SHOPPER INSIGHTS FOR DUMMIES

The term ‘shopper insights’ has become widely used in the retail and vendor worlds, creating numerous new positions to staff with people claiming to possess and apply this new skillset.  While many people now carry business cards touting a shopper insights position, there are far fewer people with the combination of experiences and specialized expertise that is the pedigree of the function. 

Instead, many of these positions are staffed with classically trained marketers or sales people that built their career in another function before transitioning into the world of insights.  While this cross-pollination has significantly improved the integration of insights into business decisions and earned insights a seat at the table when developing sales or marketing plans, it has also diluted the quality and confidence that used to be placed in unbiased insights. 

Unfortunately, those coming from other functions tend to have access to much more limited and significantly more biased toolkits they have pieced together from the fragmented and often superficial exposure to market research techniques.  This has lead to tainting the purity, utility and beauty that is possible when experienced, educated, and aware researchers dive into understanding a topic.

The competency of insight is still relatively scarce and there is generally limited understanding of what insights are, how they are discovered, what they can do and how they are best used.  Reading the articles at sellwithinsight.com will likely give you a better understanding of this topic than the majority of your co-workers. 

A WORKING DEFINITION

Shopper Insights are nothing more than finding useful data points, interpreted in the right context and appropriately applied to alter the behavior of shoppers in a desirable manner.  In our world, this most commonly is toward the end of creating more or more profitable sales for a company by influencing the distribution decisions of Buyers and the product selection process of shoppers.

Our clients typically hire us to solve the following structural problems: 

• Lack of time:  Where true insight ability exists, time is often the barrier to achieving great results.  Days are consumed with immediate or urgent needs that consistently take priority over tasks that are actually on a strategy document or work plan.  Our ability to operate independent of this cycle and focus on completing longer term or bigger picture projects helps clients meet both the pressing needs to deliver sales this quarter and the delayed need of being in a better position to deliver sales next year.
• Lack of perspective:  Our clients have deep knowledge about their business that we could never mimic of the duration of a single project.  However, that deep understanding typically comes with a narrow or limited perspective that that results from that focus and the lack of time to step outside the delivery of immediate business needs and consider broader or longer-term opportunities.  Together, we’re able to design and deliver solutions that concentrate our broad experience across 100+ clients and 150+ categories with a client’s deep category expertize that neither of us would have arrived at alone.  ·      
• Lack of truth:  Ask any manager and they can explain or justify the decisions they’ve made this week with some level of rationale.  There is always some degree of logic supporting just about any decision.  However, that logic can also be horribly flawed when outdated assumptions become treated as facts.   We frequently see companies operating on incomplete or inaccurate “educated guesses”, often innocently made out of necessity in that past, that have unknowingly evolved into today’s facts or truths.  We help clients vastly improve their knowledge by testing these assumptions and correcting or establishing new truths where needed.
• Too much useless data:  Almost any business houses or has access to terabytes of data gained through sales, secondary sources, public domain, subscription services or past projects.  Unfortunately, it can be extremely difficult to separate the signal from the noise in this data and weeks can be lost searching secondary sources for insights that simply aren’t there.  We focus on helping clients create custom, clean, up-to-date insights tailored specifically for their business issues.

As simple as the above descriptions sound, getting and acting on great insights tends to be rare, and requires picking the right questions and using the right technique for discovery, combining creativity and discipline to understand, and having the confidence to take action and apply the new learning. 

ASK. 

Insights come in a variety of forms and many collection techniques:  We always begin by getting a clear understanding of the end objective or outcomes that justify the investment of time and money put into the project.  This typically includes getting a long list of questions the client would like to answer.  It is our job to engineer a solution that translates these objectives and raw questions into the best possible design.  We spend a significant amount of time considering how questions need to be asked to get the most insightful and useful answers and which techniques best match the parameters of the project.  These techniques most often include:

• Surveying shoppers via quantitative online surveys
• Conducting in-depth one-on-one interviews
• Exposing participants to various stimulus and studying their reaction
• Segmenting shoppers into unique clusters and creating detailed profiles for each
• Conducting focus groups
• Observing shoppers in stores
• Recognizing patterns or anomalies in sales data
• Utilizing smart-phone apps to capture data
• Hearing from other experts (like the Buyer) who may have access to a unique set of data about category dynamics

ANSWER.

While Data Scientist is a more widely used term, we prefer to call ourselves Data Artists:  Our business started in Northwest Arkansas serving Walmart and the local vendor community.  We have focused our entire existence meeting the needs of this niche:  Companies seeking to understand and influence the purchase habits of potential buyers.  We thought small to medium size companies could benefit from the same utilization of insights that drive a disproportionate amount of success among the largest companies that could afford to have entire teams and seven-figure budgets dedicated to telling the story of why every household wants to or needs to buy their brands.  We’ve repeatedly seen insight win.  We’ve seen companies gain category captaincy and huge distribution gains by having a compelling data-based story to tell.  We’ve seen how drastically packaging and branding can evolve when the shopper is given a voice.  We’ve seen buyer relationships reinvented when vendors started coming to meetings with new and relevant insights that give the buyer confidence to make bold decisions.

Anyone that has experienced outsourced work to an off-shore company for just about anything knows how critical perspective and context are to delivering great work.  This same truth applies over a much shorter distance when seeking to understand new insights.  Market research companies that apply one-size fits all templates and employ analysts that have never worked with retail, never carried the sales bag for a vendor or never presented to a Buyer are too removed from the industry.  They lack the perspective and context necessary to discover great insight and translate it into useful actions that deliver new sales.  We see stories and opportunity in the data that most would miss. 

APPLY.

We specialize in the application of insights: 

When applied properly, insights create new in-market stimulus that alters behaviors.  This stimulus ranges from marketing and merchandizing materials to package design or pricing strategies while the behavioral changes fall into three basic buckets called the Components of Volume:

1. Penetration or closure:  Figuring out ways to attract more buyers to a product.
2. Transaction size:  Increasing the amount of money shoppers spend on a purchase by convincing them to buy more expensive items or multiple items at the same time.
3. Frequency:  Increasing how often products are purchased, generally through increasing how quickly product is consumed (which, in turn, is typically done through increasing the number or type of usage occasions). 

Our reports are action-oriented.  We focus on insights and conclusions that can be connected to implications and recommendations.  We search for meaningful answers to our client’s questions that effect their bottom line, such as:

• Extrapolating underlying dynamics in a certain sample of stores to guide distribution decisions in additional stores that share similar traits.
• Designing shelf modular or layouts to mirror how shoppers shop and engage with the shelf.
• Designing new products or product features to address key sources of dissatisfaction.
• Improving package design that communicates the most important features or benefits that engage shoppers when they are making a purchase decision
• Identifying and removing barriers to purchase among non-buyers
• Determining basic product design and assortment recommendations, such as color, scent or size preferences that generate the most appeal.
• Creating pricing elasticity curves to model how sales, profit and the pool of potential shoppers changes with different retail price points.
• Going into a line review able to tell a complete story, focused on evidence that shoppers want or need your product, to create a far more compelling sales pitch.  Make it significantly easier for a buyer to say ‘yes’ to your product and ‘no’ to all the other vendors bringing in competitive products fighting for the same shelf space.
• Managing risk by investing a little money up front to ensure larger budgets for production or marketing are spent as effectively as possible (ensuring they are making the making the right product or marketing the right message). 

So what can we help you with?  What problem have you been putting off?  What sales opportunity have you not been able to address?