Is a new shopper research imperative emerging?
I had been in shopper research for quite some time and began to think that something was missing. Oh, don’t get me wrong, the industry had solutions and they worked — it just seemed like we weren’t getting to a granular understanding of how and why shopping decisions are “really” made. I felt a more granular understanding would lead to higher-level insights, more effective strategies and a competitive advantage for the invested companies.
In a technology-obsessed industry there have been a lot of innovations in shopper research, from the virtual shelf, to neuroscience techniques, to smart phone apps, to unobtrusive cameras or beacons…the list goes on. Several innovations have played their part and some show more promise than others, but in my opinion none would have the kind of impact that a more detailed understanding of the heuristics of decisions could deliver.
So I ventured off the beaten path in search of truth, and my travels brought me to Duke’s Fuqua School of Business. I spoke with well-known professors of marketing, consumer psychology and behavioral economics, and they shared with me what the academic world knows about the science of how people decide.
That’s how the Duke-Ipsos Research Center & Think Tank was born.
There was value in the connection between what the academic world had to offer and potential business success — it just needed a bridge. So I created the Duke-Ipsos Research Center & Think Tank, which is dedicated to advancing our knowledge of the decision theory associated with creating demand generation through the shopping experience.
I subsequently co-founded the Yale-Ipsos Behavioral Economic Think Tank, which examines behavioral economics from the perspective of consumer (brand) marketing. Both Duke and Yale conduct experiments that provide insights into the non-conscious decisions that we all make as consumers and shoppers.
Non-conscious decisions rule.
It turns out that many of our decisions are made non-consciously. Much more than we had previously thought or even given our attention to.
Take, as an example, an academic study (Keith Wilcox, Beth Vallen, Lauren Block & Gavan Fitzsimons) conducted several years ago, where respondents were presented with a choice of a side with lunch. One group was offered French fries, chicken nuggets or a baked potato. The other was offered those same choices, but with the addition of a healthy salad. Ten percent of the time the group without the healthy option sprang for the fries (the least healthy choice). But when respondents had a healthy option — salad — their choice of fries jumped to over thirty percent!
In academia, this effect is called Vicarious Goal Fulfillment. It turns out that people only have to think about the salad they had for dinner the previous night, or the salad they’re planning to consume that evening, and — voila —the mere presence of a healthy choice vicariously fulfills their goal to eat well, and they opt for the least healthy alternative.
What about real-world applications?
For shopper researchers working for companies that produce indulgent products, the questions are obvious. Does this effect work in store? On display? Every day on the shelf? Does the same effect work with images or signage?
There are hundreds of effects that have been proven over the years in academia. Many of these effects can increase sales dramatically. If you’ve ever seen examples of these effects in articles or at conferences, it’s hard not to be swept away by them. Behavioral economics and consumer psychology have arrived and become HOT! But unlike neuroscience, the virtual shelf, smart phones or big data…it’s not about the technology.
This is a revolution of a different kind.
A revolution that will be won by the companies that do these three essential things:
- Connect to the world of decision science and what’s already known. Hiding in plain sight are years of academic work in this field and hundreds of established effects that create the foundation of knowledge, learning and insight. Once you discover this world it doesn’t take much imagination to understand how powerful this knowledge can be if properly harnessed.
- Begin to conduct low cost experiments to prove these effects for your categories and create foundational learning. The emphasis is on low cost so that numerous effects can be tested over time.
- Create simple frameworks that equate the relevant proven effects to shopper marketing outcomes. This is vital. These frameworks will provide a guidepost for your organization that facilitates education and strategy development as well as the actual activation. The framework will be crucial because it ties everything together.
What’s at stake? Lots!
If your organization could understand how your customers, or potential customers, make decisions better than your competition…what’s that worth?
One share point? Five?
If you could promote your products more efficiently than your competition, how much more profitable would you be?
In a world where strategies and tactics around advertising, in-store communication, new products, price, promotion and shelf placement are quite obvious and easily replicable by competitors…strategies deployed around your advanced understanding of the science of how customers decide would fly under the competitive radar for years.
It’s the competitive advantage that keeps giving!
The firms that develop expertise first in this space will also have the benefit of elevating their strategic discourse with their retail partners who will want to understand and take advantage of these newly developed frameworks.
A few, and I do mean few, firms have visualized the competitive advantage that can be gained and are “all in,” having committed budget, senior resources and most importantly, time. For them, it’s the next competitive battlefield and they are racing to win wanting the early sustainable advantage.
These companies have taken the fork in the road.
And a not-so-obvious strategic inflection point for everyone else is born.
Is a new shopper imperative emerging? Is advanced knowledge of the heuristics of how customers make decisions a temporary fad or something you need to invest in — or do you risk being on the outside looking in? Or will choice architecture, pricing cues, affect and emotion, framing and priming become the new lexicon that details our in-store strategies and competitive advantage?
In a way, consumer psychology and behavioral economics have been with us a long time —hiding in plain sight.
Much like this inflection point…