The Missing Link


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The Missing Link

  1. 1. 18 The missing link:<br />turning shopper<br />insight into<br />practice<br />Toon van Galen<br />A leading expert and pioneer in shopper research, Toon van Galen is the<br />founder of Ratera & van Galen Sdn Bhd together with his wife, Montse<br />Ratera. The company operates from their headquarters in Kuala Lumpur,<br />and helps their international FMCG and retail clients overcome barriers at<br />point of sale across South-East Asia, China and the Middle East.<br />Fewer decisions are taken in-store than<br />previously thought<br />People are talking about how important it is to reach out to shoppers.<br />Some say: ’70 per cent of all decisions are made in store’ (Point-of-<br />Purchase Advertising Institute and Meyers Research Center, 1995) or<br />’68 per cent of all products are bought on impulse’ (POPAI). People<br />say brand loyalty has disappeared: ’68 per cent of all shoppers are<br />brand switchers’ (Nielsen Media Research, 2006). And apparently the<br />conclusion has to be that the store has become the ‘moment of truth’.<br />A massive shift of budgets towards store-related advertising is in full<br />swing. People make it look as if we could wield near total control over<br />shoppers’ brand decisions at store level.<br />According to Deloitte Development (2007), ’70 per cent of all decisions<br />are made on the shop floor, and 68 per cent of products are<br />bought on impulse’. We would love this to be true, but it does seem a<br />Shopper_Book.indb 111 16/06/2009 08:54:36<br />112 Strategy: How to Approach Shopper Marketing<br />bit high, doesn’t it? Think about it: 70 per cent of all shoppers have not<br />decided what brand or product they are going to buy. Do you shop like<br />this yourself? Do you know anybody at all who shops like this? We do<br />not. We have interviewed shoppers since 1997 across South-East Asia,<br />China and the Middle East and we consistently found that the majority<br />of shoppers do (italics) plan what products they will buy in advance, as well<br />as which brand they will buy; the only element still to be decided on<br />the shop floor is the pack size or variant of the product they intended<br />to buy. Following a series of randomly selected shopper projects we<br />carried out across the markets, on a sample size of 11,840 shoppers, we<br />found that the actual percentage of shoppers who made an unplanned<br />purchase for any given product was only 20 per cent (Ratera & van<br />Galen database of selected shopper studies, N = 11,840, shoppers<br />interviewed for a range of common dry grocery FMCG goods bought<br />in supermarkets and hypermarkets in the markets mentioned earlier in<br />the chapter).<br />Moreover, the numbers commonly quoted on brand loyalty seem<br />due for revision. We find brand loyalty levels averaging at 83 per cent<br />across FMCG categories (Ratera & van Galen database of selected<br />shopper studies, N = 9,794, same markets as mentioned before,<br />average of all measured categories), but of course this still leaves 17<br />per cent as opportunity.<br />The effect of in-store impulses is lower than many people like to<br />believe. Another bit of news that might temper some of the initial<br />enthusiasm is the outcome of effect measurements of in-store media.<br />Let us say that shoppers buy, on average, around 25 items in a grocery<br />trip and manage to do this in 67 minutes (Ratera & van Galen database<br />of selected shopper studies, N = 401, hypermarket and supermarket<br />shoppers, grocery items, location Malaysia, 2008). The time needed<br />for the physical exercise involved in getting the trolley, walking the distance<br />needed and putting items in the trolley leaves around 15 minutes<br />for the proper decision process and information intake about these<br />25 purchased decisions, since we know the average active browsing<br />time per product is 35 seconds (hypermarkets and supermarkets). I<br />imagine you are calculating as follows: assuming shoppers are most<br />interested in information for a certain product category at the immediate<br />moment of their decision in front of the shelf, this would leave<br />very little time for POS impulses to have an impact.<br />Let us get one thing straight. We are total believers in the fact that<br />the shop floor plays an ever more crucial role in the brand decision<br />process. We are firm believers in the fact that shoppers can be influenced<br />on the shop floor. We also believe that the only realistic way<br />to achieve this is via in-store media. Is it bad if you can convince one<br />in every 50 shoppers to buy your brand instead of another (Ratera<br />Shopper_Book.indb 112 16/06/2009 08:54:36<br />The Missing Link: Turning Shopper Insight into Practice 113<br />& van Galen database of selected shopper studies, estimate based on<br />the fact that only 20 per cent decide on the brand in-store, combined<br />with studies that show that 11 per cent of those have correct recall and<br />admit possibly being influenced by this particular POS material)? We<br />don’t think so. Is it bad that only one in three passers-by in an aisle<br />notice a certain prominent shelf banner, and only one in six recall both<br />the right brand and the message? We don’t think so. We just think<br />that we should understand better what is really going on in shoppers’<br />minds and get realistic data about how they are really influenced by<br />impulses we design at the point of purchase.