LEGO Online Shopping Insights Gillian Hu © All work, writings, ideas, designs, methods recorded in this document are the p...
Research Plan At-A-Glance   by  Gillian Hu <ul><li>Strategic Recommendations : </li></ul><ul><li>LEGO Research Panel :  Ob...
Research Methodology  by Gillian Hu <ul><li>Objective :  Develop an online strategy to grow LEGO’s sales in D2C business a...
Research Methodology  (continued)   by Gillian Hu <ul><ul><li>Research Audience:   </li></ul></ul><ul><li>Quantitative Sur...
Research Executions  by  Gillian Hu Stage Execution consideration  In-Person  Focus Groups <ul><li>This step can be skippe...
Research Executions  by  Gillian Hu Stage Execution consideration  Quantitative Research <ul><li>Recruit from both LEGO da...
Key Research Questions  by  Gillian Hu Stage Key Consideration  Questions to be answered Evaluation of sales data and indu...
Execution Milestones   by  Gillian Hu Activities Time Line Milestone  Success Criteria Review Sales data, Industry Reports...
Execution Milestones  (Continued)   by  Gillian Hu Activities Time Line Milestone  Success Criteria Online Survey Wks 8 – ...
Strategic Approach  by Gillian Hu <ul><li>The following strategic recommendation s could be considered for 2010 to yield h...
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Shopping Insights Case Study

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Shopping Insights Case Study

  1. 1. LEGO Online Shopping Insights Gillian Hu © All work, writings, ideas, designs, methods recorded in this document are the proprietary intellectual property of the author.  They are conceived, created, developed, and written for the sole purpose of satisfying the requirement of employment application of Consumer Insights position at LEGO System Inc. US.  Reproduction and distribution of this work should be approved by the author in advance. This plan is written for both US and Germany. The assumption is that research in both countries will be executed in parallel. All slides apply to both countries unless indicated otherwise.
  2. 2. Research Plan At-A-Glance by Gillian Hu <ul><li>Strategic Recommendations : </li></ul><ul><li>LEGO Research Panel : Obtain consumer insights at a fraction of cost frequently from customer base which </li></ul><ul><li>Increases loyalty and build valuable customer database over time. </li></ul><ul><li>Loyalty Program : Reward loyal customers with intangible LEGO experience or products they love. Identify </li></ul><ul><li>LEGO enthusiasts and empower them to become advocates of ever-growing LEGO community worldwide. </li></ul>Approach Description Key Factors in Design Key Questions to be answered Review sales data and industry trend (2 wks) <ul><li>Review yr-on-yr e-channel sales growth by types of key accounts (Amazon vs. others) </li></ul><ul><li>Obtain relevant industry trends </li></ul><ul><li>LEGO sales growth rate by channel by key accounts </li></ul><ul><li>Projected growth of online research / purchase for toys </li></ul><ul><ul><li>How does Amazon.com sales stack up w/ e-sales of others? </li></ul></ul><ul><ul><li>What is the e-channel strategy of major discounters? </li></ul></ul>Qualitative (8 weeks – overlap by 1 wk w/ review) <ul><li>In-person focus groups: 1 children and one adult group </li></ul><ul><li>5 groups bulletin boards: 2 children groups, 3 adult groups </li></ul><ul><li>Decision-maker </li></ul><ul><li>Single channel or mixed channels </li></ul><ul><li>Gender </li></ul><ul><ul><li>Who actually buys? </li></ul></ul><ul><ul><li>Merchant preference? </li></ul></ul><ul><ul><li>Channel choice for research? </li></ul></ul><ul><ul><li>Channel choice for purchase? </li></ul></ul>Quantitative (10 weeks - overlap w/ Qualitative for 2 weeks) <ul><li>Children survey: </li></ul><ul><li>-Online research, </li></ul><ul><li>-Purchase decision </li></ul><ul><li>-LEGO sets in HH </li></ul><ul><li>Adult survey: </li></ul><ul><li>-Research and purchase channel(s), </li></ul><ul><li>-Purchase decision </li></ul><ul><li>-LEGO sets in HH, </li></ul><ul><li>-Recipient of purchase </li></ul><ul><li>Do LEGO database sample and research panel sample differ in key characteristics that affect the channel choice of LEGO research and purchase? </li></ul><ul><li>Append 3 rd -party data to LEGO customers – compare to commercial panel customers. </li></ul><ul><ul><li>Merchant preference? </li></ul></ul><ul><ul><li>Why mixed channels for research and purchase? </li></ul></ul><ul><ul><li>When / how purchase decision was made? </li></ul></ul>
