A journey into the minds of shoppers

It’s no longer enough for companies to produce the best product, or offer it at the best price.

By RON FRIEDMAN
Women shopping 311 (photo credit: Bloomberg)
Women shopping 311
(photo credit: Bloomberg)
Walking around a mall with Dr. Iris Kalka is like attending a fashion show with a top designer or listening to a concert with a renowned conductor. Her knowledge and experience lets her see what laymen don’t.
For a guy like me, who only enters a mall when necessity demands, she turned the usually automatic and sometimes overwhelming experience of window-shopping into an eye-opening journey into the minds of shoppers. Her insider’s view of Israel’s retail sector revealed how far companies are willing to go to make us buy.
Kalka is an expert in the field of market research, a rapidly developing business that attempts to get into the heads of consumers to improve their clients’ bottom line. With a world of information at her fingertips, a mind attuned to registering the slightest details, and novel technology to assist her, Kalka can retrace the decision-making process that takes place in buyers’ heads from the moment they pass the window display until they reach the cash register. She then uses the information she has gathered to advise her clients on how they can better suit shoppers’ desires and, ideally, increase purchases.
This method applies to most behaviors with spatial elements. For reasons that need to be explored, the majority of people in a museum, and of course in a mall, reach some places but not others. To remedy this, we need to follow them and record their routes.
In the highly competitive world of retail sales, companies require masses of information in order to keep ahead of the competition. It’s no longer enough to produce the best product, or offer it at the best price. The holy grail of retail outlets, particularly for the chain stores that operate in malls, is customer loyalty.
Achieving this requires far more context than you can obtain from a spreadsheet. It requires in-depth understanding of the customers – their motives, their preferences, their habits, their anxieties. They need to know if the man buying a gift likes attention from employees or fears it; if the woman trying on clothes wants the mirror inside the fitting room or outside. They need to know at what height to put the display shelves and the precise moment when the cashier should make eye contact.
They need to know how often shoppers visit the store, and who with; where clients live and how much they spend on shopping. In short, they need an intelligence-gathering agency. That’s where Kalka comes in.
I met with her at Rishon Lezion’s Kanyon Hazahav, a monolithic shopping center on the outskirts of the city. She was sitting with her assistant at a cafe, observing the customers at a lingerie shop across the passage.
Arriving at the meeting made me remember why I hate malls. It was impossible to find parking, and the fact that we chose to meet during the Pessah holiday meant that the mall was more packed than ever with families looking for recreation and a place to get out of the sun.
Like all malls, this one had the magical and mysterious effect of being completely different inside than it appears from the outside, and the path from the edge of the parking lot to our meeting place cost me 20 minutes of walking back and forth across seemingly endless corridors and criss-crossing escalators. Late, stressed and sweaty, I sat down for my meeting with Kalka.
Reading my body language, Kalka could tell I was out of my comfort zone and quickly alleviated my stress with a friendly smile and an ice espresso. “Don’t worry about being late,” she said, telling me that she had spent the time walking around the mall making notes for our meeting.
Whereas I suffer at the mall, for Kalka, it is a second home. Educated at the London School of Economics, she has been conducting qualitative market research for the last 15 years. Much of her days are spent conducting field research in stores and shopping centers all around the country.
When I got to the coffee shop, Kalka was tinkering with a small electronic device. It was, she explained, a hand-held computer that she uses to monitor customer behavior. The device was installed with a program that enables Kalka and her staff to conduct observations of customers at her client’s outlets.
With the aid of a touchscreen Kalka manipulates a series of menus to create a running time line of observed behavior. A woman enters the store, click, she looks at the bathing suit display, click, she touches one of the outfits, click, she looks over to the line at the cashier, click, her glance stops at a bin full of discount underwear, click. Click, click, click… every action the woman makes is coded into the program with dozens of variables and modifiers, until she exits the store, having purchased something or not.
Kalka collects the data on any number of customers, and at the end of the day uploads it to her base computer. The program allows her to conduct analyses and come up with suggestions to give to the clients. In some cases, the behavioral data is augmented by footage from cameras installed in the store. The camera picks up nuances that the observer may not, so when the information from the handheld device is synced with the video footage, a clearer picture is achieved.
Technology aside, there is often information that no amount of observation can provide. For that reason Kalka, a professionally trained ethnographer who has conducted field work in Britain and in India, often holds interviews with customers to hear their perspective of the shopping experience and dig up additional data on their thought process.
“While we adopt new methodologies inspired by new technologies, we do not necessarily abandon old methodologies. We need that face-to-face interview, even if it’s only for a couple of minutes to eliminate what we call ‘dirty information.’ If the woman was only in the store because she was waiting for a friend, we need to know that because it affects our statistics,” she said.
“The million-dollar question in my business is how to increase ‘conversion rates,’” said Kalka. “The specific method I am now applying has been exercised for many years by people who have studied animal behavior. It has also been applied to child development. I am not saying that behavior is all. I am saying that for every single retail situation, for every population segment, there is something that can be done to increase conversion rates – to make more people buy.”
