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Posts Tagged ‘Shoppers’

A shopper may well know what types of products he or she is planning to buy in a store, but what products the shopper will come out with is much less sure. Frequently there will be some additional unplanned products in the shopper’s basket. This observation is more often demonstrated in the case of grocery shopping in supermarkets, but it is likely to hold true also in other types of stores, especially large ones like department stores, fashion stores, and DIY or home improvement stores.

There can be a number of reasons or triggers for shoppers to consider additional products to purchase during the shopping trip itself — products forgotten and reminded of by cues that arise while shopping, attractiveness of visual appearance of product display (‘visual lift’), promotions posted on tags at the product display (‘point-of-purchase’) or in hand-out flyers, and more. The phenomenon of unplanned purchases is very familiar, and the study of it is not new. However, the behaviour of shoppers during their store visit that leads to this outcome, especially the consideration of product categories in an unplanned manner, is not understood well enough. The relatively new methodology of video tracking with a head-mounted small camera shows promise in gaining better understanding of shopper behaviour during the shopping trip; a research article by Hui, Huang, Suher and Inman (2013) is paving the way with a valuable contribution, particularly in shedding light on the relations between planned and unplanned considerations in a supermarket, and the factors that may drive conversion of the latter into purchases (1).

Shopper marketing is an evolving specialisation which gains increasing attention in  marketing and retailing. It concerns activities of consumers performed in a ‘shopper mode’ and is strongly connected with or contained within consumer marketing. Innovations in this sub-field by retailers and manufacturers span digital activities, multichannel marketing, store atmospherics and design, in-store merchandising, shopper marketing metrics and organisation. However, carrying out more effective and successful shopper marketing programmes requires closer collaboration between manufacturers and retailers — more openness to each party’s perspective and priorities (e.g., in interpretation of shopper insights), sharing information and coordination (2).

In-Store Video Tracking allows researchers to observe the shopping trip as it proceeds from the viewpoint of the shopper, literally. The strength of this methodology is in capturing the dynamics of shopping (e.g., with regard to in-store drivers of unplanned purchases). Unlike other approaches (e.g., RFID, product scanners), the video tracking method enables tracking acts of consideration, whether followed or not by purchase (i.e., putting a product item in the shopping cart).

For video tracking, a shopper is asked to wear, with the help of an experimenter, a headset belt that contains the portable video equipment, including a small video camera, a view/record unit, and a battery pack. It is worn like a Bluetooth headset. In addition, the equipment used by Hui et al. included an RFID transmitter that allows to trace the location of the shopper throughout his or her shopping path in a supermarket.

Like any research methodology, video tracking has its strengths and advantages versus its weaknesses and limitations. With the camera it is possible to capture the shopper’s field of vision during a shopping trip; the resulting video is stored in the view/record unit. However, without an eye-tracking (infrared) device, the camera may not point accurately to the positions of products considered (by eye fixation) in the field of vision. Yet, the video supports at least approximate inferences when a product is touched or moved, or the head-body posture and gesture suggest from which display a shopper considers products (i.e., the ‘frame’ closes-in on a section of the display). It is further noted that difficulties in calibrating an eye-tracking device in motion may impair the accuracy of locating fixations. The video camera seems sufficient and effective for identifying product categories as targets of consideration and purchase.

Furthermore, contrary to video filmed from cameras hanging from the ceiling in a store, the head-mounted camera records the scene at eye-level and not from high above, enabling to better notice what the shopper is doing (e.g., in aisles), and it follows the shopper all the way, not just in selected sections of the store. Additionally, using a head-mounted camera is more ethical than relying on surrounding cameras (often CCTV security cameras). On the other hand, head-mounted devices (e.g., camera, eye-tracking), which are not the most natural to wear whilst shopping, raise concerns of sampling bias (self-selection) and possibly causing change in the behaviour of the shopper; proponents argue that shoppers quickly forget of the device (devices are now made lighter) as they engage in shopping, but the issue is still in debate.

Video tracking is advantageous to RFID  and product scanners for the study of unplanned purchase behaviour by capturing acts of consideration: the RFID method alone (3) enables to trace the path of the shopper but not what one does in front of the shelf or stand display, and a scanner method allows to record what products are purchased but not which are considered. The advantage of the combined video + RFID approach according to Hui and his colleagues is in providing them “not only the shopping path but also the changes in the shoppers’ visual field as he or she walks around the store” (p. 449).

The complete research design included two interviews conducted with each shopper-participant — before the shopping trip, as a shopper enters the store, and after, on the way out. In the initial interview, shoppers were asked in which product categories they were planning to buy (aided by a list to choose from), as well as other shopping aspects (e.g., total budget, whether they brought their own shopping list). At the exit the shoppers were asked about personal characteristics, and the experimenters collected a copy of the receipt from the retailer’s transaction log. The information collected was essential for two aspects in particular: (a) distinguishing between planned and unplanned considerations; and (b) estimating the amount of money remaining for the shopper to make unplanned purchases out of the total budget (‘in-store slack’ metric).

237 participants were included in analyses. Overall, shoppers-participants planned to purchase from approximately 5.5 categories; they considered on average 13 categories in total, of which fewer than 5 were planned considerations (median 5.6). 37% of the participants carried a list prepared in advance.

Characteristics influencing unplanned consideration:  The researchers sought first to identify personal and product characteristics that significantly influence the probability of making an unplanned consideration in each given product category (a latent utility likelihood model was constructed). Consequently, they could infer which characteristics contribute to considering more categories in an unplanned manner. The model showed, for instance, that shoppers older in age and female shoppers are likely to engage in unplanned consideration in a greater number of product categories. Inversely, shoppers who are more familiar with a store (layout and location of products) and those carrying a shopping list tend to consider fewer product categories in an unplanned manner.

At a product level, a higher hedonic score for a product category is positively associated with greater incidence of unplanned consideration of it. Products that are promoted in the weekly flyer of the store at the time of a shopper’s visit are also more likely to receive an unplanned consideration from the shopper. Hui et al. further revealed effects of complementarity relations: products that were not planned beforehand for purchase (B) but are closer complementary of products in a ‘planned basket’ of shoppers (A) gain a greater likelihood of being considered in an unplanned manner (‘A –> B lift’).  [The researchers present a two-dimensional map detailing what products are more proximate and thus more likely to get paired together, not dependent yet on purchase of them].

Differences in behaviour between planned and unplanned considerations: Unplanned considerations tend to be made more haphazardly — while standing farther from display shelves and involving fewer product touches; conversely, planned considerations entail greater ‘depth’. Unplanned considerations tend to occur a little later in the shopping trip (the gap in timing is not very convincing). An unplanned consideration is less likely to entail reference to a shopping list — the list serves in “keeping the shopper on task”, being less prone to divert to unplanned consideration. Shoppers during an unplanned consideration are also less likely to refer to discount coupons or to in-store flyers/circulars. However, interestingly, some of the patterns found in this analysis change as an unplanned consideration turns into a purchase.

Importantly, in the outcome unplanned considerations are less likely to conclude with a purchase (63%) than planned considerations (83%). This raises the question, what can make an unplanned consideration result in purchase conversion?

Drivers of purchase conversion of unplanned considerations: Firstly, unplanned considerations that result in a purchase take longer (40 seconds on average) than those that do not (24 seconds). Secondly, shoppers get closer to the shelves and touch more product items before concluding with a purchase; the greater ‘depth’ of the process towards unplanned purchase is characterised by viewing fewer product displays (‘facings’) within the category — the shopper is concentrating on fewer alternatives yet examines those selected more carefully (e.g., by picking them up for a closer read). Another conspicuous finding is that shoppers are more likely to refer to a shopping list during an unplanned consideration that is going to result in a purchase — a plausible explanation is that the shopping list may help the shopper to seek whether an unplanned product complements a product on the list.

The researchers employed another (latent utility) model to investigate more systemically the drivers likely to lead unplanned considerations to result in a purchase. The model supported, for example, that purchase conversion is more likely in categories of  higher hedonic products. It corroborated the notions about ‘depth’ of consideration as a driver to purchase and the role of a shopping list in realising complementary unplanned products as supplements to the ‘planned basket’. It is also shown that interacting with a service staff for assistance increases the likelihood of concluding with a purchase.

  • Location in the store matters: An aisle is relatively a more likely place for an unplanned consideration to occur, and subsequently has a better chance when it happens to result in a purchase. The authors recommend assigning service staff to be present near aisles.

Complementarity relations were analysed once again, this time in the context of unplanned purchases. The analysis, as visualised in a new map, indicates that proximity between planned and unplanned categories enhances the likelihood of an unplanned purchase: if a shopper plans to purchase in category A, then the closer category B is to A, the more likely is the shopper to purchase in category B given it is considered. Hui et al. note that distances in the maps for considerations and for purchase conversion of unplanned considerations are not correlated, implying hence that the unplanned consideration and a purchase decision are two different dimensions in the decision process. This is a salient result because it distinguishes between engaging in consideration and the decision itself. The researchers caution, however, that in some cases the distinction between consideration and a choice decision may be false and inappropriate because they may happen rapidly in a single step.

  • The latent distances in the maps are also uncorrelated with physical distances between products in the supermarket (i.e., the complementarity relations are mental).

