On the path to understanding

Editor’s note: Roxanne Salen is project manager at The Praxi Group Inc., a Kittredge, Colo., research firm. Susan Stickling is vice president at The Praxi Group.

For the past several years, the market research industry has been abuzz with two words that have changed the way researchers and manufacturers view their customers: shopper insights (SI).

Shopper insights has moved quickly across the CPG and retailing landscapes in the past decade as marketers seek to understand the shopper’s entire path to purchase and increase sales. From their home (including how they use and view products; advertising media that sparks their interest in new products; how and when they decide where to purchase the product) to the store (including aisle and shelf navigation; product attribute trade-offs; and so on), shoppers are constantly making purchase-related decisions. Shopper insights seeks to holistically comprehend the shopper’s environment, surroundings and influences to learn from and capitalize on all of the choices they make along the way.

To better understand the role of SI, we spoke with shopper insights practitioners from Clorox, PepsiCo and WhiteWave Foods to glean their thoughts on the origins, present state and future of shopper insights.

Emerged organically

Shopper insights in its current form is a function of the market research department in many companies; yet shopper insights emerged organically from the need sets and relationships between CPG sales forces and retailers. Retailers needing new and actionable insights into their shoppers approached field sales teams and category managers of several different companies with areas of questioning and research opportunities. Some forward-thinking Fortune 500 companies began transforming field functions into a new appendage of market research. “You had a morphing of category management and the merging of market research with that,” says Chad Marston, director of platform and insights, WhiteWave Foods, Broomfield, Colo.

Sales and category management brought their needs to researchers and thus shopper insights found its home in market research. Yet it carved out new niches and methodologies and is proving itself as a valuable tool for creating long-term strategies and enhancing manufacturer relations with retailers. “Moving from category management, [shopper insights] is less analytical regarding sales and thinks more about the shopper and shopper decisions and how we can influence them,” says Stephanie Sandlin, sales strategy and insight manager, WhiteWave Foods.

Blurring the line

While shopper insights has grown into its own specialized genre of research, definitions vary and it often involves blurring the line between viewing the customer in shopper mode versus consumer mode. Below are some definitions and thoughts we collected on the meaning and importance of SI:

“I would say the best definition [of SI] is understanding the how, the why and the why not of shopping emotions and behaviors,” says Neeraj Kalani, director, global consumer insights, PepsiCo, Purchase, N.Y.

“Developing better understanding of the shopper’s path to purchase from at-home, pre-trip behavior to picking the product ... and not stopping there. It’s then about understanding the shopper’s path to re-purchase,” says Ryan Dickman, shopper insights, The Clorox Company, Oakland, Calif.

“What I historically thought my definition [of SI] was has become more muddled simply because the retailer is really just the final battleground ... but it encompasses everything that consumer research and user research works to understand. And when you then add the layers of online shopping and the digital world, well, it’s sort of like, where does the shopper begin and the consumer end? I think it’s a very gray area,” says Renee Hammond, associate global insights manager, The Clorox Company.

“What is interesting about SI is the left-brain right-brain connection. You have a data set, information and usable points of reference meshed with an interpretation, the gray area of saying, ‘How does that info become real and actionable?’ And to me, that’s what SI brought,” says Chad Marston, WhiteWave Foods.

“SI leads insights about shopper behaviors in our categories to influence retailer strategy and execution. This enables actions across the 3Ds: desire [marketing], decide [sales] and delight [innovation],” says Jennifer Nuckles, strategic shopper insights manager, The Clorox Company.

Why the shift?

So why has there been this shift toward looking at the customer in shopper mode versus only as a consumer? Shoppers are now active participants in the decision-making process rather than passive consumers receiving messages. They are more price-conscious and empowered than ever, with multiple resources available to research and read reviews as well as to price-shop both outside and inside the store and make swift judgments in value.

Others say that a person in shopper mode can be quite different from the consumer of the product. Shoppers may have different emotions based on the type of shopping trip and shoppers for the same product can vary dramatically by channel. For these reasons, understanding the shopper and what is motivating him or her is imperative in ultimately driving sales. The idea is that by understanding consumers when they are in active-shopper and active-decision-making mode, the manufacturer and retailer will see increased sales.

