10 Shopper Insights that You Must Know and Dos & Don’ts

1. 10Shopper Insights that You MustKnowandDos & Don’ts Ken Zhang, ZdologyJavier Calvar, RI China

2. These shopper insights are important because … • Contribute to our knowledge and understanding of in-store shopper behaviour • Use this knowledge to adapt in-store environments to better meet shopper needs • Use this knowledge to help brand wins at the point of sale • Highlight the importance the store environment has on the shopper • Better assess shopper needs when developing retail strategies and category solutions • Understand the implications of shopper insights

3. Where do these insights come from? • Extensive shopper research carried by Zdology and Research International China across a number of categories • 100+ shopper research projects • 3000 hours of in-store video • Partnership projects with major retailers

4. 1 2 3 4 5 6 7 8 9 10 10 SHOPPER INSIGHTS Shoppers have difficulty making decisions Shoppers want to feel smart when making decisions Shoppers’ limited ability to process too much information Shoppers use memory to give meaning to objects Shoppers need consistent messages in and out of the store Discontinuity creates triggers to attract shoppers’ attention Shoppers recognize visual stimuli most easily Shoppers use familiar segments to speed up their selection process Shoppers’ tunnel vision and “boomerang” behaviour Shoppers need to be reminded of the items they need

5. Current Hypermarket Store 1980s Typical Grocery Store 1 1.Shoppers have difficulty making decisions • More choices, more difficult to make a selection • It is very common for shoppers not to know exactly what they want. • Shoppers need information/education to make a decision. Few Choices Excessive Choices

6. 1 1.Shoppers have difficulty making decisions Avg. # SKUs Carried by a Supermarket - Shampoo • 46% shoppers spend 3min+ in front of shelf • 52% shoppers pick up 3+ products Source: CCFA Chain Store Annual Report Source: Mini-Market Shopper Research

7. 1 1. Shoppers have difficulty making decisions • More choices, more difficult to make a selection • It is very common for shoppers not to know exactly what they want. • Shoppers need information/education to make a decision.

8. 2 2. Shoppers want to feel smart when making decisions I Want “Cheap” • Shoppers want to make a wise and smart decision. • They also want to be seen by peers as making the right choice. I Want “Value” I Want to Be Smart!!!

9. 2 2. Shoppers want to feel smart when making decisions Do you think the shopper will feel smart with this promotion?

10. 2 2. Shoppers want to feel smart when making decisions • Shoppers want to make a wise and smart decision. • They also want to be seen by peers as making the right choice.

11. Result: Onlyless than 50%of shoppers are able to recall any available POSM! 3 3. Shoppers’ limited ability to process too much information • The mind can only process 5-7 pieces of information • Thousands of stimuli exist in a store: • Some information is compressed • Some information is screened out • Too much information leads to “lock out”

12. 3 3. Shoppers’ limited ability to process too much information • The mind can only process 5-7 pieces of information • Thousands of stimuli exist in a store: • Some information is compressed • Some information is screened out • Too much information leads to “lock out”

13. 4 4. Shoppers use memory to give meaning to objects • Shoppers need to be given a clear stimulus in order to access their memory. What’s this brand?

14. 4 4. Shoppers use memory to give meaning to objects • Shoppers need to be given a clear stimulus in order to access their memory. What’s this brand?

15. 4 4. Shoppers use memory to give meaning to objects What’s this brand?

16. 4 4. Shoppers use memory to give meaning to objects • Shoppers need to be given a clear stimulus in order to access their memory.

17. 5 5. Shoppers need consistent messages in and out of the store

18. 5 5. Shoppers need consistent messages in and out of the store • Shoppers need consistent messages to make the transition from consumers to shoppers.

19. 6 6.Discontinuity creates triggers to attract shoppers’ attention • The mind ignores what it knows and focuses on differences

20. 6 6. Discontinuity creates triggers to attract shoppers’ attention • The mind ignores what it knows and focuses on differences

21. 6 6. Discontinuity creates triggers to attract shoppers’ attention • The mind ignores what it knows and focuses on differences

22. 7 7. Shoppers recognize visual stimuli most easily From “flashy” visuals …

23. 7 7. Shoppers recognize visual stimuli most easily … to more subtle but unique approaches.

24. 7 7. Shoppers recognize visual stimuli most easily What’s this ?

25. 7 7. Shoppers recognize visual stimuli most easily • Shoppers can process information in visual form (e.g. pictures) much more easily than words.

26. 8 8. Shoppers use familiar segments to speed up their selection process • Shoppers first sort out what is not relevant, then choose among the remaining products.

27. 8 8. Shoppers use familiar segments to speed up their selection process • Seven distinct category segments have been identified • Little association between cat and dog food • Pet health segment is associated with both cat and dog

28. 8 8. Shoppers use familiar segments to speed up their selection process • Shoppers first sort out what is not relevant, then choose among the remaining products.

29. 9 9. Shoppers’ tunnel vision and “boomerang” behaviour • Shoppers have a tunnel vision when viewing fixtures at eye level. • Also, if they cannot find what they want half-way down the aisle, they usually turn round and leave the fixture. Corridor side Eye level % of interaction 6% - 10% 4% - 5% 3% or below

30. 9 9. Shoppers’ tunnel vision and “boomerang” behaviour • Shoppers have a tunnel vision when viewing fixtures at eye level. • Also, if they cannot find what they want half-way down the aisle, they usually turn round and leave the fixture.

31. 71% of shoppers make their final purchase decision in store! 10 10. Shoppers need to be reminded of the items they need 100% Planned to buy instant noodle? No 26% 74% Yes Purchased instant noodle or not? No 12% Yes 62% Not planned but purchased instant noodle Planned but not purchased instant noodle Planned and Purchase instant noodle Details of preplan Closure rate analysis Impulse purchase rate analysis Changed Plan or not? Why? – In-store triggers Why? – In-store barriers 33% Yes Why? – In-store impacts

32. Reasons for Impulse Purchase - (%) I was reminded by in-store stuff It is on promotion now Recommended by promoter Recommended by accompanier Base=All Hypermarket Impulse Purchasers 10 10. Shoppers need to be reminded of the items they need 26% Impulse Purchase Not planned but purchased instant noodle Impulse purchase rate analysis Why? – In-store triggers

33. 10 10. Shoppers need to be reminded of the items they need • ‘Breakfast solution’ – “Squeeze a minute into your morning” • Reminding shoppers to buy their morning fresh juice with their newspaper.

34. 10 10. Shoppers need to be reminded of the items they need • Simple “meal solution” approach. • Increasing value of purchase with pasta and cook sauces.

35. 10 10. Shoppers need to be reminded of the items they need • Grouping categories in line with shoppers’ logical selection process triggers their memory and leads to more sales – whether planned, unplanned or impulse.

36. Summing up • Consumers and shoppers are two sides of the same coin, hence consistency is needed in our communications. • The store environment has enormous impact on shoppers and their behaviour. • In order to influence shoppers to our advantage, understanding what makes them “tick” is fundamental. • Therefore, shopper insights are key to win “in the last mile”.

37. Thank you for your attention! Ken Zhang, ZdologyJavier Calvar, RI China