  3. 3. Research Methodology by Gillian Hu <ul><li>Objective : Develop an online strategy to grow LEGO’s sales in D2C business and across all channels of distribution </li></ul><ul><li>Methodology: </li></ul><ul><li>Evaluate in-house sales data and industry information to define research framework </li></ul><ul><li>Use qualitative research to explore hypotheses and determine scope of quantitative research </li></ul><ul><li>Conduct online survey to quantify: </li></ul><ul><ul><li>Channel behavior and purchase process by audience groups </li></ul></ul><ul><ul><li>Respondents’ level of LEGO ownership (Heavy, Medium and Light) </li></ul></ul><ul><ul><li>LEGO purchase volume by channel and Merchant type (e.g., LEGO, Amazon, TRU+Walmart+Target) </li></ul></ul><ul><ul><li>Key drivers of channel choice for research / browsing and purchase </li></ul></ul><ul><ul><li>Research Audience: </li></ul></ul><ul><li>Qualitative Research: </li></ul><ul><ul><li>Conduct two focus groups in Northeast: </li></ul></ul><ul><ul><ul><li>Teens and tweens that conduct online research and/or purchase LEGO (get at least 1-2 girls) </li></ul></ul></ul><ul><ul><ul><li>LEGO purchase decision makers (Adults 18+): ½ online Only, ½ Mixed channels. </li></ul></ul></ul><ul><ul><li>Conduct online Focus Groups OR Bulletin Board </li></ul></ul><ul><ul><ul><li>Teens and tweens that conduct online research for LEGO (Girl quota TBD from focus group) </li></ul></ul></ul><ul><ul><ul><li>Teens and tweens purchase decision makers (Their parents usually buy what they request) </li></ul></ul></ul><ul><ul><ul><li>Single-channel LEGO purchase decision makers (18+): Research and buy Online ONLY </li></ul></ul></ul><ul><ul><ul><li>Mixed-channel LEGO purchase decision makers (18+): Research or buy on either channel </li></ul></ul></ul><ul><ul><ul><li>LEGO purchasers that do not necessarily make the purchase decision (18+): ½ Single Channel, </li></ul></ul></ul><ul><ul><ul><li>½ Mixed channels. </li></ul></ul></ul>
  4. 4. Research Methodology (continued) by Gillian Hu <ul><ul><li>Research Audience: </li></ul></ul><ul><li>Quantitative Survey(s): If qualitative research indicates that the majority of teens and tweens are buying LEGO sets themselves, one survey could be administered to both children and adults. Below is the scenario of conducting two separate surveys. </li></ul><ul><ul><li>Children Survey: Considering the limited purchase power of children below 18+, this survey will focus on online research and purchase decision of LEGO. Quantify children’s LEGO online research, and how their research could differ by the decision-maker of LEGO purchase: </li></ul></ul><ul><ul><ul><li>Group 1: Their parents almost always buy the LEGO sets they want </li></ul></ul></ul><ul><ul><ul><li>Group 2: Their parents make the final purchase decision </li></ul></ul></ul><ul><ul><li>Adult (18+) Survey: All respondents should be purchase decision makers. Several behavior-based groups will be defined in addition to level of household LEGO ownership (Heavy, Medium, Light). </li></ul></ul><ul><ul><ul><li>If focus groups indicated that most people research before purchase: </li></ul></ul></ul><ul><ul><ul><li>Research and purchase for Self : Online Only </li></ul></ul></ul><ul><ul><ul><li>Research and purchase for Self: Use mixed channels </li></ul></ul></ul><ul><ul><ul><li>Research and purchase for Self or others (children or gifts): Online Only </li></ul></ul></ul><ul><ul><ul><li>Research and purchase for Self or others (children or gifts): Use mixed channels </li></ul></ul></ul><ul><ul><ul><li>If focus groups indicated that research doesn’t necessarily took place before purchase: </li></ul></ul></ul><ul><ul><ul><li>Purchase w/o research for Self: Online Only </li></ul></ul></ul><ul><ul><ul><li>Purchase w/o research for Self: Use mixed channels (buy online or in stores) </li></ul></ul></ul><ul><ul><ul><li>Purchase w/o research for Self or others: Online Internet Only </li></ul></ul></ul><ul><ul><ul><li>Purchase w/o research for Self or others: Use mixed channels (buy online or in stores) </li></ul></ul></ul><ul><li>Note: Ensure sufficient completes in each of these groups for ad-hoc analysis. </li></ul>
