Five Ways to Improve Your Shopper Understanding
By Sue Nicholls
There’s no better time than now for transformation. Especially when it comes to our relationship and understanding of the shopper. We need to take a holistic perspective, understanding who they are, how shopper behaviors have changed, and how we need to track them moving forward. The connection to this rapidly changing consumer and shopper are paramount for organizations.
I’ll share with you five ways to create better shopper insights that you can implement to improve your shopper approach.
1. Understanding Key Drivers & Megatrends
Without understanding the key drivers and megatrends that drive shopper change, your shopper strategy and approach will be missing key insight. It’s important to realize category trends are not driven by your last promotion or those new SKUs that were brought into the category. So many times I see presentations where sales teams or marketing teams make it seem like a trend was driven by the category shoppers, by innovation, and even by tactics like promotions and new SKUs and display activity, instead of the trend being the result of something much bigger that you and I don’t influence.
Rather shopper behaviour is directed by global drivers and megatrends. For example, a big trend these days is plant-based protein. Plant-based protein isn’t being driven from specific categories like meatless proteins, but is the result of a much bigger global trend addressing environmental and sustainability awareness and for health and wellness reasons.
Big Picture Perspective
We want to always keep the bigger picture in mind and respond, as brands, and within new categories to meet these megatrends. This allows you to understand the biggest influences on consumer behavior and better predict the future for the industry and categories.
Euromonitor has an amazing analysis framework that helps you better understand key drivers and megatrends. For instance, key drivers setting the stage of a changing environment include shifting economic powers, technology advancement, environmental shifts, world population, and changing values.
Megatrends such as a circular economy, connected consumers, generation gaps, and healthy living can affect different categories differently and influence the way shoppers are shopping even at a generational level or different customer segments. You want to understand which megatrends are most driving important shoppers for you and make sure you’re addressing those needs.
2. Know Shopper Traffic and Spend Categories
The second way to create better shopper insights is to understand how shopper traffic and spend have changed, both online and offline, compared to other categories. Looking at things from a bigger picture perspective is incredibly helpful as well as understanding what’s happening in the total market, or within the total stores.
For example, spend categories such as coffee and dog food and treats have changed dramatically from pre-pandemic to post-pandemic. Being stuck at home, we all stopped going to Starbucks or Tim Hortons, or wherever you buy your coffee while on your drive to work. Dog food and treats also saw a spike during the pandemic due to an increased adoption rate and people spending more time with their pets at home.
The question is, will some of these spend categories shift back to pre-pandemic numbers as we move through the pandemic? As shoppers find a new normal, we really want to make sure that we understand and track these trends going forward from a bigger picture perspective beyond our categories. This will help us to better understand spend categories relative to the total store.
3. Dig Deep Into Shopper Behaviour
Understanding shifts in your shopper behavior is essential to gathering powerful insights. Panel data is one of my biggest and favorite data sources, and it always has been. Everyone on your team needs to understand panel data, not just category management and shopper insights, but your salespeople and marketing people need to be very proficient in understanding panel data as well.
You don’t want to only be looking at information from a consumer and brand perspective. By also turning to panel data and understanding numbers from retailer and category perspectives, you can get a lot better insights that will strategically help you better understand the shopper opportunities.
4. Look at Trended Shopper Information
Not only should we be looking at our data from the past 12 and 24 and 52 weeks, but we should be looking at it trended. If you look at a category like pasta, the trend initially appears as if it’s going up. However, this increase is only a result of pantry loading and panic right at the heart of the beginning of the pandemic.
So if we take that anomaly out, pasta in fact is not really trending up. You want to think about these numbers and trends, being realistic moving into the future. Drilling into this data once again by product group and geography will help you to truly understand what’s driving those numbers.
5. Who Is Your Shopper?
Finally, you need to know who your shopper is. When I work with teams, I ask a lot, who is your target shopper, or who is your shopper? And a lot of times they don’t really know. Rather, they give very vague or general shopper descriptions instead of really having an innate sense of who it is that they’re really trying to target.
Both retailers and suppliers want to please the whole world as one large shopper group, but instead we should split them into our proper customer segments, get to know them much more intimately, and then figure out how to market to them, what the right SKUs are, where they play in the world, where they are on the internet, where they buy from, and it goes on.
And so, it typically ends up where we must use panel data to focus primarily on the most important and heavy shoppers. Take advantage of monthly panel data to gain a more thorough picture of shopper behavior looking at household penetration, purchase frequency, buying rate, spend per trip and units per trip.
Your New Shopper Approach
So, that’s it! Implementing these five practices can help you to really think about ways to change your view on shopper insights and make the shopper a priority. More often that not, I continue to see sales presentations with little or no shopper data – it’s still about historical share and volume results vs total market. Get with the program and start using your shopper data in ways that will uncover insights and opportunities you didn’t know existed. This is the perfect moment to make shopper insights a major priority for your organization and really do a deep dive into your shopper and make them “front and centre” in your business and category understanding and presentations. After all, they do own the wallet that drives all of your business results.
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Source: westerngrocer.com