• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
The Science of Buying
 

The Science of Buying

on

  • 1,495 views

Eden Strategy Institute introduces Shopper Science, a holistic approach to marketing that integrates the latest advances in market research methodologies such as Ethnography, Neuromarketing, ...

Eden Strategy Institute introduces Shopper Science, a holistic approach to marketing that integrates the latest advances in market research methodologies such as Ethnography, Neuromarketing, Behavioral Economics, and Big Data Analytics to better drive the actual purchase decisions of consumers today.

Statistics

Views

Total Views
1,495
Views on SlideShare
939
Embed Views
556

Actions

Likes
1
Downloads
0
Comments
0

3 Embeds 556

http://www.edenstrategyinstitute.com 550
http://www.linkedin.com 4
https://www.linkedin.com 2

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    The Science of Buying The Science of Buying Presentation Transcript

    • eden strategy instituteR E TA I L   &   C O N S U M E R   G O O D SThe Science of BuyingS O C I A L   I N N O VAT I O N   P L AY B O O K   S E R I E S
    • Have you noticed how some places have a recognizable, distinct aroma? eden strategy institute | 2
    • Wondered why only some shops make price comparisons transparent? eden strategy institute | 3
    • Or asked yourself why some places are just designed more thoughtfully for users? eden strategy institute | 4
    • Who are the real purchase decision‐makers in a shop? eden strategy institute | 5
    • How easy is it for them to reach the products? eden strategy institute | 6
    • Are there insights that user improvisations & adaptations can reveal? eden strategy institute | 7
    • Shopper Science joins the sub‐fields of today’s Marketing practice to deliver more  robust consumer insight Strategy  Competitive Advantage, Industry Attractiveness, Profitability,  Organization, Operations, Marketing, Strategic Alignment Marketing  Strategy  Market size, Segmentation, Marketing mix Category  Retail  P2P  Shopper  Marcoms Marketing Marketing  Marketing ScienceBranding, Advertising,  Cross brands, Product  Location / Layout, Shelf  Influence marketing,  Customer experience, Media strategy, Slogans bundling space management,   Evangelism, User  Emotions, Behavior,  Inventory planning,  Generated Content,  Preferences/Perceptions Merchandising  Consumer advocacy eden strategy institute | 8
    • To understand shopper behavior, most market research firms use interviews, focus  groups, surveys, and retail audits that aim to access subconscious themes genesis Inspired by psychological techniques such as theRorschach Inkblot and  Thematic Apperception Tests utility beliefs, attitudes,  Useful to learn presumably unreachable  values, motivations, personality, & behaviors ? “When you drink  our soda, which  famous person do  you think of?”Main function to generate, supplement, and verify hypotheses Low fatigue due to relatively minor  cognitive demands placed on respondents Not dependent on having a highly educated  sample nor limited by cognitive ability eden strategy institute | 9
    • However, peer‐reviewed studies have demonstrated many limitations in such approaches RESPONSES × Retail audits do not  × Low test‐retest  × Teamwork‐ provide insights on  reliability; affected  based exercises  subconscious  by emotional state  compromise  motivators nor on  and thoughts at  individual  lost business the moment attitudes × Consumers see  themselves as  Associations  Completion tasks × Social  rational buyers, and  Personification, word  Sentence completion,  Desirability bias  may not provide  association, metaphors,  story completion,  still surfaces in  rich emotional or  personification arguments self‐reporting  imaginative insights method × Most market  SOME  researchers are  Construction tasks  Expressive tasks  × Hypotheses  untrained in  Third person  LIMITATIONS  Role play, acting,  generated are   psychology or  questioning,  OF PROJECTIVE  psycho‐drawing,  difficult to verify personality  Speech bubbles  collages, mood boards  assessment TECHNIQUES × Even psychologists  × Unclear which  × Not always easy to  × Low inter‐rater require weeks – not  aspects of the  achieve concrete  reliability due to  minutes – to truly  imagery actually  marketing actions as  OUTCOMES INTERPRETATION subjectivity understand the  drive purchases a result personality and  perspectivesSources: Qualitative Market Research: An International Journal Vol. 10 No. 3, 2007, pp. 300 – 309; International Bulletin of Business Administration ISSN: 1451‐243X Issue 5 (2009) eden strategy institute | 10
