Dynamic consumer and shopper environment (category management) by ri

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Dynamic consumer and shopper environment (category management) by ri

  1. 1. Dynamic Consumer and Shopper Environment Workshop Mexico 29 November 2000 Luc Rens
  2. 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 shopper2
  3. 3. Business Questions to be Answered What are the pre-store selection drivers? What are the most important decision criteria? Decision tree? What promotions are most effective?What is the level of planning in the purchase task? How do people shop?To what extent does the consumer influence the shopper? How is the shelve lay-out perceived? Where is the decision made? Which products belong to which segments in this category and why? Who is influencing the shopper and by how much?3
  4. 4. Business Questions to be Answered Inventory of business questions is needed to prioritise and get started!4
  5. 5. Approach Sharing information with respect to product category Retailers Manufacturer Consumers/Shoppers5
  6. 6. Integrated Approach Sales Manager Account Manager Business interface Retailers Manufacturer POP Shopper interface Consumers User interface Category Manager Marketing Manager Product Manager6
  7. 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 objectives7
  8. 8. Shopping and Decision Process At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category)Category definition Store selection Purchase segments Behaviour at POP Needs Shopping trip Brand driven Shopping behaviour Moments Time (spend/save) Price driven planned/impulse Users Budget (spend/save) Promotion driven Shopping modes Brand image of retailer Other decision criteria Action at POP Role of category8
  9. 9. Shopping and Decision Process At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) User Shopper User = shopper or User shopper9
  10. 10. Structure Shopping and Decision Process At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category)10
  11. 11. Information Needs At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) User interface Retailer Shopper interface Business interface Most manufacturers mainly focus on the category, and leave store selection out11
  12. 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!!12
  13. 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 drivers13
  14. 14. Research Programme: Toolbox Qualitative Quantitative Research Research14
  15. 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 objectives15
  16. 16. Toolbox: Qualitative Research At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) Explorative group discussions Accompanied shopping16
  17. 17. Toolbox: Quantitative Research At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) Observations U&A P&A, including Purchase Pulse & Interviews17
  18. 18. Other Research techniques 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 interviews18
  19. 19. Toolbox: Common Denominator At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) Family life cycle (pre-family, family, empty nesters or other segmentation) Socio-demographics Region Differentiate to primary shoppers of specific retailer = Actionable19
  20. 20. Group Discussions and In-depth Interviews At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) Explorative group discussions Broad evaluation by group discussions In-depth evaluation by single interviews20
  21. 21. Group Discussions and In-depth Interviews 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 shelf21
  22. 22. Group Discussions and In-depth Interviews 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)22
  23. 23. Group Discussions and In-depth Interviews 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 Extensive Retailer B Routine Routine Retailer C Quick Extensive Decision Pre-Family Family Post-Family23
  24. 24. Accompanied Shoppings At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) Accompanied shopping24
  25. 25. Accompanied Shoppings “ 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 another25
  26. 26. Accompanied Shoppings Research objectives 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 category26
  27. 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/interviews27
  28. 28. Accompanied Shoppings 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 interview visit visit before first second store store store visit purchase purchase tasks tasks28
  29. 29. Accompanied Shoppings: Decision ProcessCategory of Beer Decision process at POS MOMENT Emotional Functional (Extensive) (Routine) USER USER Visitors Own family Yourself Rest of family TYPE PRICE PACKSIZE PRICE plain Family pack special Portion pack29
  30. 30. Accompanied Shoppings Need Segments Personal Care Added value Indulging Healthy conditioning Caring Functional Emotional needs needs Cleaning Nourishing Basic30
  31. 31. Accompanied Shoppings Decision criteria Added value Brand Quality Brand Brand Quality Functional Price Emotional needs needs Quality Price Price Functionality Brand Basic31
  32. 32. Accompanied Shoppings Segments Highly planned purchase Cleaning Strong price focus Active behavior = looking for lowest price Low penetration of conditioners, styling products and hair cosmetics Healthy Planned purchase conditioning Strong brand focus Passive and functional behavior Indulging Average penetrations of conditioners, styling products and hair cosmetics Caring Impulsive purchase Strong promotion focus Active behavior = fun and pleasure to look around Nourishing High penetration of conditioners, styling products and hair cosmetics32
  33. 33. Purchase and Attitude Study, incl Purchase Pulse At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) P&A, including Purchase Pulse33
