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Going Shopping For Shopper Insights

19/04/17

In January 2015, Tesco boss Dave Lewis fired the starting gun on Project Reset – the retailer’s plan to simplify the shopper experience in its stores by removing 30% of the products on its shelves.

In many respects, this radical initiative on the part of the UK’s biggest grocer opened up a new front in the battle between retailers and their suppliers. For several years, the dialogue had focused on price and promotions. Now suppliers found themselves fighting a rearguard action to protect listings and justify new products, armed to the teeth with data from Nielsen and Kantar, the big guns of category strategy. Category Reviews, with their implied opportunity to exchange insights and identify opportunities, had changed to Range Reviews, implying a much more limited agenda.

Fast forward to 2017. Where are we today?

According to data released by Nielsen this month, “The proportion of consumer spend that goes on promotion has hit its lowest level in 11 years”. Mike Watkins, Nielsen’s UK head of retailer and business, explained: “The level of promotional spend has gone back to levels not seen since before the 2008 /09 economic crisis……to be more price competitive, supermarkets have turned temporary price cuts into permanent cuts”. At the same time however, we learned that, in March, food prices actually grew at the highest rate for over three years – a function of both global hikes in commodity prices and the post Brexit value of the pound.

Something has to give.

You can’t help but feel that the barrel is now probably empty. Both retailers and their suppliers need to start cooperating again to grow the category cake. But where to start?

Let’s start with those reports from Nielsen and TNS. What do they actually tell us? Firstly, they tell us about aggregated sales performance: Who are the winners and losers across grocery? Which manufacturers’ brands are on the way up and which retailers’ market share is on the way down? It’s easy to forget, when dealing with these “global” statistics, that no matter how big the category, performance is dependent on individual shoppers making individual decisions, at point of sale in individual stores. Performance is built on individual people – like you and me – deciding what to buy, right now.

Secondly,the value in the Nielsen and TNS reports is they tell us about what people bought. But there are two sides to every story – they don’t tell us about lost opportunities, those times when individual shoppers left the category without buying or made do with a lower value item when they might have spent more.

The only way to understand these micro decisions that build into macro performance is to go into store, watching how shoppers behave and probing the factors driving the behaviour we see. Time spent in store can tell us about all aspects of the mix. It can tell us about price and range – the two factors that have obsessed retailers and suppliers over recent years – but also about myriad other factors that encourage engagement and convert shoppers into buyers.

Crucially in-store research can pinpoint small changes that can be made with minimal outlay, but which can drive significant improvements in sales, shopper engagement and satisfaction.
Interestingly, over the last six months, we have seen a significant change in approach from our Nordic clients, with manufacturers linking positively with retailers and investing in in-store research leading to exciting category activation programmes. In the past, retailers in these markets have looked to the UK for inspiration. Luckily, they can still find plenty to inspire at Visuality.

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