Excerpts

Preface Rethinking Retail "When you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind." --Lord Kelvin The supermarket is my laboratory. After earning my Ph.D. in biochemistry and working for a brief period in the food industry, I traded a lab bench for the aisles of the supermarket. At that time, the supermarket was a black box. Manufacturers and retailers were concerned about how to get shoppers into the door and make them aware of products before their trips, but they assumed that they understood what happened when the shopper was inside. Our research, discussed in this book, shows that in many cases they were wrong. In the early 1970s, I left my practice as a board-certified clinical chemist and started a small laboratory providing a range of services, primarily to the agricultural and consumer packaged goods industries. One of the services that we provided was sensory evaluation--consumer taste test surveys. Following the example of universities, our "tasters" were college and university students. I initially started doing in-store research because a client said that he didn't think the opinions of college students, with their well-known penchant for pizza and ramen noodles, were very representative of typical supermarket shoppers. Being a scientist, rather than a market researcher, it never occurred to me not to interview supermarket shoppers. I approached the manager of a local supermarket, and he readily gave me permission to interview his shoppers. Remember, this was more than 30 years ago, and the local Albertsons manager had an amazing degree of autonomy. When we were in the store, we found that there were many other interesting questions to study. I pursued the in-store research niche--first as a solo consultant and then as the founder and president of Sorensen Associates, "The In-store Research Company®," and more recently, as Global Scientific Director, Retail and Shopper Insights at TNS, a global research and information services firm. We are now a part of the even larger conglomerate WPP, with a focus on advertising and communications. Although most of our experience is with supermarkets and brand manufacturers of fast-moving consumer packaged goods, we have found our core insights hold for work with supercenters, drugstores, convenience stores, auto parts retailers, building centers, consumer electronics, phone stores, and many other retailers or products. We have completed studies in a variety of channels on every continent except Africa and Antarctica, and the paradigm, metrics, and insights are as relevant elsewhere as in the U.S. (with some differences, as we will examine later). Over the years, we came to appreciate the value of conducting research in the store environment, rather than just doing research about the store, products, and shoppers. We decided to study what shoppers actually did in the store, what they looked at, how they moved through the store, and what they bought. We examined strategies that could be used to increase sales, testing these approaches in the laboratory of real stores with actual shoppers. We traveled with customers down thousands of miles of supermarket aisles and analyzed millions of hours of shopping to help retailers create more effective stores and approaches. We found that simple interventions could have dramatic effects, but only if you understood how shoppers think. And some widely used strategies have little impact on the behavior of most shoppers, so we also helped retailers stop throwing money away. As a pioneer in the field of in-store research, I have had the opportunity to see retailing go through many changes--including the emergence of new technologies and online retailing. As the industry continues to change, however, the basic insights from our research continue to hold true. And in a more complex and dynamic environment, understanding shopper behavior may be even more important. I have spent millions of dollars of my own money doing some of this research, and the world's top brands and forward-thinking retailers have spent millions more on specific projects and PathTracker® studies. We have looked at every square-inch of these stores and analyzed millions of shopping trips on a second-by-second basis, using the best technology at our disposal. The results, to the extent that the information is not proprietary, are contained within the covers of this book. I am grateful to the many managers who embraced and supported this work, even when it was unproven. I am particularly fortunate to have worked with Bob Stevens, to whom this book is dedicated. He had recently retired after 40 years in market research for Procter & Gamble, and taught me to go far beyond the product-shopper dimension mentioned previously. This, in turn, led to the development of my current holistic view of the shopper experience, including the invention of the PathTracker® suite of tools, metrics, and a scientific paradigm for the subject of shopping. Finally, I am grateful for the fine work by other pioneers, such as Paco Underhill and Siemon Scammel-Katz. Along the way, we have faced resistance to this approach. As researchers at one of the largest supermarket chains in the world told us: "We do not interview our shoppers in-store, but conduct phone or Internet surveys of them." Interviewing shoppers outside of the store is like trying to understand the movements of a flock of birds by observing a specimen in a natural history museum. It is shocking to me, but not at all exceptional. This book offers managers in retail firms, or companies that sell products through retail, valuable insights into what happens to their customers when they walk through the front door of the store. Companies that spend countless dollars getting the customer to this point often look away just at this critical moment, giving scant attention to the "last mile" of retailing. Retailers and brand owners know all about who the people are going into the store, and what they are carrying home from the store, and a lot about what they are doing at home. But I stake my career to a large degree on the fact that they know very little about the process that occurs in the store. (As I will consider later, this lack of knowledge might be due in part to the structure of the industry, which means retailers and manufacturers get more out of interacting with one another than with customers in the aisles.) This book also offers anyone who has shopped or wants to understand the shopping experience, research-based insights into the habits of the shopper. On the following pages, we explore some of the key insights from this work--the quick trip, three moments of truth for the shopper, in-store "migration" patterns, and how to put products in the path of customers through anticipatory retailing. We also look at how manufacturers and retailers can collaborate better in shaping flow and adjacency to sell more products in stores. In the second part of the book, we offer insights from a series of interviews with executives and experts on specific topics related to in-store retailing: deeper insights on the quick trip, the integration of online and offline retailing, multicultural retailing, and a retailer's perspective on the issues presented in this book. Whether you are running or designing stores, building brands, or merely want a deeper understanding of shopping behavior, this book will challenge the way you look at shopping. In a certain sense, the shoppers' eyes offer a window into our entire society. As I realized in four decades of this work, retailing is at the cutting edge of social evolution because it brings people and the things theymust havetogether. This is where the dreams and aspirations of consumers and the messages of brand owners intersect in a concrete action to make a purchase. If you want to understand our society, taking a trip with a shopper down a supermarket aisle is a very good start. I invite you to join me on this journey through the modern supermarket. I think you will be surprised at what we find. --Herb Sorensen, Ph.D. (c) Copyright Pearson Education. All rights reserved. Excerpted from Inside the Mind of the Shopper: The Science of Retailing by Herb Sorensen All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

