Shopper Fact or Insight?

Gordon Wade, Managing partner and director of best practices

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Every brand owner, retailer, ad agency and promotion agency is hungry for shopper insights. But it’s not enough simply to develop an insight. That insight must be deployed in the store in a way that links the insight and shopper to the brand and retailer.

This is not easy. Let’s start with one of the basic challenges: Many people confuse the concepts of “insight” and “fact.”

For example: Males between the ages of 18 and 35 are the heaviest consumers of beer. That is a fact, not an insight. The insight here is that the brand of beer they buy becomes a badge signifying their acceptance by a group of friends. Remember this the next time you see the Miller Lite TV commercial about the young man losing his “man card,” meaning he is no longer the kind of guy who drinks Miller Lite or belongs to that group.

Now let’s demonstrate how an insight can be used to solve a significant problem at c-stores in the beer cooler. We know that out-of-stocks are costing retailers millions of dollars in the beer category, with the average c-store suffering out-of-stocks in the range of 4%. We also know that almost one-half of the shoppers who find their favorite beer out of stock will leave that store without buying beer. Solving this problem would increase overall beer sales by 4% and also increase shopper satisfaction rankings for the store.

How can we use insights to solve this problem? We start by recognizing that beer shoppers are segmented into five need states or attitudinal segments, according to research by Anheuser-Busch InBev. These segments have different beer-drinking habits, preferred brands and annual worth as a shopper at any given store. According to the supplier, these attitudinal segments are loyalists, experimenters, aspirers, trendsetters and sippers. Loyalists account for more than one-half of all category consumption, and as their segment descriptor implies, they tend to be loyal to a specific brand and type. They also tend to be heavier consumers of beer.

Know Your Profile Mix

The challenge for retailers is this: They cannot readily know to what segment any given shopper belongs. Nor can they easily know the overall profile of beer shoppers entering their store. Do they have more loyalists and fewer trendsetters? More aspirers and fewer experimenters? If they did know their profile mix, they would be able to verify their shoppers and adjust their assortment accordingly. It isn’t easy, but as the person who wrote the initial efficient item assortment protocol for the industry’s “Efficient Consumer Response” committee nearly 20 years ago, I know it can be done.

The good news is that 80% to 85% of the beer assortment is going to be the same in virtually every store, irrespective of the unique profile of store No. 1 vs. store No. 2. Out-of-stocks are a function of misunderstanding the preferences of differing shopper profiles on the marginal 10% to 15% of the SKUs in your beer assortment. As a general rule, the out-of-stock problem will be focused on brands favored by experimenters, aspirers and trendsetters because these are usually small-share brands that are either left out of the assortment or underspaced such that one or two customers can wipe out cooler inventory before the beer distributor can respond.

If you are looking for shopper insights, let me assure you that your heart and mind are in the right place, but you must discriminate between a fact and an insight. Understand that an insight is often built around an emotional response and that merely understanding insight isn’t enough. You have to go from insight to in-store.  

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