Neil Sangster, director of analytic consulting at Nielsen Pacific discusses how to conduct targeted shopper research in order to collect the information you need to improve your sales performance...
"I want to understand how people shop in my category."
This is a typical question our clients (both manufacturers and retailers) include in their shopper research briefs when attempting to develop effective shopper marketing strategies.
My response to the client is usually to offer to save them a lot of money and simply give them the answer - "They walk down the aisle with a basket or trolley and they put things in it!"
This is not meant to be a facetious comment but rather to highlight the point that asking a general question often results in a general answer.
The reality is that shopping behaviour varies from the very simple - "I just buy the one I always do" - to the very complex - "Because my mother didn't love me."
Even if you understand the simple rationale underpinning a purchase, this may not help you if shoppers are not buying your brand. What you need to understand is why they always buy the other brand. Would they buy something else if it was better, cheaper or newer?
Understanding the problem
With this in mind, the first step of any shopper marketing strategy is to understand whether there is a problem. If there is, you need to identify what it is. Just like a visit to the doctor, there needs to be a diagnosis before you can find a cure.
So what sort of symptoms should you look for? (Refer to Charts 1 and 2).
There are three key drivers of sales that you should consider:
- Shopping trips: Where are consumers shopping?
- Shopper conversion: What is the conversion rate in retail outlets for the category and brand in question?
- Spend: How much are shoppers spending?
To understand these key drivers, Nielsen uses the nationally representative Nielsen Homescan panel, which gives us access to 10,000 shoppers every week. This data provides a measure as to where Australian consumers shop and how often. It can also determine whether they buy various categories or brands when they are in those outlets, and what they pay for the items they purchase.
We can compare this information across channels, retailers and brands to identify where the problem areas are for our clients, and hence develop a targeted research program that focuses on the key issues. The result is the delivery of more cost-effective and actionable insights, without wasting time and money telling clients what they already know.
Case example: Declining shopper conversion rate
The following example highlights how this unique shopper research works in practice. In a recent study we identified that the problem for the client's brand was a declining conversion rate - particularly among households with teenagers.
By conducting interviews with these 'problem' households and combining the results with price and promotional modelling - we discovered that there were five key reasons for the declining conversion rate:
- Increasing competition from new entrants to the category
- Declining brand relevance
- Lower consumption as part of a meal
- A poor promotional program
- Increasingly price sensitive shoppers in the category
By understanding the causes of the problem we could then conduct more detailed analysis to recommend appropriate actions to remedy the issues.
We proposed a range of activities targeted at one or more of the issues that we had identified:
- Increased price promotional activity to stay in shoppers' repertoire
- Ensure appearance in catalogues is supported with display to increase in-store presence
- More special events/sponsorship aimed at teens
- Communicate how the brand fits with meal occasions
- Innovative packaging to refresh and modernise the brand image
- Improve distribution in non-grocery channels where teenagers shop
- Improve distribution of the key sub-brand that has high appeal to teenagers.
Once these actions were implemented we could then monitor the impact on sales (via store tests) and purchase behaviour (via matched Homescan panel analysis).
So the first step in a successful shopper marketing strategy is identifying what the problem is. If there is a clear understanding of where the areas of weakness are, then you can focus on what needs to be done to improve your sales performance.
Conducting targeted shopper research collects the information you need to ultimately deliver the best strategy to maximise the return you get from your shopper marketing tactics.
Neil Sangster, director of analytic consulting at Nielsen Pacific. The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. Please send any comments or questions you have in relation to this article to: email@example.com