K I N G
R E TA I L
S O L U T I O N S
SURVEY
Consumer Insights Survey Results Highlights
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In last year’s Consumer Insights Survey report, retail design firm King Retail Solutions (“KRS”) laser focused on category blurring across retail channels (ex. purchasing groceries from a convenience store, jeans from a pharmacy, flu shots from a big box store, or a hot prepared meal from a grocery store). Now in its second year, KRS has more than doubled its annual study to include six new topics for 2015. This year, KRS not only looks at shoppers’ still evolving habits and attitudes when it comes to category blurring, but also expands focus to analyze shoppers’ opinions and purchasing motivators when it comes to using smartphone shopping apps, online and subscription shopping services, being e-tracked in-store by retailers, experiencing in-store delight, and much more. The 2015 study also analyzes demographic variances in all categories and illustrates YOY changes in category blurring data for groceries, fresh prepared foods, and services purchases.
U.S. CONSUMER SURVEY: WINTER 2015 Survey conducted by King Retail Solutions, Winter 2015. Multi-generational, U.S. respondents included ~400 Millennials, ~400 Gen X, and ~400 Baby Boomers. Equal parts male/female. (www.kingrs.com)
New Topics 2015 Smartphone Shopping Apps Buy Online, Pick Up In-Store Retail Subscription Services In-Store Delight Product Information Preferences In-Store Mobile Tracking
2 6 8 10 11 12
Category Blurring Where U.S. Shoppers Buy‌ Groceries Fresh Prepared Foods Services
13 16 18
APPS QUESTIONS
It’s no surprise that smartphone usage varies by gender as well as generation. Women have more smartphones and, on top of that, a higher percentage of retail/shopping smartphone apps than men. Millennials have more smartphones and, on top of that, a higher percentage of retail/shopping smartphones apps than Gen X’ers who, in turn, have more smartphones and, on top of that, a higher percentage of retail/shopping smartphone apps than Baby Boomers. But even for those demographic segments with the lowest adoption, the prevalence of shopping applications in Americans’ day to day (and some would say minute to minute) lives is clear: 51% a majority that can only be predicted to continue to grow - of us have one or more shopping-related apps on a smartphone.
Percent who own a smart phone:
Women Men Boomer Gen X Millennial
80% 71% 68% 77% 83%
If they have a smartphone, 67% have at least one shopping-related app 69% of women 65% of men 58% of Boomers 68% of Gen X 73% of Millennials
11%
within that larger group a larger % have
4% 12%
shopping-related apps on their phones.
19% 18%
# of Shopping Apps on their phone Don’t have a smartphone Smartphone but no shopping apps
Have 1 app ...2 ...3 ...4 ...5+
10%
3% 9% 12%
12% 6.5%
3% 6.5%
ALL
11%
10%
12% 4% 9%
12.5%
24% 14%
14%
25%
20% 16%
MEN 29% 25%
BOOMER 32% 29%
GEN X
4% 10% 13% 12.5% 9%
WOMEN
5% 10% 19% 18%
23% 25%
MILLENNIAL 17% 22%
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More Millennials have smart phones and
Other apps supplement our shopping by providing loyalty incentives, discounts, and other rewards (Groupon #1, RetailMeNot #2, LivingSocial #3). Complementing these top app categories are shopping apps that provide comparison or calculation services or simply serve as a curator to suggest purchasing specific merchandise from select retailers and e-retailers.
WWW.KINGRS.COM
So what are these smartphone shopping apps we have downloaded into our palms and when and why are we using them? For the most part, they’re apps that represent specific retail and e-retail brands (Amazon is #1, Ebay #2, Target #3) and 47% of us use them for shopping both online, on our phone, and in a store. Add to that the 14% of shoppers who solely use their shopping apps for in-store shopping and you get a total of 61% of shoppers who use their shopping apps for in-store shopping. Brick and mortar retailers should take note. Investing in functional, helpful, even delightful proprietary shopping apps is clearly no longer a fad to humor, but instead a significant tool to employ for increased in-store sales.
