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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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.

(more…)

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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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Time To Shop

In his book Inside the Mind of the Shopper, US shopper insights pioneer Herb Sorensen states that “Shoppers only spend 20% of their time selecting purchases and 80% in transit” with the implication that retailers need to put products in the path of shoppers so they can spend less time walking and more time buying. This would certainly seem to be a valuable insight in as much as it makes a distinction between useful and wasted shopper time; however is this generalisation about time utilisation always true? (more…)

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Seeing The Light

This great lecture by Beau Lotto on light and colour got me thinking…

 

So:

Colour is important in telling us about our environment and the things in it.

Colour is a function of the wave length of the illumination, the transmittance of the space between our eye and the object and the reflectance of the object. Changing any one of these dimensions changes the colour we perceive.

Our brains adapt to changes in these dimensions so that we can continue to perceive objects as the quality of light changes, but this adaptation is not instantaneous.

This being the case let’s consider a retail environment. (more…)

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Putting Things Into Context

As traditional media fragments then the retail coal face becomes ever more important in the battle of brands to capture the attention of consumers en-mass.

Little wonder then that shopper marketing and the research and insight which fuels it are becoming an increasingly significant element in many organisations marketing and communications mix.

But marketing to shoppers at this first moment of truth presents a unique set of challenges. (more…)

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