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Observing shoppers through technology

In our last blog, we talked about manual vs. technology-based observations. As technology has moved on, so have the number of technology-based observation options available. There is no right or wrong technology to use, they all have pros and cons.  To help you decide what works for you, here is a brief overview of how we think you can best utilise these technologies….

Motion sensing technology

One of the more recent technologies used for observing shoppers is Xbox motion sensing technology. A camera connects to an Xbox to capture shoppers, using algorithms to define behaviours. This enables the capture of high volumes of traffic over an extended period (leaving equipment in store for 1-2 months).  Real time data can be transferred directly to a dashboard – allowing you to see instant results. This would be beneficial if you had a new initiative in-store and wanted to see how it was performing against some basic metrics such as conversion, on a day by day basis.

However, this technology needs to be set up on rods attached to the fixture, so it’s not that aesthetically appealing and may not be appreciated by a retailer. It also won’t work well if there is a low ceiling in a store, while it is difficult to determine the exact accuracy and tolerance of the behavioural data captured.

Wi-Fi tracking

Another way of observing behaviours in store is through smart phone Wi-Fi tracking. As the name suggests, it’s a programme that measures shopper movement via tracking the Wi-Fi connection on shoppers smartphones. A series of tracking recorders are placed on the ceiling to triangulate the position of the shopper by tracing the Wi-Fi signal emitting from the shoppers phone as they move through the store.  Typical tracking takes place by recording the shopper position at one second intervals, with recorder numbers and locations dictating accuracy – typically within 4-5 foot. In our opinion, this is great for understanding total store flow and dwell time in smaller sized stores to help create perfect store layouts.  It can also be used to understand window merchandising opportunities by tracking flow in close vicinity to the store

However, Wi-Fi tracking is reliant on smartphone penetration (currently 70-80% in UK), then having Wi-Fi enabled on the phone (c50-60% of smartphone users). The accuracy level of 4-5 foot means it could only be macro space specific rather than at a granular category level, and there is also no link to purchase behaviour to understand the relationship between movement and purchasing.

We would recommend this technology more for retailers than manufacturers – probably more suited outside of FMCG where there is a more pertinent need to understand multiple categories in small spaces and the relationship between movement and purchasing. The technique is ideal for high street retailers, particularly those tech or fashion retailers aimed at younger / more technically savvy shoppers with very high smartphone penetration.

Ceiling mounted video cameras

Then of course there is the use of standard ceiling-mounted cameras. Multiple cameras attached to ceiling or fixtures providing video coverage

of the area.  Video footage is captured of all shoppers within any retail space.  A standard set of codes are then applied as a manual team of watchers record shopper behaviour at a respondent level, which is then aggregated to assess behavioural patterns.

This technology enables you to understand shopping behaviour at both a macro and micro space level to accurately capture shopping styles (grab and go vs consideration), flow in area, hot spots/cold spots and identify potential opportunities for growth. It produces highly accurate data and can be supported with associated questionnaire data to understand the filmed behavioural metrics further. Supportive video clips of behaviours are also a great way of engaging with retailers. Some providers can network the recording to relay footage immediately – allowing for analysis to start without delay.

On the flip side, ceiling mounted cameras require retailer buy in and store permissions to get the fieldwork off the ground.  This can take time. It can also be difficult to live stream data from some field sites, while data protection laws in certain markets mean this approach is not always available.

In our opinion, this technique remains the best tool to understand and assess store/category usage.  The level of detail and ability to tailor exact watching requirements to fit any bespoke requirements make it the gold-standard for analysing shoppers physical behaviour.  It provides real life in the moment data with no research bias.

Get in touch with any questions and feel free to share!

In-person vs. technology-based observations

Following on from our last blog which talked about the use of eye tracking technology, we will now focus on the use of observational technology for shopper insight.

Observational research is key for understanding shoppers, as it provides the most objective insight into how shoppers truly behave at the point of purchase.

HOW we observe shoppers is key, and there are essentially two major choices… in-person observation vs. technology-based observation. The techniques naturally come with very different price tags, so it’s important to understand when it’s appropriate to use each one.

In-person observations

Let’s start with in-person observation. Putting it simply, this involves using a trained observer to stand in a store with a tablet/pen and paper, discretely capturing quantitative metrics of behaviour for individuals. For example how long do they spend shopping? How many products do they touch? Which brand do they buy? It’s fairly basic in its approach, and therefore usually offers the most cost effective solution to capture some key in-store metrics over a short space of time. There is no need for complex camera installation or post fieldwork footage streaming, which can make it the simplest and most scalable approach, especially when conducting global projects where some markets simply won’t have access to technology to do this any other way.

