Engineering for Reality

Mitch Morrison, Vice President of Retailer Relations

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“Reality,” said the acclaimed physicist Richard Feynman, “must take precedence over public relations, for nature cannot be fooled.”

Feynman, who assisted in the creation of the atomic bomb and died in 1988, was writing about the blunders behind the space shuttle Challenger disaster, and the disconnect between NASA’s bureaucracy and the complexities of engineering for space.

But swap out “reality” from his quote for “retailing.” Let’s also substitute a couple of other words and make the sentence as follows: “Retailing must take precedence over manufacturer wants, for consumers cannot be fooled.” Who am I to reframe Feynman? Well, it wasn’t from me—it’s part of the fascinating findings shared with us by VideoMining Corp. Based in State College, Pa., the company works with major consumer brands and retailers to test certain assumptions by using quantitative analysis of shopper behavior.

In simple English, the company installs hidden video cameras to see if customers behave the way we want them to or think they will.

In a must-read report you’ll find exclusively in this issue (p. 51) by senior editor Samantha Oller, VideoMining worked with five of the convenience channel’s largest chains: 7-Eleven, Circle K, BP’s ampm, Cumberland Farms and Sheetz.

Funded by CPG companies, the instore- intelligence specialists spent six weeks observing in-store behavior. Specifically, they looked at where the customer first makes a beeline, where the customer is most decisive in his or her purchasing behavior, and where that shopper is likely to pause.

If you read the results carefully, you’ll smash the false gods we’ve been told to worship and revisit the many assumptions long considered Retailing 101.

How often, for instance, have we been told that multiple destinations guarantee higher sales? Conventional thinking says to place salty snacks in three stops inside your store, vs. in a single in-line set, and you’ll see sales grow significantly. The truth, VideoMining’s report suggests, is far more nuanced.

Perhaps the most enigmatic was the gum/mints section, where foot traffic was high but sales were weak. Or, as Samantha puts it, “gum was one of the categories in which the conversion from ‘shopper’ to ‘buyer’ was low.”

And even when additional placements were employed, customer conversion remained about the same, defying the notion of impulse and repetition—that the more someone sees something, the likelier he or she is to embrace it. “Don’t assume you’ll get incremental sales just because you have multiple product locations,” Priya Baboo, VideoMining’s executive vice president of shopper insights and strategy, told Samantha. “You have to think out of the box to capture their attention.”

Overall, the news is far from grim. The study shows clear victories for c-stores. Most notably, cold vault and foodservice/ fountain are drivers, regardless of whether the store is on the East Coast or West Coast. Yet even here, there are shades of gray.

For example, Michael Burkenbine, marketing programs specialist for BP’s ampm brand, learned from the report how important fixtures are in influencing traffic flow. For instance, he shared that if an aisle ran parallel to the store’s entry, customers could choose to go left or right. However, if the aisle is perpendicular to the entrance, the heat map reported “hot spots” where customers automatically would face certain products—potentially a prime impulse opportunity, or a wasted space if you have the wrong products staring at the customer.

What I especially like about this study is that it challenges emotional strategies with empirical observations. True, you may know your market better than any consultant, but video cameras do not lie.

Just because you may enjoy strong foot traffic doesn’t mean your registers are ringing as loudly as they should.

It is possible you are carrying products your customer doesn’t really want. Equally true: You may be carrying the right products without the optimum plan-o-gram. Just as nature cannot be fooled, neither can the consumer. What better way to truly know what your customer wants than seeing it on video? 

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