Enhance abilities

SI also comes with its own set of applicable methodologies. In the SI realm, qualitative work steps away from seated focus groups and instead leads customers to mock shelves. One-on-one interviews have evolved to anthropological studies in ethnography and now incorporate shop-alongs. Several new technologies have also surfaced to enhance the researchers’ abilities to explore shopper behavior via simulated shopper settings. Virtual shopping allows the shopper to navigate aisles and the shelf space in an online environment and hot-spot technology helps optimize the in-store environment by tracking movement throughout areas of the store. “These more emerging technologies such as hot spots and online virtual shopping are very helpful to retailers because they allow us to reach shoppers without disrupting the daily course of business,” says Nuckles.

Although most would agree that the true in-store setting is the most ideal space to conduct shopper research, these simulated shopping techniques allow for real-time research that can emulate the experience of the consumer in shopper mode. While retailers have at times preferred the research to be done in-person at their store, the trade-offs between price, value and accuracy remain important considerations.

Though virtual technologies do not exactly replicate the shopper’s experience, they can effectively model and predict new shelf arrangement schemes, end-caps and cross-category placement. “[Virtual shopping] is a nice-to-have methodology and should be used as an aid to other foundational research studies,” says Kalani.

These alternative technologies are largely found to be credible, though managers still find themselves vetting the best suppliers from a crowded field. “I embrace innovation on the supplier and manufacturer fronts in developing new tools and methodologies but at the same time, I want to be selective in which ones I choose because I know there are a lot out there,” says Dickman.

Immediately actionable

Most of the companies we spoke with say that shopper insights is well-embraced within their respective organizations and is often the driver of strategic decision-making. However, the results of SI are often expected to be immediately actionable and beneficial - charging SI with a substantial task. Further, there is sometimes a disconnect between consumer and shopper research, as each have their own separate agendas, objectives and end users.

While some CPG companies have or intend to create a role for someone to link the various components of shopper and consumer research, not all have achieved this to the extent desired. “The marriage between shopper and consumer insights has not fully happened yet. For consumer insights folks, shopper is still an afterthought,” says Kalani.

Furthermore, the objectives of shopper versus consumer research remain somewhat out of sync. While consumer research encompasses the more traditional market research disciplines, including brand research, SI seeks to understand why these brands are appealing or not appealing to the shoppers and why sales do or do not result.

Leverage findings

While SI started at the retailer level, research now often originates from manufacturers who are looking to leverage findings to enhance and build cross-channel and cross-category purchases. Savvy manufacturer-side researchers are always looking for ways to project findings across multiple channels and build a base of foundational knowledge to share and continue building upon.

In fact, retailer relations are quickly mentioned as one of the key benefits of conducting shopper research. “I think retailers already get it. They are closest to the shopper so they really seem to hunger for SI and are very open and appreciative of anything that you can bring them,” says The Clorox Company’s Hammond.

There is a knowledge exchange that results in greater opportunities for both the manufacturer and the retailer. The retailer is able to build bigger baskets while the manufacturer simultaneously increases sales.

“I think there are a few benefits [of having an SI department],” says Kalani. “One, you embrace a capability that helps build better partnerships with the retailers on the basis of understanding what matters to them the most: shoppers. Two, it creates internal awareness among different functions that truth is at the shelf. Three, it pushes Tier 1 companies out of complacency mode and gets them to understand the path-to-purchase phenomenon. Retailers have limited funds and to do a lot of qualitative and quantitative research is unreasonable so they are looking to partner with companies who actually bring these burning issues to the front.”

Manufacturers typically know a retailer’s outlook on SI and whether it is embraced and accepted within the retailer organization. When the retailer is a proponent of SI, a successful manufacturing SI department will prove itself as a credible partner by establishing trust and a solid track record of usable insights. “Part of having a good partnership with retailers is involving them from the inception of the research to the end,” says The Clorox Company’s Nuckles.