Technology-based observations

So why would you go to the trouble of installing expensive cameras/technology and streaming footage? There are several key reasons why …

Accuracy – using human observer’s in-store means that you are liable to human error. If the area of observation happens to be very busy, it will be impossible to expect an in-store observer to accurately capture everything that is going on.  The beauty of using cameras is that the footage can be re-watched and re-watched until all the data is collected, making it a far more accurate technique for measuring multiple behaviours.

Detail – building on the point about accuracy, some measures that we want to observe may be too difficult for in-store observers to capture – for example are shoppers studying (engaging without physically interacting with the category)? How long are shoppers spending at specific sections or sub-categories within their total category time spend? Are shoppers reading the front, back or side of particular product packs?  If you require more complex metrics, then filming allows you to watch the footage in slow motion, accurately capturing each and every measure.

Sample Size – if you’re just looking for a read on behaviour, then a good observer will be able to capture the behaviour of dozens of shoppers over a few days and perhaps a couple of hundred in a week, which is perfectly robust for many shopper research needs. However, if our question is about conversion, then a more robust base size over a longer period of time might be required. Observational technology can capture thousands of shoppers over a longer period of time, and with the more automated techniques available, can actually be a more cost effective way of collecting some simple metrics with this level of scale.

There are also various types of technology available to help us observe shoppers too, including more automated techniques such as Xbox motion tracking and smart phone wi-fi tracking through to manual video capture and coding. Again each technology will have pros and cons, the choice you make is largely down to your objectives, budget and timeframes. More on these next time…..

The Power of Eye Tracking

We’ve talked in general about technology application for shopper research in our previous blogs, so we now want to focus on how to apply some of the specific technologies to shopper research. Today we will concentrate on eye tracking.

Eye tracking was first introduced as a technology suitable for shopper research way back in 1993! The technology has come a long way from the clunky camera mounted cycle helmet used back then; making the technique far more widespread, cost effective and accessible. However, the power of the technology will only be harnessed through successful application to your business issues.

Eye tracking works through utilising an infra-red beam to track exact eye movement. As so much of our shopping behaviour is sub-conscious, eye tracking is invaluable for understanding the visual cues that shoppers use sub consciously to find, shop and buy their chosen products.

When should eye tracking be used?

It has three main applications in retail/etail …

1.Merchandising Optimisation – understanding more about the visual process used to find and buy products by identifying fixture/web hotspots to help us maximise product positioning on shelf

2. POS Optimisation – understanding what communication items people don’t look at is as insightful as understanding what they DO look at! As so much of our visual environment is discarded; being able to understand what POS items aren’t seen could save thousands of pounds of unnecessary marketing spend, allowing us to concentrate on the items that ARE seen and utilised throughout the shopping process

3. Packaging Optimisation – many new products fail because they lack stand out on the shelf. If we understand more about what products, brands, colours and shapes create shopper cut through in a category, we can use those visual cues on pack to ensure our brands to get noticed and purchased!

Are all eye trackers the same?

It is not just about choosing eye tracking as the correct technique to meet your business needs – the type of eye tracker you should use also needs to be considered in-line with the business questions you are trying to address. If you are interested in understanding web-based eye movement, then static eye tracking equipment such as Tobii will be most appropriate. However, mobile eye tracking is better suited for projects conducted in a bricks and mortar environment.

If you’re objective is to unpick the most important elements of your pack or POS message, then the type of eye tracker you use will be essential, as some eye trackers are better equipped to measure visual activity to a detailed pack level than others; which is why getting to the heart of your issue is key before jumping to the technology solution!

Eye tracking is particularly useful for understanding the shopping process in environments/categories where physical product contact is limited and visual cues are key to selection – such as fast food, bars, kiosks and tobacco. However, eye tracking is not the best tool to understand shopper issues such as how to layout a store or how to optimise range and space. Equally eye tracking alone may not provide all the answers to any business issue. As with all shopper insight, the key is in interlacing different technologies and methods to get the best results.

Our next blog will focus on the different techniques and technologies available to observe physical shopper behaviour…

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.

Is Virtual the answer?

