BrainTrust Query: A Holistic View of Consumers
One theme emerging from the Shopper Insights in Action 2011 event in Chicago last week was the necessity for viewing shoppers and consumers from a holistic perspective. Grant McCracken, author of Chief Customer Officer, suggested that we "dolly back" when researching the consumer or shopper.
"Dolly back" is a film term meaning that the camera pulls back to get a broader shot. Rather than just view the transaction, understanding the whole consumer would allow us to get to a cultural perspective from which we could predict trends. One speaker offered a quotation from A. G. Lafley, former CEO of P&G, "We have to consider the consumer as a whole person, not just the piece of them related to our product — e.g., not just the mouth for oral care."
Some companies have been learning about their shoppers and consumers as people with some surprising insights.
For example, Brian Lannan, Target’s group manager of guest insights, shared one surprise. Fashion forward 20-30 year-olds were asked to identify their primary fashion influence — they said their moms!
Mike Hogan, senior vice president and chief culture officer of Game Stop, found that a broad consumer group of 30+ men and women are an important segment for them, not just the younger men and boys.
Todd Hale, senior vice president, consumer & shopper insights, Nielsen, reported that, in addition to increased food sales at Target and Walmart, cookbook sales are a growth category. Rajeev Sharma, CEO of Videomining, reported that store path research revealed that Hispanics not only buy different products, but that they shop differently. Jonah Lehrer, author of How We Decide: The New Science of Decision-Making, presented neuroscience research indicating that an understanding of how the brain works reveals opportunities for learning what a consumer feels.
The overall conclusion: developing strategy based only upon transaction attitude or attitudinal research is not sufficient for understanding how consumers shop and buy.
Discussion Questions
Discussion Questions: What are the advantages as well as the challenges of taking a holistic view of consumers and shoppers? What research methodologies are appropriate for generating a holistic view of consumers?
I don’t think any of these are holistic approaches. The key is to find out why shoppers buy what they buy and how to influence that decision. Sometimes the answer is at the shelf; sometimes it’s in the shoppers’ habits; sometimes it resides in the culture or the demographic. To insist on a holistic view is no better than insisting on the moment of decision view. Neither are correct or incorrect — it depends on what you are trying to accomplish and what the research tells you you are capable of.
Well, this is a wonderful idea and it is being done by more than a few retailers today. But cultural backgrounds are sort of rudimentary, it seems to me. We have the tools, technologies and information to “dolly back” and see far more interesting patterns in the data. That’s the value of the excellent analytics we now have available.
So, sure, cultural patterns is one way to segment — the fun starts in finding other patterns.
The impediments are finding money to fund technology to parse all that data, getting merchants to recognize the new possibilities, and getting merchandising and marketing to work together on a level playing field.
Money and culture are always the issue these days (and compensation structures, but that’s a longer story).
We’re talking about a breakthrough of epic proportions. Treating human beings as whole, integrated beings! Will research ever stop amazing us?
In looking at the survey options, I notice that one of the choices is that this is a “new” approach. I’ve got news — understanding the integration of all things has been advocated in ancient teachings since the beginning of time. “Dolly back” indeed!
I hope I live long enough to see a discussion topic about how we need to treat EVERY system in a holistic way — the supply chain, manufacturing processes, the retail store — everything.
Again…IT’S ALL ONE THING!
This article reminds me of the New Yorker cartoon of a man and woman seated at a bar. He says, “Well, enough about me. What do you think of me?”
Oftentimes consumer research is conducted with the same mind set. Marketers are anxious to hone in on their products and brands without considering the position of this product and its purchase within the array of thoughts, activities, and decisions of the consumer. Retailers tend to magnify the importance of the insights received because they don’t consider where it fits in the scheme of things for the shopper. Then they are surprised when the strategies which come from the insights are not on target.
A wise person once told me, “It’s only a toothbrush.” When you conduct research about toothbrushes, you can get to thinking that it’s all anyone else is thinking about these days. The same is true for stores, salad dressing, etc.
When I conduct research, I start with the “context.” It’s a first step in true understanding regarding the product, brand and decision process. Do people make their decision at home or in the store? Is the purchase an impulse or deliberate? What influences the decision process — before entering the store, in the store or when the consumer is making that purchase on line?
At home we may think in the abstract … what we heard, saw or know. In the store, we are dealing with different trigger points — all of the above plus signs and packages, prices and channel strips, not to mention the environment of the store and experience. You don’t have to test every component, but you have to insure that the contribution of each has a place in the research thought process. That’s a holistic perspective which leads to more reliable strategies and greater brand revenues.
