the holy grail of retailing - tns nipo. shopper...active retailing: linking shoppers with products...
TRANSCRIPT
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Active Retailing: Linking Shoppers with
Products Faster, for Greater Profits
Herb Sorensen, Ph.D.
The Holy Grail of Retailing
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The Shopper Represents the Consumer at Retail
Brand Equity Pre-Disposition
Brand Equity Pre-Disposition
Transaction Seals Purchase
decision
Transaction Seals Purchase
decision
Shopper type
Type of occasion
State of mind
Channel choice
Pre-planning
Retailer choice
Retailer experience
Store layout
Store dynamics
Store atmosphere
Shopping style
Shopping basket
Shopping route
Shelf layout
Signage
Promotions
Pack standout
Consumption experience feeds back into brand
equity
Consumption experience feeds back into brand
equity
PRE-STORE
STORE
P.O.P.
Pack communication
In-store advertising
Consumer Experts
Consumer Experts
Shopper Experts
Shopper Experts
TNS Sorensen“The In-Store Research Company®”
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Hidden in Plain Sight!
Count the number of times the ball is passed between the players in the WHITE shirts
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Agenda
Active vs. Passive Retailing
Store Design: Seven Rules
Merchandise Layout to Target Shoppers
Category-Brand-Item: Measure/Manage Performance
Partnership: Retailers-Brand Manufacturers-TNS
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The Problem . . .
Fewer sales opportunities
Increased channels
Rise of C-stores
Shoppers are more diverse and complex
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The Solution . . .
. . . detailed knowledge of the shopper’s behavior in finding, selecting and bringing their products to the checkout.
TNS is now the driving force in a global retailing revolution.
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Treasure Hunt?
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The Holy Grail – Active Retailing
To know exactly what each shopper wants, or may buy, as they come through the front door.
To deliver that to them right away, accepting their cash quickly and speeding them on their way.
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Store Design: 7 Rules
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Tools: All Stores – All the Time – Anywhere
Paper & pencil
-Online internet
Tablet PC
Video Eye Tracking
People Counters
RFID PathTracker ®RFID PathTracker ®
Kiosk
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RFID PathTracker®
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Individual Shoppers
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Millions of Shopping Trips; Second by Second
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ZigZag Path Pattern
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Racetrack Path Pattern
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Racetrack with Excursion Path Pattern
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Your greatest opportunity to sell is in the first third of the store.
Rule #1 - Concentration
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Very Heavy
Heavy
Moderate
Light
Very Light
80/20 Shopper Density
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What’s Wrong Here?
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Shoppers will move around the store in a counter-clockwise (CCW) direction.
They will move from back to front.
They will buy on their left “when they have a shopping cart.”
Rule #2 – Shopper Asymmetry
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Very Heavy
Heavy
Moderate
Light
Very Light
The Journey Through The Store
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Clockwise is counter-intuitive
Right half of the store generally pulls better because of traffic flow
Counter-clockwise shoppers spend $2 more an average trip than clockwise shoppers
55 53
81
010
2030
405060
7080
90
leftentry
centerentry
rightentry
Average number of shoppers
Go with the Flow
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Short-trip shoppers are very important:
More of them.
Spend money faster.
Stay nearer the front of store.
Rule #3 – Trip length is important
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0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
0 10 20 30 40 50 60 70 80 90 100 110 120 130
Trip Length in Minutes
Sh
are
of
Sh
op
pers Share of Trips by Length
Half the tripsare over in 8minutes or
less!!!
0%
3%
6%
9%
12%
15%
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Items Purchased
Pe
rce
nt
of
Sa
les
Share of Trips by Items Purchased
Half of all shoppers buy 5 items or
less!!!
Spending Speed (typical)
R2
0
5
10
15
20
25
30
35
0 10 20 30 40 50 60 70 80Shopping Trip Length (minutes)
Sp
en
din
g S
peed
($/M
inu
te)
Short trippersspend moneyreally fast!!!
Trip Lengths
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80/20: Implications
Faster Spending Speed = shorter trip focus
Short trippers are just stock-up shoppers on their other trips!
Short trippers: Twice as many 5-minute shoppers can be accommodated as 10-minute shoppers = fewer capital assets and greater profits.
Analogy: Turnover rate at peak times in restaurants
“The good is the enemy of the great!”
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Rule #4 – Concentrated Merchandising
Develop a "C-Store Plus" merchandising strategy in the right front quadrant of the store.