The research shows that while promotion (coupons or in-store flyers) for an unplanned product has a significant effect in increasing the probability of its consideration, it does not contribute to probability of its purchase. This evidence furthermore points to a separation between consideration and a decision. The authors suggest that a promotion may attract shoppers to consider a product, but they are mostly uninterested to buy and hence it has no further effect on their point-of-purchase behaviour. The researchers suggest that retailers can apply their model of complementarity to proactively invoke consideration by triggering a real-time promotion on a mobile shopping app for products associated with those on a digital list of the shopper “so a small coupon can nudge this consideration into a purchase”.

But there are some reservations to be made about the findings regarding promotions. An available promotion can increase the probability of a product to be considered in an unplanned manner, yet shoppers are less likely to look at their coupons or flyers at the relevant moment. Inversely, the existence of a promotion does not contribute to purchase conversion of an unplanned consideration but shoppers are more likely to refer to their coupons or flyers during unplanned considerations that result in a purchase.  A plausible explanation to resolve this apparent inconsistency is that reference to a promotional coupon or flyer is more concrete from a shopper viewpoint than the mere availability of a promotion; shoppers may not be aware of some of the promotions the researchers account for. In the article, the researchers do not address directly promotional information that appears on tags at the product display — such promotions may affect shoppers differently from flyers or distributed coupons (paper or digital via mobile app), because tags are more readily visible at the point-of-purchase.

One of the dynamic factors examined by Hui et al. is the ‘in-store slack’, the mental budget reserved for unplanned purchases. Reserving a larger slack increases the likelihood of unplanned considerations. Furthermore, at the moment of truth, the larger is the in-store slack that remains at the time of an unplanned consideration, the more likely is the shopper to take a product from the display to purchase. However, computations used in the analyses of dynamic changes in each shopper’s in-store slack appear to assume that shoppers estimate how much they already spent on planned products in various moments of the trip and are aware of their budget, an assumption not very realistic. The approach in the research is very clever, and yet consumers may not be so sophisticated: they may exceed their in-store slack, possibly because they are not very good in keeping their budget (e.g., exacerbated by use of credit cards) or in making arithmetic computations fluently.

Finally, shoppers could be subject to a dynamic trade-off between their self-control and the in-store slack. As the shopping trip progresses and the remaining in-store slack is expected to shrink, the shopper becomes less likely to allow an unplanned purchase, but he or she may become more likely to be tempted to consider and buy in an unplanned manner, because the strength of one’s self-control is depleted following active decision-making. In addition, a shopper who avoided making a purchase on the last occasion of unplanned consideration is more likely to purchase a product in the next unplanned occasion — this negative “momentum” effect means that following an initial effort at self-control, subsequent attempts are more likely to fail as a result of depletion of the strength of self-control.

The research of Hui, Huang, Suher and Inman offers multiple insights for retailers as well as manufacturers to take notice of, and much more material for thought and additional study and planning. The video tracking approach reveals patterns and drivers of shopper behaviour in unplanned considerations and how they relate to planned considerations.  The methodology is not without limitations; viewing and coding the video clips is notably time-consuming. Nevertheless, this research is bringing us a step forward towards better understanding and knowledge to act upon.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Deconstructing the “First Moment of Truth”: Understanding Unplanned Consideration and Purchase Conversion Using In-Store Video Tracking; Sam K. Hui, Yanliu Huang, Jacob Suher, & J. Jeffrey Inman, 2013; Journal of Marketing Research, 50 (August), pp. 445-462.

(2) Innovations in Shopper Marketing: Current Insights and Future Research Issues; Venkatesh Shankar, J. Jeffrey Inman, Murali Mantrala, & Eileen Kelley, 2011; Journal of Retailing, 87S (1), pp. S29-S42.

(3) See other research on path data modelling and analysis in marketing and retailing by Hui with Peter Fader and Eric Bradlow (2009).

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Department stores are competing hard for more than thirty years to overcome the challenges posed to them by shopping centres and malls. They keep refreshing their interior designs, merchandising and marketing methods to remain relevant, up-to-date, and especially reinvigorated for the younger generations of shoppers. Department stores and shopping centres are two different models in retailing for offering a wide array of product categories, and accompanying services, within enclosed built environments — different in requirements and responsibilities of managing them, in their structures, and most importantly with respect to the shopping experiences they create. There is enough room in consumers’ lives for shopping both ways.

Shopping centres may be found in the central areas of cities and on their outskirts, on main roads at city-gates and in suburban neighbourhoods. A shopping mall, according to the American genuine model, is a shopping centre characterised by location outside the city centre, housed in a single- or two-floor building spread over a large area and a large-space parking lot, free of charge. But shopping centres or malls exhibit nowadays such a variety of architectural structures and styles of interior design, at different sizes and locations, that the distinction in terms has become quite vague and less important.

Department stores belong traditionally in city centres. They also are typically housed inPartial back closed windows allows a glimpse into the Coop store their dedicated buildings (e.g., 5 to 7 floors, including one or two underground floors). Each floor in a contemporary store is hosting one or more departments (e.g., cosmetics, accessories, menswear, furniture, electric goods and electronics/digital) or amenities (e.g., restaurants). That was not the case in the early days (1850s-1920s) when the retail space open to the public included only up to three floors and the rest of the building was used for production, staff accommodation, and other administrative functions; the range of products was much smaller. So the department store as we better know it today follows the format redeveloped in the 1930s and further progressed soon after World War II. The styles of interior design and visual merchandising, nevertheless, have certainly changed several times over the years.

There is however another recent format of a department store which resides within a shopping centre. It is a reduced and condensed exemplar of the ‘classic’ department store, probably not how consumers more often perceive and think of such stores. But having a reduced store version is perhaps not a problem inasmuch as its location. Shopping centres invite retail chains of department stores to open a branch as an anchor store in their premises, and it seems as a necessary action by the retailers to maintain visibility and presence amid the threat of the shopping centres posed to them. This venture also allows the retailer to extend and reach shoppers away from city centres. Yet, one may question if it helps and serves the interests of the department store retailer as much as of the proprietor of the shopping centre. Being more limited in space and scope of products, while surrounded by a few hundred other shops and stores under the same roof, the department store could get more easily lost and vanish from shopper attention in the crowded space. It should be much more difficult for the store to remain conspicuous in this kind of environment, especially when shoppers can refer to a selection of specialist shops in any category they are interested almost next door.

When a shopper enters a respectable department store he or she tends to get absorbed within it. The variety of products on display, lights and colours, brand signs, and furnishing and fixtures in different shapes and styles pull you in, making you forget of the outer world. The shopper may find almost anything one needs and seeks, whether it is for wearing, decorating the living room, or working in the kitchen, enough to forget there is a street and other shops and stores out there. Think of stores — just for illustration — such as  KaDeWe in Berlin, Selfridges in London, La Rinascente in Milano, or Printemps in Paris: that is the magic of a department store. Of course there are many other stores of this type from different chains, in different styles and atmospherics (which may vary between departments within the same store), and in some of the main cities in each country. For instance, Marks & Spencer opened its modern flag store in a glass building at the turn of the century in Manchester, not in London. Not long afterwards Selfridges also opened a store in Manchester, and then in Birmingham. Printemps and Galeries Lafayette sit next to each other on Boulevard Hausmann in Paris — both are very elegant though the latter  looks more glittering and artistic,  appearing even more upscale and luxurious than the former. Now Galeries Lafayette is planning its yet most modern concept of a department store to open on Champs Élysées.

That is not the impression and feeling one gets in a shopping centre. Although a centre can be absorbing and entertaining in its own way, usually it would be the centre’s environment that is absorbing as a whole and much less any single shop or store. Even in larger stores the shopper is never too far from being exposed again to other retail outlets that can be quickly accessed. In the shopping centre or mall, a shopper moves around between shops and stores, reviews and compares their brand and product selections, and at any point in time he or she can easily return to “feel free” walking in the public pathways of the centre, eye-scanning other stores. It is a different manner and form of shopping experience for a consumer than visiting a department store.

The rise of branding and consumer brands since the 1980s has also had an important impact on trade, organisation and visual merchandising in department stores, as in other types of stores in general. There is a much stronger emphasis in the layout of floors on organisation by brand, particularly in fashion (clothing and accessories) departments. The course of the shopping trip is affected as a result. Shoppers are driven to search first by brand rather than by attribute of the product type they seek. That is, a shopper would search and examine a variety of articles (e.g., shirts, trousers, sweaters, jackets) displayed in a section dedicated to a particular brand before seeing similar articles from other brands. It can make the trip more tiresome if one is looking for a type of clothing by fabric, cut or fit, colour and visual pattern. But not everything on a floor is always sorted in brand sections, like a shop-in-shop; often a shopper may find concentrated displays of items like shirts or rain coats of different models from several brands. Furthermore, there is still continuity on a floor so that one can move around, take along articles from different brands to compare and fit together, and then pay for everything at the same cashier.

In some cases, especially for more renowned and luxury brands, the shop-in-shop arrangement is formal where a brand is given more autonomy to run its dedicated “shop” (known as a concession), making their own merchandising decisions and employing their own personnel for serving and selling to customers. The flexibility of shoppers may be somewhat more restricted when buying from brand concessions. However, even when some “brand shops” are more formal, much of the merchandising is already segregated into brand sections, and shoppers frequently cannot easily tell between formal and less formal business arrangements for brand displays. The sections assigned toView over terraces in a multi-storey department store specific brands are usually not physically fully enclosed and separated from other areas: some look more like “booths”, others are more widely open at the front facing a pathway. Significantly, shoppers can still feel they are walking in the same space of a department or floor, and then move smoothly to another type of department (e.g., from men or women fashion to home goods). That kind of continuity and flexibility while shopping is not affordable when wandering between individual shops and stores in a shopping centre or mall. The segregation of floor layout into dominant brand sections or “shops” within a department store (and some architectural elements) can blur the lines and make the department store seem more similar to a shopping centre, but not quite. The shopping experiences remain distinct in nature and flavour.

