Natural Foods Merchandiser

Gain business insight through in-store research

Every store is unique. Some sit on country lanes, some are in busy city neighborhoods. Each has a different layout, product mix and set of customers.

Many of the findings of the 2005 The Natural Foods Merchandiser Consumer Research Study will apply to all independent retailers of natural, organic and health products. However, managers of unique stores may wish to let the voices of their own customers call the shots on store operations, merchandising and marketing spending.

Good, objective research can take the guesswork out of business decisions and can focus managers on areas of the organization where change will lead to happier customers, growing sales and improved profitability.

Aren?t customer comment cards enough? Well, they are good at highlighting the very best and very worst customer experiences, but comment cards will only ever be used by a small (and maybe not very typical) group of your customers. Here?s how to obtain a set of insights that cut across all customers at one point in time.

Step 1: Choose a method
There are many market research methods: one-on-one interviews, in-depth studies, focus groups and forums with larger groups, to name a few. Probably one of the best tools with which retailers can get a detailed look at a broad cross-section of customers is a detailed survey administered in the store. Why in the store? Because that?s where customers? experiences and opinions will be freshest. Generally a paper survey completed on clipboards is most straightforward, but a Web-based survey run on an in-store computer will save data entry time.

Step 2: Design your survey
Unless you are offering your respondents a five-course dinner or a large-denomination bill, they are not going to be willing to spend more than a few minutes with your survey. Therefore, keep it to no more than one two-sided page. Let respondents remain anonymous—they will be more honest that way.

Here are some sample questions for a hypothetical store, Woody?s Natural Products. Unless you specifically want to leave a given question wide open, put specific choices next to boxes or ovals for people to check, as shown in the first example.

I. Purchasing Behavior—lets you understand who accounts for what percentage of your overall sales and which stores you lose business to.

  • How long have you been a Woody?s customer?
  • How often do you shop at Woody?s?
  • Where else do you shop for natural, organic and health products?
  • How much on average do you spend each month at Woody?s?
  • How much on average do you spend each month at all the places from which you purchase natural, organic and health products?

II. Attitudes Toward Store—lets you understand what your customers? priorities are and where you need to make improvements. For open-ended questions, allow two or three lines for writing.

What?s the best thing about shopping at Woody?s? What?s the worst thing about shopping at Woody?s?

Which of the following is most important to you when deciding where to purchase natural, organic and health products? (Choose the elements for this list that make your store different from other outlets for better or for worse: convenience of the location, ease of parking, staff knowledge, staff helpfulness, selection of natural and organic products, overall store prices, frequency of specials and discounts, etc.)

Please state the extent to which you are satisfied with the Woody?s experience. What else should Woody?s be doing to make you a happier customer? What other products would you like to buy from Woody?s that we are not now carrying?

III. Marketing and Media—helps you understand which media are effective if you are spending money on marketing and advertising or are planning to do so.

How did you first find out about Woody?s? Have you ever seen information about Woody?s specials or promotions? If so, where? Have these caused you to make additional purchases at Woody?s?

If Woody?s has information about new products or special offers, how should they inform people like you so that you see the information and respond to it? Television advertising (which station), radio advertising (which station), print advertising (which newspaper or magazine), direct mail, store newsletter, e-mail, etc.?

In the last 12 months, what has caused you to increase your purchases of natural, organic and health foods?

IV. Demographics—lets you know who is saying what.

  • What is your gender?
  • What is your age?
  • Where do you live?
  • Other questions might focus on income, marital status, number of children living at home, etc.

Step 3: Administer research
Hire someone pleasant and polite who has no stake in the outcome of the research to intercept your customers. They?ll say, ?Would you be willing to take 5 minutes to fill out a survey on Woody?s?? Make sure you impress upon this person that priority No. 1 is making sure each customer has a good experience and that nobody is pressured. Offer respondents an incentive—either a gift certificate, coupon or freebie or a drawing for a big prize. (If you do a drawing and if your survey is anonymous, you?ll need separate entry forms for the drawing.) Have your survey administrator catch people at a couple of different times during the week—the busy post-work time, the sleepy midday time and the weekend, for example, to get a good sample of all your customers.

Step 4: Mine the golden ore of customer insight
Compile the survey responses into a data file. A Microsoft Excel spreadsheet will do the job nicely. This lets you calculate totals and averages more easily than adding it up by hand. Once you?ve taken a look at all of the aggregated results, try slicing and dicing a little bit. See if you can see some patterns within different groups. What do your long-standing customers have to say? What about your big spenders? What do your older shoppers want and need?

Step 5: Make research a springboard for excellence
It is almost guaranteed that this research will reveal things that will have to change: problems that need to be corrected, opportunities that need to be taken advantage of, best practices that need to be extended. Make sure that each relevant staff person sees the research results, understands them, feels the truth of them and is aligned to the action that comes from them.

Knowledge is power. If you let the voices of your customers echo throughout your organization, you can generate powerful change and significantly improve business performance. Good luck.

Sherwood Badger Smith is president of The Intelligence Agency, a market research consultancy for the natural products industry based in Traverse City, Mich.

Natural Foods Merchandiser volume XXVI/number 8/p. 14, 22

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