Using REAP (Retail Ecosystem Analytics Process) to Leverage Marketing Intelligence and Drive Retail Success
- Sep 23, 2010
The research and analyses detailed throughout this book provide valuable data on how shoppers behave in stores and why. But, without a defined means of transforming that data into insights and action plans that are implemented, the data is of marginal value. Implementing REAP (Retail Ecosystem Analytics Process) is central to the development of the shopper intimacy that drives consistent results.
Utilizing REAP to Deliver Consistent Results
The key elements of REAP are
- Use of data and analyses to define targets
- Focus on servicing the defined shopper's needs
- Translation of the targeted shopper needs into strategy and action plans
- Full involvement of all the retail marketing disciplines
- Continuous feedback and analysis to refine and enhance future executions
The successful implementation of REAP requires
- Analyses of the retail opportunity from all angles
- Definition and segmentation of opportunities for analyses and development
- Implementation of formal procedures for delivering consistent results
REAP begins with a thorough analysis in which we mine the existing data, segment our targeted shoppers, and then develop the ideal positioning to best serve the targeted segments. The data mining includes an examination of all the available information sources including syndicated data, loyalty cards, house credit cards, in-store studies, and focus group research. We use that data to develop a profile of the various customer segments that shop our locations and then focus on the segments we want to develop as a point of focus. This segmentation, when combined with the research analyses, unearths the key drivers for the most desirable segments and the ideal positioning to best serve targeted customers' needs.
With our positioning goal in place, we define our product, establish product groupings that support the targeted shopping groups' objectives in visiting our stores, and then organize these groupings for efficient shopping. Our product definition includes an understanding of the items that shoppers need to complete their shopping mission. Proper product grouping leverages the shift from a passive journey through the store to an active purchase consideration so that related items are seen, evaluated, and purchased. Well-executed organization optimizes the return generated from each customers' visit by directing customers through a shopping path that supports the efficient completion of their tasks in our store.
Next we structure our conversation with shoppers by guiding them from a general orientation to an eventual purchase decision. At a macro level we design the flow of the store to guide their navigation through the physical space with appropriate graphics and signposts. Understanding that shoppers predominantly follow the path we establish, we want to reward their choice by making our flow and navigation intuitive in anticipating their needs on this shopping mission. At the same time, we want to create a controlled interruption of the potentially rote shopping expedition to generate incremental revenue. The graphics and guideposts we employ should support the shopping process on multiple levels (logical, emotional, and so on) and reduce shopper's stress level by providing the right type of information so that they are open to more of our marketing messages.
The design process encompasses all the executional elements of the plan including the architecture, store lighting, and merchandising fixtures. Each of these is designed to support the strategic goal of anticipating shopper needs and facilitating their purchase decisions (see Figure 1.1).
Figure 1.1 REAP Design Process
Throughout the design process, the shopper is at the center of our thought universe. However, we must also understand the needs and input from all the participants in the retail marketing equation: retailers, brands, and agencies.
As we refine our shopper analysis and develop a profile of our targeted shopper segments, we must recognize that the behavior of defined groups within stores will vary based on a variety of factors associated with the specific shopping occasion such as the shopping objective; (major shopping trip or fill-in visit) or the addition of others to the shopping party (spouse, friend, child, and so on).
For example, if we target harried young mothers and seek to build store loyalty, we may want to
- Utilize an entrance area for quick meals on the go—she can quickly pass through the area on her major shopping trips, but will appreciate the convenience if she wants to pick up a meal on her way home from work or a family event.
- Add special check-out lanes with a kid-friendly/mom-approved product assortment in identified lanes to remove a potential irritant.
- Reward the inclusion of a child on a store visit with a small gift so that the youngest family members look forward to the visit and family shopping becomes a pleasant experience (also understanding that shoppers with children tend to purchase more than those without children).
The key is to use the research and analyses to define your most valued shoppers' segments and understand their needs on different visits. Armed with this understanding, build your programs to anticipate and meet those needs.
For agencies and brand marketers, it is essential to fully appreciate retailer issues and goals. Retailers are oriented toward a consideration of brands based on what they can provide in terms of
- Influencing the shopper's choice of channel and specific retailer
- Driving the shopper's choice of shopping outlet
- Impact on store positioning and store brand promise
- Effect on total category purchases
Agencies and marketers must further appreciate the different concerns of the multiple constituencies within the retailer. They must understand the interplay between brands within and between related segments. Winning programs focus on driving total store or total category sales versus trading dollars within the store or category.
Retailers and agencies must, likewise, fully appreciate brand objectives to be met at retail. They must evaluate and understand the interplay between channel preferences for brand purchases and the impact brands have on the total shopping basket. They must also appreciate the differing needs of the constituencies within brand organizations. Winning retailers leverage the power of the brand as a thought and labor-saving tool for shoppers in store so that shoppers are less fatigued and open to increasing the total size of their basket.
Agencies must work to understand the essential dynamics in store. They need to be a knowledge center for the intersection of the key players in the fulfillment of the shopper's needs. They then need to apply creativity to the expression of the marketing programs that support important retail and brand goals while facilitating the shopper's mission in store. Finally, they guide the implementation of the program through the involved constituencies and their intermediaries.
All parties work separately and together to deepen their insights and their relationships with consumers and shoppers. The development of this relationship includes
- Qualitative and quantitative analysis
- Understanding shopper dynamics by channel, outlet, segment, and shopping occasion
- The key drivers of the fall-off between intent and action
- Proprietary and syndicated research
Retailers possess a unique information source in their ownership of transaction data and shopper trip/household behavior from proprietary databases through loyalty and credit card programs; brands own singular data sources in their experience with multiple retailers and channels, and their proprietary research on customer interaction and preferences with brands and discrete product segments; agencies control a particular knowledge base with their work across brand and retail categories and their immersion in multiple geographies and grasp of the technical specifics of the marketing disciplines essential to successful program execution. Our ability to make sound marketing decisions is constrained by our access to relevant data and knowledge. Cooperation and collaboration dramatically increases the available knowledge and data improving our planning and the results they generate. This collaboration among the retail marketing resources should be a foregone conclusion.
In our early days in the industry, Mel Korn was a passionate advocate for collaboration among retailers, brands, agencies, and marketing at retail producers to optimize at-store campaigns—a point that seemed obvious. We did not fully appreciate the need for the advocacy until a chance conversation highlighted the norm for how programs were generally executed.
A display honored as the best of the year by POPAI, the industry's nonprofit trade association, delivered a forceful brand message while also displaying the product beautifully. It was truly attention grabbing with bright colors, creative design and greatly increased ease of access to the product. Additionally, the fixture perfectly integrated with the general media campaign.
Upon congratulating the fixture producer, we were shocked when he burst into laughter and shared that the integration relied totally on a chance meeting with the general media agency in the client's hallway. As the fixture producer was on his way to meet with the purchasing department, he gathered bits of information in a two-minute conversation with his agency counterparts who had just met with the brand team.
By sheer circumstance and skilled follow-up, they captured the essence of the TV ads in the retail campaign to drive a program that was a creative and business success.