There is an obvious benefit in expanding understanding of your customer’s preferences, but only insofar as it influences their decision to come to the store/site and buy/not buy the product. The disadvantage is that, in the quest to gain a holistic view of the customer, retailers can wander off into information that, while nice to know, doesn’t influence the sales nor provide guidance into how to do this.
For much longer than I — or anyone else for that matter — can remember I have been advocating this as the only viable approach to developing an in-depth knowledge of the customer.
That isn’t to say you can’t move a good deal of product with more superficial insights; it’s just to say that this is the path you have to walk if you really want to form a mature, sustainable, commercial relationship with an individual.
The only shock here is that you have to have a conference to tell you there is more to a person than his or her teeth.
Brilliant!
No wonder marketing is in such trouble.
The concept of “holistic view” has always been a challenge for marketers — at least this one.
Understanding your consumer and their use of your products in context is intuitively advantageous and intellectually appealing. Who doesn’t want to know more about the mindset of shoppers as they decide what to buy? Who doesn’t want to have a greater influence in that consumer’s life throughout the path to purchase?
But the devil is in the application of that knowledge. At the extreme end of the spectrum, each one of the millions of consumers who purchase our product represents a single, unique “holistic being” for us to understand. As a marketer, can I afford to market only to “Alice” exclusively as her unique self? Even if I understand that the reason she is predisposed to cold-water, bleach free detergents is because she lives in a condo with pets, is environmentally concerned and has very expensive clothing? I have never experienced the luxury of that kind of marketing budget.
Instead, most marketers are forced to focus on the maximum number of detergent users possible who might be predisposed to their product features. And our message needs to be direct and relevant, positioned as close to the time and place of the purchase decision as possible. We simply have to have that kind of effectiveness and efficiency.
So how do we take from the best of both worlds? Finding those elements of consumers’ lives that are most relevant to our product usage and purchase decision is the beginning. Once those are isolated, concentrate on the ones that optimize the trade-off between broadest application and greatest influence.
“Dolly-back” is great advice when marketers laser in on messages like “Tide cleans whiter and brighter” — but beware the siren song of researchers imploring you to go live with Alice’s family for a week so you can really get to know her.
I started talking about the idea of a more holistic view of the consumer while with Kenosia. I called it the “One Truth” or, said another way, the “Whole Truth.” The idea of normalizing disparate data sources (more than 2) is not a new concept, but until recently it has been rarely used for a few key reasons:
1) The complexity of the analysis;
2) The cost of the data sources required including collection costs, and;
3) the ability to normalize all the data sources into one clean easy to understand reporting system.
I remember one client a few years ago that combined syndicated data with government data to help determine sales trends for his category that were influenced by tax increases or decreases in a given state. The results of having this information and reacting to it were substantial. Imagine if that same analysis included demographic and market basket data as well as 2 or 3 other interesting data sources. Would the results have been even better? I can only assume the answer would be “YES.”
Thanks to some wonderful technology breakthroughs, access to different data sources and the ease of bringing them together has become much easier. Now the industry needs to help train their teams to look at a consumer using this more holistic approach (One Truth).
Now if we can only get that translated down to the salesfloor.
The one thing missing that can most drive sales is a holistic approach to the employees. If we can “dolly back” and see them as people rather than a cost center, we’ll see it is all connected. As Ian says often, “It’s all one thing.”
There are only three things the marketing effort can hope to do: attract new customers, retain existing customers, and improve the profit from existing customers. Understanding the customer is important, but understanding what we’re trying to accomplish is more important.
Unless you see something really weird in the demographics of your frequent shopper card holders, attracting new customers will be your hardest and most costly task. Getting new customers requires individuals to change their shopping habits and can only be accomplished by broad reaching advertising and deep price discounts to entice people to change.
Retaining existing customers and improving their profitability can be accomplished through intelligent use of the frequent shopper data. Frequent shopper cards can be used to offer electronic continuity programs (reward points, free turkeys, etc.) that encourage customers to continue shopping with the retailer. Analysis of actual purchases can identify opportunities to steer customers toward new categories or higher margin (private label) brands in order to increase the size of their shopping basket and its profitability.
I am very skeptical about getting bogged down in the details of frequent shopper data. “Paralysis from analysis” is often used to describe the inability to make a decision in an uncertain environment. People hesitate because they feel they need more information to make a decision. In the meantime, the opportunity has passed them by and a competitor takes advantage of the situation. I think understanding the three things you are trying to do and picking out a few key measurements that will give you the feedback necessary to monitor your progress is better than getting bogged down in too much detail.
In retail, we are not asking thousands of different questions; instead we ask the same questions thousands of times. If a “holistic understanding” means knowing who your customers are, what departments they shop, and what brands they buy, then I am all for it. Beyond that, I don’t really feel much more is needed.