  5. 5. Research Executions by Gillian Hu Stage Execution consideration In-Person Focus Groups <ul><li>This step can be skipped if all stakeholders feel comfortable with online focus groups or bulletin board. If used, the research findings can be compared to online Focus groups or Bulletin Board. </li></ul><ul><li>Select participants from LEGO database and from focus group facility database. Find out if consumers from these two sources are different in their research/shopping behaviors or key characteristics that may affect LEGO research / purchase. </li></ul><ul><li>Determine gender distribution in focus groups using LEGO database information (or LEGO institutional learning). </li></ul><ul><li>Understand if most consumers research and buy at multiple types of merchant or if they use a preferred type of merchant. This can help determine if “merchant type” needs to be incorporated into the design of online focus groups. </li></ul>Online Focus Groups or Bulletin Board <ul><li>Since this is an online shopping research, conducting research in the same medium means respondents will be “in their element”. It is also more likely to obtain a national sample. </li></ul><ul><li>Since Teen and Tweens will be the research audience and most of them are well-versed in online medium, this could be more convenient than requiring them to attend in person. </li></ul><ul><li>Using bulletin board, participants can log in a few times a day for 3-4 days without sitting through a 2-hr session. The moderator can modify or develop questions based on respondents’ input and interchange among participants. </li></ul><ul><li>All respondents will be participating at the same time in online focus groups on the web instead of going to a facility. This cuts down travel costs and speed up completion time. </li></ul><ul><li>Again, use LEGO database as one of the recruiting sources for this research. </li></ul><ul><li>Implementing traditional focus groups is also fine if budget allows. Video streaming allows clients to view focus groups LIVE and cut down travel costs. </li></ul><ul><li>As outlined on p.3, five groups will be conducted. It becomes expensive to do all these groups in 2 or 3 geographic regions. </li></ul>
  6. 6. Research Executions by Gillian Hu Stage Execution consideration Quantitative Research <ul><li>Recruit from both LEGO database and from a research panel (e.g., NPD). All commercial panels collect demographics and psychographics, these information can help put a “face” on LEGO customers. </li></ul><ul><li>Since LEGO database does not contain demographics or psychographics, consider append 3 rd -party data on these survey participants if budget allows. Compare this profile to the research panel profile and note the differences. </li></ul><ul><li>If the cost per complete using the research panel is high, and sample profile of LEGO customers (most 3 rd -party companies like Experian will perform a free test match and append) are similar to that of the research panel, consider recruiting respondents from a larger random sample of the LEGO database and use a smaller proportion of the research panel to reduce cost. </li></ul><ul><li>If qualitative research indicates that most teens and tweens do not actually purchase LEGO sets (limited financial resource, don’t have a credit card for online shopping, needs to be driven to a store to buy by cash), children should receive a different survey dealing w/ research but not purchase. </li></ul><ul><li>The following groups should be defined and used for customer segmentation: </li></ul><ul><li>Level of LEGO ownership: Heavy, Medium, Light </li></ul><ul><li>Research Channel: Internet Only, Other, Both </li></ul><ul><li>Purchase Channel: Internet Only, In-store, Both </li></ul><ul><li>Research and Purchase: Single channel, Mixed channel </li></ul><ul><li>Merchant Preference: Amazon, LEGO, TRU+Target+Walmart, Other </li></ul><ul><li>Purchase decision: Children, parents </li></ul><ul><li>Purchase recipient: Self, others </li></ul>
  7. 7. Key Research Questions by Gillian Hu Stage Key Consideration Questions to be answered Evaluation of sales data and industry trends <ul><li>Amazon .com has a lot more LEGO SKUs, compared to 200-300 in other key account sites </li></ul><ul><li>How does Amazon’s sales and profile differ? </li></ul><ul><li>How do LEGO sales correlate w/ themes? </li></ul><ul><ul><li>How do sales trends differ by type of merchant (e.g., LEGO vs. Amazon vs. Walmart/Target /TRU)? </li></ul></ul><ul><ul><li>Do households affiliated with LEGO Clubs or receiving LEGO magazines purchase more LEGO? </li></ul></ul>Qualitative Research <ul><li>Do teens actually buy LEGO sets themselves? </li></ul><ul><li>When online research was not done prior to purchase, do consumers use other sources (e.g., WOM, newspapers, inserts)? </li></ul><ul><li>How does “pre-purchase” to “purchase” conversion