Saturday, July 28, 2007

Nielsen study reveals four different shopping mindsets

As usual, RetailWire has another great discussion going on, this time about a recent Nielsen study which describes four different "mindsets" that consumers may experience while grocery shopping. As Tom Ryan, the discussion's leader notes, "knowing the differences can help brands and retailers better target customers by category." The four modes are:

  • Auto-Pilot - Shoppers grab 'n go. Typical categories: margarine, mayonnaise, bottled water, nuts, coffee, popcorn, carbonated soft drinks, hot cereal, cheese and cold cuts.
  • Buzz-Activated - Shoppers are open to buzz and engaging advertising. Categories: energy and sports drinks, chocolate, ready-to-drink tea and yogurt drinks.
  • Variety-Activated - Shoppers seek new tastes, new formats. Categories: cookies, salad dressing, chewing gum, salty snacks, breakfast bars and cold cereal.
  • Bargain-Activated - Shoppers compare prices and hunt for promotions. Categories: canned tuna, canned tomatoes, canned fruit and pasta sauce.
These mental contexts describe not only how the shoppers think, but also how they act, respond to different kinds of in-store promotions, how they navigate the store, and how they make purchases. While this kind of customer segmentation could certainly yield interesting data if used to categorize shoppers on every trip (e.g. with the help of a swiped loyalty card to link different shopping trips and baskets together), as many in the discussion noted, it's not necessarily the most useful way to divide up shopping habits. My favorite comment from the discussion came from Herb Sorensen, the Global Scientific Director for Shopper Insights at TNS Sorensen. Here's his take:
We found that when we let 75,000 shoppers in three different major supermarket chains sort themselves into groups, there ended up being three groups: quick trippers, fill-in shoppers, and stock up shoppers. No surprises there, and this was based only on a selection of behavioral characteristics (walking speed, length of trip, number of items purchased, etc. - hierarchical cluster analysis) and no attitude or demographic measures.

The valuable part of the finding was that six categories were purchased in quantity by all three groups; another half dozen were purchased mostly by the second two groups; and a final half dozen categories were purchased predominantly by the stock-up shoppers. This makes possible a rational scheme for merchandising a SELECTION of these 18-20 categories in an intuitive (for the shopper), instinctual manner.

So rather than sort by basket contents or mental context, Sorenson found that a natural segmentation came from the shopper's needs. Moreover, in this case that segmentation correlates very nicely with trip duration, which gives marketers even more to think about when trying to attract the attention of these various groups. Sorensen's final thought on the matter is telling: "Too many segmentation schemes are too complicated and too intellectual to allow practical execution on the sales floor." I think we may overlook that from time to time, as we become ever more engrossed in collecting and tabulating data. While deep wells of knowledge about individual shopping trips can be extremely useful, it's all for naught if no practical application can come from it.

Tags: shopper segmentation, retail media, retail advertising

No comments: