Consumer Insight: Going to the Source

Why do shoppers choose one product over another? What role does packaging play? Do consumers need to touch and demonstrate a product before they make a purchasing decision? And what impact—if any—does the aisle attendant have on a shopper's decision?

Of course, for every product category and every brand, the answers are different. One thing is certain, though: the retail aisle is ultimately where the product's—and the manufacturer's—success is determined.

The consumer goods manufacturer with the right answers to these critical questions has a significant competitive advantage in the marketplace. Unfortunately, getting accurate, quantifiable data on consumer purchasing decisions is becoming increasingly difficult. Manufacturers need greater market insight than they are receiving now from the retailers that sell their products, or from widely available consumer reports. To succeed in an increasingly competitive retail environment, manufacturers require a more objective, quantitative, and custom-tailored research method in order to determine brand value, improve retailer relationships, and meet real-world needs.

Consumer Knowledge Means Power
The Consumer Information Shortage
Understanding the Purchasing Decision—As It Happens
Consumer Insight: Far-Reaching Effects
A New Methodology in Consumer Research
Moving From Data to Strategic Insight

Consumer Knowledge Means Power

Not long ago, manufacturers held the power in the retail equation. Consumers shopped for name-brand products. Manufacturers told retailers how much product they would receive and how it would be displayed. They dictated how much to charge for their products and when promotions would occur.

But, with the rise of mass merchants and "big-box" retailers, that power has shifted significantly. Today, consumers shop at such retailers as Wal-Mart and Target and buy the brands that are there. In essence, the retailer has become the brand. Retailers now have the power—and, therefore, control over the in-store purchasing process. They are the ones demanding that a certain quantity of product be delivered to their stores at a particular time. Retailers now make the decisions concerning which goods are placed on which shelf—and which are left off the shelf entirely.

If manufacturers are to stay competitive, they must find a way to shift that power back in their favor. How can they accomplish that? By improving their relationship with the consumer, so that they can meet end-user needs and increase the value of their brand. In the manufacturer's case, knowledge truly is power. Manufacturers need more—and better—consumer information if they are to continue providing products that truly meet end users' needs and drive cash-register sales.

The Consumer Information Shortage

Although retailers provide a constant stream of information to the manufacturers that service them, this data lacks strategic value. Retailers usually only offer point-of-purchase information generated at the cash register, and then only on the manufacturers' own products—not competitors'. This raw sales data fails to answer the key questions that can help manufacturers to improve their product offerings and merchandising materials. Because point-of-purchase sales data is historical, it tells the manufacturer nothing about consumers' unmet needs. And, because sales data is one-dimensional, it tells manufacturers nothing about the complex purchasing decision—or how many consumers left the aisle without purchasing anything.

The two traditional research methods available to manufacturers—broad consumer studies and secondary data analysis—are also problematic. While conducting a primary consumer study may seem logical, it can be extremely expensive and limited in scope. Most often, manufacturers convene focus groups or commission telephone surveys that rely on memory, instead of hard, objective evidence gathered in the retail aisle. Buying consumer or household data from a secondary source is also expensive and provides data that is too broad to connect to a specific product decision. Most important, however, is the fact that these research methods do not reflect the retail shopping experience—the environment in which purchasing decisions are actually made.

Understanding the Purchasing Decision—As It Happens

Because manufacturers cannot depend on retailers or traditional research methods to obtain true insight, they need to go to the source—and study consumer behavior in the retail aisle. In order to gather the best possible data, manufacturers need to see the consumer's decision-making process as it happens.

By observing this process, the manufacturer can gain answers to essential questions such as:

	Who buys our products?
	What factors—such as price, packaging, or the aisle attendant—influence consumers' decisions?
	Where are end users purchasing our products?
	When are key purchasing decisions made?
	Why do shoppers choose our brand, competing brands, or nothing at all?
	How much time did the consumer spend in the aisle before buying?
	Did shoppers come into the store intending to purchase a specific brand?

The list of critical questions doesn't end there—and these questions should be customized to fit within manufacturers' strategic challenges and marketing objectives.

While the answers generated are valuable, obtaining information is only the beginning of the process. The analysis of that information is crucial in developing new strategies to help win consumers and increase profitability.

Consumer Insight: Far-Reaching Effects

Because purchasing decision data is rich in objective facts, it can and should have far-reaching implications across a manufacturer's enterprise, impacting such key business processes as:

	Product development—What kinds of products and product attributes are consumers looking for? What changes would make next-generation products more attractive to consumers?
	Pricing—What do consumers believe is a fair price for certain products—and how do manufacturers measure up against those expectations? Do consumers equate price with quality?
	Merchandising—Do consumers feel the need to touch products before buying them? What role does the aisle attendant play in the consumer's ultimate decision?
	Brand management—What messages do different brands convey to consumers? Does a manufacturer's intent match consumer perceptions?
	Market share strategies—How do consumers view competing brands? Should a manufacturer create a new partnership with its most important retail channel?
	Consumer service—Do consumers value having a consumer service telephone number or Web site printed on the packaging? Should manufacturers rethink their warranties or performance guarantees?

The top-level strategy changes made because of market insight captured in the retail aisle can lead to increased penetration, market share growth, greater brand awareness, and higher sales. The problem is that such data—and the necessary analysis—has traditionally been out of reach for most manufacturers.

A New Methodology in Consumer Research

The question, then, is how can manufacturers study consumer decisions cost-effectively, while ensuring reliable, objective data? In response to this common challenge, GMT has developed an exclusive service called Consumer Observation Video Evaluation Research, or COVER.

COVER combines the power of videotaped consumer decision analysis and intercept interviews to produce a new methodology in consumer research. This approach is based on studying objective, in-aisle behavior, in addition to gathering more subjective information, such as memories and brand impressions—giving manufacturers the answers to their most pressing strategic and marketing questions.

Working with a retailer, GMT sets up a series of cameras in the aisle, usually focusing on one product category. Consumers are videotaped from a variety of angles as they enter the aisle, consider products, and finally make their choice. The videotape reveals such critical information as the length of the decision-making process, the number of products touched, and whether consumers interact with store personnel. Then, since even videotape cannot tell the consumer's entire story, intercept interviews are conducted as shoppers leave the aisle. Once consumers have made their product choice—or have chosen not to purchase—a GMT researcher asks them questions about their behavior, their attitudes toward certain products and brands, and their intent to buy as they entered the store. The questions include the factors that consumers believe led them to their ultimate purchasing decision—something that videotape alone cannot reveal.

Finally, GMT's in-depth analysis of the videotapes and consumer surveys results in quantifiable recommendations for increasing brand awareness, merchandising effectiveness, product recognition, and market share. No other research method is as objective or comprehensive, or considers such seemingly disparate factors as brand perception, predisposition to buy, and in-aisle assistance.

Unlike point-of-purchase data or broad consumer trends reports, COVER provides information that is custom-tailored for each manufacturer—insight that has power to transform the business, from product development through sales and marketing.

Moving From Data to Strategic Insight

In today's fast-moving retail environment, few things are certain. One certainty, however, is that retailers cannot be relied upon to look after manufacturers' best interests. There is little intelligence—or true insight—behind the information retailers provide to manufacturers. And the research methods manufacturers have traditionally employed are too limited in scope, and rely solely on memories and perceived behavior.

To gain a competitive advantage in the marketplace, manufacturers need a more objective, quantitative research method—a new methodology—than is widely available. They need the unique blend of video observation and in-aisle intercept interviews to gain true market insight. Such insight has the power to change the way manufacturers do business—and lead to bottom-line results.