occur? How much does it depend on who is the decision maker? </li></ul><ul><li>How do girls and boys differ in LEGO online research and purchase? </li></ul><ul><li>Do girls tend to buy “Pink” or “Belville”? </li></ul><ul><li>Do children and adults spend similar amount of time research LEGO online? </li></ul><ul><ul><li>Do consumers use one site for research and buy on another site? Why? Better SEO? </li></ul></ul><ul><ul><li>Do adults research LEGO online equally for themselves than for their children? </li></ul></ul><ul><li>How often do parents allow children to make a purchase decision? </li></ul><ul><ul><li>Are LEGO “players” predominantly boys? Does this gender distribution differ for adults? </li></ul></ul>Quantitative Research <ul><li>How does self-reported LEGO set ownership (H/M/L) correlate w/ merchant /site (LEGO.com vs. Amazon) preference or channel choice? </li></ul><ul><li>Does the research behavior differ for adults that buy for themselves vs. those buy for others? </li></ul><ul><li>What % of parents research and buy LEGO both for themselves and for their children? </li></ul><ul><li>Do the parents of Heavy LEGO HHs more likely to buy LEGO for themselves (being enthusiasts)? </li></ul><ul><li>How do HHs that receive LEGO magazines or have LEGO Club membership differ in merchant preference or channel choice from others? </li></ul><ul><ul><li>What is the % of respondents research and buy using the same channel? </li></ul></ul><ul><ul><li>Why do consumers use one channel for research and another for purchase? </li></ul></ul><ul><ul><li>How often does purchase follow research during the same internet visit? Why not? </li></ul></ul><ul><ul><li>What are the key factor of whether children get to make LEGO purchase decision or not? </li></ul></ul><ul><ul><li>What is the proportion of children buy LEGO with their own allowances? </li></ul></ul><ul><ul><li>What is the proportion of consumers buy LEGO without conducting research first? </li></ul></ul>
  8. 8. Execution Milestones by Gillian Hu Activities Time Line Milestone Success Criteria Review Sales data, Industry Reports, and LEGO Shopper Insights Wks 1 – 2 <ul><li>Internal review of sales and other key info. </li></ul><ul><li>Socialize preliminary research brief with key stakeholders and make revisions based on their input </li></ul><ul><li>Complete qualitative research RFP </li></ul><ul><li>Open bid to qualitative suppliers </li></ul><ul><li>Allocate budget and coordinate resource </li></ul><ul><li>Share research plan w/ German team. </li></ul><ul><ul><li>Understand and incorporate stakeholders’ business objective into scope and design of research </li></ul></ul><ul><ul><li>Get internal stakeholders’ buy-in of research brief </li></ul></ul>In-person Focus Groups Wks 2 – 6 <ul><li>Select In-person focus group supplier </li></ul><ul><li>Approve screener and begin recruiting </li></ul><ul><li>Approve discussion guide and conduct focus groups </li></ul><ul><li>Summarize insights, share them w/ stakeholders (including German research counterpart, and extract key learning as input for online focus groups </li></ul><ul><ul><li>Project was completed on time and within budget </li></ul></ul><ul><ul><li>Logistics and execution were smooth </li></ul></ul><ul><ul><li>Obtain positive feedback from stakeholders </li></ul></ul><ul><ul><li>Meaningful and actionable insights were gleaned from research </li></ul></ul><ul><ul><li>Answered key research questions </li></ul></ul>Online Focus Groups OR Bulletin Board Wks 5 – 9 <ul><li>Complete RFP and bid out to suppliers </li></ul><ul><li>Finalize RFP based on In-person focus group insights and select supplier </li></ul><ul><li>Approve screener and begin recruiting </li></ul><ul><li>Approve discussion guide and conduct focus groups OR interviews </li></ul><ul><li>Summarize insights, share w/ stakeholders (including German team), and extract key learning as input for online survey design </li></ul><ul><ul><li>Project was completed on time and within budget </li></ul></ul><ul><ul><li>Logistics and execution were smooth </li></ul></ul><ul><ul><li>Obtain positive feedback from stakeholders </li></ul></ul><ul><ul><li>Meaningful and actionable insights were gleaned from research </li></ul></ul><ul><ul><li>Answered key research questions </li></ul></ul>
