The Uses of Multivariate Analysis in Retail
Retailers use multivariate analysis to understand how customer perceptions of their business and brand image affect purchase behavior. By knowing what influences customers to visit and spend, retailers can shape their marketing approach to more potently draw people into their stores. Multivariate analysis in retail is used to support brand and advertising development, store design and distribution strategy.
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Multivariate Analysis
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Multivariate analysis is an array of advanced statistical tests used when observing many variables or perceptions interacting at once. The decision to shop at a retailer usually involves more than one thing or one variable. People purchase because a variety of perceptions influence them. Price, brand image, product quality, atmosphere, good looking staff, environmental friendliness or it's just close by, could all affect where someone shops. Here is where multivariate analysis excels: if a retailer measures how important these features are to consumers, he can observe which perceptions most influence where people shop.
Branding
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When building and promoting a brand, retailers communicate features that multivariate analysis shows have a high correlation or likelihood of importance to shopping at the store. If research shows, for example, cleanliness and high-end brand image greatly influence consumers, these are included in the retailer's communications when positioning the brand and designing the store.
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Advertising
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By knowing what influences consumers most, advertising can be crafted to carry only the most important messages. Identifying the effect of existing advertising is also a common use for multivariate analysis. Retailers may want to know, after they advertise, who was most affected by the ads and what about the ads affected them most. For example, a retailer runs a flyer in certain areas of Chicago. By surveying people getting the flyer about what they like most and the likelihood they would come to the store because of the flyer, retailers can use multivariate analysis to find what was most influential. Then they can build a more effective flyer and distribute it nationally.
Store Design
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Multivariate analysis assesses the ability of features to convince people to shop, and so retailers have a useful tool to build their stores. If research shows people prefer good prices over an aesthetically pleasing environment, the retailer knows investing heavily in designing a store with beautiful colors and carpet is less likely to be effective than better pricing strategies. Helping to decide what storefront and window display images are most effective at drawing people into the store is another retail use of multivariate analysis.
Distribution
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Since multivariate analysis is capable of comparing how much people like brands, the compatibility of brands in different retail outlets can be assessed. When selecting retail outlets for their brand, a manufacturer can assess which retailer's brand is best for theirs. For example, a clothing manufacturer with a particular image may use multivariate analysis to find retail outlets with a brand image most compatible and supportive of theirs.
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References
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