Did you hear the one about the traveling salesman and the grocery shopper? No? Well, it goes like this. Traveling salesmen are always moving from one customer to another looking to stay on schedule and get as much done as they can. The same is true of grocery shoppers and that is why a new study uses a concept known as the "Traveling Salesman Problem" (TSP) to better understand how consumers shop around the supermarket.
Wharton marketing professor and RetailWire BrainTrust member Peter Fader along with his Wharton colleague, Eric Bradlow, and doctoral student Sam Hui have written a new paper, The Traveling Salesman Goes Grocery Shopping: The Systematic Inefficiencies of Grocery Paths.
As the research paper points out, TSP-type problems have interested academicians and practitioners, but a lack of in-store data has made it difficult to gain quantifiable insights.
For the study, Wharton researchers worked with Sorensen Associates and its PathTracker system employing radio frequency identification (RFID) tags on shopping carts.
The study tracked shoppers as they moved about a supermarket in the western U.S. The research analyzed the paths taken in 993 shopping trips and put that together with the corresponding purchases. What researchers discovered is that, while consumers were good at choosing an order in which to move about collecting goods in the store, many are taking a longer path than is necessary.
Shoppers "might have the right order, but they are taking too long and going too far to get from point to point," said Prof. Fader. "It seems like people are doing a certain amount of wandering around regardless of how much they buy."
Shoppers that do the most wandering, not surprisingly, also tend to be the same ones with the most in their carts when checking out, according to the study.
According to Herb Sorensen, Ph.D., president and CEO, Sorensen Associates, shoppers "spend only 20 percent to 30 percent of their time actually acquiring merchandise," leaving retailers an opportunity to determine ways to get customers to buy more in the remaining time on shopping trips.
"We can't manage that time intelligently if we don't know what's happening," he said.
Greater use of in-store media may help retailers address the opportunity, according to Dr. Sorenson, who added "$300 billion of advertising money will move into the retail space in the next five years."
While consumers spending more time in the store tend to checkout with larger market baskets, the researchers pointed out that making shopping more difficult and time wasting can have serious top and bottom line consequences for grocers.
Dr. Fader said the research collected didn't help definitively answer the question as to why some shoppers spent what appeared to be "needless time" in the store.
"Some shoppers may be hedonic browsers ... who like to wander around the grocery store and derive utility in 'window shopping,'" according to the researchers. "Other shoppers may not have enough knowledge of the store to remember where the products they wish to purchase are located."
"By no means does this study solve all the burning questions that keep retailers awake at night, but it's a step in the right direction," said Dr. Fader. "The main point is that we're bringing hard science to an area that's been left to judgment and intuition alone. There are still many steps awaiting us on our 'path' to better understand in-store behavior, and we hope we can be fairly efficient -- unlike most grocery shoppers -- as we move ahead with it."
To download a copy of the research paper, The Traveling Salesman Goes Shopping: The Systematic Inefficiencies of Grocery Paths - go to this download page.
Discussion Questions: Is it useful and relevant to study "shopper inefficiency"? Should retailers try to create sources of inefficiency, and how do they know how far to go in this regard?