In our last blog, we talked about the growth of new technologies in shopper research. We explained how we can ensure we use new technology and traditional methodologies in the right place at the right time by judging their relevance in line with our business needs, timings and budget. This week, we would like to talk in a little more detail about one technique we are asked about a lot – Virtual Reality.

It has long been possible to build aisles, stores and even streets through a virtual platform that mimics reality. However, through clever programming and design, these platforms increasingly go beyond the basic building blocks of products and buildings, they also incorporate staff, moving shoppers and sound; creating an altogether immersive shopping experience.

This has opened up many different opportunities when it comes to shopper research, especially where generating store permissions is time consuming and difficult. Having your own virtual store is surely the answer to all of your prayers??…allowing you to research what you want, when you want!

Well, virtual reality most definitely has its place in the world of shopper insight, but it isn’t the right tool for all your business issues. Having spent the last fifteen years researching shoppers in both real and virtual stores, we want to share some of our pearls of wisdom around how and where virtual research is most appropriate for your research needs.

Diagnosing vs. Testing

Most virtual research providers will be able to provide you with some kind of statistic which demonstrates how closely virtual reality mimics real behaviours in-store. Whilst this may be true when looking at certain metrics, we believe that there is only so far a virtual platform can go when reflecting reality. There are so many factors in-store that will influence your behaviour at shelf….your mindset, your mission, whether you have children with you, the weather, how hungry and thirsty you are, the number of shoppers in the store, etc.

Whilst virtual research can do its very best to try and factor in these elements, it will never reflect complete reality. We also have to consider that shoppers are not spending real money during a virtual shopping task, and have the luxury of sitting in a lab or their own home, rather than a crowded cluttered store. We often see metrics like dwell time and number of selections being higher in the virtual environment because of these factors – shoppers don’t have the urgency or monetary restraints they may have in a real shopping scenario. For these reasons, we believe virtual reality is not the starting point for understanding how your category or store area is being shopped. To diagnose shopping behaviour, you should use a research tool that allows you to understand real behaviours in the moment.

Where virtual reality has a real benefit however, is when you come to test initiatives rather than diagnose behaviours.

You may have a new shelf layout you want to trial, or perhaps you want to see how some POS stands out in the aisle. Testing in actual stores can be a real headache. You require buy-in and permission from retailers to use their stores for trials (a challenge in itself). Significant changes need to be made to that fixture; often at great expense and time (e.g. mocking up prototype POS or relaying an entire aisle) and you are exposing what could be confidential ideas to anyone that may happen to enter those trial stores (including your competition).

When you test in virtual reality, you have the benefit of controlling the entire environment – to ensure you can completely isolate the elements you want to test (e.g. a retailer can’t add a promotion to a brand which may skew the results). It’s easy and quick to create multiple testing scenarios at the click of a button, allowing you to test concepts that may otherwise never make it past the drawing board. It also allows you to test everything against a control scenario. This means even if some behaviours are more artificial than you would see in a real store, all changes can be accurately compared to your control, which is what is important to enable you to test the true impact of the initiative you are trialling.

Quite often, it is the results of a virtual trial that convince a retail partner to trial your concepts in a test bed of their own stores – moving you one step closer to a roll out of successful ideas.

In Aisle vs Out of Aisle

The next area where you need to judge the suitability of virtual reality is against the scope of the environment you want to understand – are you looking to explore behaviour within a confined environment (i.e. within an aisle) or a more expansive environment (i.e. a total store or department shop).

We believe virtual reality has more relevance for research when you are interested in evaluating behaviours within an aisle. All respondents have to be pre-recruited for a virtual task, which becomes much easier if you can recruit them against shopping specific categories and brands. Respondents also have to be set a task – and the most suitable task for a virtual platform is to shop a category of interest. This means you only have to invest in the full virtual build of one fully shoppable aisle (your aisle), and shoppers can be dropped into the environment close to that aisle to complete their mission.

This is the quickest, most straight forward and cost effective route for virtual reality.

However, if you wanted to know how many shoppers passed and shopped a particular gondola end within a store, this would be more challenging to execute virtually. You can’t ask respondents directly to shop the gondola or category, you would have to task them to shop the entire store or section of a store and see how many of them noticed or shopped the gondola in question. This is possible virtually, but requires a more significant environment build which comes at a cost. The larger the area, the more difficult it would be to execute using an on-line virtual platform too (the file size would crash most home PC’s). It would also take much longer to field, as shoppers could in theory be shopping for 25 minutes as they are browsing a store or large area.

