dynamic consumer and shopper environment (category management) by ri

Workshop

Mexico

29 November 2000

Luc Rens

Dynamic Consumer and Shopper Environment

2

Category definitions are changing, by….

changing consumer needs

introductions of new products

changing shopper needs

The Retail sector is an increasingly dynamic and exciting environment

new channels

petrol stations, on-line shopping, etc.

mergers of retailers

expansion of retailers

Today’s landscape involves …..

a wide range of products and variants

a multitude of brands

across a many of retailers

via ever multiplying channels

……offered to an increasingly demanding and sophisticated consumer and shopper

3

Business Questions to be Answered

What is the level of planning in the purchase task?

What are the most important decision criteria?

Decision tree?

What promotions are most effective?

Which products belong to which segments in this category and why?

Who is influencing the shopper and by how much?

How do people shop?

How is the shelve lay-out perceived?

What are the pre-store selection drivers?

To what extent does the consumer influence the shopper?

Where is the decision made?

4

Business Questions to be Answered

Inventory of business questions is needed to prioritise and get started!

5

Approach

Consumers/Shoppers

Retailers Manufacturer

Sharing information with respect to

product category

6

Integrated Approach

Consumers

Retailers Manufacturer

Category Manager

Shopper interface User interface

Marketing Manager

Product Manager

Sales Manager

Account Manager

Business interface

POP

7

Shopping and Decision Process

Get Category, Marketing and Account Management together

Define ownership & involve the right people

Structure the Shopping and Decision Process of the shopper

Clearly formulate your objectives

8

Store selection (in general)

Purchase behaviour (category)

In-store behaviour

(general + category)

Usage behaviour (category)

Category definition

Needs

Moments

Users

Store selection

Shopping trip

Time (spend/save)

Budget (spend/save)

Brand image of retailer

Role of category

Purchase segments

Brand driven

Price driven

Promotion driven

Other decision criteria

Behaviour at POP

Shopping behaviour

planned/impulse

Shopping modes

Action at POP


Pre-store In-store At home

9



In-store behaviour




User Shopper

User = shopper or

User shopper


10

In-store behaviour






Structure Shopping and Decision Process

11



In-store behaviour



Shopper interface User interface Business interface Retailer

Information Needs


Most manufacturers mainly focus on the category, and leave store selection out

12

Information Needs

Understanding the shopper is NOT only insight into ‘what happens in the store’

Create crystal clear objectives

know the end users

all retailers or one specific retailer

type of manager

Understand both retailer and company’s angle

Preparation is an important stage

internal individual sessions or workshop with all relevant people

Think in output

what are you going to do with the results?

Just do it!!

13

Import Questions

What is the Category definition?

What is the relationship between user and shopper (who decides)?

user = shopper

user shopper

Who are my consumers and who are my shoppers?

Where, when and how is decision made?

at home

pre-store

in-store

How do shoppers shop for the category?

What are the dominating factors in the Shopping and Decision Process?

Category drivers

Purchase drivers

In-store drivers

14

Research Programme: Toolbox

Qualitative

Research

Quantitative

Research

15

Toolbox

Shopper Knowledge Programme

The set-up of the programme is modular

The research modules cover different parts of the decision and shopping process

Each research module meets specific objectives

16

Toolbox: Qualitative Research



In-store behaviour




Explorative group discussions

Accompanied shopping

17

Toolbox: Quantitative Research



In-store behaviour




P&A, including Purchase Pulse Observations

& Interviews U&A

18

Specific Objective Technique

Category definition? Natural Grouping

Category segmentation? Creative Shelf building

Missed potential category? Exit interviews

Dynamics of total store? In-store Position of category in store? traffic observations

Effects of promotions? Exit interviews

Other Research techniques

19

Toolbox: Common Denominator

Family life cycle (pre-family, family, empty nesters or other segmentation)

Socio-demographics

Region

Differentiate to primary shoppers of specific retailer

= Actionable



In-store behaviour




20

Group Discussions and In-depth Interviews



In-store behaviour




Explorative group discussions

Broad evaluation by group discussions

In-depth evaluation by single interviews

21

Research objectives


Offer insight into:

Definition and perception of the category (needs, moments and users)

related to decision and purchase behaviour

relationship user versus shopper

where (planned versus impulsive), when and how is decision made

what are other influencing factors

related to shelve at POS (creative shelve building)

Different shopper segments (in general and for category)

Pre-store selection drivers (retail- and marketing-mix).

