MARKET REASEARCH: Know your customer

In a furious retail environment where as many as 80% of brand-buying decisions are made in store, detailed research can make all the difference. Cathy Bond reports

In a furious retail environment where as many as 80% of brand-buying

decisions are made in store, detailed research can make all the

difference. Cathy Bond reports

All the top supermarket chains have a similar offer: own-brands, themed

point-of-sale activity - and they’ll all be on board with customer clubs

soon,’ says Bob Qureshi, director of The Harris Research Centre’s retail

division. ‘Where’s the point of difference?’

‘Market research is the only way to measure and understand what makes

the shopper tick. That’s crucial when it is said that around 80% of

brand-buying decisions on many regular FMCG products are taken in-


In a retail climate where sticking with a formula simply because it is

successful quickly turns strong brands into also-rans. Market research

can give a crucial competitive edge. As one food retail marketer says:

‘If you keep on looking for customer benefits, it will lift you above

the rest; if you don’t you merge into the wallpaper.’

It’s this finding-out process which has boosted retail market research

into the big league over the past few years. AMSO reports an 18% rise in

retail business among its 33 members during 1995, when total market

research grew by 11%.

Market researchers have been quick to latch on to retail angst,

providing off-the-peg, neatly branded tools that can be adapted to fit

the needs of individual clients aiming to revamp all or part of the

corporate package, from store design to product range, service and


If it sounds like cosmetic work, it’s because few people outside the

market research sector understand quite how deeply its techniques can

dig to find solutions.

Gordon Simmonds Research, for example, uses attitudinal data alongside

conjoint analysis and demographics to develop customer profiles and get

a fix on store perception.

Research International has found a retail market for a research

technique originally developed for fmcg brands. Locator, dubbed a brand

image model, aims to clarify the influence of image attributes on

customer perceptions.

Sears Group subsidiary Adams Childrenswear used Locator last year to

reposition stores ‘which had started to lose their edge in a market

sector where discounting was taking hold’, according to Maureen Johnson,

managing director of RI’s retail division.

Research kicked in to the project at a very early stage, with prototype

new stores being designed to fit a pattern of customer needs and

expectations, highlighted in RI’s initial work. ‘We needed to make sure

that everything was in place, from brand positioning to product and

services - and how that was communicated to the customer,’ says Johnson.

She points out that traditional retail research has tended to home in on

practical aspects.

‘Locator gets the soft as well as hard information because emotional

needs are an important part of the criteria people use when choosing

between retail brands.’ The result is the Adams 2000 store, which is now

being rolled out countrywide.

Some research consultancies have pitched into the melee of

retailer/manufacturer relationships, where lines of communication are

being redrawn.

Category management demands different research parameters to match the

new, and supposedly mutual, spirit of co-operation.

According to GSR director Janet Richards, retailers are now researching

the culture and efficiency of potential partner organisations. ‘It’s

rather turned the table on manufacturers,’ she says.

‘A few years ago retailers just wanted to screw suppliers for what they

could get,’ says Allan Breese, client services director of Taylor Nelson

AGB. ‘Now they want to understand what consumers want from product

categories and work with suppliers to improve the offering. It’s led to

a major surge in the need for information - not just retail market share

but where and why undertrading is happening.’

‘There is research input right from the start, from product design to

what sort of promotional material would work,’ says Qureshi. ‘We work in

an increasing number of joint ventures between retailers and

manufacturers. I see it getting to the point where products are

virtually launched in-store.’

He cites a recent project for United Biscuits (UK), which developed an

in-store campaign for the new McVitie’s biscuit countline, Ace, that

virtually saturated Tesco supermarkets in point-of-sale material, from

floor to ceiling and store to petrol station.

‘At least UB went into in-store promotion alone, based on research which

showed how closely shoppers interact with products and promotional

materials. We called it ‘Ace in yer face’,’ says Qureshi. ‘At the

launch, 5% of everyone leaving Tesco stores had bought the product.’

And then there is the retailer’s lethal weapon, the customer database.

It provides warm-to-hot prospects for tightly targeted direct-marketing

campaigns, based on who spends what, when, and in payment for which

particular mix of brands and products in the trolley.

‘In the past, there’s been too much focus on ‘What am I missing?’ as

opposed to ‘What are my customers doing and what else can I do for

them?’,’ says Edwina Humby of DunnHumby Associates, the marketing

database consultancy that is steering Tesco’s Clubcard activities. A

database such as Tesco’s can be manipulated to make customers spend more

on a wider range of products, she says, ‘so it’s very powerful’.

Many companies are already plundering the data contained in customer

databases. ‘We are more frequently being asked to analyse databases

from store cards and it’s relatively easy to pick out samples which are

then used to target further analytical qualitative work,’ says Richards.

Business is brisk, too, in the initial assessment of the impact of

customer clubs, on market share, purchasing habits and consumer


‘We do a lot of work to evaluate how they are used, where new business

is coming from and how they change customers’ behaviour,’ says Breese.

It’s a new toy for retailers, and they are fascinated. But there are

hidden dangers, warns David Sneesby, marketing director of Taylor Nelson

AGB’s marketing services division.

‘If loyalty schemes fall down it’s because they are inward-looking,’ he

says. ‘They bring very detailed information on customers but they won’t

tell a company anything about the people who are not on the database,

although they are just as important in different ways.’

It follows that there will be continued heavy dependence on tracking

studies, because retailers will always need to know what their customers

are doing when they shop with a competitor - and this contributes to the

wealth of qualitative data demanded for customer care programmes, too.

‘There’s a tremendous amount of research being done in customer care as

retailers try to gain the high ground,’ says Ricky Baxter, new business

director of Marketing Direction. According to Richards, it is

increasingly measured on a store-by-store level. ‘Then it can be tied in

with individual performance evaluation and rewards.’

Says Research International’s Johnson: ‘The need to reposition brands

and formulate an effective strategy is what’s driving the retail sector.

They are all trying to create brands and trade them in true marketing

fashion. That’s where the new money is coming from, because the retail

trade is prepared to be much more adventurous.’


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