Robert Stevens

Author's Notes and Acknowledgments	p. xv
About the Author	p. xxi
Preface	p. 1
Introduction Twenty Million Opportunities to Buy	p. 5
Twenty Million Seconds: Shopper Time Is Mostly Wasted	p. 8
Time Is Money: Shopper Seconds per Dollar	p. 10
Leaving Money in the Aisles: The $80 Million Question	p. 11
Planning Our Trip	p. 13
Shopping Serengeti	p. 20
Endnotes	p. 22
Part I Active Retailing	p. 23
Chapter 1 The Quick Trip: Eighty Percent of Shopper Time Is Wasted	p. 25
Three Shoppers: Quick Trip, Fill-In, and Stock-Up	p. 26
Rise of the Small Store	p. 29
Perils of Promotion	p. 30
The Big Head and Long Tail	p. 31
Heads You Win	p. 34
The Communal Pantry	p. 36
Layered Merchandising	p. 38
The Right Paths for the Right Shoppers	p. 39
Purchase Models and Selection Paradigm	p. 41
Spending Faster	p. 41
Conclusion: Dual Chaos	p. 43
Endnotes	p. 45
Chapter 2 Three Moments of Truth and Three Currencies	p. 47
Moments of Truth	p. 48
Seeing the Truth: Eyes Are Windows to the Shopper	p. 50
Reach: Impressions and Exposures	p. 53
Stopping Power (and Holding Power)	p. 59
Closing Power	p. 60
Three Currencies of Shopping: Money, Time, and Angst	p. 62
A Complex Optimization	p. 66
Endnotes	p. 67
Chapter 3 In-Store Migration Patterns: Where Shoppers Go and What They Do	p. 69
If You Stock It, They Will Come	p. 70
Understanding Shopper Behavior	p. 73
First Impressions: The Entrance	p. 75
Shopper Direction: Elephant Herds	p. 76
The Checkout Magnet	p. 79
Products Hardly Ever Dictate Shopper Traffic-Open Space Does	p. 79
Managing the Two Stores	p. 88
Five Store Designs	p. 90
Where the Rubber Meets the Linoleum	p. 94
Endnotes	p. 95
Chapter 4 Active Retailing: Putting Products into the Path of Shoppers	p. 97
Active Retailing	p. 99
Put the Right Products in the Path of Customers	p. 100
Double ConversionTM: Converting Visitors to Shoppers to Buyers	p. 100
Packaging Must Play the Starring Role	p. 102
Holding Power-How Long Is Long Enough?	p. 105
Stopping and Closing Power: VitalQuadrantTM Analysis	p. 106
Playing the Niche	p. 109
Good Is the Enemy of the Great	p. 111
Endnotes	p. 111
Chapter 5 Brands, Retailers, and Shoppers: Why the Long Tail Is Wagging the Dog	p. 113
Where the Money Is in Retail	p. 114
Massive Amounts of Data	p. 115
Shifting Relationships	p. 117
A Refreshing Change: Working Together to Sweeten Sales	p. 118
Beyond Category Management	p. 120
A New Era of Active Retailing: Total Store Management	p. 121
Pitching a Category's Emotional Tone More Precisely	p. 126
Retailers Control Reach	p. 127
The Urgent Need for Retailing Evolution	p. 128
Endnotes	p. 130
Part II Going Deeper into the Shopper's Mind	p. 131
Chapter 6 The Quick-Trip Paradox: An Interview with Unilever's Mike Twitty	p. 133
Endnotes	p. 145
Chapter 7 Integrating Online and Offline Retailing: An Interview with Professors Peter Fader (The Wharton School) and Wendy Moe (University of Maryland)	p. 147
Endnotes	p. 159
Chapter 8 Multicultural Retailing: An Interview with Emil Morales, Executive Vice President of TNS Multicultural	p. 161
Endnotes	p. 177
Chapter 9 Insights into Action: A Retailer Responds: An Interview with Mark Heckman of Marsh Supermarkets	p. 179
Part III Conclusions	p. 189
Chapter 10 The Internet Goes Shopping	p. 191
Entering the VideoCart Age	p. 192
Cell Phone Invasion	p. 193
Implications for Retailers and Brand Owners	p. 194
The Power of Model Makers	p. 195
The Model Business	p. 196
A Fivefold Increase	p. 196
Endnotes	p. 197
Chapter 11 Game-Changing Retail: A Manifesto	p. 199
Part IV Appendix	p. 205
Appendix: Views on the World of Shoppers, Retailers, and Brands	p. 207
Excerpts from "Views from the Hills of Kentucky" by	p. 207
Index	p. 213