A quicker and more cost effective way of testing this type of issue would be some filmed or in-person observations in a real store – where you could track the actual number of shoppers who passed, shopped and purchased from the gondola end – focusing the research in this particular area, observing natural conversion to the gondola.

In summary, as with all shopper tools, there is a time and a place for using virtual reality as a platform for shopper research. The most suitable, and the area where virtual excels, is in-aisle test-based research – understanding the impact of range changes, merchandising solutions and POS communication. Virtual reality certainly opens up opportunities for different types of shopper research, but it shouldn’t be a panacea for every shopper issue we want to research.

Using technology for shopper research

Technology – isn’t it amazing to think of the advancements that have been made even in our lifetimes. There have also been some amazing technological advancements when it comes to how we research shoppers. We are no longer limited to in-store interviews and traditional focus groups. We can track the paths of shoppers using RFID mobile technology, we can build virtual aisles and stores to test new concepts, we can `scrape` your web screen to generate purchasing data and we can even scan shoppers’ brains as well as their till receipts!

These advancements open up many different opportunities when it comes to conducting research, and if used correctly, can provide cost and time savings; two crucial currencies in our industry. However, with this choice comes decision paralysis, and as research buyers, we need to be sure we are using research-based technology in the right place at the right time. A good shopper research agency should be cherry picking different methods and technologies for you, by considering the three crucial factors which will dictate where and when technology is relevant …

1. What is your Business Issue?

Your business issue should always be at the heart of any research solution. Too often even as research buyers, we get fixated on the method rather than the business issue. This often governs who the brief is even sent to in the first place – instantly limiting us if we have jumped to the wrong method for our issue.

Any good agency should be working with you to diagnose the various elements of your issue which will subsequently determine the methods, platforms and technologies that will be most relevant to you…

Consider the following questions before deciding on the right technology…

WHAT are we trying to understand? Identifying what business levers you are trying to pull is crucial as a starting point. If for example you are looking to better inform in-store merchandising, you need to understand how a fixture is shopped in the moment, which means on-line platforms/technology aren’t going to deliver.

If you are trying to test a shopper marketing concept that is very futuristic or confidential, then a platform such as virtual reality is ideal; allowing you to test shopping behaviours in a controlled, private virtual environment.

There are even different types of eye tracking technologies which are suitable for different business issues. One might be more suitable if you’re issue is about packaging, and are most interested in how and what shoppers look at on packs. If you want to evaluate navigational signage, there are eye trackers better suited to measuring visibility whilst in motion.

WHO are we targeting? Which group of shoppers are you trying to talk to and in which category? If for example you’re researching a sensitive category such as Sexual Wellbeing, then a face to face group is going to be uncomfortable for the majority! In this scenario, technology can play a huge role – conducting qualitative research via on-line bulletin boards for example, will feel much more comfortable, encouraging more honest responses.

WHERE we want to research will also dictate the use and role of technology. For example researching in discounters can prove challenging, but that shouldn’t prevent us from learning … mobile technology can help document behaviour as it happens. Equally if we are trying to understand transient forecourt behaviour, then pre-recruited research will be almost impossible, so similar technology can be applied to understand what, when and why shoppers buy. So technology can really help overcome the barriers that are apparent for traditional techniques in such channels.

2. Timings

Understanding your business issue is one thing, but doing this in isolation of your time scales will not always provide you with the right end research solution. Again technology can be used to speed things up … for example a quick read on some basic questions from an on-line omnibus can be turned around much more quickly than an in-store survey. An in-store mobile survey whilst limiting in terms of the granularity and detail provided, can provide almost instantaneous results if you need some headlines back more quickly.

3. Budget

Going hand in hand with timings is budget. Be mindful that using technology does not always provide the cheapest option. For example, in-person observations for a small area of a store are likely to be more cost effective than using a camera solution. A set of traditional accompanied shops may be cheaper than some mobile qualitative research.

A good shopper research agency should be finding the best blend of method, platform and technology to meet your issue, budget and timings. Technology opens many doors, but is not always the right solution for these three parameters. Let’s not forget – when we commission research, we are actually paying for actionable insights, not technologies or methods. If technology allows us to get to these insights more quickly and cost effectively, then all is well and good. But don’t throw away those traditional techniques just yet, as they are sometimes just as powerful at getting to the end result! If you work with an agency that truly understands shopper behaviour, then they will find the right solution for your needs.

Driving the success of Discounters

Who can remember life before Discounters?

