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If you understand consumers and shoppers well, you can much better imagine what will work for them

Most big companies in our industry talk about the crucial role of consumer and shopper insight in their business. But the reality is often different. It is common to find boardrooms where there is little quality discussion about what makes consumers and shoppers tick. Even when consumers do appear in conversations, they are too often only represented as numbers, via customer satisfaction or sales metrics.

So what does a good approach to insight look like and how can companies go about driving value from it? First, get more intimate with consumers. Spend time with them ‘up close and personal’ in the environment in which they experience your business. Listen to them, to understand their (sometimes conflicting) needs and motivations. Look for frustrations you can solve. Heinz’s upside-down ketchup bottle becomes an obviously good idea as soon as you observe consumers (or yourself) desperately trying to shake ketchup from the standard bottle. With Covid, consumer intimacy is challenging but there are companies offering imaginative solutions via Zoom or video.

Second, see stores through the shopper’s eyes. There is often talk about “purchase decision hierarchy”, looking to explain purchases as a systematic series of choices. Do I want healthy or indulgent? Do I want brand or own-label? Do I want multipack or single-pack? The implication is that shoppers methodically work their way through a category to arrive at their optimal choice. But if you watch people shopping, it quickly becomes obvious this is rarely how it works.

Shoppers are typically on autopilot. They often buy things without any significant deliberation. So a more insightful approach is to learn from psychologists about the way human beings allocate attention and make choices. To understand System 1 (semi-automatic) and System 2 (more considered) decisions, as behavioural economists would say. This psychological understanding is increasingly used by fmcg companies and retailers to inform the way categories and brands are sold to shoppers.

Third, insight is about imagination. Surveys and sales analysis are important and play a role in measuring progress and honing ideas. But “start with the data”? Not always. Ten years ago, there were no surveys showing that a new tonic water brand was what consumers really needed. Fever-Tree did it anyway. Similarly, it is unlikely surveys convinced the Co-op to bring better environments to the convenience store sector. They did it because they had the imagination to envisage what better stores could look like. If you understand consumers and shoppers well, you can much better imagine what will work for them.

Insight can be alchemy for companies. It can fuel differentiation and stellar results. It is much more than data. It is about deep understanding of how people operate, prompting imaginative responses and ideas.