Understanding Customer Motivations
Different customers go to different stores for different reasons.
Case I – You are coming back from office and you remember you are out of milk. You make a quick stop at the local ‘kiraana’ store near your house and pick up milk and maybe eggs too now that you are here.
Case II– It’s a Saturday afternoon. You are lazing around in the house when your wife hands you a list of grocery shopping. It’s a weekly replenishment trip. You realize you have to pick up fruits, vegetables, juices, the aftershave you ran out of etc. etc. This time you may not go to the store next door. Instead, you may go to a Foodworld or Niligiri’s which carries a wider assortment and you can get everything in one stop.
Your choice of store could be determined by the assortment in the store (how many products, how many varieties)) or convenience (speedy billing or availability of parking). The determining factor depends on the kind of shopping trip you are making (or at least have planned to make). You will probably not go to a big store with crowded parking and long billing queues if you have to pick up just bread and milk. The small store at the corner of your street will be a much more convenient option. However, if you are doing your fortnightly round of stock up for the house where you have to pick up everything from fruits to shaving cream to your favourite ruby grapefruit juice, the ‘kiranewaala’ may not have everything you want. You may instead go to the Food-world which is 3 km from your home.
Different factors determine which store a customer will choose for his shopping trip. Conversely, different stores will have different kinds of trip distribution. Understanding this distribution can help determine store layout, store assortment and other information like do you need more parking space, does it make sense to have home delivery etc..
Retailers can do all this and more using the billing information. Billing information can characterize each basket. No. of items in the basket, Rupees spent, distribution of product groups, distribution by department or any other level in the product hierarchy. This is all valuable information from which actionable insights can be derived. Retailers can understand the reason(s) for a customer’s trip and then design suitable strategies to drive store volumes.