Wharton professors Peter Fader and Eric Bradlow recently released a paper in the International Journal of Research in Marketing entitled "An Exploratory Look at Supermarket Shopping Paths." A PDF draft of the paper can be found online. I was alerted to the paper via this reasonably detailed highlights article from Knowledge@Wharton.
There were some findings that may be interesting to retail grocery marketers, and may be surprising if you haven't actually done any grocery shopping. As might be expected, while some of these findings offer insight, most of them could have been captured just be actually spending time watching customers. Possibly the most amusing part is just how wrong conventional wisdom about shopper behavior was. Some findings:
- Grocery shoppers don't weave up and down all aisles -- a pattern commonly thought to dominate store travel. Instead, most shoppers "tend only to travel select aisles, and rarely in the systematic up and down patterns most tend to consider the dominant travel pattern."
- Once they enter an aisle, shoppers rarely make it to the other end. Instead, they "travel by short excursions into and out of the aisle rather than traversing its entire length."
- Shoppers prefer a counter-clockwise shopping experience. They tend to shop more quickly as they approach the checkout counters. Shoppers' behavior is driven more by their location in the store than the merchandise in front of them.
- The perimeter of the store -- often called the "racetrack" -- is actually the shopper's home base, not just the space covered between aisles. "Whereas previous folklore perpetuated the myth that the perimeter of the store was visited incidental to successive aisle traverses, we now know that it often serves as the main thoroughfare, effectively a home base from which shoppers take quick trips into the aisles," the paper states.
Now, as you know, this is eyetoIT, not eyetoGrocery, so what is my real point of mentioning this, other than as an opportunity to get some jabs in at the possible cluelessness of retail marketers about their customers?
The reason is that this is another great example of the ancillary data that can be gathered and applied to a business. I wrote about this last year in "The Real Value of Automating Processes." This is another great example. The business case for RFID is typically anchored around some kind of improvement to the organization's supply chain. But here is a way in which a business can extract additional value from the signficant fixed investment they made in RFID.
Think about extending this idea. Right now, the research is on shopping patterns. But once we get to RFID tags in merchandise (possibly in all merchandise as the price point declines), a retailer would be able to "see" every customer shopping. They could see people pick up a product, carry it in their cart, and then take it out and replace it with an alternate product (for example, they might substitute their preferred brand with an alternate brand being promoted on an endcap display. This could have signficant implications in how a store might change its planogram to induce purchasing of private-label products or those which are being heavily supported by trade promotion.
In an industry like grocery retail, with its very thin margins, this sort of knowledge could have a significant impact on corporate performance. Remember, eking out an additional 10 basis points of margin in retail can often mean a 5-10 percent increase in net earnings.
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