The thought process behind your customers’ purchasing behavior ( customer behavior ) is often difficult to explain or articulate, not the least by customers themselves. This uncertainty exists inherently in any survey or panel responses, but there are tools available to retailers and analysts to determine how customers shop by focusing not on what customers say, but on how they behave. The increasing availability of robust transactional level data sources (POS data , Loyalty Data) and the tools needed to analyze them allows for detailed analytics on what specific products are in customers’ baskets.
One of the simplest ways to look at transactional level data is one of the most effective in understanding consumer trip missions, complimentary products, and the most effective merchandising and promotional opportunities. Simply looking at how often given products appear in peoples’ baskets, and the dollar value of the total basket gives retailers an idea of which products drive the most total spend in store. Retailers will be more inclined to give extra facings and listings to those products that drive consumers into their stores and are purchased as part of a larger shop in the store. This means that gauging a SKU’s value to the organization should not simply measure dollars and margin, but also how it helps drive customers to shop at a retailer, and ultimately drive loyalty and sales ( loyalty analytics ).
Consumers also engage in specific trip types and shopping missions, regardless of whether or not they realize it consciously. Baskets that contain a preponderance of personal health and wellness products indicate that the customer is in a different mindset from one that is shopping primarily for groceries. The timing, promotional responsiveness and basket size of these different types of shops can help identify which levers are most effective at expanding the trip to include additional categories, ultimately helping the retailer capture a larger share of their customers’ wallet.
When trying to determine which products drive consumer loyalty, and how customers shop when fulfilling different requirements there is a simple method to follow. Instead of asking a consumer how they shop, let them tell you through their behavior by peeking inside their basket.
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