<br />Figure 18.1 Shopper’s shelf impressions<br />Shopper_Book.indb 113 16/06/2009 08:54:36<br />114 Strategy: How to Approach Shopper Marketing<br />Many shoppers find current category presentations in stores confusing<br />and unexciting. In interviews, the average score that shoppers<br />give for category presentation in the store in front of shelves is reasonable<br />with 8 out of 10 (Ratera & van Galen database of selected shopper<br />studies, N = 7,469, sub-sample of surveys quoted before), but also<br />around a third of shoppers find that the layout could be clearer and/<br />or more exciting. This is probably not helped by the fact that shoppers<br />use at least two competing hypermarkets or supermarkets each week<br />for their grocery shopping and that most major retailers across our<br />markets present the same category differently within their stores, even<br />within the same chain.<br />A successful shopper marketing strategy has to be rooted in true<br />shopper insight. If, for the sake of argument, we characterize the<br />shopper as a person who has a very short period of time for a decision,<br />a very limited time span for information intake in-store, and a low<br />recall of any impulses thrown at him or her, there is still an enormous<br />window of opportunity. Shoppers can be influenced at the point of<br />purchase even though, at this point in time, the success rate of our<br />efforts might be lower than we hope. Many shoppers also have unsatisfied<br />information needs about products and the suitability of products<br />for their needs. They are interested to learn selected relevant facts<br />about products to help their decision making. So how could we use<br />this insight? We could use a better insight into the shopping and decision<br />process to make product grouping and shelf layout easier for<br />consumers to shop and understand. And we could take away hidden<br />barriers to better purchasing by making the layout a facilitator of a<br />higher-spending and more satisfied shopper.<br />Translating advertising messages used outside the store directly<br />into POS material for in-store use might not lead to the right impact,<br />since they do not address the specific barriers that exist at shelf level.<br />Shopper_Book.indb 114 16/06/2009 08:54:36<br />The Missing Link: Turning Shopper Insight into Practice 115<br />Some implementation examples of<br />these findings<br />Cooking oil case: create a clear upgrade<br />path for cooking oil shoppers<br />In this study (which we presented at the Esomar world retail<br />conference in Valencia in 2007), we found that shoppers typically<br />bought only one type of cooking oil, and that the main<br />barrier that prevented spending more on a second speciality<br />oil like olive oil was lack of insight into the benefits of using different<br />oil types for different cooking purposes. A regrouping of<br />the category, along with changing the order of presentation of<br />the higher-margin speciality oils to first in the flow, and adding<br />basic explanations at shelf level about the usage, led to a sales<br />increase of 22 per cent (and won the category management<br />project of the year award of one of the biggest Asian retailers,<br />Dairy Farm International, Giant Hypermarket, Malaysia).<br />Hair care (shampoo and conditioner) case:<br />take away existing barriers in the category<br />presentation<br />This category is dominated by some of the most professional<br />marketing companies in the world, yet traditional shopper marketing<br />approaches still prevailed in stores during one of our<br />studies. This had led to a traditional brand blocking presentation<br />in shelves, combined with random brand advertising signage<br />on top of the header boards directly above the category, but<br />not matched by actual products directly underneath the boards.<br />All major retail chains used different layouts for this category.<br />A thorough study of the behaviour in-store by shampoo shoppers,<br />which also delved into perceptions and barriers by means<br />of combining five or so different methodologies (such as traffic<br />flow tracking and video analysis combined with browsing observations<br />and interviews at the aisle but also in-depth focus group<br />discussions), made clear that most hair care shoppers are<br />unhappy with their current choice of shampoo and conditioner.