From the same Shopper Insights in Action conference came a perfect example of how important it is to consider the whole context of culture as part of shopper insights.
Considering a trend that’s gaining steam, which is that by 2030, 60% of the world’s population will live in urban areas, Kimberly Clark began to think about what that might mean in their product development and supply chain model as retailers change store formats, sizes and locations to match the population flow. They undertook an analysis process that led them to conclude that there are huge differences looming in the way product assortment and merchandising could likely evolve in key channels of trade within key categories they must thrive in at retail globally.
This effort used a lot of high-powered, multi-variate regression analysis, and will likely be paired in the future with more holistic shopper behavior studies as the cultural trend of urbanization takes place in both U. S. and key global markets. Kimberly Clark also learned how it must begin to think about manufacturing and productivity at the shelf of much smaller stores and how it must change its operations to sell and to service a plethora of much smaller retail operations in the future.
Shoppers can’t really articulate why they are migrating back to urban areas, nor can they articulate why they feel happier shopping in an urban area visiting the butcher, the baker and the candlestick maker. Whatever you choose to call it, deeper, more qualitative research, particularly when combined with some of the newer neuroscience findings, can indeed give the opportunity for more holistic, AHA moments that can be transformative for deciding how to go forward and win the shopper’s heart.
There is no magic button to push for answers, and, in this industry, there is certainly not a one size fits all solution. I agree the impediment is partly money, but more often it’s a realization of the difficulty in getting approvals for action that’s different between manufacturers and retailers.
The overwhelming advantage is that you begin to see your customers as partners in your business. After all, you don’t have a business unless you have customers. Now, comes the hard part: how are you going to train your employees to serve partners? Does it change your idea about who you will hire and how much you are willing to pay to get someone who can delight your partners? Perspective is a wonderful thing; sometimes changing yours is the best tonic for building a successful business.
Key to taking a holistic view is understanding the consumer and the shopper … in context. Focus on the Path to Purchase — steps taken outside and inside the store to identify the pivotal points of influence where people are thinking about brands and purchase intent. As channels blur, social media influences more resourceful shoppers, private brands grow — positioning for marketers is changing rapidly.
Campbell’s gave an overview of their Landmark Path to Purchase Study, calling it Comprehensive, Multi-method, Multi-supplier to understand what was significant for influencing the shopper decision at key points. It’s a major investment for the company, yielding new insights around who their shoppers really are, when/where they think about the product and what the best way is to reach them.
The major caution is to clearly define the questions, and more likely use directed qualitative methodology — numerous discussions about getting beyond the articulated shopper response, while learning more about consumer usage, buying behavior and shopper thinking during the purchase decision.
One of the single biggest impediments to holistic research in marketing is that, in its very nature, the research itself is a commercial activity and will not be done if it can’t turn a profit. Research companies provide standardized services — surveys for example — that lend themselves to “factory” production. And of course the research engine on the user/client end is also a “factory,” using “templates” to fill the gargantuan appetites of major corporations.
The alternative to custom research (discussed above) is to find existing data sources that can be analyzed. The largest such data source is scan data, and it is not an accident that the largest research company in the world is largely driven by sitting on the largest pile of this data.
Of course, academics typically do not have access to continuing streams of piles of cash that they can use to pursue whatever interests (holistic) they might have. Consequently, their studies are heavily driven by “available data,” or they are small and “researchy,” even if they are pushing the edges of knowledge.
All of this is the foundation of the dearth of true scientific inquiry into the world’s largest industry, the $14 trillion annual retail industry ($8 trillion among the brand manufacturers.)
I could cite truckloads of anecdotal facts to support the picture I have briefly painted above but will cite two instances that go to the heart of the matter, drawn from the top five players in the world of consumer/shopper/marketing research:
Over a period of several years, while working on a cooperative program, it was repeatedly drummed into me that “what we say has to represent 30,000 stores across the US.” Without being more specific, how would YOU represent 30,000 stores across the US? The reality is that unless you were going to spend a fabulous fortune on research — not going to happen — you are going to rely on existing data, largely, with maybe a soupçon of “tweaking” data.
Then, virtually ALL of the global manufacturers want their own global research factories that can standardize practices (and research suppliers) across the globe. The billions poured into these sub-enterprises largely drive check-the-box or fill-in-the blank type research. That is, “template” driven research. Again, don’t propose to do research that can’t be executed by existing global factories.
All of this portrays a very status quo type of research environment, quite non-scientific, if I might say. The single most important characteristic of scientific advance is curious investigation driven by observation and measurement. And the observation must be unfettered by the restraints of available data and methods. That is, a scientist will create methods of measurement appropriate to answer the unfettered questions. Industry, in its very being, is “fettered.”