Perception of different retail formulas in relation to the category (decision and

purchase behaviour)

Shopping modes and shopping needs in store

Role of the shelf

22


Research techniques:

Natural grouping: segmentation of products according to the respondents’ perception

Creative shelf building: put product segments into shelve and motivate

Evaluation of different existing and concept shelve presentations (videos or photos)

23


Sample spread by:

Retail formulas primary shoppers

Life-cycle/ family stage

Store choices can differ per

Shopping mode (Extensive, routine and quick decision)

Retailer A Retailer B Retailer C

Pre-Family Family Post-Family

Extensive

Quick

Decision

Routine Routine

Extensive

24

Accompanied Shoppings



In-store behaviour




Accompanied shopping

25


“ To see the offer through the eyes of the customer “

Check whether the definition of the category is clear

Explore consumer needs with regard to category

Decision making process at POS

Evaluation of retail environment

Asses reactions to fixture and position of category in-store

Understand use & preferences of one store over another

26


Offer insight into:

At home

Evaluate category drivers (needs, moments and users)

Evaluate pre-store selection drivers

At POS (primairy and secundairy store)

Different shopping trips

Store selection

Behaviour at POS (routing and modes)

Behaviour and action in front of shelves (planned verus impulsive)

Shopping modes (extensive, routine and quick decision)

Decision at POS

Influencing factors at POS

Perception of the shelf (emotional and functional)

fit of shelf to the decision and purchase process for the category

Research objectives

27

Accompanied Shoppings: Decision Process

Advantages

More real than single interviews

Outlet is stimulus

Rich information

Insight into:

shopping behaviour at POS

influencing factors at POS

Disadvantages

Simulated

Carefully select respondents

Expensive

Qualitative insights into shopping behaviour at POS

not quantified

in combination with quantitative observations/interviews

28

interview

before

store

visit

visit

first

store

visit

second

store

purchase

tasks

purchase

tasks


Interactive observational technique

One-to-one in depth observation & interview in the store interviews of 2 to 3

hours

Pre-recruitment: e.g. family life cycle

5 interviews per retailer

2 outlets visits per respondent

29

Accompanied Shoppings: Decision Process

Decision process at POS

Emotional

(Extensive)

Functional

(Routine)

Visitors Own family Yourself Rest of family

plain

special

Family pack

Portion pack

USER USER

TYPE PRICE PACKSIZE PRICE

MOMENT

Category of Beer

30

Accompanied Shoppings Need Segments

Emotional

needs

Functional

needs

Added

value

Basic

Cleaning

Indulging

Nourishing

Caring

Healthy

conditioning

Personal Care

31

Accompanied Shoppings Decision criteria

Emotional

needs

Functional

needs

Added

value

Basic

Quality

Brand

Price

Functionality

Brand

Quality

Price

Brand

Brand

Quality

Price

32

Accompanied Shoppings Segments

Highly planned purchase

Strong price focus

Active behavior = looking for lowest price

Low penetration of conditioners, styling products and hair cosmetics

Planned purchase

Strong brand focus

Passive and functional behavior

Average penetrations of conditioners, styling products and hair

cosmetics

Impulsive purchase

Strong promotion focus

Active behavior = fun and pleasure to look around

High penetration of conditioners, styling products and hair cosmetics

Cleaning

Healthy

conditioning

Indulging

Nourishing

Caring

33

Purchase and Attitude Study, incl Purchase Pulse



In-store behaviour




P&A, including Purchase Pulse

34


Quantify the results of explorative group discussions and in-depth analysis

Define the role of the store in the decision process

Provide key measures on purchase behaviour

Offer insight into purchase segments per retail formula (e.g. brand hunters, price

hunters, devoted loyalists)

Offer insight into perception of retailers for the category

Define the role of promotions within the category

Objectives

35


Structure of Interviews:

1. Purchasing behaviour in the overall category

categories purchased

purchasing modes

frequency of each mode

retailer choice and motivation

2. Perceptions of retailers for category on a series of attributes

3. Statements for the segmentation analysis - tailormade to the category

4. Optional: evaluation of promotions

36


Sample

In home shopper study of N=750

one visit; approximately 30 minutes interview

Focus on purchase behaviour rather than usage behaviour

Large sample size is needed to make statements for at least 4 or 5 large retailers

Including Purchase Pulse segmentation technique

37


Purchase Pulse

A segmentation technique developed by Tandem Consulting determining:

