Inside Insights, Part 2: New Tools for the Team

Brands and retailers are looking around the table – and in the toolbox – as they strive to construct a more integrated approach to insights development that better meets the needs of shopper marketing.The end goal: create an effective cross-functional team with the skills needed to glean stronger shopper insights from a growing range of data sources.Who conducts the insights work – and how – is where the rubber meets the road. Manufacturers and retailers are adopting new technology-driven tools and combining research and marketing skills in different ways to better shape shopper marketing strategy and deliver more efficient, successful programs.One factor driving this evolution has been a rapid change in consumer lifestyles and shopping behavior. That has some marketers rethinking their whole environment.“As shopping behavior blurs and categories and trips blur, it gets harder to identify where we play,” says Christian Thompson, senior director of shopper insights at Kellogg Co., Battle Creek, Michigan. “Snacking behavior and breakfast have changed a lot in the last 15 years.“Shoppers redefine the category by the choices they make at the shelf,” Thompson adds. “We want to understand the full path to purchase – the decision-making process that happens even before deciding on the trip or the store. How do decisions affect which store to go to, which aisle to walk, which brand to choose? That’s what drives us.”Such big changes in shopper behavior make it even more crucial to have accurate insights. As marketers’ appetite for primary research increases, new digital tools offer easier, faster and cheaper ways to gather and analyze shopper data – and get the respondents out of the artificial focus group and into the real store.For instance, it’s common now for research vendors to field trip missions, sending a panel of app-wielding shoppers into the store on specific assignments like buying a product. Such excursions are “a tiny fraction of the cost” of traditional shop-alongs that require researchers to accompany shoppers, says Jennifer Mathissen, executive vice president of strategy at Catapult.The Pocket EthnographerPrimary research? There’s an app for that.Evolving technology, especially mobile, has spurred a growing inventory of tools for gathering shopper insights. These new technologies are supplementing – and sometimes even supplanting – classic research techniques.More than 90% of marketers use traditional primary research tools to find shopper insights, according to an exclusive survey of 53 marketing professionals at leading manufacturers conducted in July by Catapult and the Path to Purchase Institute. That includes in-store tools such as observations, intercepts and shop-alongs, plus out-of-store tactics like focus groups and surveys (see attached chart).These methods are still considered to be the most effective ways to uncover insights; cost has always been the main reason that syndicated or POS data is often employed instead.Hence the allure of new data sources gleaned from social media (used by 49% of respondents), mobile activity (41%) and online communities (29%). These tools can put researchers directly in touch with shoppers at a much lower cost.But these new tools still have to prove their mettle: only one forward-thinking survey respondent ranked mobile-based research as best for finding shopper insights (see attached chart).Researchers need to avoid the allure of experimenting with every new technology – the “fear of missing out” – when they don’t have a clear end goal in mind. (Google Glass, anyone?) “You have to decipher what looks cool from what’s usable and will do something for your business,” says Mark Hertenstein, senior vice president of enterprise solutions at marketing services agency Epsilon. “Too often, people are running after the data or technology before thinking through what they want to achieve.”After all, one research truism never changes: “If you’re going to get answers, the best way to do it is face to face with shoppers,” says Mike Klein, director of insights & analytics at Post Foods, Parsippany, New Jersey. “The best way to know what someone is thinking [about a product] is to ask the minute they pick it up. If they make it to the front door, they’ve probably already forgotten about it.”Fortunately, that kind of primary research is getting easier, and cheaper, thanks to new technology. Among the options that researchers now have at their disposal:MobileKey benefits: There are mobile applications for smartphones and tablets that let brick-and-mortar shoppers record and share their experiences via video, photo and/or written report. Some apps even capture what shoppers do, not just what they say they do, providing a more realistic view of behavior.“When the shopper goes by himself, that’s closer to the reality you’re trying to capture. Let’s face it: A gaggle of strangers tagging along on the trip isn’t normal and makes it hard for shoppers to be themselves,” says Nicole Bergeron, partner at retailing consultancy Seed Partners, Minneapolis.