    • Yet, marketers continue to invest in buying qualitative research studies, despite a  lack of measurable brand impact Percentage of  Global advertising spend trustworthy brands  $300 60% 52% USD285b 40%  $280 22% USD271b 20%  $260 0% LEADING TO 2005 2006 1997 2008 Source: Datamonitor Source: Young & Rubicam BrandAsset Valuator SUPPORTED BY % of consumers who could Global investment in  name one of the top 50 qualitative research products launched that year  $6 100% USD5.36b USD3.95b 75%  $4 50% 43%  $2 19% 25%  $‐ 0% 2007 2011 2005 2006 Source: ESOMAR Source: Datamonitor eden strategy institute | 11
    • The human brain is complex; neither mining unconscious desires nor focusing on rational  responses is sufficient to understand true purchase drivers and drive practical marketing • People are emotional • Driven by social influence AUTOMATIC  • Averse to loss  SYSTEM  (Impulsive) REFLECTIVE  SYSTEM  (Thinking) THOUGHTS,  DECISIONS, AND  ACTIONS• People are rational• Driven by self‐interest• Maximize utility eden strategy institute | 12
    • Shopper Science provides tools to analyze and influence both the automatic and the reflective systems of the brain Shopper  Science  Techniques Neuromarketing Ethnography Marketing  Behavioral  Analytics Economics Big Data eden strategy institute | 13
    • Neuromarketing “a new branch of marketing, based on the techniques resulted from neuroscience for a better  identification and understanding of the cerebral mechanisms that fundament consumer behavior” To Help Understand  Information Processing  In Order to … Tools Attention Predict how  EEG Learning  consumers think fMRI Memory AND  Face Coding Language Understand what Galvanic Bracelets Emotion parts of the brain tell Voice Fluctuation  Development  consumers how to act eden strategy institute | 14
    • Shopper Scientists shape cognitive input to achieve different desired responses at the  stimuli spectrum Multi‐sensory Basic fonts are easy to read Unlike complicated ones Gestalt processing Warmth &  Right cortex  openness LemoNaDe 25c HIGHER  processing LOWER  COGNITIVE  Conventional layouts COGNITIVE  STIMULI STIMULI Surprise! Mental  Simple slogans Learning white  spaceNote: All images not proprietary to Eden are reproduced courtesy of Wikipedia eden strategy institute | 15
    • … and guide purchases by framing consumer choices that require higher or lower  cognitive effort at the decision spectrum Hybrid cars  Luxury car as  appeal to the  a status  environmental  symbol to  consciousness  impress of customers Sponsoring a  Incentives e.g. car purchase Automated  specific child  online  maintains donor  donations to  commitment give by default  each month Difficulty Visualising the  e.g. charity donation HIGHER  unhealthy  LOWER  Pairing  intake of soft  COGNITIVE  COGNITIVE  options make  drinks nudges  EFFORT  Commitment multiple  consumers to  EFFORT  WITH  e.g. F&B choices purchases  healthier  WITH  much easier alternatives REFLECTIVE  AUTOMATIC  SYSTEMS SYSTEMS Pricing later  Pain of Purchase models higher  e.g. buying electronics Limited options  gives existing  allow easy  customers the  choices impression of  getting a bargain Feedback e.g. new outfit  Cause marketing  helps socially  Better‐than‐ conscious  real feedback  customer  to encourage  segments self‐ purchases selectNote: All images not proprietary to Eden are reproduced courtesy of Wikipedia eden strategy institute | 16
