New insights on decisions in front of the shelf

Shelf space

Shelf space

Retail selling space is a fixed resource. Although the average size of stores has increased, it has not kept pace with the overpowering product introductions. Retailer managers keep making space constrained decisions about product assortment and allocation of space to these items. But decisions do not stop there, once they have decided which products to sell and how much space should be given to them, they need to decide where to place them – in what context, coexisting with which other products.

Every item in the store is linked to other items. Understanding item relationships within a shopper basket is extremely beneficial for retailers. By discovering the influence one product has over the demand of another, marketers can create campaigns aligned with this and improve sales.

Many retailers use basket analysis to try to understand shopper behavior in order to make the right decisions regarding these topics. The truth is that new insights are rare and mistakes based on intuition are frequent and costly. We have discovered a specific consumer pattern and we will share it with you now.

Some background: One of the most important supermarket chains in the world wanted to track shopper engagement on the shelf and conversion based on different stimuli during a month on a complete category – Baking Aisle (cakes, jellies and desserts). This was carried out in South America during this spring. The chain decided to implement groundbreaking technology: Shopperception was used to create objective performance metrics.

The system used 3D cameras (to sense the scene) connected to proprietary algorithms analyzing consumer behavior. This is kind of google analytics in the real world that is unbiased shopper observation and analysis. The tool tracked multiple shoppers (more than 88000 customers) continuously during opening hours and no human interaction was needed.

One of the many findings was that light products are picked in half the time than regular ones. Conversion of regular jelly was 37 seconds on average, whereas light jelly was only 15 seconds!

This is quite important because if the retailer detects that light products are triggering shopping in that aisle, they can focus on special activations to increase demand. We have discovered a new shopper behavior that can now be analyzed further on: Does this happen in other categories? Do light products sell faster?

This must also be studied within Shopper Missions.  A hypothesis could be that the shoppers purchased light products for their own consumption, probably planned or routine in every shopping trip. On the other hand, regular products might be purchased as a sweet attention for the rest of the family, a slower decision-making process.

Shopperception also identifies when products are grabbed first and last as well as returns. This goes beyond detecting what items are likely to be purchased together, this enables retailers to know which items trigger more sales in the category – the so called Halo Effect.

In this particular case, the purchase of light products did not prevent shoppers from buying more products but most of the following purchases were also within the light line as well.

A further analysis on this could have impact on packaging design (light vs regular), product development (more light variants), facings in the shelf and even the creation of an exclusive aisle for light products.

Objective metrics that back up assumptions will empower accurate decision-making along the supply chain. New technologies have arisen to aid retailers in understanding shopper behavior so that they can gain margins and market share, drive more targeted promotions and increase ROI.

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