Retail’s Black Hole – what’s really going on inside stores?

 

 

 

Competition from data rich ecommerce is forcing bricks and mortar retailers to adapt or die. In order to prosper, high street retailers need to understand what’s really going on inside their stores. Online shoppers’ behaviour is closely scrutinised and constantly monitored. As soon as a shopper logs on to an e-commerce website ads pop up and follow them around as they make their shopping journey and beyond.Meanwhile in the real world, retailer and brand owners are frantically playing catch up.  They have traditionally relied on EPOS data to tell them what shoppers are buying. EPOS data only gives a fraction of the picture though and doesn’t answer two of the key questions that are pivotal to analysing shopper behaviour, namely where are shoppers going and what are they doing?

For example, they can’t tell you that most shoppers who browse whisky, don’t actually buy it.  Nor can they reveal the shoppers lost at  lunchtime as the store is uncomfortably busy and queues are too long.

A recent SRI project focusing on the cereal aisle is a prime example of how using behavioural analytics is the only way for retailers to get a true understanding of what’s going on inside stores.  It revealed that only 42% of shoppers who enter the store actually go down the cereal aisle.  Of those, 43% do not even stop and browse and 26% browsed the petfood on the other side of the aisle. Therefore, only 13% of shoppers actively engaged with cereal.  This worryingly low numbers surely tells retailers and brand owners alike that they need to do more to attract and entice shoppers in to their categories.

Real-world insights are essential to gain a deeper understanding of the kind of experiences customers want, to maximise revenue within stores by using space and layout effectively. Retailers who have been watching closely and moving strategically to stay ahead of consumer expectations are thriving. Behavioural analytics are crucial in helping them understand customers’ wants and needs to maintain and increase wallet share.

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£Millions lost at the checkout: the value of behavioural analytics

Queue abandonment
Queuing causes shoppers frustration and increases abandonment rates

 

 

 

Queuing may be quintessentially British but it’s indisputably bad for customer satisfaction. Which ultimately means it’s bad for sales. The-doom mongers may constantly predict the Armageddon of bricks and mortar shopping, but the reality is that there are still a wealth of shoppers that prefer to purchase instore rather than online. Ensuring that shoppers complete their shop is clearly a fundamental requirement for retailers.

2018 intelligence suggests that UK brands and retailers are losing over £14bn per year  because of queue abandonment.  SRI has worked on several projects, in both the UK and Internationally, that corroborate these findings.

One UK retailer we worked recently saw average queue abandonment rates of 6% and similarly a South African retailer we analysed saw figures of 8%.  In both cases, these abandonment rates were even worse during the lunchtime period. Busy office workers didn’t want to spend their precious lunch breaks queuing and would abort their mission rather than waste time.

Thankfully, such unwitting self-sabotage is relatively easy to measure and fix.  But as the old adage goes, you don’t know what you don’t know. The key to success therefore lies in identifying problems you don’t necessarily know you have, by getting ever closer to your customers’ behaviour. Behavioural analytics help you monitor what your customers are actually doing, enabling you to offer an improved experience that enables them to complete their shop!

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Walkaways – the missing metric that could save Retail

It is hard to see, read or hear any news article about traditional retail these days without hearing about footfall being down and shoppers deserting bricks and mortar.

It’s not all doom and gloom though. There are some easy ways to avoid becoming victims of the ‘Amazon effect’. In particular, analysing behaviour of shopper’s instore experience.

At SRI, we believe there is an enormous opportunity being missed.  We call them ‘Walkaways’.  Shoppers who browse or interact with products or categories but don’t buy

Amazingly, retailers and brand owners do not standardly measure Walkaways.  In recent months, we have completed behavioural analytics studies in grocery, DIY, healthcare, drinks and pop-ups and a consistent theme emerges.  Too many shoppers engage with products and categories but walk away from the category without buying.  Typically, SRI sees Walkaway rates of 20% to 40% in mainstream grocery retail.

Take the example below.  The heatmap shows where shoppers have actively browsed categories, but in the end, not purchased anything.

Static screenshot from SRI animated heatmap

In this real life example, the category walkaway rate was an eyewatering 38%.

Measuring and improving these walkaway rates is an opportunity there for the taking. After all, these shoppers have actively chosen to come into your store and browse your products.  Understanding why they then walk away is the key to future success.

For more information contact info@shopperretailinsight.com

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Myth Busting

For as long as I care to remember the adage that 70% of purchase decisions are made in-store has floated around in conversations and articles in the retail community and been used as a justification for investment in in-store shopper marketing activity.

In recent years there has been much conjecture over the 70% figure. So where does it come from?

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Paying Attention to Packaging

Grocery shopping is a task based activity.

Often times we will walk into an aisle and play out a heuristic script which leads us to select the same product that we always have.

Searching for that product is a process of elimination guided by familiar signals such as the shape and colour of packaging.

In these circumstances, for a product attempting to build market share, disrupting this process and gaining a shopper’s attention is no mean feat.

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The draw of the store

Although the growth in on-line sales is unquestionable, that’s not a reason for retailers or manufacturers to take their eye off the ball with Bricks & Mortar.

In the UK a mere 4.4% of grocery sales are on-line and the IGD predicts that this will rise to 8.9% by 2019. OK that’s strong growth but it still leaves over 90% of sales to be accounted for by physical stores. (more…)

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Grocery Retailing – A Volume Business

Grocery retailing is undoubtedly a volume business where marginal changes in shopper behaviour can have a massive impact on the balance sheet.

To use an example, some five and a half billion litres of milk are sold in the UK each year with the top 5 grocery multiples accounting for nearly three quarters of this volume.

At a price of £0.75 a litre, Tesco as the UK’s largest retailer sells over £1bn worth of milk a year to the British people. As such increasing sales by just 1% would result in a revenue uplift of around £10m. (more…)

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Find Time

How do we look for things?

Chances are that if you are like me at some point you will have lost something such as your keys and have had to try and find them. You will have gone first to the most logical places such as the key hooks by the door or the counter top in the kitchen; but if your keys don’t show up there you’ll try elsewhere, working through a mental list of all the possible places that your keys might be. As the search goes on you’ll probably feel yourself getting more and more frustrated and possibly start thinking about how much time you are wasting and how you need to be moving on to do something else. But you don’t stop, you need your keys!

Looking for products in a supermarket is no different. (more…)

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