The relative importance of branding, display factors, promotions and price in influencing consumer behaviour in store for the category

How users of the category are pre-disposed to behave in the purchase environment (and with reference to specific stores)

38

Purchase Pulse

Assumptions:

There are 4 basic components of behaviour for the category

brand hunters

devoted loyalists

promotion hunters

price hunters

indifferents

economiser

passive

active

Price focus

Brand loyal Promotion

focus

Active vs Passive

Shoppers

39

Pre-store purchase attitude

Shopper segments

23%

44%

5%

7%

14%

8%

Brand hunter Devoted loyalist

In-store promotion selective Promotion selective hunter

Promotion hunter In-store price selective

40


Purchase attitude

Category of shampoo is dominated by a brand focus

There is a large number of both devoted loyalists and brand hunters

There is a lot of active behaviour (43%), especially when compared to other categories

There are no indifferents in the market

41


Active versus passive behaviour and focus

Active

Brand hunter

Promotion selective hunter

Promotion hunter

Passive

Devoted loyalists

In-store price selective

In-store promotion

selective

43% 57%

26%

8%

66%

Brand focus Promotion focus Price focus

Focus:

42

43

15

17

33

57

85

83

67

0% 20% 40% 60% 80% 100%

Shampoo NL

HHC NL

Shower gel D

Deodorant D

Active Passive


Benchmarks active versus passive behaviour

43


Benchmarks brand, price and promotion focus

66

34

31

49

26

24

23

19

8

42

28

10

23

22

0% 20% 40% 60% 80% 100%

Shampoo NL

HHC NL

Shower gel D

Deodorant D

Brand Promotion Price Indifferent

44


Brand Hunter (23%)

Buying fixed brand

Go to an other store when brand is sold out or when their brand has a special offer

Actively check papers

More often than average households with more than one

person

Buy 2 brands of shampoo in average; low purpose

penetration own brand shampoo

Are relatively often functional added value or emotional added value (std)

45


Devoted loyalists (44%)

Always buy the same brand

Hardly interested in promotions

Sooner go to an other store than promotion oriented buyers

when their brand is sold out

Relatively often young 1- or 2-person households

Are often functional added value or emotional added

value (std)

46


In-store promotion selective (5%)

Within the total offer, they are sensitive for almost all offers in promotions

Special offer is more important than brand

Often do not decide until at shelf

Relatively more often families with young children

Buy hair cosmetics less than average

Relatively often buy shampoo from Andrelon or own brand

Are relatively often emotional basic (exp) or emotional added value (exp) buyers

47


Promotion selective hunter (7%)

Interested in a large number of promotions, but more selective than promotion hunter

Especially discount coupons are appealing

Somewhat more often young people

Relatively often buy hair cosmetics

Relatively often buy shampoo of the own brand

Relatively many emotional basic (exp) or emotional added value (exp)

48


Promotion hunter (14%)

Are attracted to almost all promotions

Promotions more important than brand and often give occasion to switching

Often do not decide on brand until in front of shelf

Relatively more older singles

Buy 2,5 brands of shampoo on average

Hardly any functional added value buyers, many emotional added value (exp) buyers

49


In-store price selective (8%)

Often buy own brands and brands with a special offer within the total offer of the store

More often families with young children

Relatively often men

Often buy styling products

Buy almost 3 brands of shampoo on average

Often buy shampoo of the own brand

Are relatively often buyers from the segment

Cleaners and nourishing

Both the supermarket and the drugstore are important channels for the purchase of

shampoo

On average 2 different channels are mentioned where shampoo is bought

50

Observations and Interviews



In-store behaviour




Observations

& Interviews

Only by means of in-store research the actual shopping

behaviour and dynamics can be observed and

understood

51


To determine how fixture is actually shopped

To understand shopper behaviour

To provide details of shopping mode

To provide key purchase measures:

conversion levels

planned versus impulse purchases

purchaser profiles etc.

