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How to Explain Retail Market Research & Analytics Tools to Your Boss
From The Buxton Co You’ve done your homework and found the perfect retail market research solution for your business. There’s just one catch: you have to convince your boss. If your boss isn’t already familiar with the various types of retail market analysis techniques, this can be a daunting task. Below, we outline the what, how, and why of market research solutions to help you educate your internal decision makers and gain their support for the investment. What It Is Whenever you talk to someone about market research, it’s important to clarify terms. Most people are familiar with what’s called primary market research – which includes studies such as surveys, focus groups, and other techniques that involve collecting original consumer data. But many retail market research solutions, including customer analytics, are classified as secondary market research. This type of research involves taking data that already exists – such as customer data, sales data, location data, and even third party datasets on elements such as consumer lifestyles – and analyzing that data to discover insights. The bottom line: if you are buying an analytics solution or an overall study of a market, you likely won’t be collecting survey data or conducting focus groups. How to Apply Market Research and Customer Analytics The “output” of retail market research can vary, but here are some common deliverables and their applications: • If you commission a customer profile analysis, you will likely receive a report outlining the research findings and details on your most dominant customer segments. If the solution has a predictive analytics component, the results may also be deployed to a geospatial analytics platform so you can visualize concentrations of core customers and those who look just like them. Once you can see the concentrations of customers, you can more easily identify areas of opportunity within a market. • Site scoring tools usually involve a detailed report on the factors that are found to correlate with your store performance and definitions of your drive-time trade area for different types of retail markets. The tool is then deployed into a geospatial analytics platform so you can use it to run site scores on current and potential locations. • A growth potential analysis is based on a previously developed site scoring tool. The market research firm will use that tool to analyze every possible combination of location placements across a defined geography, based on your performance and cannibalization thresholds. The result is usually an Excel spreadsheet summarizing how many locations each market can support as well as access to the results in a geospatial analytics platform. Why We Need It Once you’ve explained what retail market research is and how it will be applied to your business, you have to tell your boss why it matters. For any type of market research, the ultimate goal is this: make better business decisions. Sure, you can continue to make real estate, marketing, and operations decisions based on past experience and instinct, but that’s like trying to drive a large truck down a dark country road…without headlights. Market research is like the headlights on the truck. It shows you the best path forward and helps you spot dangerous areas to avoid. When combined with your own knowledge and expertise, it gives you the confidence to make important business investments.
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