    • Effective Shopper Segmentation needs to go beyond basic demographic archetypes THINK SIGNAGE USAGE SEE ‐ Traffic approach vs. facing ‐ Cognitive effort ‐ Color‐ Independence level ‐ Height, Size ‐ Peripheral vision REACH ‐ Font, Imagery, Message‐ Embarrassment ‐ Brightness ‐ Height‐ Contraditions ‐ Degree of actual utilization ‐ Acuity ‐ No. of free hands ‐ Volume of grasp ‐ Strength of grasp SHELF INTERACTION FEEL ‐ Display touchability ‐ Informativeness ‐ Sensorial stimulation ‐ Depth of shelf ‐ Emotional dis/engagement ‐ Height / eye‐level accessibility ‐ Body language (e.g. for kids, aged, obese) ‐ Personality, shopping style ITEMS ‐ Relationships between and no. of items ‐ Weight ‐ Requirements for bag rest , baskets ‐ Purchase value NEEDS‐ Desires and need states‐ Interactions‐ Frustrations‐ Decision pathways WALK ‐ Accompaniment ‐ Pace, Speed ‐ Route ‐ Attire eden strategy institute | 17
    • … and lead brands towards in‐store Shopper Ethnography that analyses hundreds of  unarticulated but actual purchase drivers & barriers Interaction with goods? Shelves Fitting rooms Store room Usage behavior? Queues? Shopper  Inventory range and availability? Shopper mix? density? Sample booths Clerk interception rate? Competing /  complementary  TYPICAL STORE FORMAT Search  stores in vicinity? Shelf merchandising? ease? Shelves Field of  vision? Shelves Aisle  Shopper  Lost  length? Distance  interaction? shopper? Shelves Aisle  Nearby events  between  width? / weather  sections? conditions? Ethnographer/s Traffic  Obstacles? seasonality? No. of queue  Queue format  Route? lines? Promo baskets / length / time  / slope? Tardiness? Impulse buys? Self‐service kiosks Availability /  maneuverability of  trolleys / baskets? Counters Knowledge adequacy? Stress  Clerk’s  View of store? levels? focus? Cleanliness?  Vigilance? Noise levels? Store displays Security Store displays Buying persuasiveness? Attractiveness? Relevance? Transition zone?LEGEND Footfall? Population composition of neighborhood? Shopper Access to car parking? Store staff eden strategy institute | 18
    • … such as service interaction relationships of dominance, emotion, or professionalism in an academic setting Appropriate mannerism, distance, tone,  Better attendance for the introductory lecture on  or volume of speech? academic subjects or the session on career prospects? Discussing finances with counselors… … or campus lifestyle with seniors? Actively taking notes and filling out forms… … or not exactly engaged in class? eden strategy institute | 19
    • … or to identify “Thoughtless acts” in an F&B setting CUSTOMER SATISFACTION ERGONOMICS CUSTOMER CONCERNS Elbow leaning  Backrest too  for support straight Seat depth  too wide Confused staff Irate customerPOSSIBLE INTERPRETATIONS• Reasonable scope of customer demand? • Physical comfort affect state of mind? • Damage to item?• Decision‐rights of service staff? • Customer experience? • Premise cleanliness?• Lack of coordination? • Desired length of customer stay? • Security of belongings?• Standardization vs. customization?POTENTIAL IMPLICATIONS• Confidence training? • Restaurant workflow? • Personalized spaces?• Assertiveness? • Human factors design? • Pre‐empting concerns?• Inventory management? • Engineering desired patron behaviors? • Reassurance?• Communications skills? eden strategy institute | 20
    • … in RetailSTAFF EXHAUSTION SELF‐ESTEEM TECHNOLOGY UTILISATION Portable  barcode  scannerPOSSIBLE INTERPRETATIONS• Leaning against furniture for back support? • Power relations? • Mobility requirements? • Subservience? • Technological readiness? • Change management?POTENTIAL IMPLICATIONS• Attrition due to working conditions? • Role playing for empathy? • Capital input to productivity?• Operating hours? • Negotiation skills?  • Labor input to productivity? eden strategy institute | 21
