Archive for October, 2015

The Decision Tree Dichotomy

If we were to play word bingo when it comes to shopper research briefs, the most commonly used words that appear time and time again are…. (1) decision, and (2) trees! Getting to a decision tree seems to be the Holy Grail for shopper marketeers and category managers, yet when probed, we are often not entirely sure what we need one for and how we will use the results.

So what should we be using a decision tree for and how should we go about creating one?

You won’t be surprised to hear the two factors are clearly interlinked. We shouldn’t be rushing to a decision tree solution until we are completely clear about how we want to use the information. In reality there is no one right way of producing a tree, there are just different approaches and different approaches will be more or less relevant depending on the reason for doing it in the first place!

What should we be using a decision tree for?

As with any good research brief, the starting point should be with the business issue, not the research tool (a decision tree). Decision trees can be the chosen research tool for a variety of business issues. For example:

1. To map the category landscape and identify white space for new products

2. To dictate how a shelf should be merchandised

3. To define a plan for shopper marketing activity

What we should be asking is – how can we expect a single decision tree to enable us to create plans for all of these issues? In reality, this is asking too much of one tool and results in a `one size fits no one` solution.

This makes logical sense when we actually think about what information is needed to fuel those business decisions…

To map the category landscape and identify white space for new products

If we are trying to get a better understanding of our category landscape and white space, we need to take a total market view over a long period of time to predict the future. This should involve looking at actual purchase data to see what shoppers are buying and the key relationships between products, alongside a monitor of macro-economic and social trends. Taking this approach helps us to understand the likely needs different products/categories are meeting; allowing us to create a strong category map and understand any new/emerging sectors coming to light, based on potential needs. In the moment research is unlikely to get us close to this outcome, as it can only report on what shoppers are currently doing now.

To dictate how a shelf should be merchandised

If our main priority for a decision tree is a merchandising solution, then a different approach should be adopted. Merchandising should be about creating an effective layout that helps shoppers find and buy products either in-store or on-line. The key word here is FIND.

In most categories, the majority of shoppers will already have a good idea about what they are going to buy (either the exact product or the brand or the type). Very rarely will these shoppers be making conscious decisions at the shelf – therefore a decision tree that plots what is important to them is merely describing learnt scripts of behaviour that have been formed over time. It will NOT reflect how they go about FINDING their product or set of products. Far from making decisions, these shoppers are de-selecting everything until they reach their relevant part of the fixture. Therefore any approach that uses drivers of choice to determine a hierarchy will not be satisfying a merchandising objective.

Sales data will tell you WHAT shoppers are buying over time, but not HOW they find products. If merchandising is the priority, then research needs to happen in-store, diagnosing the shopper’s task at the shelf (the mechanics they take to find or choose products at-fixture). We should be looking to define a hierarchy of how shoppers FIND their product not make decisions over time – a search hierarchy rather than a decision hierarchy.

To define a plan for shopper marketing activity

If we’re using a decision tree to inform shopper marketing activities, then task at shelf is still important, but here the focus should be to identify and understand shoppers who are genuinely making choices at shelf. Knowing what decisions shoppers make at home vs. in-store is crucial to any through-the-line shopper marketing plan. This involves understanding what drives choice of one brand over another. Understanding what these drivers are, and where the decisions are made will help us to inform both WHERE activity should be happening (above-the-line or below-the-line), and WHAT messages are likely to drive purchasing at shelf.

In summary, it is rare that one research tool or tree is ever going to provide a perfect solution to all of your business issues. We need to combine a series of methodologies and tools that help us understand what is happening now, what is likely to happen in the future and how shopper needs and priorities will change subject to their task at shelf. Equally, all the research solutions in the world will never produce an off-the-shelf ready-to-go planogram or shopper solution. The research will provide the ‘science’, but we should be adding our own ‘art’ into the mix to create solutions that will work for our business and our shoppers, both now and in the future.

2 steps to unlock category conversion

I have a three year old son and a one year old daughter that both attend nursery. As such, I seem to spend a great deal of time in the waiting room of our local doctor’s surgery! One recent visit, after this weeks bout of whatever it was, got me thinking about one of the biggest issues we face in the world of category and shopper – improving category conversion. It was a fairly routine and now incredibly familiar set of steps that the doctor went through …… listen to the symptoms, observe and test to diagnose the issue, then prescribe some advice or medicine to treat accordingly. A process we should also follow when it comes to tackling category conversion.

As a shopper research agency, we are often asked to propose a solution to tackle category barriers. A perfectly sensible question to ask. However, we are often asked to rush towards the treatment, without first properly diagnosing the issue.

Diagnosing where

The business question we are typically trying to address by understanding category barriers is; how can we improve category conversion to help us achieve growth? To improve category conversion we must minimise existing barriers to conversion and maximise the triggers to purchase, but our first step should be diagnosis – WHERE, if at all, do our current barriers exist?

Is our conversion issue within a certain channel? Or perhaps within a specific retailer? This already narrows down our prescribed treatment needs.

Shoppers may plan to visit our category in any particular channel or retailer, but do they actually visit? Is the issue that we are not getting our planned shoppers to the aisle?

Is the issue within the aisle? If shoppers visit do they then go on to shop? If they shop do they go on to buy? They might browse, but they don’t all convert to purchase. The barriers, and consequently our opportunities for improvement could lie at any one of these stages.

Researching and creating simple conversion funnels diagnoses where our issues are, allowing us to size the missed opportunities.

This simple process allows us to pinpoint exactly where our efforts should be focused – and therefore where we should be further investigating the WHY.

Diagnosing why

If our funnel reveals that we are not encouraging shoppers to visit our category in discounters, our next phase of research can concentrate away from the aisle, or even away from the store/channel, exploring WHY discount shoppers don’t visit our category (what are their barriers?) … for instance do shoppers even know that our products are available within this channel? Do they have poor perceptions towards retailer range and quality? A treatment for this diagnosis could include shopper marketing coverage in the retailer magazines, showcasing the great brands and range available.

As another example, our conversion funnel may highlight that shoppers do visit and shop the category in supermarkets, but they don’t go onto purchase. Here we want to concentrate our research focus within the aisle, talking to shoppers that engage but walk away without buying. Barriers may be around ease of navigation, ease of shop, or we may have issues with out of stocks. The treatment for such a diagnosis may be a shopper-led merchandising solution supported with communication to improve ease of find and aid the decision making process.

Once we have established where our issues lie and why, we may wish to hone this further by exploring what the most pertinent issues are for our key shopper groups – WHO are we really losing at this point and HOW can we concentrate our effort on removing the barriers that are having the greatest effect with our key shopper groups?

Finally, we may wish to run this exercise with a brand focus – shoppers may buy from the category, but are rejecting our brands in favour of the competitive set. The barriers here could be different again, more likely to be focused on the brand proposition – e.g. on-pack messages, previous product experiences or price/promotions associated with brands.

It is unlikely that any category will have major issues across the entire funnel – so diagnosing WHERE the biggest conversion opportunities exist allows you to tailor barriers and triggers research towards the right stage within the funnel. This way you observe and talk to the most pertinent group of shoppers, ensuring you are more targeted (and cost-effective) with the WHY. Start with the big picture, then narrow the focus down until you are drilling into the real barriers impacting your category, your brands, your shoppers.

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