  • “With so many counters rented out to other retailers, it is as though the modern department store has returned to the format of the early nineteenth-century bazaar.” (English Shops and Shopping, Kathryn A. Morrison, 2003, Yale University Press/English Heritage.)

Department stores have gone through salient changes, even transformations, over the years. In as early as the 1930s stores started a transition to an open space layout, removing partitions between old-time rooms to allow for larger halls on each floor. Other changes were more pronounced after World War II and into the 1950s, such as  permitting self-service while reducing the need of shoppers to rely on sellers, and accordingly displaying merchandise more openly visible and accessible to the shoppers at arm’s reach. These developments have altered the dynamics of shopping and paved the way for creative advances in visual merchandising.

Department stores have also introduced more supporting services (e.g., repairs of various kinds, photo processing, orders & deliveries,  gift lists, cafeterias and restaurants). In the new millennium department stores joined the digital scene, added online shopping and expanded other services and interactions with consumers through the online and mobile channels. In more recent years we also witness a resurgence of emphasis on food, particularly high quality food or delicatessen. Department stores have opened food halls that include merchandise for sale (fresh and packaged) and bars where shoppers can eat from freshly made dishes of different types of food and cuisines (e.g., KaDeWe, La Rinascente, Jelmoli in Zürich).

Department stores in Israel have always been in a smaller scale than their counterparts  overseas, a modest version. But they suffered greatly with the emergence of shopping centres. The only chain that still exists today (“HaMashbir”) was originally established in 1947 by the largest labour union organisation in the country. Since the first American-style mall was opened near Tel-Aviv in 1985 the chain has started to decline; as more shopping centres opened their gates the stores became outdated and lost the interest of consumers. By the end of the 1990s the chain had come near collapse until it was salvaged in 2003 by a private businessman (Shavit) who took upon himself to rebuild and revive it.

The chain now has 39 branches across the country, but they are mostly far from the scale of those abroad and about a half are located in shopping centres. Yet in 2011 HaMashbir opened its first large multi-category store in the centre of Jerusalem, occupying 5000sqm in seven floors. It seems the stores have gone through a few rounds of remodelling until settling upon their current look and style. They are overall elegant but not fancy, less luxurious and brand-laden, intended to better accommodate consumers of the middle class and to attract families.

It is rather surprising that Tel-Aviv is still awaiting a full-scale department store. The chain has stores in two shopping centres in Tel-Aviv but none left on main streets. At least in two leading shopping centres the stores have shrunk over the years, and one of them is gone. The latter in particular, located once in a lucrative and most popular shopping mall in a northern suburb, was reduced from two floors to a single floor and gave up its fashion department amid the plentiful of competing fashion stores in the mall, until eventually it closed down. Another store remains near Tel-Aviv in “Ayalon Mall”, the first mall of Israel.

Tel-Aviv has the population size (400,000) and flow of visitors on weekdays (more than a million) to justify a world-class store on a main street. Such a store has also the potential of increasing the city’s attraction to tourists. The detriments for the retail chain are likely to be the high real estate prices, difficulty to find a building suitable for housing the store, and the competition from existing shopping centres as well as from stores in high-street shopping districts. Yet especially in a city like Tel-Aviv a properly designed and planned department store is most likely to be a shopping and leisure institution and centre of activity to many who live, work or tour the city.

Shopping centres and department stores can exist side by side because they are essentially different models and concepts of an enriched retail complex in enclosed environments. Unlike the shopping centre, the department store is a world in itself of retail and not an assortment of individual retail establishments. The department store engages shoppers through  its structure, design and function given the powers the retailer has to plan and manage the large store as an integrated retailing space. Consequently, a department store engenders customer experiences that are different from a shopping centre regarding the customers’ shopping trips or journeys and how they spend their time for leisure in the store. One just has to look at the flows of people who flock through the doors of department stores in major cities, most of all as weekends get nearer.

Ron Ventura, Ph.D. (Marketing)

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The location-based technology of beacons is a relatively recent newcomer in the retail scene (since 2013). Beacons provide an additional route for interacting with shoppers in real-time via their smartphones as they move around in stores and malls. Foremost, this technology is about marrying between the physical and the digital (virtual) spaces to create better integrated and encompassing shopping experiences.

It is already widely acknowledged that in-store and online shopping are not independent and do not happen completely separate from each other; instead, experience and information from one scene can feed and drive a shopping experience, and purchase, in the other scene. In particular, mobile devices enable shoppers to apply digital resources while shopping in a physical shop or store.  Beacons may advance retailers and shoppers another step forward in that direction, with the expectation to generate more purchases in-store. The beacon technology was received at first with enthusiasm and promising willingness-to-accept by retailers, but these subdued in the past year and adoption has stalled. A salient obstacle appears as consumers remain hesitant and cautious about letting retailers communicate through beacons with their smartphones and the implications it may have on their privacy.

In essence, beacons are small, battery-powered, low-energy Bluetooth devices that function as transmitters of information — primarily unique location signals — to nearby smartphones with an app authorised to receive the information. The availability of an authorised app (e.g., retailer’s, mall operator’s) installed on the consumer’s smartphone (or tablet) is critical for the communication technology to function properly. Upon receiving a location signal, the app is thereby triggered to display location-relevant content for the shopper in-store (e.g., product information, digital coupons, as well as store activities and services).

Additional requirements may be in force such as the retailer’s app being open during the shopping trip or that the shopper consents (opts-in) to allow the app receive information from beacons, but these do not seem to be necessary or mandatory conditions for the technology to work (e.g., an app may be set with ‘approval’ as default). Ambiguity that seemingly prevails about the extra requirements could be one of the sour points in the technology’s implementation. On one hand, the application of beacons is more ethical when setting up at least one of these requirements, and should endow it with greater credibility among consumers. On the other hand, any additional criterion for access of beacons to smartphones — assuming the app is already installed — could limit further the number of participating shoppers and reduce its marketing impact.

  • Only smartphones (and tablets) support apps, not any mobile phone. It should not be taken for granted that everyone has supporting smartphones, hence raising another possible limiting requirement on access for beacons (though in decline in developed countries). Another problem, yet, concerns the distinction between Apple iPhones operated with iOS and smartphones of other brands operated with Google’s Android — beacons have to work with either type of operating system and compatible apps but they do not necessarily do so (e.g., iBeacons are exclusive for Apple’s own mobile devices).

There are some more variations in the application of beacon technology in retail. Beacon devices may be attached to shelves next to specific product displays or to fixtures and building columns in positions aimed at capturing smartphones of shoppers moving in a close area (e.g., an aisle). If the beacon is associated with a particular product, the shopper may engage using the app by actively approaching the phone to the beacon. Otherwise, the app communicates with the beacons without  shoppers taking any voluntary action. Furthermore, some applications of beacon technology suggest sending information other than location signals from the beacon, such as product-related information, and receiving customer-related information by the beacon from the smartphone.

Reasonably, retailers would be interested first in applications of the technology for practical marketing purposes in their stores. However, beacon technology may also be utilised in research on shopper behaviour, a purpose now appreciated by many large retailers.

Marketing Practice in Retail

The instant sales-driven idea of application of beacon technology evoked by retailers is to introduce special offers, discount deals and digital coupons for selected products as shoppers get near to their displays. Notwithstanding this type of application, location-based features and services enabled via beacons can be even more creative and useful for shoppers, and beneficial for the retailers.

Relevance is key in achieving an effective application of the technology. Any message or content must be relevant in time and place to the shopper. That is, the content must be related to available products when the shopper is getting close enough to them. The content should not be too general in reference to any product in the store but to products in a section of the store where the shopper passes-by. Triggering an offer for a product just after the shopper entered a store is less likely to be effective, unless, for example, there is a special promotional activity for it in a main area of the floor. The retailer should not err in introducing an offer for a product item that is not available in the specific store at that time. Furthermore, if the app can link product information with customer information, it may be able to generate better content that is both location-relevant and personalised. The app could make use of accessible information on personal purchase history, interests and demographic characteristics. This higher-level application surely requires greater resources and effort of the retailer to implement.

The beacons’ greatest enemy could be their use for bombardment of shoppers with push or pop-up messages of offers, deals, discounts etc. This practice is suspected as a major fault in the early days of the technology that may be responsible for the slowdown in adoption lately. There could be nothing more irritating for a shopper if every few meters walked in the store he or she is interrupted by a buzz and message of “just today offer on X” that appears on the smartphone’s screen. Retailers have to be selective lest customers will avoid using their apps. It is much more important to produce adaptive, relevant and customer-specific messages and content overall (Adobe, Digital Marketing Blog, 4 February 2016).

  • The grocery retail chain Target, that launched a trial with beacons in 50 US stores in the second half of 2015, committed, for instance, to show no more than two promotional (push) messages during a store visit (TechCrunch.com, 5 Aug. ’15).

More intelligent and helpful ways exist to apply the beacon technology in interaction with the app than promotional push messages. First, content of the “front page” of the app can change as the shopper progresses in the store to reflect information that would be of interest to the shopper in that area of the store (e.g., show hyper-linked ’tiles’ for nearby product types). Second, beyond ‘technical’ information on product characteristics and price, a retailer can facilitate shopper-user access to reviews and recommendations for location-relevant products via the app. Third, if the shopper fills-in a shopping list on a retailer’s app (e.g., a supermarket), and the app has a built-in plan of the store, it can help the shopper navigate through the store to find the requested products, and it may even re-order the list and propose to the shopper a more ‘efficient’ path.