  9. 9. Execution Milestones (Continued) by Gillian Hu Activities Time Line Milestone Success Criteria Online Survey Wks 8 – 13 <ul><li>Conduct a mid-term internal stakeholder meeting to re-align research with corporate agenda, objective and budget </li></ul><ul><li>Complete RFP and bid out to suppliers </li></ul><ul><li>Finalize RFP based on online focus group insights and select supplier </li></ul><ul><li>Approve questionnaire </li></ul><ul><li>Test questionnaire (encourage stakeholders to test survey) and field survey </li></ul><ul><li>Share progress w/ German counterpart </li></ul><ul><li>Monitor survey progress and results </li></ul><ul><ul><li>Stakeholders are on board with research progress </li></ul></ul><ul><ul><li>Project was completed on time and within budget </li></ul></ul><ul><ul><li>Logistics and execution were smooth </li></ul></ul><ul><ul><li>Obtain positive feedback from stakeholders </li></ul></ul><ul><ul><li>Meaningful and actionable insights were gleaned from research </li></ul></ul><ul><ul><li>Answered key research questions </li></ul></ul>Synthesize findings and recommend online strategy Wks 14 – 17 <ul><li>Begin internal review of tabs and analyze raw data files </li></ul><ul><li>Review report delivered by suppliers </li></ul><ul><li>Socialize preliminary results w/ stakeholders </li></ul><ul><li>Summarize insights and compose a presentation for stakeholders </li></ul><ul><li>Present actionable recommendations and discuss implementation plan w/ stakeholders </li></ul><ul><ul><li>Additional insights were provided by ad-hoc analysis, if not completely answered by research </li></ul></ul><ul><ul><li>Stakeholders were satisfied by the insights provided by research </li></ul></ul><ul><ul><li>Recommendations were actionable and well-received by stakeholders </li></ul></ul><ul><ul><li>German research is successful </li></ul></ul>Implement strategy Wks 18 and onward <ul><li>Offer help with implementation of strategy </li></ul><ul><li>Provide ongoing support of additional insights </li></ul><ul><li>Conduct regular meetings to update stakeholders of progress in implementation </li></ul><ul><li>Obtain results of implementation to perform a closed-loop measurement of the effectiveness of research </li></ul><ul><ul><li>Research results are measurable by implementation results </li></ul></ul><ul><ul><li>Implementation of research results showed incremental sales </li></ul></ul>
  10. 10. Strategic Approach by Gillian Hu <ul><li>The following strategic recommendation s could be considered for 2010 to yield higher ROI in obtaining consumer insights on a regular basis. </li></ul><ul><li>Research Panel: </li></ul><ul><li>Similar to the customers at the highest pyramid that co-create with LEGO , establish a LEGO research panel by inviting customers in the database to opt in. </li></ul><ul><li>Panel members will be invited to provide insights into concept testing, “Shop at Home” experience, online catalog, 3 rd -party retailer experience (online or in store), pricing or any other topic. </li></ul><ul><li>Panelists could earn “credits” for their participation and exchange for LEGO products once they accumulate a certain level of “credits”. Or, they could win prize by entering into a drawing each time. </li></ul><ul><li>Demographics, psychographics and lifestyle information could be collected by LEGO to build a rich customer database, in addition to LEGO purchase history. </li></ul><ul><li>The panel is economical as compared to buying samples for each research, it also allows LEGO to continue gathering online insights at a fraction of costs and stay in touch with the pulse customers. </li></ul><ul><li>Loyalty Program: </li></ul><ul><li>The most effective way to grow LEGO D2C sales is securing repeat purchases on LEGO, and shift buyers from other merchants to buying from LEGO. </li></ul><ul><li>LEGO is a brand with loyal followers of all age groups. These “enthusiasts” not only could be repeat buyers, they also should be cultivated to become LEGO’s advocates. Current LEGO customers should be inaugurated into Platinum, Gold, Silver levels of the LEGO Loyalty Program based on the LEGO sets they own now. This is the best way to show appreciation for loyal customers. Customers at higher levels have access to “privileges” – intangible or tangible. </li></ul><ul><li>Building on the program, “credits” or “points” will be recorded when a LEGO purchase is made, or when a loyalty program member help to acquire / convert a new LEGO customer. </li></ul><ul><li>LEGO masters that host building forums or other activities that grow the LEGO community should be given “credits”. These are ways to show LEGO’s appreciation for their loyalty and support. </li></ul>

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