One and One Makes Eleven: The Power of Virtual Shelves and Choice Modelling in Product Research

Problem in hand

For any manufacturer the most important task is to understand how consumers perceive their products, how they buy them or their alternatives and what they usually see in a product before purchasing it. A lot of brands do real tests with in-store and physical product exposures to their prospective customers. This methodology works well as customer functional needs and emotional aspects are thoroughly recorded and an inline product strategy is developed for market.

A lot of research is already going on this front to support brands to take the right decisions for successful product delivery. However, multiple products are getting added into the market on regular basis and due to this brands are forced to do research more often to check any threat from competitors or from cannibalization from their own products. Also, with this increased demand of research, there comes a cost and timeline that makes product managers and research teams to look for alternates that are cost effective and efficient in terms of time.

On the other hand, with rise of Mobile and Internet, consumers are enlightened and are spoilt by endless product options. They consider a lot of things (Brand, products, price, offers, recommendation, reviews etc) and make purchase decision that are often motivated by their emotions. These days, a lot of research is executed on PC and mobile devices to make research faster and economical. However, these research methods are often focussed on capturing conscious attitudes and stated behaviour. Consumers emotional needs gets ignored as there is no provision to capture them in a typical survey scenario.

So, what is the solution for the above problem.

Talk to your consumers in a virtual world – ‘Virtual Shelf’, an alternate to in-store product tests.

Virtual shelf, a research methodology which is adapted well to understand the real consumer behaviour. With a Virtual-shelf, consumer participate in a virtually simulated shopping exercise with their PC or Mobile screen transformed into a market place with different shelf displays. A participant can interact with each SKU on the screen and access it information like product name, brand name, price, size, pack type, offers etc. like a real world shopping exercise. The interaction with products helps the participant to know the product exactly like an In-store product exposure and give his/her opinion on products that look interesting.

The ‘Virtual Shelf’ is very helpful in garnering information on:

1. Which products got consumer attention

2. Which products went un-noticed

3. Whether consumers like packaging of products or not

4. What are the units purchased

5. Amount spent on this shopping exercise

But, you can do more with ‘Virtual Shelf’… add Conjoint Analysis! A powerful solution for Consumer Research

To understand the consumer behaviour a static ‘Virtual Shelf’ does not seems to be a better solution as this shows only one scenario with fixed products and fixed prices. Consumers see a lot of shopping scenarios when they go out to different stores. So in order to get more realistic insights, ‘Virtual Shelf’ is being executed with the addition of Conjoint Analysis (also known as trade off analysis). With the addition of conjoint analysis, series of real life shopping situations are shown with products getting exposures on all possible configurations(size, pack type, price etc.) across different rows of the shelf.

With this powerful combination following research needs can be met :

1. Price Pack Architecture – Considered as most valuable research insights in CPG and FMCG domains. It helps the decision maker to keep eyes on the preferences of their products and aid price changes depending on the market scenarios. This also help the researcher identify consumer preference across type of packs (E.g. in the beverage industry – is the pet bottle more preferred than a glass bottle or tetra pack?), Optimal Volume/ Optimal Grammage of packs which will realize maximum revenue for the manufactures e.g. profitability proposition between a 330ml can vs a 250m can.

2. Current vs New products – It is very important to understand how the products of interest are performing in the market and is there any need to pull out / replace any current product. This can be achieved by showing the consumers new products which are still not in the market and whether they will be preferred or not by the consumers in lieu of older products. Or will they cannibalize any existing product of their own portfolio. This also helps in getting the optimal prices of new products and create pricing strategies to negate any impact of competitors pricing change or new SKU introduction. It is helpful in instances where manufactures are in a fix to choose among different new flavour options to be introduced.

3. Consumer psychological behaviour – Consumers tend to get confused in making decisions when they see a lot of options. They look out for some alternatives but at the end they chose the ones that makes sense to them. In order to understand more about their shopping behaviour following insights are generated:

a. Which products they actually viewed

b. Which product they finally purchased

c. Which product were considered and not purchased

d. The reason of rejection

e. How much time they spent on each product and on overall shopping exercise

f. How much they like to spend

4. Packaging test – Packaging is considered as an important aspect of any product and play a big role in purchase decision. If the product is of high quality but the packaging is poor, there is high probability of rejection. Companies spend a lot of money and thoughts in order to make the packaging attractive of any product. Packaging test is done by displaying the different packages (test packages) on different shelf positions to respondents and understand which pack type is getting more attention. Follow up questions are also introduced to know why any packaging was selected or not selected.

With the changing research space, newer methodologies are exploring areas that were untouched earlier and with advancements in virtual reality, research needs to alter the traditional methodologies.

So, next time you feel that there is a need to test your products with consumers in a real market scenario, give ‘Virtual Shelves’ backed by Conjoint a try. Many brands in FMCG domain are reaping benefits of its speed, cost efficiencies and not to mention the quality of insights. Hope to see your products in virtual space!