Beacons are associated mostly with stores (e.g., department stores, chain stores, supermarkets). However, beacons may also be utilised by mall operators where the ‘targets’ are stores rather than specific products. An application programme in a mall may command collaboration with the retailers (e.g., store profile and notifications, special promotional messages [for extra pay], content contributions).

In another interesting form of collaboration, the fashion magazine Elle initiated a programme with ShopAdvisor, a mobile app and facilitator that assists retailers in connecting with their shoppers through beacons. As an enhancement to its special 30th anniversary issue, Elle launched a trial project in partnership with some of its advertisers (e.g., Guess, Levi’s, Vince Camuto) to introduce their customers to location-based content with the help of ShopAdvisor (focused on promotional alerts)(1).

Consumers are concerned about tactics of location-based technologies like beacons that get intrusive and even creepy; they become adverse towards the way such apps sometimes surprise them (e.g., in dressing rooms). Indeed, only shoppers who installed an authorised app can be affected, but for customers who installed such a retailer’s app, with other benefits in mind, it can be disturbing at times. The hard issue at stake is how the app alerts or approaches its shoppers-users with location-based messages. Shoppers do not like to feel that someone is watching where they go.

The shopper may believe that if the app remains closed on the smartphone he or she cannot be approached. But if, as reported in CNBC News, a dormant app can be awaken by a beacon signal, this measure is not enough. This may happen because the shopper previously allowed the app to receive the Bluetooth signal or the app “assumed” so as default.  The shopper must take an extra step to disable the function at the app-level or device-level (Bluetooth connectivity). Retailers should let their customers opt-out and be careful in any attempt to remotely open their apps on smartphones (so-called “welcome reminders”), because imposing and interfering with customer choices may get the opposite outcome of removing the app.

The app may display ‘digital’ coupons for the shopper to “pick-up” and show later at the cashier (or self-service check-out). It is reasoned that if coupons are shown at the right time shoppers will welcome the offer, no resentment. The manner shoppers are alerted can also matter, by not being too obtrusive (e.g., “Click here for coupons for products in this aisle”). Shoppers told CNBC News that if digital coupons were offered to them by the app just when relevant, they would be glad to use this option, being more convenient than going around with paper coupons, but they would want the ability to opt-out.

Shopper Behaviour Research

The beacon technology may further contribute to research on shopper behaviour in stores or malls. Specifically, it may be suitable for collecting data of shopper traffic to be used in path analysis of the shopping journeys. The information may cover what areas of the store shoppers visit more frequently, how long one stays in a given area, and sequences of passes between areas.

Nonetheless, there are methodological, technological and ethical factors retailers and researchers have to consider. At this time, there are distinct limitations to be recognized that may inflict on the validity and reliability of the research application of beacons. Ethical issues discussed above regarding the provision of access of beacons to mobile apps furthermore apply in the research context.

This methodology involves tracking the movements of shoppers. Beacon technology may record frequency of visits in each area of the store separately or it may track the presence of a particular shopper by different beacons across the store. A beacon may also be able to send repeated signals at fixed intervals to a smartphone to measure how long a shopper remains in a given area. However, this type of research is not informative about what a shopper does in a specific location as in front of product shelves, and thus it cannot provide valuable details on her decision processes. Hence, retailers cannot rely on this methodology as a substitute for other methods capable of studying shopper behaviour more deeply, especially with respect to decision-making. A range of methods may be used to supplement path analysis such as interviewer’s walk-along with a shopper, passive observations, video filming, and possibly also in-store eye-tracking.

An implementation of the technology for research would require a comprehensive coverage of the premises with beacons, perhaps greater than needed for marketing practice. It should be compared with alternative location-based technologies (e.g., Radio Frequency Identification [RFID], Wi-Fi)  on criteria of access, range and accuracy, and of course cost-effectiveness. For example, the RFID technology employs tags ( transmitters) regularly attached to shopping carts — if a shopper leaves the cart at the end-of-aisle and goes in to pick-up a couple of products, the system will miss that; smartphones, however, are carried on shoppers all the time. Beacon technology may have an important advantage over RFID if location data is linked with customer characteristics, but this is a sensitive ethical issue and at least it is imperative to ensure no personal IDs are included in the dataset. All alternative technologies may also have to deal with different types of environmental interferences with their signals. Access would have both technical and ethical aspects.

A mixture of problems emerges as responsible for impairing the utilisation of beacon technology, according to RetailDive (online news and trends magazine), mainly consumers who do not perceive beacon-triggered features as useful enough to them and retailers troubled by technical or operational difficulties. Among the suggestions made: encourage pull of helpful information from beacons by shoppers rather than push messages, and speed-up calling staff for assistance via beacons (RetailDive, 17 December 2015). A recent research report by Adobe and Econsultancy on Digital Trends for 2016 indicates that retailers are becoming more reluctant to implement a geo-targeting technology like beacons this year compared with 2015 (a decrease in proportion of retailers who have this technology in plan or exploring it, against an increase in proportion of those who are not exploring or do not know). Conspicuously, there seems to be much more optimism about high effectiveness of geo-targeting technology at technology and consultancy agencies than among retailers, who seem to be much more in the opinion that it is too early (2). Agencies could have better understanding of the field, yet it signals an alarm of disconnect between agencies and their clients.

There is potential to beacon technology with clearly identifiable benefits it can deliver to retailers and consumers. It is still a young technology and requires more development and progress on various technical, applied and ethical aspects.  Promotional messages are  important tools but must be used in a good and sensible measure. A retailer cannot settle for a small set of fixed messages. It has to develop a dynamic ‘bank’ of messages, large enough to be versatile over products, (chain) stores, and consumer groups, and maintain regular updates. However, retailers have to develop and provide a more rich suite of clever content and practical tools based on location. Consumers will have to be convinced of the benefits enabled by beacons, yet feel free to decide when and how to enjoy them.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “App Helps Target Shoppers’ Location and Spontaneity”, Glenn Rifkin, International New-York Times, 31 December 2015 – 1 January 2016.

(2) “Quarterly Digital Intelligence Briefing: 2016 Digital Trends”, Adobe and Econsultancy, January 2016 (pp. 24-25). The findings are considered with caution because of relatively small sub-samples of respondents on this topic (N < 200).

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The collapse of a company is not necessarily an outcome of a single calamitous event. More likely, a final collapse will follow a period of several months or years of gradual deterioration in the management and performance of the failing company. The causes are usually a mixture of external events or market factors and not least internal actions or non-actions committed by the company. This seems to be the case with Mega Retailing, the second largest chain of supermarkets in Israel, that practically collapsed this month (January ’16) but the process of its deterioration may be traced through at least five years backwards.

The current Mega retail chain is in fact a successor of a consumer co-operative chain, “Co-op Blue Square”, established in the 1930s. That co-operative existed until the late 1990s when it could no longer sustain itself. Consumers who had a stake in the enterprise were required to sell their shares and a majority stake in “Blue Square” (73%) was acquired by the Alon energy group.

The company, renamed in Israel as “Alon Blue Square”, expanded since 2003 and added more business units in different retail areas. For instance, Alon brought under the rooftop of Blue Square (holding a 78% stake) its compounds of car fueling stations with adjacent trade services. The chain of supermarkets received the new brand name Mega (after going through an earlier short phase under the name “Super Centre”), instituted as a subsidiary in full control of Blue Square, its home company. Yet another critical move saw the establishment of “Blue Square Real Estate”, a subsidiary of the home company, which divorced Mega from control over its physical locations, making the real estate company its landlord. At the end, Blue Square is about to lose the core business that carried its name to begin with.

  • Alon Blue Square also acquired a chain of convenience stores (“am:pm”) that is separate from Mega but competes with it in city centres and neighbourhoods.

Multiple reasons can be given for the poor condition of Mega as proposed in the media. Some blame the high operating costs of Mega on wages and benefits for employees being higher than standard in the food retail industry; it is probably a legacy inherited from the older days of Co-op Blue Square when it was affiliated with a strong labour union. Not to be confused, employees in stores still earn relatively low wages, but with the low margins in the industry, the differences from competitors are claimed to be crucial. On the other hand, the management could be held responsible for keeping deficiencies reminiscent of the culture of Co-op in those older days. The owners on their part did not seem to be interested enough in what was happening to their supermarket company. Mega was lacking in strategic (marketing) thinking and mindset that would allow it to adapt better to new realities of a competitive market and higher standards of servicing and merchandising.

One should not go far to find what is wrong with the Mega chain. The problems of Mega show most visibly and strikingly in its stores. A particular branch is used here as an exemplar to demonstrate some troubling aspects. It is a neighbourhood store in the northern part of Tel-Aviv. The supermarket is not large (estimated at a little less than 300sqm or about 2500sqf) with a main hall (75% of its area) and an extension (two “corridors”). The store was established in the early 1970s and for a decade or two it was considered spacious and modern. The last major renovation took place about fifteen years ago but unfortunately within a few years it has lost much of its newly gained attraction.