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Entry-left before – bakery tables Entry-left after – “C-store” format
Rule #4 – Concentrated Merchandising
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Rule #5 – Open space is attractive
Shoppers do not want to go down aisles.
Encourage them with space and visual enticement.
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Racetrack with Excursions
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Excursions into the aisle create heavier traffic at the ends.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Front Middle Back
Vis
its
Center-of-Store Aisles
BreadCookiesCrackers
CannedDried
MexEthPastaBeans
HealthBeautyPaper
BakingSpiceHouse
LaundryCleanAuto
IceCreamCoffeeCandy
FrozenFood
BabyPets
CerealJuices
SodaSaltySnacks
DressingsPickles
Aisle Blow Back
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Rule #6 – The Checkout Magnet
It takes less and less time for shoppers to make a single selection as their trip progresses. Plan for more leisure at
the beginning at the trip.
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y = -13.922x + 104.63
R2= 0.8665
0
20
40
60
80
100
120
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
Trip Progression
Bu
yT
ime™
(se
co
nd
s)
Quickening Pace of ShoppingOn the racetrack
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In produce (beginning):
BuyTime™ = 28.2 seconds
In grocery (near end):
BuyTime™ = 8.5 seconds
Salad Dressings
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“Future Store” Ideas
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Lower every other gondola
Push the upper shelves back 6-8”
Profile
Floor
Pão de Açúcar
DiamondPyramid™ Fixture
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Rule #1 – Concentration
Rule #2 – Asymmetric traffic
Rule #3 – Trip length is important
Rule #4 – C-Store strategy – right front
Rule #5 – Open space is attractive
Rule #6 – The checkout magnet
Rule #7 – Difficult access → penetration
Store Design Summary
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MerchandisingLayout of the Store
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Chaos . . . Sort . . . Segments
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Trip Measures:
Length in minutes;
Displays visited(%)
Categories visited
Items purchased
Dollars spent
Walking speed
Day part; Day-of-week
Each Dimension:
Trip progression
Walking speed
Buy time
Share of purchases
Gondola or secondary purchase
Store Dimensions:
By category
By geographic area (left, right, front, back, center)
By behavioral domain (open bazaar, constrained aisle, service, end cap, all other)
Shopper Behavior in the Store(Segmentation Variables Summarized)
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Clusters
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PathTracker® Segments(Shoppers “sorting” themselves by behavior)
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Chaos-2: The Products
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Where to merchandise
selections of this category
What Each Segment Buys(Their “Market Baskets”)
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Categories shared by all segments
Common area near the entrance
Distinctive categories by segment
Divergent distinctive/instinctive paths
The completed sale
Putting the Pieces Together – Shopper Segments and Products
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Entry
CommonBeverages (CSD, water)Breads/PastriesSalty SnacksHealth/Beauty AidsGeneral MerchCandy/Gum/MintsTobacco
MediumFrozen FoodsDairy, RefrigeratedProduceBreakfast FoodCookies and CrackersAlcoholic Beverages
LongMeat, Poultry, SeafoodBaking/Cooking SuppliesPaper & Plastic ProductsDressings/Condi/PicklesCanned VegetablesSoupDeli-Meats/Cheese
. . . etc.
Everything else!!!
Checkout/Exit
Putting it All Together
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MerchandisingCategory, Brand, SKU Performance
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Exposures
Visits
Impressions
Sales
Purchases
Shops
1 2 3
Shopper Presence
Shopper VisionJust
ONEitem
Three In-Store Moments of Truth
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Merchandising 1-2-3™
Conversion rates – the percentage of shoppers in the store who buy an item – need to be broken into 3 components.
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0
20
40
60
80
100
Visitors Shoppers Buyers
Video
Walking
Video
Shopping
Video
Buying
Getting traffic to a section is only half of the battle. Good merchandising will yield high DoubleConversion™ – stopping the traffic and then converting the shoppers to buyers.