Objectives

52


Provide insight into in-store purchase decisions:

shopper needs with regard to the category

decision making process

role of merchandising, shelf presentation

what about the whole area of switching

Establish shopping behaviour at the category:

how is the fixture shopped - how do people behave

what are the levels of impulsive versus purposive purchases

Provide understanding of shopping behaviour

why do people behave in a certain way at POS

role of out of stock, sales promotions, shelf assortment

socio-demographics profile of visitors of the fixture

Objectives

53


Method:

Quantitative observations at POS (=fixture) at weekly and weekend-days

Minimum of N=400 observations per retailer ( 4 outlets per retailer)

Observing and noting customers behaviour as they

‘shop’ the fixture

Interview sub-sample of observed customers

10 minutes structured questionnaire

54

Observations and Interviews: Output

0

20

40

60

80

100

Prisunic Leclerc Prisunic Leclerc

No watching Examined Picked up Selected

1 liter bottle6-pack cans

AH

AH

Edah

Edah

55

Observations and Interviews: Output

Purposive 65%

Impulsive 25%

Lost sale 3%

Missed potential 7%

56

Aantal seconden bij schap, gebruik uw stopwatch: Seconden

ALGEMENE AANPAK BIJ HET SCHAP MET SCHOONMAAKPRODUCTEN

Géén aankoop: Aankoop:

Heeft het hele schap bekeken, maar niets gekocht.............................................. 1 Heeft het hele schap bekeken, en toen gekozen .........................................................3

Heeft een gedeelte van het schap bekeken, maar niets gekocht ..................... 2 Heeft een gedeelte van het schap bekeken, en toen gekozen ................................4

Is direct naar het gekozen produkt toegegeaan...........................................................5

CATEGORIEËN

MATE WAARIN MEN NAAR DE PRODUCTGROEP KIJKT

Sponzen Schuur-

sponzen

Vaat-

doeken

Dweilen Zemen Stofdoeke

n

Afwas-

borstels

Overige

Oppakken, maar weer terug leggen 1 1 1 1 1 1 1 1

Daadwerkelijk kopen 2 2 2 2 2 2 2 2

Aantal producten daadwerkelijk gekocht

Noteer gekocht product

Noteer gekocht merk

Aanbiedingen (in het schap) Ja Nee ALGEMENE INDRUK WINKELGEDRAG

Aandacht gegeven aan aanbiedingen..................................1 .................... 2 Geen verplaatsing/beweging, doelgericht ......................................................................1

Gekocht van aanbieding ...........................................................1 .................... 2 Kijkt logisch langs de produkten, beslist, zelfverzekerd, georganiseerd.......................2

Displays/promotie (aparte bak/ aanbiedingenhoek) Redelijk georganiseerd, beetje twijfelachtig, minder beslist ..........................................3

Aandacht gegeven aan display / promotie...........................1 .................... 2 Niet georganiseerd, twijfelachtig, veel heen en weer geloop, aarzelend ................4

Gekocht van display....................................................................1 .................... 2

ALGEMENE INDRUK ZOEKGEDRAG

Kijkt van links naar rechts (in looprichting)…………….1 Kijkt van beneden naar boven…………………...4

Kijkt van rechts naar links (in looprichting).….………...2 Kijkt heen en weer……………………………….…..5

Kijkt van boven naar beneden………………….……… 3 Kijkt maar naar één punt…………………………..6

57

Take pictures of shelve

Useful in analysis of data

58

Example of output

Actionable results

C1000 (NL);

Typical shopping mode: extensive weekly stock up

Often visited by families who search for full statisfaction

Shelf is liked for it’s extensive offer

2/3 purposive buying behaviour

‘In’ for experimenting

Substantial group of promotion hunters

Quite some time at the fixture

Lot of browsing/watching behaviour

influencing purchases at POS by making shelf attractive, with fun, volume

oriented promotions etc.

59

Example of output

Actionable results

Albert Heijn (NL)

Typical shopping mode: Quick decision

Often visited by young singles who are on ‘special mission’

Store needs to fulfil meal solution

1/3 impulsive buying behaviour

Price less an issue

Dominated by brand hunters

High sales conversion

Etc.

influencing purchase at POS by offering solutions, for immediate

consumptions (higher priced) etc.

60

Example of output

Actionable results

Edah (NL);

Typical shopping mode: Daily routine

Often visited by elders singles

Basic needs

Low impulsive buying behaviour

Highly purposive

Dominated by indifferents and price hunters

Etc.

influencing purchases before entering the store e.g. by promotions in leaflets

at home

61

Retailer Co-operation

Co-operation retailers = vital necessity

How do we deal with this?

Client

personally approaches head offices retailers

provides RIN with local contacts within each organisation

provides RIN with planogram of the stores

RIN

faxes a ‘permission’ letter to all outlets which they have to sign and return

sends a copy to all interviewers

confirms fieldwork dates & names of interviewers

dynamic consumer and shopper environment (category management) by ri

Documents