There are six columns of displays across the main hall which leave too little space for moving in the aisles between them. In addition, the displays reach high above the head. The whole arrangement of this hall makes a shopper feel lost in space and closed-in. Bad merchandising appears to make the supermarket look crowded and untidy. A whole new concept should have been applied to this store with fewer columns, lower displays (e.g., no more than 1.50m) that would allow shoppers to look beyond the aisle, and fewer product types and brands (SKUs) on offer — in this supermarket ‘less is more’ would be perfectly right. Shoppers obliged to get essential products like bakery and dairy in corridors may find it unpleasant.

Another troubling matter in the store concerns the shopping carts and baskets, or rather the lack of them. To pick-up one of the few shopping carts available one has to pass across the cashiers and away from the entrance. Even if one was lucky to get a shopping cart, he or she would find the cart difficult to navigate with in the aisles, especially as the store, like the whole chain, moved to larger carts definitely not useful in this specific store. What shoppers should have been provided are hand-held baskets (or wheeled baskets), and these should have been arranged in ‘towers’ near the entrance of the supermarket (not hidden under cashier desks). The baskets would serve a much better purpose in the entry area than a large unappealing promotional stand positioned there. As a result, the store also does not have a welcoming and convenient “decompression zone”.

  • Considering the competition in vicinity (e.g., a large supermarket of the leader chain “Supersol” in a nearby shopping centre; a minimarket store across the street), the approach in that  Mega’s store, whether out of flawed thinking or lack of care, could not be affordable.

Similar problems can be found in other Mega stores: (a) A delivery service interrupts and blocks the way out for customers who take home their shopping bags  — delivery boxes are piled in a passage on the exit from cashiers, personnel are handling deliveries in the same area where customers should complete their shopping and leave, and preparing deliveries for some shoppers halts others for long minutes; (b) The staff arranges merchandise on shelves during the day, often blocking aisles with box-loaded shopping carts or boxes left on the floor — shoppers have to make their way competing with personnel on access to displays; (c) Product displays do not look neat and tidy, some items get out-of-place, some are falling to one side or another — even if shoppers are responsible for not leaving items in place, a store worker should always pass by, check and fix displays. If shoppers find a store in good order, clean and tidy, they will (mostly) feel obliged to make an effort to keep it that way for everyone to enjoy.

It does not seem to be a question of good will. Mega stores are missing order and organisation. Moreover, the employees may not have a guiding hand and initiative they need from either general management or store managers to get the supermarkets look and feel the way they probably aim at. In a  presentation (in Hebrew) of a strategic plan from 2013 (Blue Square’s website) the management of Mega shows that on top of every other goal they want the customers to love their stores; Mega’s vision through its history is “At Mega (we’re) listening to you! Always, at every place and in every encounter, because we really care.” Yet the stores could not show for it. The employees may have wanted it to happen but the management was not behind them to show them how, and it is still unclear why store managers were not helping or how well coordinated they were with top management.

A seasoned consultant in marketing and retailing (Galit Moor, “Shopoholist”) told “The Marker” Israeli business newspaper about rivalries and non-coordination between the trade and operational departments of Mega — the trade people would reach agreements with suppliers but operations people would not respect them and not follow them through in the stores, causing confusion and loss of trust of suppliers. She also related to lack of understanding of consumers and not really listening to their concerns, a top management detached from the stores, and mistakes in running stores, particularly failures in dealing with details at the store level (MarkerWeek, 24 July 2015). The management was not focused, undecided whether to compete on price (e.g., to fight off discount chains) or on enhanced customer experience (blending price perception, service, convenience, variety and quality of products), and therefore it must have had difficulties setting clear priorities to staff at stores. It is not too surprising that staff and managers could neither treat properly details of service and merchandising in the stores.

In mid-2015 Mega was in debt of 1.3 billion shekels (~$340m), 700 million shekels of which owed to suppliers and the rest to banks. The delay in payments to suppliers has led to sour relations with them, where some have also froze or reduced further supplies to the retail chain. Mega started with an aggressive plan of cuts, primarily closing stores, but it could not save it at this stage. By the end of 2015, just before the court intervened (stay of proceedings), the debt accumulated to 1.5 billion shekels, half of which to suppliers who largely lost confidence in and patience with Mega.

In the previous decade Mega has expanded while defining three sub-chains: “Mega City” supermarkets for serving neighbourhoods, large central “Mega”-stores, and large discount stores (“Mega Bull”, i.e., “target”). The latter was re-named just three years ago “You” and added more stores.  Mega was actually responding to a move similar in kind by the leading competitor Supersol with their sub-chains “My Supersol” neighbourhood  supermarkets, “Supersol Express”, and large discount stores “Supersol Deal” (a confounded fourth sub-chain of ‘warehouse’ discount stores “Big” was later eliminated). Probably not by coincidence, the restructuring of chains by Mega and Supersol resemble a strategic move by Tesco in the 1990s. The expansion, and especially the establishment of very large stores, has led the Israeli chains, like the British one, into trouble. The suspect reasons are failure to adapt in time to changes in economic atmosphere and consumer behaviour since 2008 vis-à-vis an inadequate reply to the challenge from new discount chains. (It is now revealed that Tesco faulted in delaying payments to suppliers, as Mega did.)

  • Mega operated in total about 185 stores in mid-2015. Initially the plan was to close 32 stores, mainly their “You” discount stores. However, it eventually closed at least 55 stores by the end of the year, and Mega is now left with fewer than 130 stores. Its number of employees was intended to be reduced from 6,000 to 5,000 but actually dropped to 3,500 (most of them were store employees, but the staff in headquarters was also significantly cut).
  • In the first half of 2015 Mega reported sales of 2.6 billion shekels (~$685m), down from almost three billion shekels in same period of 2014. Of total sales, 80% were attributed to the stores Mega expected to keep and 20% to the 32 stores intended to be shut down. In profit, stores planned-to-continue earned 55m shekels whereas stores planned to close lost 577m shekels. As it turned out, the initial recovery plan was not sufficient.
  • Mega is second to Supersol in the food retailing industry yet not so close behind: Supersol’s market share in 2014 was estimated 18% versus Mega with 9% (a ratio of 2:1). The private discount chains held together 28% [stable 45% attributed to open-air markets, groceries and minimarket stores]. It should be noted that according to predictions (2013-2015) the private chains were expected to gain mostly at the expense of Mega with a small but not negligible slide down for Supersol (The Marker, 30 Dec. 2014) — Mega found itself in a classic disadvantageous ‘sandwich’ position.

From start Mega committed to selling at lower prices than other stores in towns and cities. At the same time, it aimed for each store to be an integral part of its community, so that residents-shoppers will feel at home in their supermarkets. However, Mega did not succeed in maintaining its ‘low price’ position according to price comparisons published over time. It is questionable whether restructuring its chain, following Supersol, was necessary and suitable for Mega. The position of Mega City on prices may have been only weakened and diluted relative to its discount sub-chain. Mega has already had a well-entrenched network of neighbourhood supermarkets with emphasis on lowering cost to consumers — it should have concentrated its efforts on this chain. Yet, Mega did not succeed to keep lower prices as well as invest in the shopping experience and product variety in its stores, potentially conflicting objectives; it did not offer thereof a consistent value proposition.

It is difficult to understand how the owners of Alon Blue Square did not notice what was happening at Mega. They are accused of taking high dividends over time (the owners claim they have been misinformed about real profits, ringing bells from Tesco). The owners may have also acted irresponsibly by means of an over-charging rental policy of its real-estate subsidiary towards Mega’s stores.

The interests of the owners at this stage are vague. Blue Square chose to rent properties to chains that took over stores of Mega-You — was it to salvage Mega or to protect other interests of Blue Square? Proposals published to buy Mega retail chain actually focus on Blue Square Real Estate. Truly, one has to buy the properties in order to be able to continue operating stores in them, but that is only due to a status created by the owners that may now play against Mega. Hence, it could be a major difference if the potential buyer is a retailer or a real-estate developer. It is in the public’s and the food retailing industry’s interest that the buyer is required to take over also the supermarket business of Mega and not dispose of it. It is furthermore important that the supermarket industry has at least one other strong retail chain as a challenger to Supersol, not leaving Supersol over-powered against a competition too dispersed among several small and medium chains.

There is not really a good reason to miss “Blue Square” as a co-operative. A new competitive business ownership and directive has had an opportunity to re-create the supermarket chain and its brand. The chain was re-branded as Mega and yet it disappointed because core components of strategy, culture and implementation were flawed. It is now time to re-invent the concept of the chain and its brand. Nonetheless, the title “Blue Square” at Alon without the supermarket retail chain will be quite void and meaningless.

Ron Ventura, Ph.D. (Marketing)

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The EXPO 2015 exhibition in Milano, that is coming to a close at the end of October, has concentrated on the future of agriculture and food on our planet. The urgency of these topics is elevated by adverse conditions of climate change (warming) and shortage in water, predicted to worsen further. The EXPO is generally a prime opportunity for countries to promote their nation-brands. This time countries were invited to showcase their advanced scientific and technological capabilities by offering programmes and solutions to overcome environmental and economic challenges of agriculture and food provision.

The supermarket retailer Coop of Italy has yet taken a different direction, within the realm of its business specialisation: Coop Italia proposes at EXPO 2015 its vision of how shopping will be conducted in future supermarkets. They have put on stage a functioning model of a supermarket store (Future Food District / il supermercato del futuro) where detailed product information is displayed on large digital screens and check-out and payment are performed on computer-automated terminals. Almost obviously, such a supermarket will require even fewer human service personnel than met today in the store.

  • Coop Italia covers online (in Italian) a range of aspects such as food retailing, shopping, technology, and the future of food itself.

