Shoppability 2.0 Conference: Collaborating Through Technology

Indiana University's Kelley School of Business offers a course that teaches future brand managers "how to understand retailers," according to Jonlee Andrews, clinical associate professor of marketing at the school.Teaching future marketers how to work together is just one sign of the industry's drive toward better collaboration between retailers and product manufacturers, a trend that was fully evident last October at the school's Shoppability 2.0 Conference. The intimate gathering of 50 research professionals from about 25 mostly blue-chip product manufacturers and retailers was hosted by Raymond Burke, the school's E.W. Kelley professor of business administration.Collectively, the event's 18 speakers (and, to almost equal levels, its audience) provided a forward-thinking -- yet wholly pragmatic -- window into the state of shopper marketing research and the extent to which it is being driven by 21st century technologies such as virtual-reality simulation and RFID-based auditing, and by newer practices like customer segmentation. These new tools don't replace more traditional research activity but enhance them to deliver better results.Highlights from the agenda included:David Guenthner, senior director of insights and customer strategy for Walmart, discussed the motivations behind the chain's customer segmentation initiative, which first began taking shape three years ago when the company decided to develop a "world class" marketing research organization.Breaking down its shoppers into seven segments allowed Walmart to examine the needs, desires and attitudes that informed each and the degree to which they fit with the chain's operational capabilities and strengths, Guenthner said. That allowed the chain to develop a strategy for targeting the three segments that offered the greatest opportunities for success. With the segmentation analysis now informing much of the chain's marketing activity, product vendors should work with the appropriate Walmart category buyers and insights representatives to align their own research learning and develop stronger collaborative efforts, he advised.Brand marketers also need to "get more aligned" with Supervalu's business objectives if they want to work effectively with the supermarket operator, suggested senior brand manager Kristen Martin. "Simple is better," she noted. "There are great ideas that are just impossible to execute in the store." Supervalu has been working with vendors on a center-store optimization project aimed at creating "solutions centers" that better address shopper needs, she said.In a similar nod to simplicity, Jack McGauley, manager of consumer research for Schnuck Markets, said the Midwestern grocer will consider a product manufacturer's program "if it shows a value for the consumer, and if it shows that we can make money doing it."Ruth Thompson, virtual reality insights manager for Kimberly-Clark, explained how her company's efforts to build advanced store simulation environments (which Burke praised as "pioneering") are helping to foster stronger relationships with retail partners such as CVS.The packaged goods maker was able to use its virtual reality capabilities to test the effectiveness of some permanent signage concepts for the drugstore chain, thereby acting as a true partner rather than a vendor seeking only to further its own agenda. Virtual reality research "does not replace in-store testing," but can help manufacturers identify the concepts most likely to prove effective in the real world -- saving time and money in the process, Thompson said. It also can be used to measure the effectiveness of in-store marketing activity to a greater extent than is otherwise possible, she said.Using virtual retail environments to test and develop programs can lead to an "easier buy-in" from retailers for in-store tests because much of the logistical guesswork has been eliminated and expected results are already available, according to Barbarita Marbelt, market research manager for H.J. Heinz. General Mills recently conducted a major study using online surveys and in-store audits, but then used virtual reality simulations "to drive action for the insight" among retailers, according to Chana Weaver, the company's category management director for dry grocery.Once in-store programs have been executed, RFID-based tracking services can be synced with scanner data to measure their effectiveness, according to Bob Michelson, chief executive officer of Goliath Solutions. Goliath recently completed installation of tracking technology at all Walgreens stores and is now monitoring the performance of all temporary product displays placed within the chain.According to Michelson, analysis of the resulting data can identify the various factors that determine display effectiveness, including specific location, graphic attributes ("lifestyle vs. product" imagery), price message ("20% off" vs. "$2 off") and display type ("shelf tray vs. sidekick").Research conducted thus far -- representing data from more than 1 million displays -- has determined that roughly 25% of displays "produce no sales lift whatsoever," Michelson said. But the technology is now available to help marketers -- and their retail partners -- understand why.

Shoppability 2.0 Conference: Collaborating Through Technology

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