2009 Shopper Insights Update

From old standbys like quantitative surveys and focus groups to newer virtual shopping tools and ethnographic research, CPG manufacturers are using every technique they can to learn why shoppers behave the way they do. "Getting into consumers' heads is a challenge," says George Jackman, group manager of shopper insights for Concord, Mass.-based Welch's. "Using shopper insights to better understand the dynamics and challenges of the grocery shopping experience is the key to improving that experience and unlocking additional sales potential."Korbel uses Nielsen data, focus groups, Internet surveys and face-to-face meetings with its buyers to better understand shoppers. "We used to do a lot of telephone surveys, but everything now is on the Internet," says Gary Heck, CEO of the Guerneville, Calif.-based champagne brand. Karin Peterson, director of shopper insights for Irving, Texas-based Kimberly-Clark, says, "We use both attitudinal and behavioral tools to answer questions and to figure out solutions to the issues that we're working on." Depending on the questions the company is trying to answer, researchers will undertake qualitative research, shop-a-longs, in-store and in-home ethnographies, Internet-based surveys and in-store shopper intercepts. The company also uses Nielsen household panels to augment its research."We're fundamentally trying to understand how people shop, how they use in-store media and signage, how effective displays are, what is more effective vs. less effective, and how we help our retail partners build their equity while we build our equity," Peterson says. Focus groups, which can provide a depth of understanding other methods don't, play an important role for many top CPGs. The Coca-Cola Co., Atlanta, is one of many CPGs relying on focus groups. "Early in the development of a marketing program, we often use qualitative research, which could include focus groups, in-store observation or shop-a-longs," says Claire Quinn, group director of retail and shopper insights for the company. "When appropriate, we also leverage a whole arsenal of quantitative research approaches."Russ Onish, director of category development and shopper insights for Dreyer's Grand Ice Cream, Oakland, Calif., says Dreyer's does quantitative and qualitative studies for the vast majority of new product launches and marketing campaigns. Onish says Dreyer's foundational study, Voices of the Shopper, revealed that the ice cream shopping experience disappoints on emotionality, which contrasts with a product that is so tied to emotion. "This has led us down a path of recommending aisle design enhancements to warm up the aisle, introducing fun and enjoyment while enhancing shopability." Onish adds that Dreyer's does both product and shopper research and says one of the most basic forms of shopper insights still has its place. "Instinct will never go away."In fact, the 2009 Trends Survey by Shopper Marketing and the In-Store Marketing Institute, which surveyed CPG marketers, learned that most marketers still rely on instinct (see chart above). Scanner data ranked highest by a slim margin and survey/focus groups/panel data rounded out the other leading source of insight, according to the survey. The chart does reinforce, however, that brands are dabbling in many different types of research.EthnographyThe use of ethnographies, in which researchers or anthropologists closely observe shopper behavior, has increased significantly over the past two years. The research firm SmartRevenue, Richfield, Conn., has about 1,000 ethnographic researchers on staff and conducts in-store and in-home research. "The advantage of the in-home is you can understand how the product is used, how it is stored, and how the products are used by family members. It gives you a much deeper and qualitative understanding," says John Dranow, SmartRevenue president and CEO. Certified Angus Beef first used ethnographic research in 2007 and plans to use it again when the company completes its next round of in-depth research in 2010. "It really is someone just literally standing and watching what folks are doing and making notes on it and then looking for some trends," says Tracey Erickson, vice president for the Wooster, Ohio-based company. The company's in-store researchers typically introduce themselves to shoppers after making observations and ask detailed questions. "It is some really rich information they're willing to share at the point of purchase," Erickson adds. As a result of this research, the company has learned that shoppers wanted more information on the label. "That was interesting because typically we try to keep the packaging clean and are trying not to cover the meat," Erickson says. "We are making changes in our labels because of those findings." Erickson says she foresees the company using the same type of research it's currently conducting well into the future. She adds, "Long term, I would like to explore the online opportunities as you look at the sheer numbers of people you can reach in a very cost-effective manner."Hasbro Inc., Pawtucket, R.I., uses focus groups, primarily when there is something tactical it wants to assess, says Matt Putnam, senior director of retail and shopper insight. "Strategically, though, ethnographies can be a great place to start because you see the shoppers in their natural environments. Sometimes if you walk into a project knowing what you want to find out, that is the only thing you will see. Unbiased observation helps avoid that," he says. Korbel's parent company, Brown-Forman, Louisville, Ky., conducts field-tracking studies and ethnographies throughout the year to better understand Korbel's strengths and areas of opportunity. Allison Leif Meyers, Brown-Forman's group manager of consumer insights, says, "It can be really inspiring to see people interact with brands in their daily lives." Phil McGee, director of category management and shopper insights for Camden, N.J.-based Campbell Soup Co., says conventional research tools still play an important role for the company. "However, as alternatives become available that allow us to save time, money or improve the depth or quality of insights, these methods may become the default choice in many situations," he says. Campbell plans to conduct more in-store and in-home research along with simulated test markets using technology that goes beyond what's typically used today. McGee says, "There have been several advances in neuroscience that offer new ways to increase our understanding of behaviors, preferences and motivators that we will be following closely. In addition to custom research, I expect our use of loyalty card and syndicated databases for more advanced analytics will also increase."Going VirtualKimberly-Clark is one of many companies that relies on virtual shopping. Researchers used the technology to assess how aging affects shopping when it developed the packaging for its gender-specific line of Depends. "For instance, one of the things that happens when we age is our eyes yellow. We have a means of creating that virtually, and it is one of the tools we use