Quantifying emotional data: The new frontier in customer-centric category management

Retailers are moving beyond pure "display-centric" category management to building a next-generation, VR-based category management platform that incorporates emotional data, in order to best serve its customers. Read on to find out how.

IQ (Intelligence Quotient), widely defined as our cognitive and academic intelligence, certainly plays a part in solving complex business issues. However, we frequently overlook IQ’s sibling, EQ (Emotional Intelligence). And when it comes to solving problems with shoppers, understanding their emotional data is key to making the “meeting at the store shelf” the best it can be.

Depending on where you get your definition, you’ll find that EQ is broadly defined as how you work with people, understand them, motivate them. It has several components including empathy (which we’ll pick up on further down the blog), and it’s critical when you venture into the realm of virtual reality (VR) and category management.

Recently, I have seen a number of companies building toward a next-generation, VR-based category management platform, and the way they are doing it makes me smile, as the emphasis seems to just be on the VR part, coupled with a focus on the “display” in stores. Sure, it’s important to have a highly functioning VR platform when it comes to category planning, but to really make an impact with the customer, you’ve got to move beyond just a display-centric focus on category management.

How do you leverage emotional data in a quantitative way?

As you move products and categories around a store or a planogram or a portion of a store, how do you understand the positioning of a product as a data point? Where exactly in the planogram should that product be placed? At Symphony RetailAI, we’ve been working in the “married” space of category planning and VR for nearly three years and we’ve moved well beyond simply having a next-gen merchandising and category management platform. We understand that it’s really “emotion” as a data point that bridges the gap between the shelf and the customer standing in front of it.

Unfortunately for manufacturers, retailers and shoppers, some solution providers miss this critical point (enter the bit about empathy that I mention up top). As a company working to provide real solutions — ones that help retailers and manufactures realize true revenue growth as a result of pleasing the customer — you must be able to incorporate and track change in the emotional and personalized viewpoint of the shopper and quantify it into a KPI that can be leveraged in a standardized planning process. This moves far beyond a mere use of a platform to solely visualize and execute store layouts.

ROI comes from understanding that shopping behaviors have changed

Just focusing the category on product minimizes the potential for ROI that is represented by understanding customer behavior. And, of course, that understanding is a moving target. When we focus on understanding shoppers’ emotional states, what makes he or she pick up the product and put it in the basket, then we can design a category plan based on those emotional aspects. That’s true ROI. Don’t forget, it’s the shopper that drives the market today. How do you quantify emotional metrics and KPIs into mechanics that can drive actual growth engines within your business? That’s where the true value lives, not just moving the physical into a virtual environment, as some vendors mistakenly believe.

Moving beyond simple slotting of products and old views of ROI… to understand shoppers

Most firms that work in category planning can take a planogram and figure how to slot products. This doesn’t help customers realize the full potential of category planning. From our years of experience with customers, we’ve incorporated an approach where we take the planogram into our virtual environment and do a test run – broadcasted to a host of panel members to see how they actually shop. We remove the guesswork. This validation of the category plan with actual shoppers is a critical difference in terms of providing true value to our customers. We also construct variations of the plan to fully vet all options. It’s important that retailers, for example, see quantification of customer data from an emotional standpoint to fully understand what customers are doing, where they’re looking, how they’re feeling/acting. It’s neural science and cognitive analysis.

What does this mean for our CPG manufacturer and retail customers? They can examine both financial and shopper ROI. For example, category managers can remove the guesswork from a category reset. They’ll have a full understanding of where the additional lift is coming from and how behavior is influenced both in the category and the broader adjacencies, based on actual aggregated shopper testing that shows how they act within a store. There’s a real power that comes from this. You can leverage upstream applications and datasets to hypothesize so that, in turn, can be translated into data and repeated, helping our customers to perpetually refine category management planning and execution.

Shopper emotional state is as important as the category plan itself!

To succeed today, you must have the IQ and the EQ. You must use data analytics and transform that data into emotional currency.

It’s great that other solution providers offer their customers a merchandising and category management platform; we’ve seen the benefits to our customers of having this basic ability for years now. But today, the key to success at the shelf lies not solely with the blend of technologies, but for customers to partner with a firm that can translate the psychological/behavioral data into KPIs that can be fully leveraged in a standardized category planning process. Anything less than this does the client a disservice.

Learn more about how emotional and behavioral data can be used to best serve customers:

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