value to our clients and our livelihoods.

Perhaps if the retailers saw such a compelling business case for the use of their data they would be investing more resources in analysis. So far the most direct revenue benefit they have seen is from selling the data to syndicated data services and manufacturers.

Ben Ball, Senior Vice President, Dechert-Hampe

Fascinating topic whose time has come. Paco Underhill and his firm helped pioneer the way in which this research is done. As a matter of fact, his firm researched dwell time at the shelf for the company I worked for.

The key was the the set types that seemed to promote an increase in consumer takeaway. (Sorry not enough space here to provide too many details.)

The only issue with this is that whatever is "discovered" by a retailer is likely to become just another profit center for them as it would be sold to the vendor community.

I just don't have faith in retail world to believe retailers actually have the consumer top of mind. I guess I'm jaded by the experiences I've had with food retailers.

Anonymous

We should not get caught up on the system, or most retailers having too much information. The issue is - if the retailer can learn how the behavioral ties in with actual performance. There are retailers out there doing such work, and the e-tags aren't the answer. These retailers understand the need to provide better service and shopping experience, and aren't dictated by historical ways and means.

Stephan Kouzomis, Faculty and Staff Member, University of Louisville's College of Business

Speaking of dwell time, we have this on a continuous basis for every area of the store, on about a 50 sq ft subzone resolution basis. One of our early discoveries is what we call the Checkout Magnet. Speed of shopping steadily increases from the beginning of the trip to the end, and is unrelated to categories. For example, salad dressings near the beginning of the trip take about 35 seconds to buy, but similar dressings near the end of the trip take about 10 seconds to buy.

We think of the shopping trip as not a destination, but as an interruption on the consumers path to somewhere else (home?). In this sense, the checkout serves as a magnet, or vortex, pulling them in faster and faster the nearer they get to it.

Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute