By Professor William Young, Chris Brown (Asda) & Andy Peloe (Callcredit)
Combining sales and demographic data can provide better insight into consumer behaviour.
The current evidence on consumer buying behaviour and sustainability issues relies on attitudinal, self-reported or national sales data. This is often not close enough to real behaviour nor helpful at a company level.
With access to sales and demographic data, we are now seeing the detail at a geographical, product or consumer type level that can only help decision making. But this can only be done through exciting collaborations across sectors.
The Consumer Data Research Centre, Asda and Callcredit came together to explore if there are links between the affluence of consumers and green-labelled products they buy. Current wisdom says green-labelled products are bought by those who are richer. Of course, we have to keep in mind when looking at this topic that retailers already choice edit some product categories providing only products with green labels.
Customer views
Asda has already been asking their customers views on sustainability issues for a number of years through their Everyday Experts panel, which is the UK’s largest survey of its kind with 20,000 members. The company wanted to take this further and worked with CDRC investigating some product categories not affected by choice editing to explore consumer behaviour.
Callcredit has a partnership with YouGov and used its survey data on green issues to model and build a green and ethical segmentation product. Callcredit has worked with CDRC to explore how this could be used in combination with other datasets.
To explore the affordability question, four datasets were used:
- product sales from Asda;
- green and ethical segmentation data from Callcredit;
- census data from the Office for National Statistics; and,
- the index of multiple deprivation for England from the Department for Communities and Local Government.
The datasets have been linked to the supermarket location using the lower super output area (LSOA) in which each store is located. A LSOA is a small area geographical unit which contains approximately 1,000 individuals.
Age and gender impacts
Through regression techniques analysing the combined dataset, the results clearly indicate that for the same population the drivers and the barriers for the consumption of products vary by product. For example, for one product category those segmented as “rich” and “eco-friendly” generally purchase the green-labelled products. This is what we expected but we also found that demographics such as age and gender have positive influence.
For another product category, the results of the model indicated that purchase behaviour is influenced by green attitudes and store type but not demographics.
This is the first time a large sample comprising of actual sales data of products across a number of stores and linked to an equally large number of data points from other sources has been used. It provides valid and reliable insights into drivers and the barriers of the consumption of green-labelled products, making the results more authentic. Hence, the results clearly indicate that the consumption behaviour and the affluence of consumers varies between product categories and other factors are at play.
Sales predictions
The results of this work are still being analysed but initial conclusions have provided good outcomes for the companies. The model developed from the combination of these datasets can be used to predict the sales of products with green labels at existing and new stores using the demographics of the local population.
This will help to better target customers of particular stores with green-labelled products they are most likely to buy, rather than an all or nothing offering. CDRC was formed to conduct this type of research with companies to find exciting new insights on important societal issues, such as ethical and sustainable consumption.
Prof William Young is a Co-Investigator at the ESRC Consumer Data Research Centre. He also leads the Sustainability Research Institute at the University of Leeds.
Dr Chris Brown is senior director sustainable business at Asda Stores. He joined Asda as an agriculture development manager with a remit to develop Asda’s strategies and activities across all sectors of agriculture. His role was extended to be head of ethical and sustainable sourcing before he was appointed to his present position in 2013, covering waste/resource management, communications and sourcing.
Dr Andy Peloe is a concept manager at Callcredit. Prior to his current role, Andy was responsible for the development of all Callcredit’s geodemographic products both in the UK and 40 international markets. As a concept manager, Andy’s focus is to seek out new data and technologies to drive forward Callcredit’s data and innovation strategy.