Businesses spend many millions trying to understand the way consumers consider the choices confronting them in a supermarket. With up to 30,000 items on shelf, and some categories having hundreds of choices, it is a key consideration.
A mix of psychology, data science, habitual behaviour, discretionary spending dollars available, and individual preferences all play a role.
A complicated mix.
However, there is a way to at least clarify part of the mix.
Consumers use decision trees, usually without thinking about them when they are in a supermarket making their purchases.
Some purchases are automatic, a habitual choice, others are made after a considered set of choices on a range of factors important to the individual are made, and there are, obviously, many shades of this continuum that apply to a highly personal process.
Imagine a consumer approaching the dairy case looking for fruited yoghurt. Some may just buy their usual brand, flavour and size irrespective of everything else. Others will make a series of choices that will vary for every person, and may look something like the decision tree below.
It will differ for each individual, some will choose the brand first, others the flavour, or the size and price, and a whole range of variations on these factors, but based on the total sales, supermarkets will range products, and give them shelf positions and space based on sales, gross margins, delivered margins, and various promotional strategies. They also use a decision tree.
Retailers and suppliers spend huge amounts of effort, and resources. on this category management exercise, trying to read the consumers mind, and anticipate their reactions to various combinations that are available to them.
It is a data intensive exercise, well suited to the “big data” techniques that are evolving around us. Combining checkout data with store loyalty cards is now becoming commonplace, what is emerging currently is the integration of mobile and social media data into the mix.
As you walk into the store to buy something, there has already been lots of effort gone into reading your mind, and there will be lots of effort and money expended in store in an effort to manage your purchase decisions.
