How often do we pause and ponder about industry issues that have a bearing beyond just our rigmaroles? Share insights that can further the common understanding? Or, at the very least, point at things that need to be set right. View Point - an exchange4media platform, will fill this void and become a source of understanding, action and perhaps some inspiration.
Managing Retail Through Market Research
Muder Chiba, Executive Director, TNS India
Modern retail is a complex business delivered simply. Due to the complexity of the business and the number of variables that go into making or breaking the business model, it is essential that modern marketing information methods are used to minimise the risk inherent in any decision.
Most retail decisions revolve around getting the right value offering with respect to where, for whom and, therefore, what. These decisions are also inter-dependent like in any other marketing decision, requiring the retailer to take the decision based on insufficient information.
If traditional product marketing decision-making is designed around the 4 Ps of Product, Price, Place and Promotion, retail-marketing decisions are primarily designed around LAP - Location, Assortment and Personality.
Information to aid LAP decisions helps retailers drive profitable businesses.
The Retail Imprint exercise is designed around understanding
and managing the Retail Footprint, the location for retail and the Retail Fingerprint,
the unique personality for the store, which makes it different and creates the
non-rational reason - why - for it.
Given that a target group is defined for this, a Retail Imprint exercise in conjunction with a clear shopping basket, latent needs exercise to develop assortment would provide Retailers with decision support on new locations, store format, assortment, positioning and aid in increasing the market for existing stores.
The Retail Footprint exercise is custom designed to generate
relevant solutions for the retailers' specific decision area with respect to
a ) Identification of right new location
b ) Identification of best-fit store for a given location
c ) Optimisation of trading areas for multiple stores
d ) Sales development planning for existing stores
The Retail Footprint exercise uses primary data, secondary data; uses consumer and retail data; uses Interview and Observation data; uses stated and derived data; uses distance comfort models and 'conventional wisdom'; uses quantitative techniques and ethnographic.
Depending on the specific situation and research need, adapted versions of psychological distance are used to get 'ideal distance' for the type of store/outlet, including those for FMCG, durables and financial services outlets such as ATMs.
Using this enables retailers to understand under-served and over-served areas and helps in managing them.
The Retail Fingerprint exercise seeks to help retailers arrive at the unique Personality of the store. Personality linking into the implicit needs of the consumer is what distinguishes a successful store from the unsuccessful one just like it next door.
The Personality is the one that invites footfall with the relevant
target shopper and creates offtake in conjunction with assortment management
and store design.
The Retail Fingerprint is drawn up with advanced implicit need models and/or with detailed qualitative work. Actionability with respect to correct segmentation and the ability to test against strategy emerge from usage of implicit need models.
This enables multiple stakeholders in design, sourcing, communication and the like to clearly assimilate the common personality for action and then test their selections if required using the same framework.
Once the Location and Positioning are designed, the assortment mix emerges from the needs / wants / purchases analysis of the catchment area, which ties in to the attractor of the personality.
In conclusion, LAP - Location, Location, Location; Assortment; Unique Personality, defines the success of a retail store or concept. Market Research to hone strategic choices here must be like modern retail: complex business delivered simply.
(The author heads Sector Practices at TNS India. Chiba has
over 20 years' experience spanning across disciplines of sales management, advertising,
market research and consultancy.)