Should you believe what your consumers say?

Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

Effective market research is vital to running a successful business, but how exactly do you ensure that the information you're getting is valid?

Consumer research professionals in the retail and shopping centre industry will tell you that there is frequently a big difference between the two. It’s partly because of imprecise recall on the part of the consumer, partly because of time pressure to produce an answer and sometimes, more darkly, in order to deceive the interviewer.

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How to get essential data for success from your customers

If consumers can’t tell you with decent accuracy what they have done in the recent past, there is no way they will be able to give you an accurate prediction of how they will behave in the future.

For example, surveys about buying intentions will often pose questions: “Will you buy a computer this year?” or “How much will you spend on clothing in the next six months?” The academic literature on such surveys suggests that unless the purchase is to occur in the near future and the purchase itself is large – therefore requiring planning – the answers you get are likely to be too inaccurate for any useful research purpose.

If you ask a person whether he is going to buy a car in the next three months, the chances are you will get a fairly accurate answer. Ask the same person whether he will buy a new phone or how much he will spend on clothes in the next three months and the answer will probably be pretty useless.

How to get the facts, just the facts

Technology cannot help market research respondents better predict their own actions, but it can improve the way information is collected about what consumers have actually done. Analysing the collected information can assist to: Redesign stores, stock the shelves and co-locate tenants in a shopping centre in ways that improve the shopping experience and leads to increased sales.

A number of competing technologies have their hats in the ring, with perhaps the current favourite being mobile technology, specifically something called ‘mobile analytics’.

Just about everyone now uses mobile phones in public spaces, and since each phone broadcasts a unique identifying signal that can be recorded by sensor equipment, it is possible to track people as they move around in a store, shopping centre, museum, or other building, just as it is possible to use GPS to track them when they’re outside.

In this way, retailers or shopping centre operators can potentially measure how people are using the facility. If it’s a shopping centre, the owner knows which stores are being visited most frequently, the most popular sequence in which they are visited and whether there are ‘dead’ or under-utilised spaces that require attention.

If it’s a retail store, the owner can find out how shoppers are moving through it, where they are pausing, which products they are buying sequentially, and so on.

If this technology is sufficiently accurate and if people don’t sabotage it by turning their phones off, then mobile analytics can gather much of the same information that traditionally has been gathered in consumer surveys. It has other obvious advantages over traditional consumer surveys besides just its objectivity − it captures information from everyone carrying a switched-on phone rather than just a sample of people contacted during traditional market research surveys, and it does not require interference by a market researcher in the life of the consumer.

How "sanity testing" differentiates winning businesses from losing ones

The problem − if you can call it that − is the owners’ perception of privacy. The technology tracks the phone signal but gathers no information about the phone’s owner. A researcher can study a person’s behaviour, but has no insight into who the person is and what the person’s motivations, demographic affiliation, place of residence, occupation or even gender.

Being able to link actual behaviour to shopper characteristics is a key advantage for the market researcher using more traditional methods.

For this reason, traditional forms of consumer research that does involve asking the consumer questions personally, either online, by phone or face-to-face, are likely to be around for a while yet.

That still leaves us with the problem of inaccurate data. But this is what can separate a very good market researcher from a not-so-good one: The experience and insight to see where the data is going off the rails - a process generally referred to as ‘sanity testing’ − and making appropriate adjustments. It’s a dark science, but if it’s done well it can illuminate well enough to get the job done.

What we do, not what we say

Actions not only speak louder than words, but they speak more truthfully. It's not that consumers are liars, it's just that the future is tough to predict. Academic literature suggests that unless a purchase is to occur in the near future - and the purchase itself is large - consumer answers regarding purchase behaviour are likely to be too inaccurate for any research purpose.

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