Family Dollar Launches Learning Labs in Stores

Family Dollar has opened an ongoing stream of shopper insights by installing ShopperGauge retail learning labs in 20 stores.Through a partnership with ShopperGauge developers RockTenn and BVI Networks, Family Dollar has become host to the first large-scale rollout of the “laboratories,” which allow the extreme-value retailer to accumulate quantitative data on shopper response to merchandising and marketing designs, displays and promotions.The labs utilize video technology to automate the process of collecting behavioral data as shoppers traverse the store and engage with brand messaging and displays. They generate detailed, quantifiable data on such metrics as how many shoppers visit each location or category and which brands, shelf sets or packaging designs are most effective in engaging and driving them to purchase — all collected across a broad number of shoppers over extended periods of time. Predictive insights can then be drawn based on a large number of variables, including seasonality, time of day and weather conditions.New video cameras have been installed and connected to point-of-sale systems in each of the 20 labs, including units that track walk-throughs of the entire store and sectional cameras focused on specific areas such as entrances, particular shelves and checkout. The locations and quantities can be adjusted based on what needs to be evaluated.“The data we currently have is going to be much more outcome-based in terms of how well items are performing,” Don Hamblen, Family Dollar's senior vice president-marketing, told the Institute. “[ShopperGauge] gives us the opportunity to look at [performance] on a granular basis down to a four-foot section, test and validate hypotheses, and get a more insightful and robust view of actual in-store behavior on an ongoing basis.”Among the data that Family Dollar is interested in mining is the impact of various store departments — how many shoppers go to food versus apparel, for example — to form predictions on how to drive traffic around the entire store. The chain also wants to evaluate messaging techniques in aisles and places such as endcaps to determine what methods drive bigger baskets.Family Dollar is also utilizing the labs more specifically to evaluate its latest store format: “Concept Renewal 2.” The shopper-focused format lays out the front of the store like rooms in a home, with sections for health & beauty, grocery & kitchen, laundry, home solutions & décor, and apparel, Hamblen explained.Of the 20 test stores (which were selected to provide matching shopper demographics), 15 boast the CR2 format and five are control environments. That lets Family Dollar gain insight into how the format is performing in comparison to traditional stores, as well as how new merchandising and marketing efforts are performing in test versus control stores.“Conventional” research on the CR2 design — including shopalongs and shopper observations — inspired the company to move forward with 1,300 openings (1,000 of which were remodels), Hamblen said. But now he hopes the 7,000-store chain can gather information and draw hypotheses on a more robust basis. “As we have diagnostic questions [related to] a traffic, conversion or adjacency problem, we can diagnose and, hopefully, implement quicker,” he said.The retailer also hopes that the labs will help optimize private label marketing, especially in regard to using national-brand and store-brand products in combination to drive basket size. “We have different opportunities with different supplier partners interested in shopper marketing, whether it’s a promotion, merchandising, placement or signage idea they want to experiment with us on,” Hamblen said.Baseline testing of the labs took place in September. Full testing launches this month to evaluate a Halloween campaign, and will continue in November on a “Harvest” effort for Thanksgiving. The tests will evaluate the impact of changes in merchandising tactics, shelf sets, packaging and floor displays, and how that impacts traffic, dwell times and other shopper behavior.While this year’s efforts are focused solely on self-driven initiatives, packaged goods partners are signing up to help evaluate traffic and the importance of their categories in 2012, ShopperGauge managing director Jon Kramer told the Institute. Participants will receive monthly reports on store traffic (segmented down to daily data) that include analysis of changing trends, seasonal patterns and conversion rates for their categories. ShopperGauge was first introduced in 2010 (see "NRF Show 2010 Overview" in Related Articles) and previously has been tested on smaller scales at several retailers.

Family Dollar Launches Learning Labs in Stores

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