Coop Italia: Future Food District at EXPO 2015 (3)

It should be emphasised that the experimental supermarket of Coop at EXPO Milano is not just for demonstration but visitors of the site can practically collect food products into their shopping baskets and purchase them at the end of their trip. In the store’s front and on the upper level a visitor/shopper may find fresh produce and packaged food products displayed on shelves. From there he or she may descend to the lower level to find mostly refrigerated and frozen products. If products were actually selected from the display area, the shopper may go to the self-service scan-and-pay terminals and finalise the purchase (payment can be made by credit and debit cards or in cash).

The prospective format offers, according to Coop Italia, new interactions between consumers, products and producers. Mainly, consumers can observe and read from digital display screens much more information on products and their producers than has been traditionally possible in supermarkets. The screens are hanging usually above shelf cabinets or refrigerators at about head level. When the shopperCoop Italia: Future Food District at EXPO 2015 (4) points to a particular product’s title and image on the nearest screen, a variety of details in text and graphics, and a larger pictorial image of the product, will appear on screen. Besides the essentials of product name, size measures and price, additional information may be presented on product components and nutritional values (e.g., calories, sugar, salt, fat, protein, fibres), and on its source (e.g., producer company and country of origin). This facility should save shoppers the effort of tearing their eyes while reading small print on product packages, where packaging is relevant at all. The information is also displayed in a more friendly and comprehensible form (e.g., using understandable terms, illustrated visually in graphic charts). These enhancements of the future shopping experience are much about advanced display technology and data visualization.

Occasionally the visitor/shopper may also see some sales statistics and more background on growing and production of the product of interest with emphasis on nutritional and health implications. Coop Italia suggests that presenting more of these kinds of information will give better direction to consumers on preferred or recommended food products in future times (e.g., given new constraints on food provision). Thus Coop connects to the general issue of the future of food at the focus of EXPO 2015.

Coop Italia: Future Food District at EXPO 2015 (1)

Being on site, the space of the supermarket looked elegant and modern. The large black screens hanging over, positioned in an angle as “\”, definitely signalled a change in the visual scene of the store. It was the first cue to be noticed as to how the future supermarket could be different. The screens were easily discernible but their arrangement was not in any way disturbing to the eye — one could quickly get used to them. Activating the display and viewing information for any chosen product was intriguing and to some extent even entertaining. On one hand it felt like “playing” while shopping, on the other hand it increased interest in products considered, if only for curiosity and not for purchase. The information presented was usually helpful and of practical value for decision-making. Overall, the future supermarket model appeared to enrich the shopping experience.

There were some impediments, however, in practice. Making the screen to display information related to a desired product was not always smooth and easy. It was not clear, for instance, if one should raise a chosen product item up to the screen above or just point towards the image of the relevant product (visitors could be seen trying both). Whatever sensors were supposed to identify the gesture of the shopper’s hand or the product itself, they occasionally were not satisfactorily responsive. Most screens were located on-top so that shoppers could not touch them, and therefore the question was: How do I cause the system to recognize my choice of product. But perhaps it was also a matter of some more training by the shopper to get it right (gamers should have better success with such a system).

Screens on-top and as panels on the door-side of refrigerators

Screens on-top and as panels on the door-side of refrigerators

Additionally, sometimes it felt the information displayed changed too quickly, not giving enough time to review parts of the data provided. Information on each product was usually screened in two or three “shots” (i.e., display of first portion of product information replaced by display of the next portion). Since the shopper has no control of the duration of display, it could be sometimes irritating when, as a shopper, I could not review a data figure of interest in time. But one should remember that usually a shopper is not alone and the same screen may have to serve multiple customers within a few minutes, so a single shopper may be allowed just a brief time to inspect the most needed information. The stress on shoppers might be felt particularly during peak hours of shopping.  Hence, shoppers may benefit from the convenience of viewing information on large screens, but when necessary they should be able to toggle to the private screens on their mobile devices to continue their review of product information.

  • It is noted that Coop Italia provides QR codes for products that shoppers can scan and access the product information on their own devices (and possibly conduct the purchase online).

Regardless of the technology employed, the Coop deserves congratulating for their visually appealing layout and arrangement of product display, and its orderliness and cleanliness. It was evident that great care was invested in setting-up and housekeeping the supermarket. Since this is indeed an experimental stage for the future supermarket, it is reasonable and expected  that work to improve the performance and usability of the technology installed will continue. When it arrives, the younger generations will most likely be prepared for this concept. In summary, the shopping experience ‘nel supermercato del futuro’ was positive and encouraging.

 


How is Coop Italia perceived following its initiative? Naturally, the Coop would expect its Future Food District initiative to have a positive effect on the company’s image. Feedback they received from consumers following their visit of the future supermarket included (most frequent responses, cited from video clip):

  • The Coop demonstrates that it is modern and up-to-date (48%)
  • The Coop demonstrates that it has at heart the future of the planet and its inhabitants (29%)
  • The Coop demonstrates that it keeps in line with the new requirements of consumers (27%)
  • The Coop anticipates the future (19%)
  • The Coop is looking to generate curiosity and interest (13%)

But 16.5% also indicated that the Coop has gone too much ahead of its time, that consumers are not ready yet for all this technology, and 15% argued that the Coop may risk distancing those who are not familiar with the technology. Hence, the technological advances may be welcome, yet it could be too early to implement at this time.

 


The EXPO exhibition in Milano this year was enormous in scope and fascinating; it was well-organised and instructive. All countries presented products and other artefacts, images and models standing for some of their national and cultural assets and symbols,   emphasising, as much as possible for each country, environmental considerations and priorities. The differences in scale between exhibits of countries, however, were striking. There was also large diversity in level of sophistication of presentation, in the technologies used and other display aids applied. In particular, some countries focused more on high-tech techniques while others relied mainly on low-tech features.

Country exhibits hosted in shared-pavilions by theme (e.g., Cacao and chocolate, coffee, rice, bio-Mediterranean, arid zone) were modest; those countries also related  moderately to projects or developments to resolve agricultural and food challenges. But even among smaller exhibits it is unfair to talk of homogeneity because some countries were enlightening exceptions who managed to put up impressive and interesting exhibits.

Countries exhibiting in their own pavilions blended more expansively between their traditional assets and their programmes and technological solutions dedicated specifically to the challenges of future agriculture and food. It must be noted that some pavilions were impressive in their architecture per se. But the country pavilions also proved that size is not everything — diversity in level of effort invested, ingenuity and richness was discernible among those pavilion exhibitions. Furthermore, it also did not seem that variation in quality, originality and interest of exhibits was accounted for merely by differences in economic power or resources.

Israel Pavilion at EXPO 2015: A Vertical Field

Israel Pavilion at EXPO 2015: A Vertical Field

 

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During a shopping journey in a store where a consumer intends to buy multiple products, he or she is required to make a sequeqnce of choice decisions. Each decision is about to be made in a category with different product attributes, but beyond that there could also be differences in the settings of the choice situations, such as the size of the choice set, the structure of information display for product items, and information format. The transition between choice problems that differ in their characteristics should require shoppers to make some adjustments in preparation to reach a decision, each time in somewhat different settings. This is in fact true when filling a basket either in a physical store or on a website of an online store — shoppers have to shift between decision problems, and on the way they may need to replace or correct their choice strategy.

Researchers have been studying the paths that shoppers frequently follow, moving between sections of a store during their shopping trip. This type of research usually focuses on identifying and depicting the sequence in which store sections and product categories are visited, and the frequency in which category displays are stopped-by. However, the transitions from a choice decision in one category to another may also have  consequences for the decision process in any single category visited (e.g., as in adjusting for every new choice problem). Moreover, the sequence or order in which choice problems are resolved may have an effect on particular decisions.

  • Different techniques are applied for tracking the pathways of shoppers in brick-and-mortar stores (e.g., RFID, mobile-based GPS, video recording through surveillance cameras). Studies in supermarkets have shown what areas of a store shoppers approach first, and how they start by walking to the back of the store and then make incursions into each aisle (without leaving the aisle on the other end but returning to their point-of-entry). Hui, Bradlow and Fader reveal that as shoppers spend more time at the store, the checkout looms more attractive — the shoppers who feel a stronger time pressure become more likely to go through an aisle and approach a checkout counter. As perceived time pressure increases shoppers also tend to cut-off exploration and concentrate on visiting product displays from which they are most likely to purchase. (1)

Consumers have been described as adaptive decision-makers who adjust their decision strategies according to characteristics of the problem structure or context — for example, the amount of information available (given the number of alternatives or attributes), the type of information (e.g., scale, units), or the order in which information elements are displayed. In the outset, consumers may be guided by top-down goals — maximizing accuracy (relative to a maximum-utility ‘rational’ rule) and minimizing cognitive effort; a decision strategy (i.e., a rule like Equal-Weights or Lexicographic) can be selected in advance with respect to the accuracy-effort trade-off assessment of rules in a given choice situation, this according to Payne, Bettman and Johnson. However, they argue that this approach may not be sufficient on various occasions. When the characteristics of a choice problem are not familiar to the consumer, he or she will construct a strategy step-by-step as the structure and detail of information on alternatives is observed and learned. Even in cases the choice situation and context are familiar, the consumer may face unexpected changes or updates in information (e.g., inter-attribute relations) that may require her or him to modify the strategy. Hence, a consumer who started with a specific rule may replace it with another on-the-fly in response to data encountered, and often elements from different rules may be combined into an adaptive new choice strategy (as opposed to a ‘pure’ strategy)(2).