The top shopping apps can be categorized into five unique categories:
By demographic, percent of each app category on their phone‌ E-Retailer Retailer Loyalty/Coupon/Rewards Shopping Tools Distributed E-Commerce
E-RETAILER apps are for retail stores that exist solely electronically (no physical presence), RETAILER apps are for retail stores with a brick-and-mortar presence, LOYALTY/COUPON/REWARDS apps provide discounts and shopping incentives for a variety of purchases,
In what circumstances do you use the shopping-related apps on your phone?
SHOPPING TOOLS provide comparison, calculation, or other shopping services, and
Only for shopping in a store. Only for shopping online/on my phone. Both for shopping in a store and for shopping online/on my phone.
DISTRIBUTED E-COMMERCE apps offer curated shopping selections with purchases directed back to the source retailer.
Top Apps by Demographic TOTAL
51% 22% 16% 12% 11% 6% 5% 5% 3% 3% 3% 3%
MEN
WOMEN
MILLENIAL
GEN X
BOOMER
63%
44%
53%
49%
52%
31%
15%
22%
24%
18%
9%
21%
16%
21%
11%
8%
14%
11%
14%
10%
11%
10%
7%
13%
13%
1%
9%
8%
5%
4%
1%
8%
8%
4%
3%
3%
6%
1%
7%
8%
1%
4%
4%
3%
3%
2%
3%
2%
3%
5%
3%
3%
2%
4%
3%
3%
3%
2%
3%
5%
APP
or Cartwheel by Target
ALL
42%
MEN
51% 37% 44%
GEN X
39%
BOOMER
43%
15% 30%
9%
34%
18% 30%
14%
34%
1%
9%
1%
9%
17%
35%
9%
14%
8% 10% 8%
2% 1% 2% 1%
WWW.KINGRS.COM
WOMEN MILLENNIAL
33%
PAGE 5
ALL
14%
MEN
12%
WOMEN
16%
MILLENNIAL
12%
GEN X
15%
BOOMER
17%
TOTAL
3% 2% 2% 2% 2% 2% 2% 2% 2% 2% 1%
38%
47%
43%
45%
35%
49%
40%
48%
36%
49%
39%
44%
MEN
WOMEN
MILLENIAL
GEN X
BOOMER
3%
3%
2%
5%
1%
1%
3%
1%
5%
1%
3%
2%
3%
3%
1%
3%
1%
1%
3%
3%
4%
1%
1%
2%
4%
1%
3%
4%
1%
1%
1%
3%
2%
3%
1%
0%
3%
1%
3%
2%
3%
1%
1%
3%
1%
4%
0%
1%
2%
2%
4%
0%
3%
1%
0%
RANKS TOP 10 FOR THIS DEMOGRAPHIC (BUT NOT OVERALL)
APP
DOESN’T RANK TOP 10 FOR THIS DEMOGRAPHIC
BUY ONLINE, PICK UP IN-STORE
When asked how they felt about shopping online for in-store pickup: This option appeals to me and I have made this type of purchase in the last 12 months. This option appeals to me but I have not made this type of purchase in the last 12 months.
ALL
MEN
WOMEN
MILLENNIAL
GEN X
BOOMER
PPL WITH KIDS
PPL W/OUT KIDS
RURAL
URBAN
SUBURBAN
This option does not appeal to me.
40%
45%
36%
34%
42%
45%
48%
35%
36%
37%
42%
38%
32%
42%
40%
38%
36%
34%
41%
36%
42%
37%
22%
23%
22%
26%
20%
19%
18%
24%
28%
21%
21%
Men, Baby Boomers, people with kids under the age of 18 living at home, and suburban dwellers are the most likely to have made an online purchase for in-store pickup in the last 12 months. Millennials and rural dwellers are the groups least interested in shopping online and picking up their purchase in a store.
Shoppers are game for in-store pickup.
WWW.KINGRS.COM
When it comes to shopping and purchasing online for in-store pickup, hardlines and softlines are the goods shoppers are most willing to buy. Less appealing for this type of purchase are fresh prepared meals and groceries. What makes food
PAGE 7
purchases so different? It may be that grocery and fresh prepared food retailers are just getting started with the buy online, pick up in-store movement. Given a few more years, the tide may turn in favor of the food guys. But it may be something else... Perhaps shoppers are considering the consequence of buyer’s remorse in a food purchase scenario (You can’t un-buy a pizza. Or can you? How
much headache is involved?). And if you absolutely know you won’t be returning that pizza, why pick up in-store at all? Delivery makes more sense. Whereas the idea of returning/ rejecting a laptop, t-shirt, or tea towel at first in-person sight actually might sound easier than dealing with a return from a home delivery.
