Talking tech: Shopper iQ aims to shed more light on consumers
By Dean Best | 21 December 2012
Suppliers and retailers have a mass of data on consumer behaviour but Shopper iQ believes it provides vital information its rivals do not. Roger Jackson, the service's founder, argues there is a lack of data on why consumers buy certain products and whether they were satisfied with their purchase. He speaks to Dean Best about how Shopper iQ can improve the industry's understanding of consumers.
just-food: Data is vital for the industry in deciphering consumers' shopping habits. However, major retailers are already armed with data sets from initiatives like loyalty card schemes. What is different about what Shopper iQ can provide?
Jackson: Very little of what they have as a stand analysis tells them why. It's all on what people are doing. It's incredibly powerful but you immediately scratch your head and say: 'Why are consumers doing that?' With Tesco's Clubcard, you have to design individual surveys and go back to ask Clubcard users why they are buying what they are buying.
What we felt we would do with Shopper iQ is capture the key questions you have to ask in every category on what consumers are thinking and doing. Things like: Was a product on their shopping list or was it an impulse purchase? How long did they spend at the fixture? Are they happy with the quality of the product, the price? We benchmark so we can report which categories get the best rating on price satisfaction, which gets the worst and so on. The big thing for the retailers is the ability to get competitive comparisons. That's a massive gap they will have. They have in-depth analysis on their own shoppers but it's quite weak on telling them how they stand competively.
just-food: The test market for Shopper iQ was Australia. Why was that?
Jackson: It's a constrained market in that we can get the data and cover a lot of territory very effiicently and also it's very representative. All the major FMCG are represented here. It's a good replica of what you find in most developed markets but it's small.
just-food: In how many markets is the product available?
Jackson: The second market was the UK and that's what we've been doing for the last two years. We're looking at the US, France and probably Germany. We're going to be launching in the US in quarter two of 2013, as we will with France.
just-food: How do you survey the 90,000 consumers that provide the data for Shopper iQ?
Jackson: We use Internet panels. We ask if people have been shopping, where they went and what they bought. It's a large sample because each respondent is only really asked about one product or one retailer. For example: "You've been to Asda and you've bought bread. Let me ask you about how satisfied you were with the purchase." We do that on different shoppers and different categories and build up a database and then we compare.
just-food: What sets your data apart from your competitors?
Jackson: There really isn't anything like this. The comparison is with a couple of major services. With panel data, for example Kantar data in the UK, shoppers are recalling what they bought. You can understand a lot about behaviour, how much they bought, where they bought it from, market share and all that stuff. Basket data tells you a lot about shopper behaviour in different categories. Those are the two big qualitative data sources. There is no big qualitative data source for attitude, perception or satisfaction. It is a bit of blank space and that's why we decided to do it.
The competitor to what we do really is companies doing it themselves. The big companies like Unilever, P&G, PepsiCo would have gone out, commissioned research to do a diagnostic of the shopper and take that to the retailer. Every now and then a big piece of shopper research would be done but not systematically and not done in the way a retailer can use because it can be partial. Often retailers can look at supplier research and say they designed it around their own agenda.
It would be naive of me to say there is not a mass of shopper data out there but what we're trying to do is win the industry over to the concept of, rather than everyone doing their own shopper research which is essentially copying each other, let's come up with a system we can all sign up for that will work better for everybody, be more cost effective and have a standardised way of looking at things.
To do category management effectively, jointly between supplier and retailer, you need to have an objective measure of shopper satisfaction. That was our start point. Is the shopper happy with what they are getting or not on a dozen criteria?Some of the other metrics we've got have evolved around clients saying: 'This would be useful, can you add that in?'
just-food: The talk in the industry is of more promiscuous consumers and there is a need for ever deeper insight into why consumers in this economic climate are buying particular products.
Jackson: There is the ever-demanding need to get smarter because we are all trying to get our budgets to work harder in a more competitive environment. When we were talking to Cadbury recently, they knew they were spending a vast amount of money promotionally but they asked themselves: 'Do we actually know if we are spending the right money in the right way in the right categories? Should we be doing the same in block chocolate as we do in sharing bags?' We ask consumers if they can recall if it was on promotion and then ask if their purchase changed because of the promotions. We get a sense if the consumer was going to buy it anyway, which is an important piece of information.
just-food: What holds back potential clients from signing up?
Jackson: There is always reluctance because it is another piece of expenditure. I go back in strongly and say: 'This will save you money in the long run'. This costs about a third or 20% of a bespoke survey. I recognise they only do that every two or three years and of course in year one you can't judge if you will need to do the other research.
There is also a resistance among research buyers to buy something that is not unique to them. We take a step back and say: 'How useful is it to have a unique view of the shopper if it doesn't help the retailer?' One of the things that a lot of the clients who are signing up are coming on board with is the sense that maybe it would be better to have some data that is shared and then invest their own money more wisely in digging into certain things. Collect the basic data cheaply with us and spend extra money every other year on a big study, more advanced stuff.
The third thing is the general sense that companies already have a lot of data. Most manufacturers in the UK probably have more data than anywhere else in the world. Do I need more data right now? That tends to disappear when they understand what we deliver. It is genuinely incremental data.
just-food: How could your service improve?
Jackson: I'm passionate about making our outcome chart clearer, cutting to the point, easier to understand. We've just spent A$1m on building an online, interactive dashboard, where you can click on, say, 'Asda, chocolate bars and price satisfaction' and out comes a chart. The ability to use on tools and a dashboard is massive for us. We're very well placed for that as every client has access to the same data, so we can build hi-tech tools and amortise the cost of that across all of our clients. We also have to get really good at helping clients get the stories. They say: I love this info but what's the message to the retailer? Helping clients get to the point where they can communicate in minutes.
just-food: The US and France are set to be your next markets. Will you cover the major national retailers in both countries?
The feedback from clients is they want more coverage from day one. We're going to be pretty comprehensive in the US, include the major national chains, the two major drug chains and three or four regional players. France is probably going to be the top five supermarket chains for the first year.
just-food: Have you met specific challenges in these markets?
Jackson: Our focus is categories rather than brands. We set out to provide a category management but going to the States, they are so brand-oriented, they actually say: 'What can you tell us about our brand through this data?' We've already done some initial analysis to look at which brands are delivering better returns. That's something I haven't really driven the system into yet. Category management in the UK has become a sophisticated profession. It's the category first and brand second. The team in France are just starting the process.
just-food: Any emerging markets?
Jackson: We've talked to people in South East Asia on the retail side. The former head of Tesco Lotus in Thailand said they were completely bereft of shopper knowledge. There's quite a lot of excitement in the back of mind about Thailand, Indonesia, Brazil, Russia, where category management in retail is not data-led. What we do could be a good start point, rather than everybody piling in and doing their own research. I limit that enthusiasm with the realisation that it's not a sophisticated market and who would pay for the data? My logical strategy is do the developed world first, get that up and running and then see where our clients what it to go.
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