1 item tagged "customer insights"

  • Product out of stock? Gain insights from it!

    Product out of stock? Gain insights from it!

    As I was at a home improvement store this weekend looking for some boxes for packing, I had that sinking feeling we’ve all probably experienced lately.

    In my case, that feeling meant ‘no boxes’– at least, not the size I needed and the store had very few alternatives. That section of the store looked eerily similar to the paper goods aisle in the early stages of the COVID pandemic. An image most of us would rather forget.

    Mercifully, this seemed to be a store-specific issue, and all the country’s boxes aren’t sitting in warehouses or on rail cars. While I eventually found some boxes, consumers are increasingly facing more concerning shortages and empty shelves of items we’ve long taken for granted, like bottled water and food items, durables, home building supplies, and even cars. The lesson for us all has been that one hiccup in a parts supply chain (for example, a shortage of microchips) or a sudden surge in demand, as we’re seeing now, can ripple into waves of shortages and have immediate and long-term emotional and behavioral impacts on consumers. This can greatly disrupt a product category in terms of overall volume and brand share.

    ‘Shock’ supply shortages are nothing new to the country, especially in times of war or oil embargoes, but this is a mostly new experience for today’s younger- to middle-aged consumers. So how do today’s consumers feel when their favorite brand of English muffins is out of stock for the first time ever? What action do they take when there is little selection of new pickup trucks at the dealership, and the less-desired model is available—but costs 10% more than it did last year?

    Sound and focused research can help answer these questions, including both qualitative and quantitative options.

    Qualitative research—whether depth interviews or focus groups—is a great tool to get at the emotional aspects of facing out-of-stocks. This can help brands ask of their consumers:

    • What was the initial feeling when seeing the shelf empty of the product you drove there for? That might include anything from shock to acceptance, based on the consumer’s mindset and expectations and their level of brand loyalty.
    • How do they feel about who’s responsible, and why? In other words, who gets the blame? Is it the brand or the store, or for those more politically inclined, the President? The answer to that question can have far-reaching impacts that are hard to shake.
    • What action was taken and how did that make them feel? Buying an alternative brand that you’ve always disliked is never a great feeling. How do Coca-Cola diehards feel about Pepsi being the only alternative at the time and vice-versa? On the other hand, it could be a great opportunity for that substitute brand, if you’ve never tried it.
    • What impact did the experience have on future shopping behaviors? Is there a deterioration in brand affinity or store loyalty?
    • What is the greater impact for the brand and store? I remember seeing social media posts early on in the pandemic, about where to find certain items—and those same stores seemed to get some great, free awareness from it.

    These questions and others can help brands prepare for possible and current shortages by better understanding the mindset of consumers and thus, influencing the messaging and advertising that goes out during times of shortage.

    While qualitative research gets at the emotions of out-of-stock experiences, a quantitative study can help validate those findings, as well as answer the in-the-moment consumer question of, ‘What next?’

    discrete-choice study, including virtual shelf sets, can be designed to effectively estimate the impact of out-of-stock scenarios on product demand, volume, and share, as well as the impacts of temporary price spikes, new entries into the category, or changes in shelf placement or number of products available. A large number of scenarios can be tested in one study. This approach can help researchers and brand managers quantify:

    • Where consumers shift their purchases—whether to another brand or product category, or whether they choose not to make a purchase at all.
    • The impact of price spikes on a brand or competitors, including price sensitivity.
    • The role that shelf placement plays, including number of product facings or the appearance of empty placings.
    • The effects of sales/discounts, packaging messaging, and other on-shelf factors.

    Given this data, a market simulation tool, such as the DecisionSimulator™, can be developed to test the impact of these scenarios on brand and competitive brand demand, volume, and share. This can be invaluable in making decisions during planning and distribution, and making decisions about the supply chain of ingredients or parts. Different segments can be analyzed including brand loyal consumers, as well as those loyal to a competitive brand.

    Massive supply chain disruptions, and the resulting consumer shock, are probably not here to stay forever. But while we’re dealing with the current challenges—perhaps for several more months or even years for some products—thorough and timely research, including qualitative and quantitative approaches, can provide invaluable information and tools in these uncertain times of market and supply disruption.

    Author: Mike Humphrey

    Source: Decision Analyst

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