to evaluate our packaging for that particular consumer group," Peterson says. As part of its virtual research capabilities, Kimberly-Clark can also overlay eye-tracking software to see what shoppers are looking at on the screen. Johnson & Johnson, New Brunswick, N.J., has used virtual shopping in addition to shop-a-longs, shopper intercepts and online surveys to gather its insights. When launching a new product, the company worked with virtual shopping company Decision Insight to create virtual shopping experiences to help determine how products should be shelved. Mike Pishvanov, associate director of shopper insights for Johnson & Johnson, McNeil Consumer Healthcare Group, says, "Since the Decision Insight methodology allows us to view the shoppers during a virtual shopping trip, even examining their typical purchases across the category, we can get at the potential impact to the category rather than just consumer-stated preferences." As a result of the research, Johnson & Johnson was able to use the virtual shopping data to tell retailers where to best shelve the product. "It also showed that there would be a strong interest in the product and that it would be relatively incremental," Pishvanov says, adding that retailers welcomed the data. "A lot of times, they're hungry for as much information as they can get." Alex Sodek, senior vice president of research for Kansas City, Mo.-based Decision Insight, says, "We create virtual aisles based on actual planograms and let respondents shop them." Decision Insight works with its clients, including Frito-Lay, Pepsi and H.J. Heinz Co., on a range of research, from package testing and aisle arrangement to pricing. Companies that aren't currently using virtual shopping say they plan to use it in the future. Welch's Jackman says he sees the benefits of virtual testing and is expecting to use it this fall. "You can let [shoppers] navigate through the store and gain a tremendous amount of knowledge relatively inexpensively and very quickly," he says. Hasbro's Putnam adds, "Nothing will ever replace actual in-store observation, but that is time-consuming and difficult. You can do a lot quickly with virtual. It is a good way to refine your solution set before you go to retail with it," he says. (The In-Store Marketing Institute wrote a white paper on virtual retailing and its uses to study the shopper. See Related Articles below.)It Takes CollaborationDavid VanderWaal, senior manager of in-store marketing for LG Electronics, Englewood Cliffs, N.J., says in the past, LG relied on retailers to provide shopper information. "What we're learning is that it needs to be a collaborative effort between the brands and retailers on how you can drive more closure," he says. VanderWaal adds that the shopper research conducted by durable goods companies has lagged behind that of more supermarket-based products but is catching up. "For durable manufacturers, you have a product that consumers might buy every seven to 10 years, so the shopper dynamics around that need to be carefully uncovered." Like many other brands, LG uses online research and shop-a-longs. "We bring in people who are in the market right now to describe to us what they would like to have when they go and shop," VanderWaal says. "The shopper is asked to verbalize everything going through their heads as they're going through this experience." Coca-Cola's Quinn says retailers are looking to collaborate with brands to help them grow their entire store as well as specific categories. "We have invested significant resources behind our Landmark Shopper study, building capability to conduct retailer-specific analyses. This enables us to work collaboratively with retailers and provide targeted and actionable insights," she says.Sheila Mulholland, vice president of sales for virtual-reality company Fifth Dimension in Princeton, N.J., says in the past five years marketers, shopper insight managers, and market research and category managers have started working in a much more collaborative fashion to create and launch brands. "I truly believe that in this economy and competitive environment, you cannot afford to be wrong."Using Research VendorsMany of those interviewed hire third-party companies to conduct their research, including Campbell Soup, Hasbro, Dreyer's and Certified Angus Beef. "The technology and the skill sets grow so quickly. Good research requires a lot of information and someone who can drill it down to what matters," Putnam says.Given the wide variety of new tools on the market and suppliers that provide them, Campbell's has started hosting supplier days, where the entire insights team spends 30 to 45 minutes with six or seven new suppliers. However, McGee points out, "In some cases, the technology is more advanced than our understanding of how to use it for shopper insights. That makes it challenging to make choices between the tried and true vs. a new method that may create a breakthrough idea."For companies that are interested in trying the latest high-tech solutions, there are several providers they can turn to. Garden City, N.Y.-based Actionspeak uses hidden, shopper-worn video cameras as a way to document and probe experiences at retail. "What we do is help our clients see, feel and understand what it's really like to be the shopper, and bring that reality to life through engaging video stories," says Todd Eisen, president.Actionspeak's clients include Heinz, Nestlé, Sara Lee, Hallmark and Walmart. Eisen says some clients have "acknowledged the serious limitations of traditional research methods" such as shop-a-longs, exit interviews and focus groups. "The video puts them back in the moment, so we can examine what they noticed, didn't notice, what mattered to them and why," he says.CognoVision Solutions Inc., Markham, Ontario, uses small camera sensors to provide real-time, anonymous, automated audience measurement. Haroon Mirza, CognoVision's director of business development, says, "We can determine the number of people who are looking at in-store media, how long they are looking, what time of day they looked and if they are male or female." The company is in the preliminary stages of collecting age-bracket information with its technology and can also do shopper-path-tracking analysis. The Marketplace Station, which creates digital display stations at retail, is using CognoVision's technology in displays at Whole Foods so on-screen messaging can be changed instantly based on the shopper information captured. Raji Kalra, managing director of the Newmarket, Ontario-based company, says, "It makes us more sticky to the client. It is our job to sell more products in the store and heighten awareness."Artisan Complete, Markham, Ontario, is also using CognoVision's technology in its displays for Movado's Concord brand. Steven Giggliotti, director of digital merchandising for Artisan Complete, says, "By using CognoVision's systems, we can see gender and how long people have been at the display. We've used the data to improve the content and increase the call to action."

2009 Shopper Insights Update

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