Last updated on September 5th, 2012 at 04:22 pm
Purchase, N.Y.-based PepsiCo aims to increase beverage sales in convenience stores and supermarkets through a better understanding of shopper behavior. To that end, the beverage giant is closely observing shoppers’ path to purchase in stores. The initial learning includes how Hispanic beverage buyers differ from non-Hispanics. It also has led to a test of new equipment merchandisers and a new c-store layout.
“Because our products are discretionary and impulse based, we really need to understand what’s going on in-store in terms of behavior,” said Kent Bassett, senior director of shopper and channel insights for PepsiCo North America Beverages.
The beverage giant is obtaining its insights into shopper behavior via video research from VideoMining Corp., a provider of in-store measurement technology that automatically converts video into precise, statistical data on the shopping process. The technology collects the data via a network of cameras throughout the store, producing a feet-on-the floor tracking of each shopper. The network also captures every “Do I buy or don’t I buy?” moment, measures them in seconds, and then relates them to sales and conversion.
Research by PepsiCo has found that 59 percent of purchase decisions are made in the store, 64 percent of LRB (Liquid Refreshment Beverage) is purchase for others, 58 percent of beverage growth is from Hispanic shoppers, and 50 percent of shoppers become aware of new products in the store.
“So in-store behavior is clearly very important to us,” he said, adding that PepsiCo judges itself by four metrics: Are we bringing in more buyers? Are we increasing our conversion rate? Are we increasing our shopping incidence? Are we increasing the items and dollars?
Those metrics tell PepsiCo “what exactly has to change to be successful in the marketplace,” said Bassett, speaking in a presentation at the annual Shopper Insights in Action conference in Chicago recently.
In the Convenience and Gas (C&G) channel, PepsiCo is focusing on category conversion, traffic flow and display conversion. Bassett calls C&G a “must-win channel” because it consists of 62 million trips and 36 million beverages sold per day. Other than gas, LRB is the top selling product in convenience stores.
“There are a lot of challenges when it comes to the data,” he said. “It is immediate consumption, so nobody is bringing something home to scan for a panel. It’s highly fragmented with strong regionals, so we have a hard time getting retail data. Core shoppers, such as unacculturated Hispanics and blue-color males are not online participating in studies. Store visits tend to be around two minutes, so it’s hard to intercept somebody and do ethnography. And 70 percent of the visits are gas-and-go; they don’t even make it into the store.”
That lack of traditional data makes in-store measurement via video technology all the more important, he said.
To take advantage of the unique shopping behavior in c-stores, PepsiCo is testing a three-sided display case at Rutter’s, a chain in Pennsylvania. PepsiCo has also developed a “model store” that it is promoting to retailers around the country. The layout capitalizes on the impulse nature of c-store shoppers.
“We are in the process of rolling it out now,” he said. “We created a model store based in part on these shopper insights.” Included are ideas for merchandising, signage and other touch points in the store.