A Better Way to Track Shoppers Offline

TL;DR

Although online retail is growing, 90% of retail spending still occurs offline. This study explores using online tools to track and measure offline consumer behavior.

Transcript

[MUSIC] Offline compared to online retail is still actually a very large faction of consumer spending. So, although online is growing quite dramatically, as of now essentially still about 90% of retail spending happens in the offline world. And firms are still trying to figure out how to best promote products, how to best run a price promotions, th... Read More

Key Insights

• 💗 Online retail may be growing, but the majority of retail spending still occurs offline.
• 💨 Offline retailers are seeking ways to improve their promotion and pricing strategies.
• 👣 Tracking and measuring offline consumer behavior is challenging but essential for effective marketing decisions.
• 🏬 Advertising can attract consumers to different parts of the store, potentially leading to increased sales in other categories.
• 🏪 Placing frequently purchased items in the back of the store can drive impulse purchases.
• 🎚️ Advertising has a positive impact on sales at the category level but does not significantly impact sales in adjacent categories.
• 🏪 Allocating advertising budget based on product category effectiveness is more effective than narrow product or broader store level decisions.

Questions & Answers

Q: How does online retail differ from offline retail in terms of tracking and measuring consumer behavior?

Online retailers have the advantage of being able to track consumer clicks, website visits, and purchasing behavior. Offline retail traditionally lacked this level of observation, but this study introduces a new measurement tool to track how consumers navigate through offline stores.

Q: Can advertising in offline stores attract consumers to different parts of the store and increase sales in other categories?

Yes, advertising can attract more people to specific parts of the store they wouldn't have otherwise visited. This can lead to positive spillover effects, where consumers may pick up other products on their way to the advertised aisle.

Q: Why do stores often place frequently purchased items like milk in the back?

Placing frequently purchased items like milk in the back of the store forces consumers to walk past other categories. This strategy increases the likelihood of impulsive purchases as consumers pick up items they didn't plan on buying.

Q: Is advertising effective beyond the individual product being advertised?

Yes, advertising for a specific product can increase sales not only for that product but also for the entire category. This occurs because some consumers are reminded to buy products in that category when they see the advertisement.

Summary & Key Takeaways

• Offline retail still accounts for 90% of consumer spending, despite the growth of online retail.

• Firms are trying to find effective ways to promote products and run price promotions in the offline world.

• This study introduces a new measurement tool using radio frequency identification tags to track consumer behavior in offline stores.