The top seven 'hidden retailer insights'
During last December’s Drug Store News Industry Issues Summit, our panel of retail executives discussed how to optimize consumer white spaces, creating new trips and value. If you were not there, you missed some great discussions by many of the top thinkers in our industry.
I believe everyone attending gained valuable feedback on how to uncover and fill currently unmet consumer white spaces. Two key themes were discussed:
First theme: We all must continually engage in rapid learning and discussion with our retail partners, suppliers and competitors to evaluate assumptions, business models and emerging marketplace shifts if we all want to achieve success. Great innovations are birthed at the intersection of the consumer, the retailer and manufacturer. That is the magic of co-creation.
Second theme: Oftentimes the criticism of the industry is that the innovation process seems like a “perpetual game of tag.” Once a company innovates, everyone else attempts to copy the idea, creating a sea of sameness, and the consumer is left confused. The real goal should be to go in another direction and invent something that is truly different. “But as we all know, that is easier said than done.”
As I walked away from moderating this industry event, it hit me that there were a number of subtle “hidden insights” shared that may have slipped through the cracks. Here are the hidden gems:
- Category role: Each retailer emphasized, “Help me understand how my consumer defines the category within my store and what they expect of me?” Vendors must help the retailer define the role of the category considering the changing mind-set of their consumer. Insight: National consumer trends are not enough. The retailer wants to better understand how their consumer sees the category, and what their consumer wants from the category in their store. The consumers' category expectation is different depending on the retailer.
- Localized assortment: The trend toward localized assortments helps optimize regional or cultural needs. Retailers are looking for assortment insights that address community, neighborhood and household needs to create the optimal assortment by store. Insight: Who within your operation is thinking about this insight, and how do you bring new knowledge to your top retailers relative to deeper consumer, regional or market segmentation? The goal is to optimize your revenue by optimizing the stores that better align with your product offering. In the new economy, it is about value creation on a store-level basis.
- Emerging insights: Many of the retailers shared that they want their partners to provide emerging and international insights that help them understand “what’s next?” This includes harnessing or uncovering new insight that assists them in creating solutions that address future demands coming around the corner. They also are looking for in-store ideas that create a stronger experience for their consumers, helping them brand the store. Insight: Provide them with something they do not know, helping them understand “what’s next” and how to create attachment with their most valuable core consumer.
- One voice: Often time’s manufacturers think about the retailers business as two separate enterprises: brick-and-mortar and the .com digital business. The panel made it very clear that you must think about this as an integrated blended business. If you are not, you are not in alignment. Insight: Both arms of the business should not be thought of as a separate business — but one integrated voice. (Programs, imagery, positioning and solutions must align, and manufacturing teams should think of this one comprehensive business.)
- Self-treatment solutions: Since 38% of consumers self-treat at home, there are always opportunities to create products and services for this core consumer group. Retailers are looking for companies that create brands that address unmet needs or offer health-and-wellness products currently only available through medical professionals. Insight: Develop and facilitate co-creation meetings exploring products that address self-treatment items within the category or adjacencies. This is a ripe opportunity.
- Critical thinking: The new skills expected of tomorrow’s manufacturers are “critical thinking” and the ability to “synthesize” information and get down to the best actionable insights that truly matter to the consumer. Insight: the more your sales and marketing organizations share global insights, think critically about the retailers business, partner with the right alliances, co-create and invent in-store experiences — the stronger your odds of success. The top retailers are looking for sales and marketing executives who think like general managers.
- Ethnographic insights: Our panel wants their partners to gather ethnographic insights with their core consumer. Ethnographic insights are gathered by researchers who study the habits and lifestyles of consumer within their home. The research is deeper and more objective than focus groups, because it is reality based. Insight: “Go deeper with your knowledge and bring hidden insights that transform your product development, based on how the consumer lives. The behavior of a dollar or mass channel customer is very different than the behavior of a high-end food retailer. Retailers are looking for insights based on the behavior — and hidden needs — of their own customers. Go the extra mile, understand the retailer’s core consumer.
Thanks once again to our panel of leaders. We all received an education on how to create more value in our business engagements.
Dan Mack is founder of Mack Elevation Forum and a partner in The Swanson Group. To learn more go to www.mackelevationforum.com.