Basic Shopper Metrics Help Innovators Understand a New Product’s Place in the Retail Shopping Landscape
Anyone who has taken a new CPG product through concept testing and launch will be familiar with basic measures of new product success like Trial Rate – the percent of consumers who found the product offer appealing enough to try it and Repeat Rate – the percent of triers who were satisfied enough with the product’s performance to buy it again.
Now, with the rising importance of understanding the shopper as well as the consumer, innovators have a new set of basic shopping metrics to learn. Just as an architect needs to make a new building fit into the existing landscape of roads, buildings, and green space, innovators need to understand how their new product fits within the “landscape” of the retail shopping experience. In addition, just as the architect needs to satisfy design requirements both emotional (such as a warm and welcoming entrance) and quantitative (such as rooms with specific measurements), innovators need to understand the shopper emotions* associated with high versus low values of the new shopping metrics.
Here are three basic shopping metrics that provide valuable guidance for new product designers.
· Predetermination. This is the % of shoppers who know what category, brand, and SKU they’re going to buy before they even enter the store.
o In some categories, the purchase decision is often predetermined right down to the specific SKU and number of units bought. For example, when she buys milk, Mary always buys one gallon of Dean’s fat-free.
o In other categories, shoppers are more likely to enter the store with the general category on their list, but will select the specific brand, SKU, and quantity after examining the available assortment. For example, when visiting the cereal aisle, Sue may buy anywhere from 1 to 4 boxes, selecting from a consideration set of 10 different brands, with multiple factors impacting her choice such as sales, coupons, what varieties she bought last time, and what is still in the pantry.
The level of predetermination tells us several things about the shopper’s mindset, such as whether category shoppers are more likely to be on a finding mission or a selecting mission and also the extent to which the shopper is likely to notice and be influenced by in-store marketing.
o Mary buying milk is on a finding mission and needs only a few visual cues to navigate to the milk case, the fat-free variety, and the Dean’s brand; she is likely to block out everything else in the vicinity. Emotionally, Mary wants a sense of mastery, that she can immediately find her usual products within the complexity of the store.
Research Tip: Eye-tracking research is key to determine the specific visual cues used to find the best-selling products in the category, so that you can make sure your new product has its own unique “finding” cues.
o Sue buying cereal is on a selecting mission and is more likely to notice new products, displays, sale price signs, and at-the-shelf coupons. Emotionally, selecting can become a sport, where the shopper is looking for a win.
· Category familiarity. This is defined by the combination of two metrics: % household penetration and annual purchase frequency.
o The more widespread a product’s usage is, and the more often it is replenished (e.g., milk), the more likely shoppers are to know about all of the available options and to now shop the category on “auto-pilot,” blocking out in-store marketing. If you want to interrupt the auto-pilot, you generally need to do it outside the store.
o The less familiar the category, the more information the consumer is likely to seek, and the more assistance she needs to differentiate among options. The shopper is likely to feel insecure and seek the reassurance and safety of a well-known brand name or a trusted endorser, or, lacking that, she’s likely to choose the product with the best explanation of its features and benefits. If frustrated in determining the optimal product for her needs, she may resort to choosing on price or even delay her purchase.
· Category complexity. This is defined by four numbers, typically obtained from syndicated retail sales data: the number of unique SKUs carried in a typical store; the % of SKUs that are new each year; the absolute number of unique product attributes available, such as brands, forms, flavors, colors, scents, active ingredients, package types, sizes, and price/quality tiers; and the number of highly technical attributes which are harder to understand and compare, as in health care categories and functional foods. The more complex the category, the more time a shopper generally spends on both finding and selecting, making these categories prime targets for in-store marketing investments.
o In a category with high variety complexity -- even one with high familiarity, such as canned soup -- the shopper can easily become frustrated in even the most basic finding mission. Such categories present an opportunity to improve shop-ability (leading to higher sales) and to better satisfy the shopper’s emotional need for mastery (leading to higher brand and retailer loyalty). The Campbell’s Soup IQ Mazimizer is a success story in this regard, as is their new soup label design.
o In categories with high technical complexity and low familiarity – such as many health and personal care categories – the brand with the clearest story that most strongly taps into a shopper’s emotional needs is most likely to win. Remember that you have only seconds to tell your story at the shelf, so your package’s text and imagery are crucial.
o Categories with lower complexity are often ripe for innovation in packaging and marketing. Think about how you could tap into the shopper’s emotional needs for connection with family and friends, for playtime, for self-creation.
When you put these three metrics together, you have a good starting point for understanding the landscape of a category.
Package fronts need to address the questions a shopper needs answered in order to make her purchase decision. For example, when buying cold medicine, the symptoms treated and the number of days of relief in the package are critical facts to the shopper. When buying family meal components, the shopper really wants to know the number of servings in the package and perhaps the prep time. How do you figure out which features are driving purchase decisions? In-store shopper observation and interviewing is the place to start, because you need to see how much time the shopper spends reading package information, what parts of the package they look at, and then capture their thoughts immediately. You get the most realistic results by talking to real shoppers in real stores. Then, to test specific executions, try one of the virtual reality shopping systems offered by vendors such as Vision Critical, Red Dot Square, Fifth Dimension, and Decision Insight. For a review of the process Campbell’s Soup used to come up with their new label design, click here. (If this link doesn’t allow you to see the full article, just Google “emotional soup shopping.”)
* Credit to shopper marketing agency SaatchiX for defining mastery, security/safety, sport/competition, and connection as the most important shopper emotional needs in 2009. Less important but still in play are dreaming, self-creation, sanctuary, and playtime.