“You can follow up directly with [participants] for additional questions, so the door is still open for conversation like it is with shop-alongs,” says Mathissen.Advantages: Primary research becomes more efficient and cost-effective. Real-time mobile reporting also cuts down on the need for researchers to travel for shop-alongs.Research apps also can passively follow shoppers who’ve opted in to have their smartphones tracked to learn what stores they visit, how long they stay, and other behavioral data, says Rachel Matney, partner at Seed.On the consumer-focused side, shopper apps like Shopkick can provide a glimpse into category-level activity, although their fragmented data makes it hard to glean insights.Drawbacks: “You get the first-person perspective of the shopper, but you miss the researcher’s third-person observations of the shopper and the store staff, other shoppers, and the environment,” Mathissen says.What’s next: Watch out for more “receipt capture technology,” in which participants submit receipts to validate specific purchases and earn rewards. Among the benefits for marketers is the ability to “capture purchase data without having to go through the retailer,” says Hertenstein.Understanding the allure of that point, some app operators are specifically using these platforms to get the data: Participants often are required to scan their whole receipt, thereby providing information about the full shopping trip.Virtual simulationKey benefits: Virtual shopping environments, which expose test subjects to computer-driven simulations of store interiors, provide a close correlation to real shopping – as strong as 0.9 compared with ultimate market-share data – within a controlled setting. “Observation in the field is good, but it’s a hassle to get approval [from retailers],” says Klein.Advantages: Virtual simulation makes it possible to test multiple concepts, something that can’t be done anywhere near as easily – or as inexpensively – in the field or even in mock physical-store environments. “It’s a way to show shoppers what a concept would look like in-store and see how they react to it,” Mathissen says.Drawbacks: The technology is still used mostly on a macro level rather than to drive distinct insights for specific retailers, says Beth Craig, director of insights at Catapult. “Marketers need to ask, ‘What should it look like at Kroger versus Walmart versus CVS?’” Craig suggests. “That hasn’t really evolved yet as much as it should,” mostly because of cost.But large retailers drive enough volume to make it worth the investment for manufacturers. (A handful of top CPGs even have in-house virtual labs.) In fact, retailers sometimes ask category captains to conduct proprietary research and will even absorb some of the costs, Craig adds.In addition, “real” ultimately trumps “virtual” every time. Even fans of the technology still feel safer conducting a final in-store test on virtually validated concepts before incurring the costs of a full rollout.Social media toolsKey benefits: Social listening has been a popular source of consumer insights for years. Recently, “the biggest improvement is the logic that data providers use to synthesize and sort posts,” which has made it more useful for shopper research, says Mathissen.Advantages: Social listening via third-party services offers three different levels of sophistication: 1) a scan for specific keywords, 2) a search for other words that can provide “sentiment analysis” (via good/bad adjectives), and 3) a separation of posts into themes such as “shopping,” “trying out,” and “enjoying.”It’s this third level that helps drive shopper insights, Mathissen says. “It can give you five or six quotes about what shoppers are really thinking to use as touchstones” when considering shopper archetypes. That work requires a live person to “pick out the gems,” she adds.GPS technology is giving social research additional legs by identifying where people are (especially in-store) when they’re socializing. Some vendors can even anchor scannable social posts against GPS coordinates to track the commentary through the store, Mathissen notes.Drawbacks: Gauging social sentiment is a great way to test new concepts and promotions, says Kevin Mabley, senior vice president of strategic services at Epsilon.But while it’s great to quickly look at sentiment and draw immediate insights, “Beware that it doesn’t represent your full audience. They may not be your most important customers, even though they’re your loudest ones,” Mabley warns. “You’re favoring speed over comprehensiveness, and it’s important to pay attention to context.”Community listening/crowdsourcingKey benefits: Tapping into relevant, interested groups to gain feedback on products and promotions gives an unvarnished view of consumer attitudes. It also can help identify and even galvanize the ideal target.Advantages: Self-selecting crowds are more authentic than focus groups, and their conversations are more natural. Researchers get the benefit of hearing comments in the context of an overall conversation. Plus, it’s cheaper and more efficient than convening focus groups.Drawbacks: The trick is finding a community that is a desired match for the brand, Bergeron says. Making Sense of it AllThe more data sources there are, the more opportunities for retailers and brand marketers to find insights. Manufacturers have had a longstanding practice of mining reams of syndicated purchase data from the likes of Nielsen and IRi, but what’s new is the explosion of data about what shoppers do outside the store.“It’s very helpful to get a more robust understanding of the shopper outside the path to purchase, including beliefs and lifestyles” that impact shopping habits and purchase decisions, says Mathissen.Marketers are getting more sophisticated in layering various data sources, Hertenstein says. For instance, “people are experimenting with Web behavior: where and how consumers engage online, [and] through which device.”The speed with which data arrives also has increased significantly. “We don’t have to wait weeks or months for redemption data and surveys,” Mabley says. “There’s a benefit to instant, real-time feedback, but you have to adapt quickly. You have to be more agile than in the past … and more flexible to be able to change course.”Of course, data from retailer loyalty programs remains the core, especially since the focus now is on shopper insights. “You want to see how Kroger is bringing value to shoppers at an individual household level,” Hertenstein says, in order to set the best strategy for that retailer.So, how do you choose, and use, your tools wisely? First, don’t be distracted by flashy new gadgets.