Deciphering shopper behaviour with ‘Store Trek’ research done by IIM-A, TNS, KiE Square and OgilvyAction
BestMediaInfo Bureau | Mumbai | February 11, 2013
Shoppers of FMCG products are behaving differently for the first time, ever, in India. New and especially big-box modern formats are driving this change. Over the last five years, the penetration of hypermarkets has risen significantly.
However, one might argue that modern trade contributes to below eight per cent of all retail trade in India. This is a function of store penetration, not channel adoption. India has only six modern trade stores per million. According to a report published by AC Neilsen, the top 17 metros in India contribute to 73 per cent of the country’s modern trade business. In the same geographies, modern trade contributes to a third of total retail.
Should brands split limited last-mile marketing dollars by a channel’s contribution to sale, or by its contribution to behaviour change? This question is meant to be rhetorical, though the reality finds itself stuck in the absurdity of investing by contribution to sale.
This line of thought extends itself quite naturally to another, yet not the last of what could become a series of rhetorical questions: Are the rules of shopper marketing the same across traditional and modern trade formats? If the marketing community’s entire mental encyclopedia of shopper marketing resides in its knowledge of selling to shoppers in non self-service, highly cluttered formats, is there an inherent need to learn something new? And, perhaps, un-learn something old?
In order to truly discover how shopper behaviour has changed in India, as shoppers move from bargaining at mom-and-pop stores to seeking a bargain at hypermarkets, India needed a robust study that had academic rigour, shopper research, analytics and practical application in equal measure. To do this, the country’s top-ranked business management school, Indian Institute of Management - Ahmedabad (IIM-A), TNS, KiE Square and OgilvyAction came together as equal partners.
With the much debated and once-failed decision of allowing FDI in retail now having seen the light of day, India is likely to emerge as the most exciting growth market for international hypermarket operators. The real impact of FDI is likely to kick in only after 2015 and it’s anyone guess how large modern retail will be, in the world’s fourth largest GDP (by purchasing power) in 2020.
Hypermarkets most conducive to inducing brand switch
It’s a well-established fact that shoppers shop at multiple formats. In other words, the percentage of trade that happens out of modern trade is far lower than the percentage of shoppers who shop at these stores. All of these shoppers are likely to experience an unconscious change in their own behaviour. This change in behaviour is manifested in the form of category adoption and, or a switch in brand preference. Once altered, category and brand preferences are unlikely to change when shoppers visit their neighborhood hole-in-the-wall, dimly lit, highly cluttered mom-and-pop store.
Big Bazaar & HyperCity
The study spent the last few months understanding how shoppers behave at hypermarkets. Two hypermarkets were picked, one at each end of the value spectrum.
Big Bazaar is India’s largest hypermarket chain; it’s known for great deals. With promoters shouting out offers for the day and products and categories strewn around, the inside of these stores mimic every detail of a big bazaar. The focus on offers and discounts is at its highest at these stores.
At the other end, the study picked HyperCity. Complete with swanky interiors, this hypermarket chain is known to offer the finest shopping experience in India. Though discounts exist at these stores, they aren’t overtly communicated.
The study chose three urban cities – Mumbai, Delhi and Bangalore; and picked nine categories across food and personal care – chocolates, chips, carbonated soft drinks, health food drinks, breakfast cereals, hair care, oral care, and soaps.
Two shopper research techniques were followed: discreet shopper observation through physical observers and cameras put up in each of the above categories; and exit interviews. The sample included over 6,000 shoppers, 3,300 buyers and 2,700 exit interviews. In addition to this, it collected over 450 hours of video footage.
The research then built a shopper predictive model called ‘Store Trek’. If wants to know how many male shoppers aged 21-30 there are at value hypermarkets in Mumbai, shopping on a weekend from 5 - 7 PM as part of their weekly stock-up, with an assertive co-shopper, are likely to smell a soap before buying it on impulse, the study would have the answer.
Of course, there’s more. ‘Store Trek’can predict each aspect of physical behaviour; this means tell exactly what percentage of a category’s shoppers and buyers are likely to touch, smell, pick up, read, check prices, check brands, check variants and so on. The research can also give you purchase decision hierarchies for categories, impulse versus planned sales, time and money spent by shoppers, store visit frequencies, shopping missions, top brands shopped by category, videos demonstrating physical behaviour, role of co-shoppers, basket size, cross-category associations and percentage of grab-and-go shoppers.
This analysis can be done by category, gender, age, location, type of store and time of shopping (day of week and hour of day). ‘Store Trek’ makes all this information available at the click of a few buttons and on a single-page screen.
Store Trek: Screen Shots