Vulnerability. Parity. Leadership. Using Shopper Perceptions to Drive Brand Decisions In the world of retail, what matters more – perception or reality? For Watt International, the answer is clear: perception trumps reality. And when it comes to defining research parameters and marketing strategies, the most important insights you can get are found in an understanding of what’s truly important to your (potential) customers, and where your brand stands relative to these factors. After that, it’s all a question of execution, measurement and refining. In this presentation, Patrick will present: a. A ground-breaking case study outlining how a retailer is using shopper perceptions and insights to identify what matters to customers, where it’s winning, and where it’s losing; b. A look at the path to purchase for a non-traditional retail environment, and what every CPG and retailer can learn from it; and c. What role social media plays in the path to purchase.

1. Vulnerability. Parity. Leadership.
Using Shopper Perceptions to Drive Brand Decisions
IIR Shopper Insights in Action
Wednesday, July 13, 2011
research strategy creative

2. What Perception are YOU creating?
“Do NOT touch merchandise on display”
“Do NOT bother the staff”
“Ask for assistance ONLY IF you are
goingto make a purchase”
“Do NOT thank the staff for a free look”
“Do NOT complain about the hours of
operation or make personal enquiries”

3. Watt International | Overview
Line of Business:
Integrated Retail Agency
In business since 1966
We help brands find ways to sell
MORE things, to
MORE people,
MORE often.

4. The Integrated Retail Agency

6. The US economy will experience a
double-dip recession
1. Strongly agree
2. Agree
3. Disagree
4. Strongly disagree
5. We’re already in one.

7. What’s the Perception? What’s the Reality?

8. Measuring Shopper Perceptions:
Brand Loyalty Switch Factors

9. Brand Loyalty Switch Factors
$ Price
Convenience
Quality
Selection
Pleasure
Social Conscience
Features

10. Brand Perception Index: How it works
The Seven Brand Perception dimensions are classified in three ways:
• Vulnerable – poor retention; low conversion possibility
• Leadership – strong retention; high conversion possibility
• Parity – does not materially impact retention or conversion
A comparative index score, where Core Shopper data reflects “retention”,
and Non-core shopper data reflects “conversion”.

11. Which gets higher priority in your business:
1. Retaining /growing your existing consumer base
2. Attracting/converting new consumers
3. A balance of both
4. We don’t distinguish our priorities in that way

12. Brand Perception Index
$ Price Index
Convenience Index
Specific to your market/category, do you know:
Quality Index 1. How your Core shoppers (and Non-Core
shoppers) rank the importance of each Factor
in your category?
Selection Index
2. How your brand stacks up against each
Factor vs. the competition?
Pleasure Index
Social Conscience Index
Features Index

13. Retention indices (Core shoppers) Dallas, Texas
- Vulnerable Parity Leadership +
Price
Quality
Convenience
Pleasure
Selection
Social
Conscience
Features

14. The brands/products we buy The places we buy them
Who’s calling
the shots now?

16. Generation M:
• Born after 1990: The coming consumer generation
• Don’t know life without the internet
• Short attention spans
• Don’t trust advertising – look to their social network
• Mobile technology is a commodity
• Sensitive to our environment
• Developing their consumer DNA during the global
recession.

17. Compared to Gen X and Y, Generation M –
the coming consumer generation – will be;
1. More brand loyal
2. Less brand loyal
3. Demonstrate about the same brand
loyalty

18. The next generation of shoppers will be
more informed, less brand loyal and will rely
on their social networks to make informed
buying decisions.
Flexibility and adaptability will be key.
Is your brand ready?

19. Traditional, innovative ways to change the Path to Purchase
Tesco’s “Buy one get
one free” has turned
into: “Buy one, get
one free… later”

20. Social media and mobile connectivity have
changed the Path to Purchase and
dramatically increased the importance of
understanding the “Perception” of your brand

21. The Value of a Brand
Reality
Positive Brand Value =
Perception

22. Engaging shoppers in the brand using social media
Shopkick - a smartphone application that registers
shoppers as they walk through the door, earning them
points and prizes toward the purchase of store items.

23. Virtual supermarket – an
opportunity to tap into
shopper’s down-time
10,000 new shoppers and
raised online sales by 130
percent.