    • … for AmenitiesREST POINT WAITING ROOMS MISSING BENCHES PHONE BOOTHS OBSERVATIONS • People using facilities for a  • Visitor reading papers while  • Visitors using main entrance  • Visitor taking a call, standing  siesta waiting outside privacy rooms for  steps as seats on one leg and leaning on a  her queue number to be called beam for support POSSIBLE INTERPRETATIONS • Consider designing for the  • Possible boredom being stuck  • Visitors may need to engage in  • Visitor fatigue  needs of local communities waiting private discussions before and  • Can waiting itself be eliminated? after visiting MND premises POTENTIAL IMPLICATIONS • Opportunity to showcase user‐ • Provide entertainment? (e.g.  • Incorporate benches for visitors to  • Include call booths for visitors  friendly built environments? information, food, tours, kids areas) rest, possibly with privacy screens? to consult external parties  • Personal alert systems  allow visitors  during a transaction? to go elsewhere while waiting? • Meetings scheduled by appointment  to eliminate downtime? eden strategy institute | 22
    • … in Information InteractionEDUCATIONAL POSTERS UNWIELDY DISPLAYS DISPLAY INTERACTIVITY ENGAGING THE UNINTERESTED OBSERVATIONS • Posters messily pasted  • Visitors struggling with large maps /  • Interactive displays need to finish  • Not all visitors will be naturally  in AVA reception blueprints playing a clip before resetting drawn to various exhibits POSSIBLE INTERPRETATIONS • Ineffective use of posters • Displays may be too large for easy  • Resetting protocol in displays may  • Traffic flow to exhibits are  • Unprofessional corporate  physical manipulation  be perceived as delayed response  structured on a pull basis identity time and cause  impatience  among viewers POTENTIAL IMPLICATIONS • Replacing posters with  • Interactive digital displays? • Calibrate interactive display  • Channel visitor traffic such as  interactive digital games that  controls according to visitor flow? with corridors / passageways  provide feedback on  to keep visitors engaged? campaign effectiveness? eden strategy institute | 23
    • … in Service ProvisionQUEUE MANAGEMENT UNINSPIRING TOUCHPOINTS WORKING DESK SERVICE ATTITUDE OBSERVATIONS • Visitors confused about which  • Applications counter is  • Visitor using  • Aggressive service attitude observed at  queues to join and forms to fill essentially a hole‐in‐the‐wall displays as table reception POSSIBLE INTERPRETATIONS • Instructions may not be  • Uninspiring environment and  • Lack of workspace  • Role conflict between regulator and  clear/intuitive esp. to non‐English  closed posture at dissonance with  for visitors industry promoter? readers the stated premium standards of  • Are high counters barriers to  this professional body communication? POTENTIAL IMPLICATIONS • Cross‐agency concierges to usher  • Well‐lit, furnished reception area  • Individual workspaces  • Can barrier‐free communications with arm‐ visitors to the right queues and provide  to communicate a sense of pride  for visitors? chair layouts improve customer service  guidance on logical sequence of forms  among engineers? attitudes? to fill before being attended to? • Open layout to convey sense of  • How can we transform the mindset of staff  • Encourage online self‐service tools? engagement? to see themselves as advisors or hosts? eden strategy institute | 24
    • Insights should then be mashed with Big Data Analytics to create fresh value propositions Market  Inputs from  Analytics to  creation with  multiple  generate  demand &  Sustaining  datasets insight supply  change matchingDESCRIPTIONIdentify various sources of potentially  Structure datasets to discover meaningful  Resolve a previously unmet need by  Reinforce behavioural change to ensure useful data patterns matching demand with supply stickiness and lasting impactAPPROACHES• Crowdsourced, ground‐up  • Aggregate datasets (e.g. unified IDs,  • Predicting and channelling resources  • Benchmarks intelligence (e.g. locations, moods,  relational databases) (e.g. traffic) • Gamification / incentives sightings, temperature  • Visualise data (e.g. geo‐location, heat maps) • Connecting people  preferences) • Reputational mechanism (e.g. friends, volunteers) • Test hypotheses & uncover insights• Sensor data (e.g. ambient noise,  • Community influence  • Making