You will have been living in a vacuum if you haven’t read about the success of Discounters in recent years. Those who claimed they would never set foot inside such a store have started to become intrigued about what they have to offer…and they can’t help but be impressed.

When understanding how people shop is your day job, you can’t go to any store without over-analysing the experience, so why are Discounters doing so well…

We should always remember that shoppers are expecting retailers to optimise one or more of the following currencies for them when they shop; their time, their money and the experience they have. So how do Discounters maximise these?

1. Time

The time factor is definitely a key channel driver for most shoppers. Go to any of the large multiples and you struggle to spend less than 25 minutes in-store. However most shoppers can be in and out of Aldi or Lidl on a main shopping mission in less than 15 minutes!

So why is shopping in Discounters so quick and efficient?

Range/Choice – the range within Discounters is very focused, holding around 1500 – 2000 lines compared to the 30,000 plus that one of the Big 4 might carry. Far from limiting choice, this often encourages shoppers to buy more as they are exposed to categories they wouldn’t even consider buying in other retailers. This is a basic shopper principle; less = more. Shoppers often don’t feel short changed by reductions in range, in fact when range reductions have been researched shoppers often cite having MORE choice, not less, for the simple reason they can actually SEE what is there!

The limited range makes it EASY for shoppers – you can quickly go up and down the aisles rejecting categories at a glance if they are not on your list. Equally, there is no need to spend hours procrastinating over which blend of pasta sauce to buy; making choice easier. The downside is that they don’t always have everything you need, but the time saving outweighs the ability to choose every time for most shoppers.

Layout – the second element of the discount experience that saves time is the layout. Go into any Lidl or Aldi in the country, and it will look almost identical. Regardless of which store you go to from one town to the next, you know exactly where everything is, there’s no need to learn a new store layout as layout is consistent. This enables shoppers to draw upon their ‘learnt cognitive map’ and quickly locate products in store. Nothing annoys shoppers more than a store re-fit, as they have to re-learn this map all over again, spending their time navigating rather than buying (not an efficient driver of spend per second for retailers!)

Queue Time – Shoppers hate to queue! As shoppers we frequently agonise over which queue to choose and whether the person next to us is moving quicker than you. Not in Discounters! The staff are practically throwing the products at you, and it’s a learnt art to pack this quickly. This maybe a barrier to some shoppers, but for those that love shopping in Discounters its part of the appeal.

The entrance into online and convenience stores for Aldi also suggests that they are striving harder for more ways to win on the time/convenience currency.

2. Money

The clue is in the name for Discounters – and there is no doubt that overall basket spend is significantly less than other channels on the same mission. Their straight forward pricing strategy means that you don’t have to look out for deals and do the maths in-store (something we know shoppers don’t enjoy). This gives shoppers permission to buy more… splashing out on the “deluxe” range or buying an £8 bottle of wine, because they feel they are getting better value for money. So it’s not always about buying the cheapest, but offering value.

3. Experience

The experience is perhaps the currency that Discounters lack the most – and indeed where other channels can up their game. However, everything is relative, and given you are effectively shopping in a warehouse, there are a few `highs` that give you a sniff of that experience.

The `here today gone tomorrow` non-food offers that feature everything from gardening spades through to motorbike gloves are a little random, but are always packed with shoppers delving around for a bargain. A little light relief from the grocery shop, this adds a level of excitement! The Discounters execute this strategy well – with a good path to purchase shopper marketing campaign. The door drops highlight these `exclusive` deals, which encourage footfall and build the anticipation of what is coming next. The fact that they always sell out of the top sellers suggest this is a great tactic for the retailers.

Lidl and Aldi have well executed ATL campaigns – which really deliver the food/consumption experience shoppers are looking for – highlighting provenance, freshness and quality at affordable prices. However, this is not consistent through the line, as when you get to the store itself, it’s not always easy to find those ostrich burgers or prawn wan-tans that look so good on your big screen. We know that shoppers are in auto-pilot when they enter stores, forgetting what they have learnt elsewhere. Some simple POS or in-store displays featuring these items could help to raise better awareness towards them in-store – creating better consistency through the line.

So, the conversion to Discounters continues, although for most this is not the only channel used. Discounters deliver very well against two of the three key currencies for shoppers – time and money. Even though the experience is not as strong, the time and money savings compensate for this, and some small changes could enhance the experience further without compromising the other currencies. This also gives other channels the opportunity to work harder on the experience, where they can’t always match on price and time.

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