<br />Shopper_Book.indb 115 16/06/2009 08:54:36<br />116 Strategy: How to Approach Shopper Marketing<br />The search for the right message at<br />POP sometimes involves breaking the<br />existing category rules<br />The actual finding of solutions on product layout and grouping, based<br />on how shoppers shop the category, combined with the right message<br />at POP, is an art only a few people understand. Whilst it is fairly easy<br />to come up with a more logical grouping for some categories (think<br />of pet food: people prefer a split into dog, cat, fish, and then divided<br />into dry, wet, treats), for most categories the decision tree is not the<br />right lead to follow when designing the merchandising hierarchy on<br />the shelf. If shoppers buy mainly cheap cooking oil based on price<br />comparisons, the common mistake could be to conclude: ‘Let’s group<br />it by price and put the lower-price ones first in the flow, since that<br />is what they currently buy.’ We may then find that the only reason<br />they buy like this is because they are not sure about the usage of the<br />slightly more expensive alternative oil types. That means there is an<br />opportunity to educate them on-shelf about use of different oil types<br />and thus break the old rules of the shopping process. If shoppers are<br />At the same time they are hesitant to switch brands because<br />of insecurity about the suitability of products for their hair type<br />and lack of clarity about which conditioners fit with which shampoos.<br />For some shoppers the ideal shampoo presentation was<br />a grouping of products by hair type, such as all products for<br />long black hair or dry hair grouped together. Testing showed,<br />however, that this was not acceptable for all types of shoppers,<br />mainly because they did not know exactly what hair type they<br />have. The implemented shopper marketing strategy made some<br />simple improvements in product grouping, putting conditioners<br />not on the top shelf or even in a separate section but directly<br />next to their respective mother variants, and this alone led to a<br />quick increase in sales. The ultimate desire for shoppers was for<br />a quick and efficient verification of their hair type and for related<br />tips about which product combinations would have the desired<br />effect. Some of these findings were later introduced in another<br />market via use of hair testing equipment and subsequent advice<br />on shampoo type and brand, on and near the shelf, with promising<br />results.<br />Shopper_Book.indb 116 16/06/2009 08:54:36<br />The Missing Link: Turning Shopper Insight into Practice 117<br />brand loyal to shampoo only because they are risk averse, but actually<br />keen to change, there is clearly an opportunity to seduce them into a<br />better alternative by breaking with the current way they purchase the<br />category.<br />Obviously we need to look for alternatives that find a balance<br />between shopper needs and relevance in terms of higher category<br />spending and retailers’ and manufacturers’ profits. This breaking of<br />the old shopping behaviour rules requires an experienced eye combined<br />with more complex research designs, mostly a combination of<br />various in-store methods together with qualitative techniques and<br />shopper segmentation tools and correlation analyses across various<br />in-store factors.<br />The road to successful implementations<br />Even if trade marketing or sales departments find the budget, and<br />the marketing department can overcome the ‘not invented here’<br />syndrome and come up with the additional budget and support for<br />properly designed in-store materials, the ensuing sell-in of the project<br />findings to major retailers sometimes leads to demands for cash rather<br />than gratitude for offering profit-generating category solutions.<br />Luckily there are more and also different parties coming on to<br />the shopper marketing scene – advertising agencies, for example,<br />are starting to see that this part of the budget is not coming back and<br />that communication at store level requires new skills. This influx of<br />brainpower from different angles could lead to a much needed fusion<br />between the knowledge and insight part, on one hand, and the creative<br />design and communication part, on the other hand.<br />We are no doubt heading for even more interesting times. Let us<br />enjoy them.<br />References<br />Deloitte Development (2007) Shopper Marketing: Capturing a shopper’s<br />heart, mind and wallet, Deloitte Development, New York<br />Nielsen Media Research (2006) In store ads sway consumers, Adweek,<br />29 August [Online]<br />nielsen_instore_ads_sway_68/<br />Point-of-Purchase Advertising Institute and Meyers Research Center<br />(1995) Consumer Buying Habits Study, Point-of-Purchase Advertising<br />Institute and Meyers Research Center, Englewood, NJ<br />Shopper_Book.indb 117 16/06/2009 08:54:36<br />