“I can see retailers opening doors [to in-store research] more down the road because as long as it’s done well, it benefits everyone involved - shopper, retailer and manufacturer. Doing it well means holding all involved parties to higher standards of preparedness with respect to having well-articulated business issues and best-in-class accompanying research plans,” says Dickman.

Resounding trends and outcomes

When asked about the future of shopper insights, we heard several resounding trends and outcomes, including: a better understanding of the digital shopper (including direct-to-consumer) and new in-store concepts as well as broader adaptations and applications of SI among retailers, manufacturers and suppliers alike.

Most retailers are aware of the value of well-executed shopper research, though we will likely see an expansion of retailers conducting shopper research both on their own and by partnering with manufacturers. After all, a retailer’s knowledge of its shoppers ultimately leads to knowledge of how to drive sales.

Brick-and-mortar retailers will need to continuously adapt, innovate and prove their value as the rise of digital and online access for shoppers continues. “Digital is a key focus area for our consumer and shopper promotion group. Digital includes everything from Web sites to downloadable and printable coupons, text-to-win, text alerts, etc. We’ve seen this rapidly changing and need to address this in order to be true to our shopper behaviors,” says Nuckles.

Some examples of innovations include the use of smart carts, informational kiosks, in-store television advertising and an increased presence of scanable QR codes and UPC symbols. “The whole digital space is going to be huge and specifically how people shop with mobile technologies and how that relates to in- and out-of-store shopping behavior. Moving from home to store and everything in between, shoppers will increasingly be always connected,” says Dickman.

Shoppers now have mobile phones and devices at their fingertips and can choose which messaging they are interested in as well as price-shop and compare while on the go. This means the retail landscape will change; the look and feel will adapt to the needs of educated, savvy and mobile shoppers. “In-store environments will continue to evolve to cater more to an increasingly sophisticated, increasingly busy shopper. I think mobile technologies will be directly imbedded into this - making shopping more efficient and more intuitive,” Dickman says.

Many retailers are choosing to proactively create brick-and-mortar environments that appeal to and tap into the emotional and behavioral connections shoppers have to their in-store experiences. “We’ve had a relatively stagnant retail paradigm for a while now. I think this will start to change quite rapidly - even in the next five to 10 years - as we see new store concepts emerge, from smaller formats to more targeted concepts around particular shopper groups,” Dickman says.

Third-party research suppliers will continue to gain knowledge and resources in the realm of shopper insights. More of these firms will serve as conceptual partners - something some manufacturers find is currently lacking. “There are a lot of suppliers in the shopper space that are just adapting consumer capabilities to a growing function, so this is an area I expect to change,” says WhiteWave Foods’ Marston.

Suppliers need a deep understanding of the nature of SI so that they can effectively partner in the design and execution of successful research projects. Further, suppliers must continue gathering knowledge and seeking out new methodologies for researching the digital shopper and the on-the-go shopper. “Most supplier shops have focused on more traditional brand insights. Suddenly, suppliers are shopper experts. I do not find this particularly helpful in that it makes the manufacturers’ job harder in knowing who to partner with. If suppliers were more up-front about what they are experts in, manufacturers could more effectively partner with suppliers based on their expertise. This strategy may benefit suppliers in the long run because they stand for something rather than standing for nothing,” says Dickman.

And of course, there will be greater adoption on the manufacturer side as well. This includes more SI departments, as well as wider integration of SI within various organizations. Many think shopper insights will continue to get more recognition for the value it can bring to the table. Further, while it will remain separate from traditional consumer research, there is the potential for great synergy by linking shopper insights and traditional research.

Vital and evolving

The modern-day shopper is empowered; he or she can choose which messaging is personally relevant, can research and compare products before selection and can price-compare at home, on the go and at the shelf. Given the enhanced role of the shopper, shopper insights is and will remain a vital and evolving field of research. Now it’s up to the retailers, manufacturers and researchers to continue to learn, understand and act upon the needs of the ever-changing shopper.