A blog for all things retail and licensing.
TwitterFacebook

Leverage the marketplace – convert a NON-BUYER into a BUYER

Guest Blog by David Zahn

Conventional wisdom in retailers and FMCG manufacturers focuses on growing the business by maximizing market share and increasing conversion among existing shoppers /consumers.  By targeting this population, it is assumed to be more efficient and productive than trying to convince those do not currently shop at a store or in a category to become shoppers at that outlet or in that aisle.

However, for REAL growth to occur, we have to actually leverage the marketplace where we have been hesitant to go – at NON-CONSUMPTION. Historically and conventionally, we have believed that it is harder to convert a NON-BUYER into a BUYER than it is to get someone to switch. And, while there is both intuitive logic to that and plenty of proof to lean on; that does not grow the market in total. For that to occur, the shopper has to make incremental purchases and not just swap from one to another.

Looking at the matrix below, labeled Four Types of Shopping, you see in the lower-left quadrant  how the shopper makes routinized purchases that are not impacted by the information currently available from the store or manufacturer, nor does the shopper particularly seek additional information.  Moving to the right; the lower right-hand quadrant shows the shopper seeking a solution or to meet a job, but being stymied by the lack of news or communication from the store or brand on how to accomplish that job with the products currently available.  Moving up to the upper-left quadrant; the manufacturer and store focus on switching behaviors between existing options – and while it may re-allocate the shares, profits, and sales dollars among competitors, it is not creating growth or incremental sales of any substantial amount.  The only way to grow the TOTAL business in a sustained way is to provide context, information, decision-support, and assistance to the shopper through an improved Ecosystem that aligns with the shopper’s desire to accomplish a new job or an existing job in a more successful way. Therefore, what is required is a better understanding of the jobs the shopper wishes to master and what requirements must be in place for that to lead to a purchase of a product (or combination of products purchased in concert).  Simply relying on so-called “causal data” or studying “panel data” will be helpful; but insufficient in that it is not tracking and seeking to understand the decision-making process of the shopper.  It is attempting to link correlational data (a sale occurred under this condition) and assumes it is directly responsible for the purchase.  In fact, that is rarely accurate.  The missing piece is an understanding what the purchase is designed to provide – and not simply the occurrence of a purchase.  By better understanding what the shopper is attempting to accomplish, and participating in that vision, the retailer and manufacturer can better position their offerings to accomplish that outcome.

As an example, review the following example of a “typical shopper’s experience.”Now, imagine if Mary were able to engage in her pursuit in a way that resembled a mutual effort.

If the store and brand understood what she was seeking to do and helped her think through it and make a more confident choice, they could provide the right resources and tools to aid her (and build their own businesses at the same time!).

The process is a nine-step process as defined below that begins with identifying the shopper’s job(s) and then working to identify how to best provide that within the context of the business’ capabilities, strategies, resources, and commitment.

 

 The technology/process depicted above contains a tool that focuses insights and prospective actions through a “QFD-Like” technique (QFD = Quality Function Deployment – a process used by progressive innovators to design quality into products to meet user demand) that allows for easy identification of successful initiatives and gap analysis hampering success from occurring.  This technique allows for quicker, less expensive, and more accurate decisions regarding: new item introductions, category management initiatives, shopper marketing activities, and in-store activities.

For more information on the process, please contact David Zahn, of ZAHN Consulting, LLC at davidzahn@zahnconsulting.com.

Leave a comment

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>