Shopper Insights Study 2009

Obtaining shopper insights is the foundation of effective shopper marketing, and a recent study confirms its importance.The "2009 Shopper Insight Study" from Coogan Partners finds that 75% of companies regard shopper insight as important to their future success, and 60% are planning to increase their spending on obtaining it by at least 5% in the coming year. Only about 11% expected funding to decrease during the year.Yet only 23% of these same organizations consider themselves effective at converting shopper insight into actions that can be implemented at retail, with most rating themselves "somewhat effective" at best, according to the study. "The industry has come a long way," says Ken Coogan, managing partner of Coogan Partners. "But everyone recognizes that there is lots of work left to do."The survey was designed to give perspective on how the consumer packaged goods industry approaches the topic of shopper insight, including how insights are sourced, what types of insights are having the greatest impact, and how the shift to shopper marketing is changing the go-to-market approach of CPG companies.Polling senior executives at 31 major CPGs representing a wide range of product categories, the study identified distinct differences between companies reporting success at translating shopper insights into actions and those that don't. Specifically, companies that are less effective were twice as likely to have issues with organizational training and capabilities. Companies that consider themselves better organized also report a better success rate at improving the shoppability of their categories at retail and driving impulse purchases."Shopper marketing is truly a collaborative effort," explains Coogan. "While the research department is the largest source for funding and developing shopper insights, the sales, shopper marketing and category management teams are primarily responsible for activation. So organizations must ensure that the insights being developed have a practical impact on retail partners, and that the sales force understands how to translate insights to actions."To gather insights, CPGs are using a variety of research methodologies, including syndicated panel studies, in-store observation and intercepts, and loyalty card data. Used less frequently are such techniques as cart-based tracking systems, virtual reality simulations and in-store video."Most of the tools available to shopper marketers today didn't exist several years ago," says Coogan, citing in particular the more sophisticated analysis of loyalty card data on the part of retailers -- and their greater willingness to share the information with vendor partners. "Now, skill sets need to evolve along with these tools."The study also examined the types of insights that are having the greatest impact in store. These included: Understanding consumer decision hierarchies to influence purchase decisions both outside and inside the store. This was the only insight identified as having a better than "moderate" impact. Improving the category's "shoppability" by facilitating navigation, influencing the perception of quality and value, making the shopper feel informed, etc. Conducting price optimization to communicate value in a turbulent economy. Examining variety versus duplication to provide the right assortment. Testing set flow and signage to make it easier for shoppers to find what they need. Identifying optimal placement of categories to maximize basket ring.One key to improving the impact is understanding the unique nature of the store environment, according to Coogan. "The store is not just another media outlet" he says. "Shopper satisfaction is only improved when all marketing and merchandising elements -- assortment, set flow, signage, advertising -- work in concert. In-store advertising needs to consider the context of the shopper at that point in time: Do they want to be entertained or informed? Understanding the shopper mindset is key to identifying the types of media and messages that will influence their decisions.""For shopper marketing departments, then, the challenge is to go beyond individual elements of the store experience to create a holistic approach by focusing on the insights that really matter," Coogan says.Among other conclusions, survey respondents cited the importance of customizing insights for each retailer, since the same shopper can have a very different mindset depending on which store they're in and what their mission is."Retailers are offering increasingly sophisticated databases and in-store measurement systems to help us understand shoppers," Coogan says. "Successful manufacturers are connecting their shopper-insight experts with activation partners at retailers to ensure that everyone is on the same page."

Shopper Insights Study 2009

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