Based on our wealth of experience and diversity of clients over our first 15 years, we’re continuing our series on the 4 current challenges across 3 key sectors of FMCG, Retail and Hospitality. In case you missed it, here’s Challenge 1: Making the Case for Distribution.
Today we’re focusing on retail:
2.Identifying Value Drivers
Retail is undergoing a structural transformation driven by heightened competition and enabled by advances in digital technology. The consequence for retailers is an intense focus on managing value and dealing with price comparisons. This can result in missing opportunities to understand how different behaviours depend on a combination of attitude, habit, environment and circumstance.
Behavioural Economics has taught us a great deal about the human desire for great deals – but there is more to this than price alone. Many retail purchase decisions are made within the blink of an eye – or increasingly, the click of a button – and contrary to what we would like to believe shoppers do not generally spend time rationally deliberating the options available or running endless price checks. Simplicity of offer and range, clarity of layout, strength of communication and ease of recognition are all factors which influence decision behaviour. Add the environment, so called soft experience factors, memory based perceptions of the brand and all dimensions of service and the reasons behind decisions become clearer.
The challenge for research is to demonstrate that value can be measured beyond price and research has a bigger role to play than modelling price effects by identifying and mapping all the key drivers of choice, preference and decision making.
Tomorrow we’ll be sharing Challenge #3: Shifting Lifestyles in hospitality, in the meantime if you want more information about the challenge to FMCG or retail please get in touch.