The Consumer Decision Tree explained
Also called product hierarchies, consumer decision trees are graphical records which assist manufacturers and retailers to understand consumer buying habits and the decision-making processes followed by individuals while shopping a category
Think about how you make a decision to buy a product, it will be driven by a need or want in most cases, yes all those factors that influence you before you actually have the product in your hand, things like promotions, store location, store layout, brands you like, what you see online, and many other factors, all these factors are related to the ‘Path to Purchase’, the consumer decision tree focuses on the In-store Elements of the Path to Purchase.
The Path to Purchase
The step before defining the Consumer Decision Tree (CDT) is defining the category, which plays an important role in how the CDT takes form. This part of the process will depend on the consumer need and can vary widely depending on the circumstances such as who and what the consumer is shopping for and what type of need it is i.e. main grocery shop, convenience top up, something to wear etc. etc.
The type of need will also influence what type of retailer and location is chosen.
Before entering a store most shoppers already know what type of product they are looking to buy. The first decision they usually make when first entering a category (or planogram) is which brand to buy. Brands offer the promise of quality and consistency.
The next decision is typically regarding quality segments. This includes economy, premium and super-premium. These segments are typically well-defined within the category and are priced accordingly, making it easy for consumers to shop. Quality and value are typically made evident by pricing and promotion strategies within the segments.
The next decision of the consumer decision tree is based around product attributes including size, type, flavor, packaging, etc. Products in the segments are typically grouped with similar items, for example "kids cereals."
A well-constructed consumer decision tree gives consumers the opportunity to shop the category and easily perceive value between segments, product offerings and brands. Private labels should be sprinkled throughout the section, typically next to the category leader. Private label strategies should be used to augment branded strategies, not replace them.
Knowing how products are grouped together within a category assists in creating planograms which group products in a logical and shopper friendly way. Practically, when line item product data includes accurate classifications it allows space planners to identify when a product is not merchandised appropriately.
If strategically implemented, consumer decision trees could be the difference between a strong committed loyal customer and an occasional shopper.
Product adjacency is where the products are positioned on shelves near other similar products so consumers can easily purchase all the products they need in one area, it is also used to create awareness of brands shoppers may not have seen before or new product being introduced positioned next to or near the brand leaders.
Building great planograms
Of course there are many more considerations when building great planograms and you will need to take these into account in your process, just click on the first link below where we have explained this in more detail.
Building great floor plans
By using the consumer decision tree you can also build great floor plans, the consumer decision tree will help define how the categories should be grouped together, just click on the second link below where we have explained this in more detail.
Good advice on understanding and using consumer decision trees to factually build planograms which reflect the thinking of the customers.
Gerry Byrne says
Hi Randy, thanks for the comment, the more we understand about how consumers go through the path to purchase a product the better we can ensure we have the right products on sale!
Mariam Jalal says
Thanks for sharing this! I find this very helpful not just to me, but I also see my friends in this field learning from this. Great post! Keep sharing and also visit our page. We also have some other retail grocery related blogs.