Kalka’s clients, household names like Coca-Cola, Honigman, Osem, Partner and Elite, hire her to tell them what goes on in the mind of consumers and how they can increase sales by making modifications to their outlets or service.
“We look at the small modifiers that other people might not even consciously register. We examine things like lighting, signage, product placement, temperature, sounds, queuing arrangement, employee behavior, the list is endless. Each one of these factors may make a difference depending on the type of clientele the outlet caters to,” said Kalka.
“Are the shoppers mostly male or female? Do customers enter the store with their children? Do people come in groups, or individually? What is the age of the average customer? Answering these questions leads us on the way to creating a more suitable shopping experience and hopefully increasing sales.”
Kalka said that in the current economic situation, improving conversion rates, even if only by a little, gives companies a big advantage over their competitors. “If I can bring about a 4- or 5-percent increase, I’ve done my bit and the clients love me,” she said.
The Internet has had a huge influence on the way companies conduct internal research on their services. In the past, the traditional method was to hire someone as a “secret shopper,” send them into the store without the management and staff knowing about it and debrief them on their experience.
“That method has its value, but it also has serious limitations,” said Kalka. “A secret shopper may be able to relay his or her experience, but lacks the knowledge to provide constructive suggestions for change. They lack the real motivation behind the visit and so their main ‘mission’ is to discover what has gone wrong.
“Today, with new tools that make it possible to chat live with people all over the country, where applications are designed specifically for conducting online focus groups, where Internet forums are flooded with chatter about products and brands, our main problem is an overabundance of information. Today we need tools to filter the data down so that we do not get information overload. The problem becomes about analyzing the data instead of collecting it.”
Today there are companies that specialize in mining the Web to extract information about customer preferences. Companies like the Israeli Buzilla specialize in brand monitoring and analysis and offer their clients routine and efficient ways to track the digital dialog taking place on the Internet regarding their products. The company monitors Web forums, social media Web sites like Facebook or MySpace, consumer discussion panels and blogs for any mention of the company or its products, aggregates the data and presents its clients with in-depth analysis on what’s being said about them.
Avi Degani, the owner and CEO of Geocartography Group, two years ago launched the Israeli version of Mosaic, a software application that divides all the households in Israel into 11 groups, containing a mosaic of 40 defined consumer types clearly distinguished from each other by their different buying habits and lifestyles. By entering an address in Israel, paying clients can find out all they need to know about the residents, from their marital status to their shopping patterns. This information helps them target their advertising to bring in new customers or better serve the ones they have. 
According to Kalka, Israeli companies have been quick to adopt new methods of information gathering. “In the beginning there was resistance, because managers thought they could know what customers were thinking and feeling based on ‘gut instincts.’ In America, managers wouldn’t presume to think they know everything about their clients, but here everybody is involved in the social milieu and thinks they know best. Today those days are over and companies appreciate the objective nature of the data we provide.”
The downside of all this hyper-attentive business practice is the risk of invasion of privacy. The world of market research is gradually becoming dominated by “Big Brother” methodologies. People might not know that they are being observed or followed, or that their personal information is being collected.
In other countries there has been some major opposition to these methods. One of the fiercest battles currently being fought in the US is around the issue of “loyalty cards” issued by many supermarket chains. The cards offer regular shoppers discounts on their groceries; but opponents say they come at the price of giving up your privacy.
An article in the British Daily Mail told of a Jewish woman, Hillary Freeman, who received a Pessah greeting from her grocery delivery service provider, Ocado.
“Rather than being a thoughtful gesture, it was actually an invitation to spend my hard-earned cash on Passover groceries. Call me paranoid, but this direct – and ethnic – marketing ploy made me feel slightly uneasy.
“How on earth, I wondered, did Ocado know I was Jewish? As the grandchild of German Jews persecuted by the Nazis and forced to wear yellow stars before they fled to safety in Britain, being listed on any database as a Jew doesn’t sit comfortably with me.”
Kalka said that in her case, privacy was not a concern because she receives consent from the people she observes.
“I am really glad that my occupation does not infringe upon the privacy of innocent people,” she said. “My profession relies on the goodwill of people, on their authenticity, so it is always important for me to develop a proper code of ethics.
“When a pharmaceutical company wanted their representatives to attendfocus groups on the sexual habits of Israeli men, I immediately refusedto conduct these groups. We are a very small country, and, besides,data can be gathered without infringing upon such basic yet importantrights of people.”
Following my meeting with Kalka, I went tothe flea market in Jaffa to buy a gift for a friend. In stark contrastto the precisely designed and calculated environment in the mall, themarket features a hodgepodge of eclectic and assorted merchandise thatrequires service of an entirely different kind. There the proprietorsits amid stacks of merchandise piled high, in no apparent order.Looking for a particular product, you are completely at his mercy, asonly he can find something amid the mess.
In the flea market,it’s back to basics, where price is the sole consideration of whetherto buy or not, and cash is king. Here the merchants don’t requireservices like the ones Kalka offers. Instead, a good bout of hagglingmakes sure everyone leaves happy.