Ch06 Retail Research

RETAIL RESEARCH

DEFINITION

Retail research is “the process of assimilating, absorbing, analyzing and interpreting facts pertaining to the shopper’s behavior; so as to implement them by the retailers in order to better understand the psyche of the consumer and create value.”

Dr. RamKishen Y.

DEFINITION

Hence, retail research is the methodology of studying retail behavior. Retailers need to have a short-term outlook and timely information due to the changing dynamics of the market environment. A retailer needs to be aware of the store’s current position in the market and also forecast what customers will demand.

Types of Retail Research

• QUANTITATIVE– Retail Audits: consists of a physical inspection of the

store operations and an assessment of the documented programs that support the various aspects of the operation.

– Includes: store layout and visibility management; in-store management; customer relations and interface; visual merchandising; ambience and hygiene management; manpower planning and responsibility allocation; sales and cash management


• QUANTITATIVE– Retail Process Audit: to examine a store’s

efficiency in terms of its operating process or reduce the cycle time, hence the retailer can identify ways in which to improve customer service deliveries and performance and thus reduce the turnover time.


• QUANTITATIVE– Retail Store Audit: by counting the inventory in the

store and recording deliveries to the store since the last visit. Auditor will collect observable information such as shelf prices, display space, the presence of special displays and in-store promotion activities to project and arrive at nationwide and regional estimates of total sales, inventories, etc.

– Formula: Sales for the period = Beginning inventory + Deliveries to the store – Last inventory


• QUANTITATIVE– Contents of a Nielson Store Audit Report• Sales• Distribution• Selling prices• Retailer support• Media advertising• Special analyses


• QUANTITATIVE– Consumer Research: to determine and analyze

consumer behavior.– Consumer research enables the retailer to study

and understand consumers’ needs, wants, and how they make purchase decisions with the goal to improve managerial decision-making


• QUALITATIVE TOOLS– To determine consumer’s perceptions of the store

and products.– To familiarize with the range and complexity of

consumer activity and concerns.– To obtain new ideas for promotional campaigns

and products that can be tested more thoroughly in larger and more comprehensive studies


• QUALITATIVE TOOLS– Ghost Shopping• Ghost shoppers are agents who visit client’s retail

premises to make an evaluation of the service standard of the store to understand whether it is meeting or failing to meet its customers’ needs.• Ghost shoppers are people who visit stores as

anonymous customers, and in the process, help these stores better understand how they can meet customers’ needs.


• QUALITATIVE TOOLS– Ghost Shopping• Companies use mystery shoppers to understand and

improve the typical customer experience at each location and throughout the organization.• Ghost shopping is useful for studying the customers’

awareness of a brand and the number of outlets that are selling the product.• Obtain information about its competitors in terms of

new product launches, market share, new promotions, campaign, etc.


• QUALITATIVE TOOLS– Ghost Shopping• Obtain information about the placement of the product

in the outlet; whether the product has the right place on the shelf, the visibility of the product, how fast the product of a particular brand is moving and the product’s impulse buying appeal.• Benefits: product placement, point of selling, visibility,

customer demand, repurchases, brand recall, and awareness.


• QUALITATIVE TOOLS– Ghost Shopping

• Tools:– In-person Assessment: it involves analysis based on text-based questions

of which a few require narrative responses. Digital video recordings or photographs are included for clarification of the assessment

– Phone surveys: this involves text-based reporting to describe their experience. Digital audio is used to provide data and tracking and interpreting the moves that the user makes while navigating a retailer’s site

– Online Channel Assessment: a special behavioral browser guides users to respond to online assessment objectives by asking appropriate questions, collecting data and tracking and interpreting the moves the user makes while navigating the retail store’s site.


• QUALITATIVE TOOLS– Ghost Shopping• Variants of ghost shoppers:

– Level 1: a mystery telephone call– Level 2: a quick purchase with little or no interaction– Level 3: initiating a conversation using a script– Level 4: The agent has excellent communication skills and

knowledge of the product


• QUALITATIVE TOOLS– Mall Rats: are individuals who go to malls but

don’t shop, that is, they are passive and not active customers. • Types:

– Rattus Mallus: this common mall rat is generally found in enclosed malls, and can also thrive in a shop-cluster. Normally found in packs, the group has some unique characteristics


• QUALITATIVE TOOLS• Types:

– Time: normally these mall rats visit malls in the evenings, on weekends and public holidays

– Feet: these mall rates enjoy cruising and they invariably are on the move. Some covers as much as five kilometers over a few hours in large malls or shopping clusters.

– Mind: According to their peer groups, these rodents are at the forefront of fashion. They seem to possess a subliminal understanding of which mall or shopping cluster is popular and which is out of fashion

– Wallet: these mall rats typically spend money on food and low-cost category


• QUALITATIVE TOOLS• Focus Group Discussions

– 8-12 members (usually paid)– Homogeneous in terms of demographic and socio-economic

factors but have heterogeneous views– experience related to the product of issue being discussed– 1.5 – 2 hour sessions– Client may sit behind a one-way mirror– Qualified moderator– Conversation may be video and/or audio-taped or notes may

be taken


• QUALITATIVE TOOLS• Observation Techniques: research involves researchers

following customers as they shop, work and relax at home in order to see how they make decisions, use products, etc (ethnographic).• Tools:

– Watching what people do– Helpful conditions– Approaches to observational research– Machine observation:


• QUALITATIVE TOOLS• Tools:

– Machine observation: » Traffic counters: time spent and flow into retail store» Behavior management: involves examining people’s habit» Physiological measurement:

• EEG (electroencephalogram)• GSR (Galvanic skin response)• Pupil meters (measure pupil dilation)


• QUALITATIVE TOOLS• Observation Techniques• Types:

– Casual Observation: it takes place when managers monitor variables such as competitive prices and advertising activities, the length or queue of the customers waiting for service, etc. on a continuous basis.

– Systematic Observation: it can be used as a supplement for another tool. For instance, during home interview, the interviewer may have the opportunity to observe and note down the condition and size of the house and the type of neighborhood and quality of the residence.

STRATEGIC FRAMEWORK FOR RETAIL RESEARCH

FUTURE OF RETAIL RESEARCH

• SPSS, LISREL, PSPP, R, EVIEW, ETC.

Questions for Practice

• Define Retail Research. What are the different types of retail research?

• Explain the Strategic Framework of retail research by giving suitable examples.

• Do you think Retail Research will help retailers in finding vital information about shoppers’ buying behavior? Give Reasons.

Documents

Ch06 Retail Research