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Vulnerability. Parity. Leadership. Using Shopper Perceptions to Drive Brand Decisions

IIR Shopper Insights in Action Wednesday, July 13, 2011

“Do NOT touch merchandise on display”

“Do NOT bother the staff”

“Ask for assistance ONLY IF you are goingto make a purchase”

“Do NOT thank the staff for a free look”

“Do NOT complain about the hours of operation or make personal enquiries”

What Perception are YOU creating?

Watt International | Overview

Line of Business: Integrated Retail Agency

In business since 1966

We help brands find ways to sell MORE things, to MORE people, MORE often.

The Integrated Retail Agency

The US economy will experience a double-dip recession

1.  Strongly agree

2.  Agree

3.  Disagree

4.  Strongly disagree

5.  We’re already in one.

What’s the Perception? What’s the Reality?

Measuring Shopper Perceptions: Brand Loyalty Switch Factors

Brand Loyalty Switch Factors

Price

Convenience

Quality

Selection

Pleasure

Social Conscience

Features

$

The Seven Brand Perception dimensions are classified in three ways:

•  Vulnerable – poor retention; low conversion possibility

•  Leadership – strong retention; high conversion possibility

•  Parity – does not materially impact retention or conversion

A comparative index score, where Core Shopper data reflects “retention”, and Non-core shopper data reflects “conversion”.

Brand Perception Index: How it works

Which gets higher priority in your business:

1.  Retaining /growing your existing consumer base 2.  Attracting/converting new consumers 3.  A balance of both 4.  We don’t distinguish our priorities in that way

Brand Perception Index

Specific to your market/category, do you know:

1.  How your Core shoppers (and Non-Core shoppers) rank the importance of each Factor in your category?

2.  How your brand stacks up against each Factor vs. the competition?

Price Index

Convenience Index

Quality Index

Selection Index

Pleasure Index

Social Conscience Index

Features Index

$

Quality

Convenience

Pleasure

Selection

Social Conscience

Features

Parity

Price

Retention indices (Core shoppers) Dallas, Texas

- Vulnerable Leadership +

The brands/products we buy

Who’s calling the shots now?

The places we buy them

Generation M:

•  Born after 1990: The coming consumer generation

•  Don’t know life without the internet

•  Short attention spans

•  Don’t trust advertising – look to their social network

•  Mobile technology is a commodity

•  Sensitive to our environment

•  Developing their consumer DNA during the global recession.

Compared to Gen X and Y, Generation M – the coming consumer generation – will be;

1.  More brand loyal 2.  Less brand loyal 3.  Demonstrate about the same brand

loyalty

The next generation of shoppers will be more informed, less brand loyal and will rely on their social networks to make informed

buying decisions.

Flexibility and adaptability will be key.

Is your brand ready?

Tesco’s “Buy one get one free” has turned into: “Buy one, get one free… later”

Traditional, innovative ways to change the Path to Purchase

Social media and mobile connectivity have changed the Path to Purchase and

dramatically increased the importance of understanding the “Perception” of your brand

The Value of a Brand

Positive Brand Value = Reality

Perception

Engaging shoppers in the brand using social media

Shopkick - a smartphone application that registers shoppers as they walk through the door, earning them points and prizes toward the purchase of store items.

10,000 new shoppers and raised online sales by 130 percent.

Virtual supermarket – an opportunity to tap into shopper’s down-time

To download a copy of our Digital Marketing 2011 report (and other free reports), see the back of the handout

Company Executives = 80%

Question: Does your company deliver a ‘superior experience’ to its customers?

Service Perception

Customers = 8%

Company Executives = 80%

Customers = 8%

Question: Does your company deliver a ‘superior experience’ to its customers?

Service Perception

LOTS of ways to demonstrate “service”

Quality Perception

What a simple, great way to allow shoppers to experience the primary benefit

Out of stock perception: What does “Out of Stock” mean to the shopper?

71(or 29% below the industry average)

131(or 31% above industry average)

*Total weighted index of OOS occasions and frequency of OOS products

If the shopper is willing to swap brands, then is the retailer perceived as “out of stock”?

*Total weighted index of OOS occasions and frequency of OOS products

As a CPG, do YOU know if a shopper is willing to “swap you out” if you’re not on the shelf?