24. To download a copy of our Digital
Marketing 2011 report (and other
free reports), see the back of the
handout

25. Service Perception
Question: Does your company deliver a ‘superior experience’ to its customers?
Company Executives = 80%
Customers = 8%

26. Service Perception
Question: Does your company deliver a ‘superior experience’ to its customers?
Company Executives = 80%
Customers = 8%
LOTS of ways to demonstrate “service”

27. Quality Perception
What a simple, great way
to allow shoppers to
experience the primary
benefit

28. Out of stock perception:
What does “Out of Stock” mean to the shopper?
71(or 29% below the industry average)
131(or 31% above industry average)
*Total weighted index of OOS occasions and frequency of OOS products
If the shopper is willing to swap brands, then is the retailer perceived as “out of stock”?
As a CPG, do YOU know if a shopper is willing to “swap you out” if you’re not on the shelf?

29. $ Price Index
Key influencers of store choice – total shoppers

30. Rewarding your loyal customers is becoming price of entry

31. Rewarding your loyal customers is becoming price of entry
Is there room for more CPG Loyalty Programs?

32. In-store couponing can help
manage price perception

33. Price Perception
Most retailers measure
their actual
competitive pricing,
but how about
measuring the
perception?

34. Brand Perception
Measuring the Seven
Dimensions that influence
where people shop

35. According to Walmart shoppers, how much do they
save by shopping at Walmart for groceries vs. Publix?
1. 5%
2. 10%
3. 20%
4. More than 25%

36. Price Perception: National Brands
Wal-Mart Publix Winn Dixie Food Lion
Main store Shopped
Wal-Mart - +31%
31 +23% +18%
Publix -5%
5% - +6% +2%
Winn Dixie -3% +17% - +3%
Food Lion -6% +14% +10% -

37. According to Target shoppers, how much do they
save by shopping at Target for groceries vs. Kroger?
1. 5%
2. 10%
3. 20%
4. More than 25%

38. Price Perception: National Brands
Kroger Target Tom Thumb HEB
Main store Shopped
Kroger - +11%
1 +18% +20%
Target +11%
1 - +21% +25%
Tom Thumb -1% 0% - +17%
HEB +6% +7% +8% -

39. Competitive Differential:
Provides a indication of how close your brand loyalists are to switching, and vice versa,
based on Brand Loyalty Switch Factors
$

40. What is the average “perceived” price advantage
required to make shoppers shift loyalty from their
current grocery store?
1. 5%
2. 10%
3. 20%
4. More than 25%

41. Average discount range affecting switching behavior = 25%
100%
9
14 14
17
90%
9 27
27 4
80%
10 15
70%
11
35
60% 42
40
50% 41
40
40%
30% 32
28
20% 25
27
18
10%
15
12
8
4 3
0%
OTAL
TOTAL WAL-MART PUBLIX WINN DIXIE FOOD LION
Discount over 40% Discount between 30% and 39% Discount between 20% and 29% Discount between 10% and 19% Discount less than 10%

42. Performance index: Social Conscience
Wal-Mart Publix Winn Dixie Food Lion
Core Non-Core Core Non-Core Core Non-Core Core Non-Core
Social Conscience
Index
Natural
Locally-sourced
Organic
Environmentally sensitive
Local community engagement
Charitable causes
Walmart doesn’t get enough credit for its social conscience

43. Performance index: Pleasure
Kroger Target Tom Thumb Central Market H-E-B
Core Non-Core Core Non-Core Core Non-Core Core Non-Core
Pleasure Index 96 72 90 91 94 91 121 146
cleanliness 100 79 96 112 101 94 104 115
1
tidiness 99 77 92 114 109 93 100 116
1
An enjoyable place to shop 97 69 101 116 97 84 104 131
3
Staffattitude 101 76 84 84 109 102 106 138
3
Staff knowledge 102 65 74 71 97 97 127 167
6
In-store sampling 79 55 90 55 54 74 177 215
1
Inspiring 82 71 89 54 58 75 171 199
9
Educational 87 69 84 47 69 89 160 195
9
Central Market HEB is off the chart for “pleasure”…even more so for Non-core shoppers!

44. And finally…
Which of the following retailers scored higher
from Non-Core shoppers than Core shoppers on
ALL Brand Perception indices?
1. Publix
2. Target
3. Kroger
4. Walmart

45. Brand Performance Index: Summary
Kroger Target Tom Thumb Central Market H-E-B
Core Non-Core Core Non-Core Core Non-Core Core Non-Core
Price 127 126 93 108 100 97 80 68
Quality 102 79 78 68 95 97 126 156
Convenience 111 102 94 112 103 98 92 88
Pleasure 96 72 90 91 94 91 121 146
Selection 102 92 96 100 102 96 100 112
Social
Conscience 93 68 87 82 79 86 141 164
Features 120 105 93 102 100 101 87 93
There is a disconnect between the message outside the store and the experience within it

47. Vulnerability. Parity. Leadership.
Using Shopper Perceptions to Drive Brand Decisions
Thanks for listening!
Questions?
research strategy creative