That concept may elude even some scientists (credentials and degrees won’t guarantee a scientific mind.) I have some qualifications in this regard (Ph.D., biochemistry, board certified in clinical chemistry, publications on vitamin chemistry, chick embryo metabolism, quantum chemistry, dendrochronology, and a long list of marketing/market research publications.)
I do note the recent discussion on RetailWire about the difficulty of getting college graduates to enter the world of retailing. A lot more of them enter the “factory” world of the brand manufacturers, which has been the recruiting ground for retailers over the past few years. Only a few odd-ball scientists (c’est moi) have actually immersed themselves in the un-scientific morass of retailing.
The bottom line: “a holistic view of consumers” ain’t gonna happen by reshuffling the deck chairs outlined above.
I think the better approach is a shopper-centric strategy rather than the transaction-centric strategy that many retailers take today. Too many strategy sessions start with questions around selling more product, increasing basket ring, or gaining shelf space. With a shopper-centric approach, the shopper’s needs, wants and triggers are identified and strategically addressed.
Understanding shoppers beyond their gender, age and geographic location is key to a shopper-centric approach. Demographics and psychographics are the greens fees that any marketer needs these days to better sell to their audience. To truly make impact, we need rich data about lifestyles, behaviors and our social network–all information that is shared by your shoppers and obtainable.
Look at the Amazon shopping experience: they know just when to suggest products you might like based on other items you’ve shopped for. With each click they better know their customers and their algorithms serve up the right recommendations most likely to be purchased.
Sears will suggest gift ideas for friends because they’ve tapped into your social network and have access to what items your friends like.
There are other examples of how retailers are using rich profile data to better understand and market to their shoppers–and experiencing ROI for their efforts.
As was overwhelmingly obvious last week at the Shopper Insights in Action event, was how many different ways there are available to get to “know your shopper.” Critical here is not to miss the theme of the conference, which was around the “in Action” part. Insight without action remains academic. It is only important to gather as much information as is necessary in order to meet the needs of the shopper and convert them to a buyer.
From a brand perspective, both product and store, it’s about engaging the shopper to be interested enough in recognizing and relating to your brand for whatever reason is most top-of-mind at that time. Those insights tend to be more “holistic” as you’re looking for that first point of connectivity. Typical sources for this holistic view can come from any one of the great methods highlighted last week: in-store interviews, online surveys, at-home observation, purchase behavior mining, cultural and demographic understanding, etc.
For bricks-and-mortar sales, the single most important point of decision will always be the “last 10 feet.” It is critically important to ensure you have the right product mix, laid out in the most shopable manner, at the right price and with the right incentives to trigger conversion. These last 10 feet are the most tricky and all holistic insights can be applied, but having the history on what actually sells under what circumstances can mean the difference between a buy or no-buy decision. At the end of the day, that’s what really counts. And in this case, loyalty data, price sensitivity, promotion effectiveness and leakage become your best resources for really understanding how best to meet the shopper’s needs and convert them to a buyer.
Kudos to Bob Phibbs for mentioning the importance to ‘dolly back’ and see both the customer and the sales associate as whole humans. It is in the individual customer experience that the magic of retail occurs, and that takes both the customer and the associate. It should be obvious that we must understand the holistic nature of the customer, and also the holistic nature of the associate experience–and finally how those two spheres intersect. The challenge is retail leaders seeing the value in both the cost of the primary research and subsequent analysis, as well as the monetary and time cost in planning and implementing the subsequent strategies. Given the short term decision making nature of most retailers, most will not do this. That leaves the spoils to the few who take the time and make the investment to truly understand the holistic nature of the very human behaviors and interactions of customers and sales associates.
What is refreshing to read is some of the commentators actually bringing up the employees in the stores. Frankly, far too many retail executives are short-sighted to the detriment of their organizations and customer service initiatives. You can’t provide quality customer service and get to “know” your consumer if there isn’t anyone on the sales floor and management is running from one fire to the next. You cannot scream from the top a customer service mandate if you aren’t willing to serve your internal customer, the employees and managers of the stores. As with most research that is published, very little is read by those in the decision-making positions and generally it written for vanity. I see a number of consultants and Ph.Ds on this forum, many with retail experience, though recency is a concern, if you are all being paid to enhance the consumer’s experience and enhance the retail organization’s potential, you need to focus less on consumer research studies and more on enhancing the environment of the operation for those that interact most closely with the customer that drives the business. It’s one thing to “dolly back,” to look at the “big picture”, but even more can be learned by walking several miles in the shoes of the employees and managers in the stores.