Wednesday, October 5, 2011

How National Brands and Insights Providers Can Patch Retail Research Relations

Sitting on a Two-Legged Stool? Superstore Chain Shares Insight Look at Manufacturer - Retailer Disconnect

By Marc Dresner

Years ago, a research exec from a Fortune 50 CPG complained to me that “retailers always have their hand out” when it comes to insights.

At the time the statement was made it may have been fair. At the very least, it illustrated a perceived inequity on the part of national brand manufacturers with regard to their retail research partnerships.

What this person neglected to mention was that there are two sides to the coin, with the retail perspective often being swept under the carpet in research circles.

It's not some dirty little secret, so why don't we talk more openly, more frequently about this problem?

With all of the time and resources B2C researchers devote to understanding consumers’ needs, desires and daily lives, it seems there’s not been much room left to get inside the heads of retailers.

Or perhaps major brand manufacturers operate under the assumption that they already have retailers figured out?

Ruben Alcaraz used to think so...back when he worked on the manufacturing side and again on the research supplier side.

It wasn’t until Alcaraz took a position with the third leg—the retail leg—that he realized the proverbial research seat was a little wobbly.

Today, as consumer insights manager for Midwest superstore chain Meijer, Alcaraz admits national brand manufacturers and their research providers have a lot to learn about partnering with retailers.

In an interview for TMRE’s executive podcast series, “The Research Insighter,” Alcaraz identified a number of disconnects around logistics and execution, research cost models, efficacy of recommendations and other headaches and misunderstandings that all point to one conclusion: Unless you’ve taken a walk in a retailer’s shoes, there’s a good chance that you just don’t quite get it.

Now, if you’re anything like my friend from the Fortune 50 CPG’s research department—the one quoted at the start of this blog—you might be thinking “So what?”

After all, retailers lack the sophistication and resources to conduct quality research, right? They still have their hand out.

Well, this July I attended TMRE's sister event, Shopper Insights in Action, and I can assure you that that’s a dangerous misconception, although I understand its origin.

After all, seven or so years ago, even Wal-Mart didn’t have an internal insights function.

But in just the past few years, retailers have increasingly invested in and made tremendous progress toward developing their own internal insights capabilities, and they’re not limited to “shopper” insights.

To wit: Keep in mind that Alcaraz’s title is not shopper insights; it’s consumer insights.

Channels are blurring, lifestyles and purchase-consumption behaviors are changing, and the difference between a consumer and a shopper in marketing and research terms has eroded as we learn more about the science of decision making and the complex dynamics behind path to purchase.

One last note: While Meijer’s stores are concentrated in Michigan and a few other states in the region, the chain rakes in $13-15-plus billion annually—depending on the source (it’s privately held)—and it sells everything from groceries to clothes to consumer electronics to gasoline.

That’s a pretty big shopping cart. They hold their own against national and global discount mass merchandisers and they’ve got their own insights function.

So before we jump to any conclusions, let’s ask ourselves: Who really needs who?

Listen to the interview here.

Read the transcript here.

Editor’s note: If you’re interested in hearing more from Ruben Alcaraz, he will be presenting on “Breakthrough Applications of Data Visualization” at The Market Research Event 2011 November 7-9 in Orlando, FL.

For information or to register, please visit us online at

Marc Dresner is an IIR USA communication lead with a background in trade journalism and marketing. He is the former executive editor of Research Business Report, a confidential newsletter for the marketing research and consumer insights industry. He may be reached at Follow him @mdrezz. You can meet him at TMRE 2011 in Orlando this November!

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