  34. 34. Purchase and Attitude Study, incl Purchase Pulse Objectives 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 category34
  35. 35. Purchase and Attitude Study, incl Purchase Pulse 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 promotions35
  36. 36. Purchase and Attitude Study, incl Purchase Pulse 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 technique36
  37. 37. Purchase and Attitude Study, incl Purchase Pulse 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)37
  38. 38. Purchase Pulse Assumptions: There are 4 basic components of behaviour for the category active brand hunters price hunters promotion hunters Price focus passive devoted loyalists Active vs Passive Shoppers economiser Promotion Brand loyal indifferents focus38
  39. 39. Pre-store purchase attitude Shopper segments 8% 23% 14% 7% 5% 44% Brand hunter Devoted loyalist In-store promotion selective Promotion selective hunter Promotion hunter In-store price selective39
  40. 40. Pre-store purchase attitude 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 market40
  41. 41. Pre-store purchase attitude Active versus passive behaviour and focusActive Passive  Devoted loyalists Brand hunter 43% 57%  In-store price selective Promotion selective hunter  In-store promotion Promotion hunter selective 8% 26% Focus: 66% Brand focus Promotion focus Price focus41
  42. 42. Pre-store purchase attitude Benchmarks active versus passive behaviourShampoo NL 43 57 HHC NL 15 85Shower gel D 17 83Deodorant D 33 67 0% 20% 40% 60% 80% 100% Active Passive42
  43. 43. Pre-store purchase attitude Benchmarks brand, price and promotion focus Shampoo NL 66 26 8 HHC NL 34 24 42 Shower gel D 31 23 28 23 Deodorant D 49 19 10 22 0% 20% 40% 60% 80% 100% Brand Promotion Price Indifferent43
  44. 44. Pre-store purchase attitude 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)44
  45. 45. Pre-store purchase attitude 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)45
  46. 46. Pre-store purchase attitude 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) buyers46
  47. 47. Pre-store purchase attitude 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)47
  48. 48. Pre-store purchase attitude 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) buyers48
  49. 49. Pre-store purchase attitude 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 bought49
  50. 50. Observations and Interviews At home Pre-store In-store Usage Store Purchase In-store behaviour selection behaviour behaviour (category) (in general) (category) (general + category) Observations & Interviews Only by means of in-store research the actual shopping behaviour and dynamics can be observed and understood50
  51. 51. Observations and Interviews Objectives 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.51
  52. 52. Observations and Interviews Objectives 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 fixture52
  53. 53. Observations and Interviews 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 questionnaire53
  54. 54. Observations and Interviews: Output 1 liter bottle 6-pack cans 100 80 60 40 20 0 AH Prisunic Edah Leclerc AH Prisunic Edah Leclerc No watching Examined Picked up Selected54
  55. 55. Observations and Interviews: Output Lost sale Missed potential 3% 7% Impulsive 25% Purposive 65%55
  56. 56. Aantal seconden bij schap, gebruik uw stopwatch: Seconden ALGEMENE AANPAK BIJ HET SCHAP MET SCHOONMAAKPRODUCTENGéén aankoop: Aankoop:Heeft het hele schap bekeken, maar niets gekocht .............................................. 1 Heeft het hele schap bekeken, en toen gekozen .........................................................3Heeft 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...........................................................5CATEGORIEËNMATE WAARIN MEN NAAR DE PRODUCTGROEP KIJKT Sponzen Schuur- Vaat- Dweilen Zemen Stofdoeke Afwas- Overige sponzen doeken n borstelsOppakken, maar weer terug leggen 1 1 1 1 1 1 1 1Daadwerkelijk kopen 2 2 2 2 2 2 2 2Aantal producten daadwerkelijk gekochtNoteer gekocht productNoteer gekocht merkAanbiedingen (in het schap) Ja Nee ALGEMENE INDRUK WINKELGEDRAGAandacht gegeven aan aanbiedingen..................................1 .................... 2 Geen verplaatsing/beweging, doelgericht ......................................................................1Gekocht van aanbieding ...........................................................1 .................... 2 Kijkt logisch langs de produkten, beslist, zelfverzekerd, georganiseerd .......................2Displays/promotie (aparte bak/ aanbiedingenhoek) Redelijk georganiseerd, beetje twijfelachtig, minder beslist ..........................................3Aandacht gegeven aan display / promotie...........................1 .................... 2 Niet georganiseerd, twijfelachtig, veel heen en weer geloop, aarzelend ................4Gekocht van display....................................................................1 .................... 2 ALGEMENE INDRUK ZOEKGEDRAGKijkt van links naar rechts (in looprichting)…………….1 Kijkt van beneden naar boven…………………...4Kijkt van rechts naar links (in looprichting).….………...2 Kijkt heen en weer……………………………….…..5Kijkt van boven naar beneden………………….……… 3 Kijkt maar naar één punt…………………………..656
  57. 57. Take pictures of shelve Useful in analysis of data57
  58. 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.58
  59. 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.59
  60. 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 home60
  61. 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 interviewers61

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