$ Price Index Key influencers of store choice – total shoppers

Rewarding your loyal customers is becoming price of entry

Rewarding your loyal customers is becoming price of entry

Is there room for more CPG Loyalty Programs?

In-store couponing can help manage price perception

Price Perception Most retailers measure their actual competitive pricing, but how about measuring the perception?

Brand Perception Measuring the Seven Dimensions that influence where people shop

According to Walmart shoppers, how much do they save by shopping at Walmart for groceries vs. Publix?

1.  5% 2.  10% 3.  20% 4.  More than 25%

Main store Shopped

Wal-Mart Publix Winn Dixie Food Lion

Wal-Mart - +31% +23% +18%

Publix -5% - +6% +2%

Winn Dixie -3% +17% - +3%

Food Lion -6% +14% +10% -

Price Perception: National Brands

+31% 31

-5%5%

According to Target shoppers, how much do they save by shopping at Target for groceries vs. Kroger?

1.  5% 2.  10% 3.  20% 4.  More than 25%

Main store Shopped

Kroger Target Tom Thumb HEB

Kroger - +11% +18% +20%

Target +11% - +21% +25%

Tom Thumb -1% 0% - +17%

HEB +6% +7% +8% -

Price Perception: National Brands

+11%1

+11% 1

Competitive Differential: Provides a indication of how close your brand loyalists are to switching, and vice versa, based on Brand Loyalty Switch Factors

$

What is the average “perceived” price advantage required to make shoppers shift loyalty from their current grocery store?

1.  5% 2.  10% 3.  20% 4.  More than 25%

Average discount range affecting switching behavior = 25%

8 12

4 3

15

25

28

18 27

32

40

42

40

41

35

10

9

11

15

4

17

9

27

14 14

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

TOTAL WAL-MART PUBLIX WINN DIXIE FOOD LION

Discount over 40% Discount between 30% and 39% Discount between 20% and 29% Discount between 10% and 19% Discount less than 10%

8 12

25

28

40

42

10

OTAL WAL-MART

27 27

Wal-Mart

Core Non-Core

Publix

Core Non-Core

Winn Dixie

Core Non-Core

Food Lion

Core Non-Core

Social Conscience Index

Natural

Locally-sourced

Organic

Environmentally sensitive

Local community engagement

Charitable causes

Performance index: Social Conscience

Walmart doesn’t get enough credit for its social conscience

Kroger

Core Non-Core

Target

Core Non-Core

Tom Thumb

Core Non-Core

Central Market H-E-B

Core Non-Core

Pleasure Index 96 72 90 91 94 91 121 146 cleanliness 100 79 96 112 101 94 104 115

tidiness 99 77 92 114 109 93 100 116

An enjoyable place to shop 97 69 101 116 97 84 104 131

Staffattitude 101 76 84 84 109 102 106 138

Staff knowledge 102 65 74 71 97 97 127 167

In-store sampling 79 55 90 55 54 74 177 215

Inspiring 82 71 89 54 58 75 171 199

Educational 87 69 84 47 69 89 160 195

Performance index: Pleasure

Central Market HEB is off the chart for “pleasure”…even more so for Non-core shoppers!

115 1

116 1

131 3

138 3

167 6

215 1

199 9

195 9

And finally… Which of the following retailers scored higher from Non-Core shoppers than Core shoppers on ALL Brand Perception indices?

1.  Publix 2.  Target 3.  Kroger 4.  Walmart

Brand Performance Index: Summary

Kroger

Core Non-Core

Target

Core Non-Core

Tom Thumb

Core Non-Core

Central Market H-E-B

Core Non-Core

Price 127 126 93 108 100 97 80 68

Quality 102 79 78 68 95 97 126 156

Convenience 111 102 94 112 103 98 92 88

Pleasure 96 72 90 91 94 91 121 146

Selection 102 92 96 100 102 96 100 112

Social Conscience 93 68 87 82 79 86 141 164

Features 120 105 93 102 100 101 87 93

There is a disconnect between the message outside the store and the experience within it

research strategy creative

Vulnerability. Parity. Leadership. Using Shopper Perceptions to Drive Brand Decisions

Thanks for listening!

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