The construction of a decision strategy is therefore frequently the product of a delicate balance between top-down (goal driven) and bottom-up (data driven) processing. When in particular preferences also are not well-established by the consumer, preferences (e.g., importance weights of attributes) also are formed or constructed as one proceeds in the decision process. In such a case the preferences formed would be more contingent on the particular process followed and the strategy constructed thereby. Bettman, Luce and Payne extended the constructive choice model and added to the goals of maximizing accuracy and minimizing effort two more goals (directed by a perceptual framework): minimizing negative emotions (e.g., perceived losses, difficult trade-offs) and maximizing the ease of justifying decisions (to others or to oneself). (3)

However, the adaptation of consumers may not be complete, and thus a shopper may not fully “reset” or fit his decision strategy to features of the next choice problem, which may differ from features of the previous choice setting. Levav, Reinholtz and Lin investigated specifically the impact of one characteristic of decision problems on a decision process: the number of alternatives (4). They tested how many alternatives consumers would inspect more closely from each choice set, if the total number of alternatives available increases from the first to the last decision problem (e.g., 5, 10, 15 and so on until 50), versus a decrease in the number of alternatives available from the first to the last decision (e.g., 50, 45, 40 and so on until 5 — participants were allowed to sample songs to listen to before choosing a song for each track on a disc).

In one of the decision contexts tested, most relevant here, the researchers simulated an online shopping trip: participants in the experiment were asked to choose in sequence from eight different product categories (e.g., body lotions, energy bars, notebooks, shampoo). For some of the participants the number of alternatives increased between categories (i.e., 5, 8, 13, 17, 20, 23, 26, 30) whereas for the others the number of alternatives in a choice set changed in a reverse order (product categories were also presented in two opposite sequences of alphabetical order). Participants could examine more closely each option in a choice set by mouse-hovering on a thumbnail photo of the product item to see its enlarged photo image, its price, and a short product description.

  • Note: In a physical store the equivalent would be picking a product package from a shelf, inspecting it from different angles, reading the label etc. Advanced 3-D graphic simulators let a user-shopper in a like fashion to virtually “pick” a product item from a shelf display image, rotate it, “zoom-in” to read more clearly its label, etc.

Levav and his colleagues found that the direction in which the size of the choice set changes matters, and that particularly a low or high number of options in the first decision problem induces consumers to examine more or less information on options through the shopping trip. If a shopper starts with a small choice-set, he or she is more strongly inclined to inspect every option or acquire more information on each option available. This tendency endures in the next choice problems as the number of options increases, though it may level-off at some point.

In the online shopping experiment, the “shoppers” in the increasing condition examine on average the description for each option more times than “shoppers” in the decreasing condition for smaller choice sets. The former gradually adjust downward the amount of information acquired on each option but the amount of information “gathered” overall does not decrease; for relatively small choice sets (up to 13 options) they would still examine more information on options than “shoppers” who started their journey with the largest choice set. A “shopper” who starts with a large choice set constrains himself from the beginning to inspect options less closely; even as the choice set may become more “manageable” in size, the average “shopper” does not intensify the examination of information on single options considerably, clearly not to the level as “shoppers” whose first decision is from the smallest choice set.

  • For choice sets larger than 17-20 options, where the task for “shoppers” in the increasing condition may become too time-and-effort consuming and “shoppers” in the decreasing condition may still feel too pressed, the level of information acquisition is more similar.

The researchers refer to this form of behaviour as “bounded adaptivity“; they explicate: “Our results indicate that people are actually “sticky adapters” whose strategies are adapted to new contexts — such as the initial choice set — but persist to a significant degree even in the face of changes in the decision environment” (p. 596). The authors suggest, based on results from one of their experiments, that an increasing condition, where consumers’ first choice decision is made from a small choice set, may activate in  consumer a ‘maximizing’ mind-set, searching deeper into information on alternatives (as opposed to a probable ‘satisficing’ mind-set of a consumer in a condition of decreasing size of choice set). Levav et al. note that while ‘maximizing’ has often been regarded in literature as a chronic trait of personality, they see the possibility that this mind-set can be triggered by a decision situation.

If decisions during the shopping trip are not made independently, since adaptation where necessary is not complete or “sticky”, studying in isolation the decision process a shopper goes through in front of a particular product display could be misleading. For instance, the shopper’s decision strategy may be influenced by a choice strategy used previously.  An “imperfect” or “sticky” adaptivity does not have to reflect a deficiency of the consumer-shopper. It may simply designate the sensible level of adaptivity needed in a given decision situation.

(1) Shoppers may not have to hurry to modify their strategy if the perceived change in conditions of the choice problem is small enough to allow them to act similar as before. Shoppers can often adjust their decision tactic gradually and slowly until they get to a situation when a more significant modification is required. (“Shoppers” in the decreasing condition above seem to be more “in fault” of remaining “sticky”.)

(2) Shoppers-consumers look for regularities in the environment in which they have to decide and act (i.e., arrangement of products, structure and format of information) that can save them time and effort in their decision process. Regularities are exhibited in the ways many stores are organised (e.g., repetitive features in display of products) that shoppers can gain from in decision efficiencies. Regularities are likely to reduce the level of ongoing adpativity shoppers may need to exercise.

(3) On some shopping trips, ordinary or periodic (e.g., at the supermarket), shoppers frequently do not have the time, patience or motivation to prepare and deliberate on their choice in every category candidate for purchase. They tend to rely more on routine and habit. Prior knowledge of the store (e.g., one’s regular neighbourhood store) is beneficial. Shoppers would want to adapt more quickly, perhaps less carefully or diligently, and they may be more susceptible to “sticky” adaptivity.

It can be difficult to influence when and how shoppers attend to various sections or displays for performing their decision in differing choice settings. But it is possible to identify what zones shoppers are more likely to visit in early stages of their shopping trip. If a store owner or manager wants to induce shoppers thereafter to search product selections at greater depth, he or she may arrange in those locations displays with a small number of options for a product type. It should be even easier to track movements and direct shoppers to planned sections in an online store website. On the other hand, the retailer may stage a display with some surprising or unexpected information features for disrupting the ordinary search, and induce shoppers to work-out their decision strategy more diligently, thus devoting more attention to the products. However, this tactic should be used more carefully and restrictively so as not to turn-away frustrated or agitated customers.

Displays in the store (physical or virtual) and information conveyed on product packaging (including graphic design) together influence the course of consecutive decision processes shoppers apply or construct.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Testing Behavioral Hypotheses Using an Integrated Model of Grocery Store Shopping Path and Purchase Behavior; Sam K. Hui, Eric T. Bradlow, & Peter S. Fader, 2009; Journal of Consumer Research, 36 (Oct.), pp. 478-493.

(2) The Adaptive Decision Maker; John W. Payne, James R. Bettman, & Eric J. Johnson, 1993; Cambridge University Press.

(3) Constructive Consumer Choice Processes; James R. Bettman, Mary Frances Luce, & John W. Payne, 1998; Journal of Consumer Research, 25 (Dec.), pp. 187-217.

(4) The Effect of Ordering Decisions by Choice Set Size on Consumer Search; Jonathan Levav, Nicholas Reinholtz, & Claire Lin, 2012; Journal of Consumer Research, 39 (Oct.), pp. 585-599.

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The major British grocery retailer Tesco is in a crossroad. Strategies that have brought the retail chain success, good reputation, and a leading position do not work as well as in past years. Tesco has been frequently commended for its Clubcard loyalty programme, established in 1996, that implemented an exemplary customer data-driven approach in the realm of relationship marketing; it has put the chain way in advance of all its UK competitors. During the previous decade Tesco also initiated its advanced concept of segmented network of different types of stores for different types of shopping that is continuously growing. Notably, the UK-based company has expanded into more countries and to more types of business, becoming a giant global retail group. But now Tesco finds itself in difficulty. The mission is to find where matters have gone wrong and how to put Tesco back in order.

The recent accounting blunder in which the group over-stated its profits, troubling enough, is truly only a symptom of deeper problems in the management of Tesco, going at least three years back. The profit error in excess of £263m corresponds mainly (£118m) to the first half of the current financial year (2014/15), but it extends to the previous two years, too (following an investigation by Deloitte concluded in October).

  • This error was caused, in the words of departing chairman Broadbent, by “accelerated recognition of commercial income and delayed accrual of costs in the UK food business“(1), referring to incorrect timing of reporting payments made to suppliers (done late) and concessions Tesco received from them due, for example, to promotions given in its stores (done too early). The accounting misstatement may have occurred innocently because of lack of professionalism and a guiding hand in running the company’s finances (Tesco, reportedly, did not have a CFO for a while). In the worse case, it was done to conceal the decline in its business and poor financial performance. Either way, it is evident of underlying faults in the way the company was run in recent years.

The years 1997-2010 have been a significant period of intensive activity and growth at Tesco, led by two successive CEOs, Leahy followed by Clarke. It was a period full of ambition to extend internationally and engage in additional product and service categories, beyond Tesco’s core competence in food and general household retailing. But then Tesco was caught unprepared to cope with the financial crisis of 2007-2008 and the recession that followed, especially since 2010. Tesco under Clarke was late to respond, and continued its expansion “business as usual” despite the evident decline in consumer spending. Time has now come to re-align and to take a more focused approach on those business areas and retailing activities in which the company is more capable to satisfy both its customers and shareholders. The new CEO Dave Lewis, as of August 2014, re-stated that Tesco sees itself as a customer-centric company that intends to continue providing best value to consumers through its pricing, services, and stores. It remains to be seen how the new management keeps true to this commitment.

