Inside the Minds of Your Shoppers

Despite all the research we conduct, the entire industry still grapples with the mystery of understanding why shoppers behave the way they do.

Thanks to a new tool available to all retailers, they might have a way of better understanding what drives shopper behavior to help retailers and suppliers have a new level of discussions on how to better serve customers' needs.

The tool, which comes in the form of an Internet based appraisal, and the accompanying report into the motives and mindsets of today's shoppers, was crafted by the Coca-Cola Retailing Research Council. Presented at FMI's Annual Convention in May, the report and tool are accessible through the Internet to any operator.

The report was developed following an exhaustive process of meeting, interviewing and probing shoppers on what drives specific shopping trips. Rather than examining demographic trends, the study looks into the various states of mind that might cause a shopper to select one store or another.

From the data, nine "need states" were identified -- from stock up shopping trips to quick fill-in; from balancing family needs to outright bargain hunting. Data is provided to show the relative size and importance of each group, along with some of the key likes and dislikes of each group.

Council member Kevin Davis, CEO of 11-store Bristol Farms Market in California, thinks any-sized operator can find benefit by using the study quickly and honestly. "Any operator who uses the tool to its full capacity, by answering all of the questions about themselves and their competitors honestly and fairly, will get a clear appraisal of their own stores' potential against the competition." Davis says the tool can help a retailer build a more realistic strategy for improved sales and profits.

The report helps lay out some of the challenges retailers face in understanding today's complex shoppers.

Retailers can access the information at the Council website, www.ccrrc.org, under the section for the North American council. Simply request an access code. (In the name of full disclosure: the author is a member of the Council.)

RFID Update

On a warm June morning in 1974, a retail revolution unfolded when a Marsh supermarket in Ohio scanned a package of Wrigley's Chewing Gum, ushering in a new era of customer service and data collection. A potentially more compelling technology, RFID, could remove the wall between supply and demand.

By next year, Wal-Mart, Target, Albertsons, and even the Department of Defense will require case and pallet tagging by vendors in order to track products into distribution centers and even throughout the supply chain. But the true paradigm shift is being able to link information from the supply side to in-store movement information which could dramatically reduce out-of-stocks, avoid product counterfeiting, cut shrink and provide valuable insights into what consumers really want.

But item-level RFID tagging is years away from widespread use in the EC or in the U.S. The cost of the tags must be cut to pennies in order to be economically feasible, and RFID infrastructures need to be built one system at a time. Going forward, consumer privacy is also an issue but can be dealt with if the industry is as diligent as it has been with loyalty card data.

Meanwhile, ACNielsen, an active member of the EPCglobal Business Action Group, has participated in RFID technology since it was launched several years ago by MIT's Auto-ID Center. And if it progresses as expected, we can look forward to automatic out-of-stock alerts that will reduce brand switching and help adjust assortment to achieve optimal shelf sets. We could also provide manufacturers and retailers with "real time" product forecasting at the store level and develop different plans for execution of customer-specific promotions.

This is not the age of Big Brother as some detractors fear. Rather, it is a new era of retail anthropology. It is technology that will lead not only to greater efficiencies within the industry but a more rewarding shopping experience for consumers.