markets  location, speed, posture) • Simulate scenarios for optimised decision‐ (e.g. social media) making• Stored Big Data (e.g. transactions,  • Feedback loop for Big Data health records)EXAMPLES• Missing pet / child  finder • Multi‐modal transportation systems • Electronic queuing • Accountability systems in sharing resources   (e.g. taxi‐sharing, items)• Recommendations for  tourists / aged • Issue prioritisation for town council  • Volunteer management / climate control management • Weight loss competitions • Blood donations• mHealth to reduce test redundancy &  • Fall prediction systems for the aged • Consumption management  improve quality of care (e.g. benchmark utilities usage against  national average, variable pricing  mechanism) eden strategy institute | 25
    • The automatic and reflective systems need to be considered using both quantitative and qualitative data in order to truly understand the Science of Buying Traditional  retail audit,  in‐depth  interviews, and  brand surveys Frame  consumer  choices with  Behavioral  Neuroscience  Economics Data‐driven  and  Marketing  Ethnography to  Analytics to  understand  confirm  Shopper  Decision  Psychology Dynamics eden strategy institute | 26
    • Eden Strategy Institute. Asia’s leader in Social Innovation Consulting What we do. Eden Strategy Institute approaches the global issues of disease, poverty, illiteracy, and exploitation head‐on, by  formulating strategies, models, processes, products, and designs that help our clients create, realize, and sustain quantum  profit in addressing these issues. We focus exclusively on empowering business strategies with Social Innovations that create  enduring financial impact, such as Emerging Markets Shopper Science, Silver Hair Marketing, identifying Bottom‐of‐Pyramid  segments, creating Ethical Supply Chains, Socially Responsible Investing, Policy Planning and Advocacy, and so on. Our Retail & Consumer Practice. Eden is experienced in Fast‐Moving Consumer Goods, White and Brown durables, Lifestyle  and Luxury products, Travel and Hospitality, Wholesale and Retail Trade, as well as Food and Beverages. Our work in this  sector ranges from training and incentives for Trade Marketing; footfall and shelf space management for Retail Marketing;  store layouts and need states for Shopper Marketing; to decision‐making and Net Promoter Scores for Consumer Marketing. Using a mix of business‐to‐business, consumer, quantitative, qualitative, ethnographic, neuromarketing, and analytics  methodologies, we help our clients identify future trends and micro‐segments, develop product pipelines, manage categories,  build brands, create emotions, gauge advertising effectiveness, devise retail strategies and in‐store programs, and model  pricing analytics, customer loyalty, and store locations. These apply not only to department stores, designer shops, and  supermarkets, but also to airports, hotels, libraries, museums, theatres, and trade shows – everywhere people make  purchase decisions. We advise brand stewards on how to inspire trust and advantage with responsible labeling and reporting, discover new  purchasing drivers such as healthy living or life fulfillment, infuse computational analytics in their strategic marketing  decisions, differentiate their brands with cause marketing, relook at the promise of “mom & pop” channels, and redefine  entire user experiences such as with ecotourism or connoisseurship. Our philosophy. We believe in the power of ideas to positively shape our world, one client at a time. Our focus is unparalleled  in bringing to bear our entire senior management team, as well as the world’s foremost experts, on our clients’ most pressing sustainability issues. In turn, we elect to only collaborate with clients who are seriously committed to creating value together. edenstrategyinstitute.com 27
    • Thank you! Contacts: Calvin Chu Yee Ming, Partner Jessica Louw, Summer Business Analyst Eden Strategy Institute T: +65 9751 5817 E: query@edenstrategyinstitute.com www.edenstrategyinstitute.com eden strategy institute