Double Conversion
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11%13%
16%16%
4%9%
21%10%
7%7%
6%27%
4%3%
12%29%
21%3%
1%31%
2%35%
4%8%
6%0%
6%1%1%
42%0%
2%1%1%
0%0%1%0%0%
3%6%
7%10%8%
8%
14%9%
7%
6%7%
20%
7%
19%3%
24%17%
18%22%
11%
13%20%
24%26%
17%10%
35%29%
12%
10%4%
4%4%6%8%
9%16%10%
3%21%10%
22%
13%25%
8%21%14%16%
30%
31%37%
41%44%
56%64%
40%49%
67%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
H&B - Shampoo & ConditionersCanned Fruit
Dried PastaCanned Seafood
H&B - Body Soap & CleansersCanned Soup
Dairy - CheesePrepared Food - dry mixes
Household CleaningCanned Vegetables
Prepared Food, Canned - RTSDairy - Yogurt
Frozen Dinners & EntreesBeer
Breakfast CerealDairy - Milk
LaundryCoffee
Pizza/Snacks/Hors d'OeuvresPet Food
Peanut Butter, Jams, Jellies, SpreadsMeat - Fresh
Salad DressingsBaby Food
ProduceJuice, Drinks - DG
Grocery DeliPaper Products
Spices,SeasoningsService Deli
Non-carbonated BeveragesChips
Bottled WatersService Bakery
BreadH&B - Oral Care
Cookies & CrackersCarbonated Beverages
Candy-bags/bars
Gondola Both A/O Locations
Primary Secondary – endcaps, lobby, etc.
The Two Stores
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
The Two StoresCookies/Crackers
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Shoppers must visit the area (EffectiveDistribution™)
Visitors must pause or stop to shop (first conversion: visit-to-shop)
Shoppers must purchase (second conversion: shop-to-purchase)
DoubleConversion™
VitalQuadrant™ Analysis
Underdeveloped
Few stop to shop, few who stop … buy
Poor Merchandising
Niche
Few stop to shop, but those who do … buy
Effective Merchandising
High Interest
Shoppers stop to shop, but do not buy
Attractive Merchandising
Leaders
Shoppers who pass here stop to shop and buy
EffectiveMerchandising
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Visits 1st
V>S Shops 2nd
S>P Purchaverages averages averages averages averages
Leader category . . . . . . . . . . . . . . . . . . . . . .39% 68% 26% 96% 25%Bread Dairy - Milk
Dairy - Cheese Produce
High Interest category . . . . . . . . . . . . . . . . . . . . . .59% 62% 37% 20% 7%Candy-bags/bars Cookies & Crackers Non-carbonated Beverages Spices,Seasonings
Chips Grocery Deli Service Bakery
Niche category . . . . . . . . . . . . . . . . . . . . . .27% 45% 12% 56% 7%Canned Seafood Laundry Salad Dressings
Household Cleaning Paper Products
Underdeveloped category . . . . . . . . . . . . . . . . . . . . . .28% 47% 13% 9% 1%Baby Food H&B - Body Soap & Cleansers H&B - Shampoo & Conditioners
Coffee H&B - Oral Care
Average category . . . . . . . . . . . . . . . . . . . . . .38% 54% 21% 38% 8%Beer Canned Soup Dried Pasta Pizza/Snacks/Hors d'Oeuvres
Bottled Waters Canned Vegetables Frozen Dinners & Entrees Prepared Food - dry mixes
Breakfast Cereal Carbonated Beverages Juice, Drinks - DG Prepared Food, Canned - RTS
Canned Fruit Dairy - Yogurt Peanut Butter, Jams, Jellies Service Deli
All Category, All Store . . . . . . . . . . . . . . . . . . . . . .39% 56% 22% 39% 9%
Performance across stores; primary and secondary locations
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. . . Traditional research thinking may be inadequate in-store.
The Shopper
The Stimulus
The Relationship• One-on-one• Close distance• Long time (15+ sec)• Frontal view• Center of Field of View
The Challenge . . .
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Surfing the Web
Uni-directional
Watching TV
Uni-directional
Shopping the Store
Omni-directional
The Shopper is Omnidirectional
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Packages are media, too! And nearly ubiquitous.
In-Store Stimulus is Omnipresent… or Nearly!
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Watching Them Make Their Decision at the P.O.P.
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Watching Them Make Their Decision at the P.O.P.
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Seeing What They See at the Point-of-Purchase
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Seeing What They See at the Point-of-Purchase
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TNS leads active retailing
Information is the foundation of active retailing
Unique tools
in-store shopper behavioral data and metrics
framework for understanding > actions > profits
Spans the brand-retailer bridge
Scalable: “every brand, every retailer” strategy
Shopper Insights Review
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The Completed Picture
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Thank you!