Tesco’s Stores in the UK

The British retailer distinguishes between different patterns of consumer shopping under different circumstances or for varied purposes; about ten years ago it split its mother-chain into four main types of chain stores. At the core are traditional supermarkets, known as Superstores at Tesco (482 stores as of Oct. ’14). It has added Extra mega-size stores with a much larger range of products and at lower prices for shoppers who want to stock-up their households for longer periods on fewer concentrated shopping trips (248 stores). On the other hand, Tesco developed a Metro type of store (reduced supermarket) to be located in centres of large cities and accommodate the unique needs and time constraints of working shoppers (194 stores). In addition they established a sub-chain of Express stores in a format like convenience stores for really rush trips and smaller baskets for products in immediate shortage — this is in fact the largest sub-chain currently (1,709 stores).

Mainly the three new groups of stores have grown since 2005; all four types account for more than 2,600 stores in the UK (there are some additional 800 stores of other retail-formats). The Express chain stores faced particular resentment from independent merchants because these stores have been established at their expense, by buying them out or by drawing local customers from them in their neighbourhoods (some have resolved the issue by becoming franchisees). However, it apparently was a more correct move to make than creating the Extra stores. To the surmise of Tesco, consumers are less attracted to the mega-store format because they are now less interested in making large purchases on any single shopping trip. Instead, consumers are more inclined to fill-in their stocks for the coming days (e.g., as budget or available cash allows). The advantage of buying at lower prices at Extra stores, as in the chain as a whole, also diminished in face of a challenge from more efficient discount chains like Aldi and Lidl from Germany.

Tesco has several concerns to confront and resolve. Its position is furthermore unfortunate because it is sandwiched between discounters as mentioned above and high-quality, high-status chains such as Sainsbury’s, Morrisons, and Marks & Spencer. Tesco invested in its own-brands and in prepared as well as fresh meals, and yet it is still not considered in the same class with the high-quality chains. Those chains have a much clearer proposition with regard to product and service quality than Tesco. In addition, analysts argue that Tesco’s stores have become complicated to shop — they are too large, hard to navigate, difficult to find products needed from a selection too broad, and particularly too difficult to find value. (2)

From 1994 until the end of 2005 the market share (MS) of Tesco climbed consistently from 17% to 30%, surpassing in 1995 Sainsbury’s, the leader until that time, and leaving all food and grocery chains far behind. Since 2006 and until the beginning of 2014 Tesco’s MS was essentially stable (30%-32%), then it started to slip below 30%, according to data of Kantar Worldpanel reported by the BBC. Sainsbury’s has kept floating between 15% and 20%. Three challengers are notable — although they are still well below Tesco, they can and do cause trouble for the leader: (a) Morrisons (11% after a steep leap forward from 6% to 10% in 2005); (b) Asda (Wal-Mart’s branch into the UK , 17%, climbed mainly until 2005); Aldi & Lidl (MS grew more slowly from 2% to 4% until end of 2010 and then accelerated in almost four years to 8%). Kamal Ahmed, Business Editor of the BBC, suggests that the position of Tesco has been eroded due to structural changes in retail attributed primarily to online shopping, overall weakening position of the four big chains, and customers who want “smaller daily top-up shopping”. (3)

It seems early to predict if the recent slip in MS is a sign for an ongoing decline, and it depends very much on how Tesco will react. As already indicated by CEO Lewis, Tesco is going to reduce its range of products. It may have to consider the scale of its Express sub-chain, that might got too large. It will have to carefully assess if it can and should compete again hard over price with upcoming discounters or develop and enhance other competitive advantages like shopping-related services and in-store design. Tesco is already in the midst of a project to re-model and improve the layout and design of its stores (“Transforming Our UK Stores”). While part of this work is dedicated to improving their Extra stores, Tesco’s management may want to consider alternative approaches to these stores. For instance, re-arranging the store as a cluster of several autonomous shops under the same roof (e.g., food & grocery; personal care; home improvement & gardening; repairs) which shoppers can visit independently and pay at separate cashiers.

Extended Lines of Business

Tesco has added a variety of services “in a supporting role”, that is, they do not intuitively belong in a food and household merchandise retail business but they may be regarded as facilitating acquisition and fulfilling complementary needs of customers who come to shop at the chain-stores. But even under this flexible definition, Tesco may have reached too far. Consider just the next few examples:

  • Tesco Bank provides, in addition to current accounts, also savings, loans, and credit card services (even car insurance and travel services are available);
  • Tesco Mobile offers mobile telecom service packages and smartphones, and has even introduced its own-brand tablet device “hudl” (generation 2 just launched), acting as a technology company;
  • Tesco operates a network of gas stations for shoppers to fuel their cars;
  • Extending from beauty and cosmetic products for personal care, Tesco is also in the healthcare and pharmacy business, supplying medications, medical devices and NHS-approved services;
  • Internet services (broadband, e-mail & storage) are also available from Tesco.

The top management of Tesco may have to show greater scrutiny not only with regard to the range of product types it displays in its stores (and online) but also those supplementary services and products, finding a correct balance between benefit and value they provide and the burden and complication they cause.

Tesco owns the analytic company Dunnhumby as a subsidiary to perform in-house the important work of analysing purchase and personal data of Clubcard customers, and exploiting new possibilities of Big Data, to produce intelligible insights. Yet, the retailer needs to make sure that Dunnhumby keeps to its original charter. Expanding services to external clients, for instance, could complicate its activities too much, distract the company from fulfilling its vital duties for Tesco, and expose it to unnecessary business risks.

Customer Service —  Tesco is repeatedly criticised that its in-store staff is not available and helpful enough. It has been further argued that over-reliance of the retail chain on automatic self-service scan & pay posts in its stores (instead of human cashiers) signals to customers that the staff tries to avoid contact with them. These customer concerns are worrying especially given the difficulties in shopping at large and product-crowded stores. Problems with customer service may better be resolved in parallel to issues of merchandising as well as store layout and interior design to obtain greater improvement in customer-shopper experience.

Tesco has made great effort to execute an inclusive Brick & Click approach in its retailing business, not to foresake any of the physical and online channels. The retailer furthermore works to keep the channels inter-linked. It established, for example, a Click & Collect service —  to their convenience, customers can make the order online in the morning before work and pick-up the shopping package from a store of their choice (out of 260) on their way home. It is a demonstration of effort in the right direction.

Reaching Internationally — Tesco is operating store chains in twelve countries beyond the UK, either under direct ownership or through franchising and co-operation with local retail chains. Besides nearby Ireland, the group’s overseas reach is mainly into Central and Eastern Europe (e.g., Czech Republic, Poland, Hungary, as well as Turkey), and Asia (e.g., India, Thailand, South Korea). A discussion of global operations should take into account economic, cultural and legal considerations with respect to each country. For example, operations in China had to be ceased; they are expected to restart in a new formulation with a local chain. Nonetheless, the venture of Tesco in the US, that lasted between 2007 and 2013, is knowingly the most damaging and embarrassing for the company. Its Fresh & Easy chain of neighbourhood supermarkets on the West Coast was hit by a strong opposition from US-based strong retailers, mainly Wal-Mart and Trader Joe, and in addition its approach was not well accepted by the American consumers. Tesco eventually had to fold out and leave the country.

Vis-à-vis the slip in market share of Tesco in the UK, sales of the retailer at home dropped by 2.6% in first half of FY 2014/15 (Feb.-Aug. ’14) compared with the same period last year. Like-for-Like sales (same-stores, excluding petrol) fell by as much as 4.6%. However, the more alarming outcome for stakeholders and analysts about Tesco has been a decline in profit of 55% in the UK (trading profit for H1 stands at £499m post-correction out of  £23,566m in sales, a margin of 2.3%). (4)

Overall, the sales of Tesco group (£34bn) fell 4.4% and trading profit (£937m) declined 41%.  Both Asia and Europe have seen a fall in sales, though profits in Asia dropped (-17%) and in Europe they increased (+38%). Markedly, Tesco Bank  has enjoyed a rise in both sales (4.6%) and trading profit (16%), to the envy of the retailing business. Analysts doubt that Tesco can overcome and offset these declines by end of the financial year in February 2015. The upcoming Christmas and New Year season is clearly crucial for Tesco. It is also needed as an injection of optimism for its share price that fell from nearly four pounds to £2.50 in the past two years, and then dropped furthermore to just £1.50 in September, recuperating somewhat lately to a little below two pounds.

Undoubtedly Tesco has made positive moves into the 21st century to enhance the consumer shopping experience in its brick-and-mortar stores, establish its presence online, and strengthen endurable relationships with its customers. Yet, improvements it achieved have been swollen in the wave of expansion in different directions, wherever it seemed possible and connected somehow with its main field of business. It is, therefore, ever so important and desirable for Tesco to identify and focus on those areas wherein it is more competent, especially with respect to improving the quality of shopping experiences of individual customers.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Tesco Group Interim Results: Financial Performance, H1 2014-15 (26 weeks ended 23/8/14), Press Release 23 Oct., 2014 http://www.tescoplc.com/index.asp?pageid=188&newsid=1074.

(2) Tesco Admits Accounting Missteps; Stock Slides, Stanley Reed, International New-York Times, 23 Sept. 2014

(3) Tesco Share Slumps After Raised Profit Error, BBC News: Business (Online), 23 Oct. 2014 http://www.bbc.com/news/business-29735685

(4) Ibid. 1

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