“There’s a perception that getting at shopper insights is hard, and [so] whiz-bang tools are necessary,” says Craig. “But there are a lot of current methods that are tried and true that can be modified efficiently” to produce targeted results, she says. “It may cost more to get a qualified sample, but making that adjustment lets you effectively use research tools that have worked for many decades.”Second, start with the objective.“Take a step back and ask, ‘What was my original objective and hypothesis?’” advises Kellogg’s Thompson. “Ask, ‘Where do I have the right to play, and where do my goals intersect with the retailer?’ Consider not just where your goals intersect, but also your skill set” to ensure that execution is within reach.Forming the Dream TeamAll these changes require a lot of internal adjusting, especially when roughly 45% of manufacturers don’t even have a dedicated shopper insights team yet. The median number of researchers dedicated to shopper insights at a CPG is eight – although at least two blue-chip companies already have 100, according to the survey (see attached chart). But it’s not just the research department that has to adjust.“The sales organization of the future will have more of a general-manager mindset,” thinking more broadly than the brand’s numbers, predicts Tim Toll, chief customer officer at Pharmavite, Northridge, California. The dietary supplements maker’s growing shopper insights team has four members; the team works with category management to develop actionable insights. In addition, “Increasingly, the sales staff is relying on – and contributing to – the insights work.”“We have customer teams that are starting to build competency [in shopper marketing] and are demanding more and more information,” Toll says. “In the joint business-planning process that we’ve created, the first thing we do is an assessment of the retailer’s shopper, and we drive that to action.”“Internal teams are working more closely now than five years ago, because we have the same goal,” agrees Kelly Annis, chief marketing officer at Post Foods, where Klein’s team handles data collection and analysis, then helps the marketing team understand it.While consumer marketing and shopper marketing have been coming together for nearly 15 years, “shopper insights and consumer insights need to become one,” adds Klein. “When that happens, we’ll see even better shopper marketing.”It’s a multi-step effort to hone shopper insights and then act on them, which makes the process better handled by a cross-functional team with complementary skills. And the best person to “translate” the insights into action “is a category manager,” suggests Klein.Getting PersonalPractitioners identify three vital skills for the new-age research analyst: traditional expertise, proficiency with new technologies, and strong communication capabilities.CPGs responding to the survey prized traditional primary research chops the most, followed by effective communication skills and data analytics expertise. Next-generation research was ranked significantly lower, although that should change: Asked what skills will be needed in five years, respondents gave the most importance to expertise with new tools, followed by effective communication, traditional tools and data analysis (see chart, below).The industry-wide appetite for more primary research keeps classic skills at the core.“There’s been a shift in the business culture to be more quantitatively based,” Mathissen says. “You have to back up your annual plan with a more robust rationale, because there’s more scrutiny in general on spending.”But technological proficiency is increasingly crucial for collecting and analyzing data.“We have access to data more than ever before,” Mabley says. “We can set up tracking using new tools to get data at the time of transaction … [so] we can analyze and react in real time.“It used to be that all transactions and rich customer data were in the retention marketing division. Now, we expect to have systems and tools to pull data to the front end of the conversation,” Mabley explains. “That requires marketers to be proficient at technology that make data available at the point of transaction, fluent in the systems that make data available for real-time transactions, and more fluent with quantitative data [to] weed through and distill down the unstructured data to a few insights you can act upon.”Lastly, communication skills are needed to help turn the insights into action.“The art of storytelling – translating insights into action – is key,” Thompson stresses. “You need a good storyteller to frame up the idea for the retailer and [then] for the shopper.”Thus, the “dream team” comprises a cross-functional group – insights, shopper marketing, sales, category management, agency partners – that brings skills and perspectives from multiple sides of the business. That can be tough to synchronize, but it can yield richer insights and a broader, more strategic perspective.Shopper insights will continue to evolve because of ongoing innovation in techniques and tools and increasingly more data about what shoppers are doing.“You get the best, most creative briefs when you take a leap in strategy. With more sophisticated modeling techniques, you don’t have to take as much of a leap,” Mathissen says. “But you need a strong underpinning of insights grounded in solid data.” About the SponsorCatapult is the behavior-based marketing services agency that delivers accelerated business growth through the “Art of Conversion.” This unique data-driven approach identifies the core, actionable insights that inspire brilliant creative with the power to convert consumers into shoppers, shoppers into buyers, and buyers into loyal advocates. Catapult delivers channel-agnostic solutions that are brand savvy, retailer smart, and digitally enabled. Catapult is an Epsilon brand.

Inside Insights, Part 2: New Tools for the Team

P2PI MEMBERS

JOIN P2PI

Related Images

Business Topic

P2PI MEMBERS

JOIN P2PI

Related Images

Related Articles

Business Topic