What goods would people purchase online for in-store pickup?
APPAREL ELECTRONICS FRESH PREPARED MEALS GROCERIES HOUSEWARES
ALL
57% 80% 28% 28% 59%
MEN
47%
87%
27%
28%
58%
WOMEN
64%
75%
28%
27%
60%
MILLENNIAL
62%
80%
33%
31%
54%
GEN X
63%
78%
28%
27%
64%
BOOMER
42%
81%
19%
23%
60%
PPL WITH KIDS
60%
81%
27%
24%
64%
PPL W/OUT KIDS
55%
79%
28%
30%
56%
RURAL
61%
82%
26%
26%
55%
URBAN
60%
80%
30%
30%
49%
SUBURBAN
54%
79%
27%
27%
65%
SUBSCRIPTION SERVICES
Over 22% of U.S. consumers in the study are signed up for some type of ongoing subscription purchasing agreement. As income increases, so does the likelihood of having entered into some type of subscription to ensure regular retail deliveries from Amazon (#1), Dollar Shave Club (#2), Birchbox (#3), or another retailer offering this appealing service. Subscriptions range from humdrum monthly deliveries of contact lens solution at a “subscribe and save” discount from Amazon to eclectic children’s craft boxes from Kiwi Crate to… well, you name it. There are subscription services out there for every lifestyle and interest. The number one factor cited when shoppers reported what they liked about these subscription services was cost savings. This savings is often a part of the overall value proposition with subscription purchase agreements, even the more seemingly frivolous ones. Example: For $10 per month the #4 most popular subscription, Ipsy, delivers economy sized samples of upscale beauty goods valued at around $50, plus prizes and coupons, in their Millennialtargeted monthly “glam bags”.
Over 1 out of 5 consumers is signed up for an ongoing “subscription” retail purchasing agreement. 19% INCOME <$25K 21% INCOME $25-50K 26% INCOME $50-100K 25% INCOME $100-150K 28% INCOME >$150K
*In order of preference
• Baby Boomers value Convenience more than Cost Savings • Income <$25K value Convenience most, followed by equal appreciation of Cost Savings and Delightful Surprise • Millennial & Urban Shoppers value Delightful Surprise more than Never Running Out • Rural shoppers rank Cost Savings & Time Savings equally at #1
Top Subscriptions: Dollar Shave Club 13%
Birchbox 10% Ipsy 6%
Amazon 63%
<5% BarkBox Citrus Lane Harry's Kiwi Crate NatureBox
Netflix Petco* POPSUGAR Must Have Stitch Fix Walmart*
*OF NOTE, even though traditional retailers like Office Depot, Target, etc. are starting to offer subscribe & save discounts, only these two traditional retailers were noted on the list.
PAGE 9
1. Cost Savings 2. Convenience 3. Time Savings 4. Never Running Out 5. It’s a Delightful Surprise
Regardless of generation, gender, income, or locale except: WWW.KINGRS.COM
Shoppers were asked to rank what they “like most” about participating in retail subscription services*:
IN-STORE DELIGHT
It turns out that treating customers respectfully and charging them a low price inspires feelings of delight. A retailer with quick, friendly service from knowledgeable staff about a great variety of products, demonstrated in-store and sold at a fair price, in a thoughtful environment, would likely top any shopper’s “delightful stores” list. You can bet they’d be back again and again.
Shoppers were asked to think of the last time they were shopping in a retail space and felt delighted or otherwise impressed with the experience:
What caused the delight…
FREE SAMPLES/DEMOS QUICK SERVICE IN-STORE ENVIRONMENT KNOWLEDGEABLE STAFF PRODUCT SELECTION / VARIETY LOW PRICE / COST SAVINGS CUSTOMER SERVICE
4% 4% 6% 11% 15% 26% 50%
GETTING INFORMATION
WITH A SALES ASSOCIATE WITH A KIOSK WITH AN APP ON MY PHONE 63% 68%
WOMEN
62%
MILLENNIAL
59%
GEN X
55%
4% 28% 13%
26%
19%
85% 64%
8%
PPL W/O KIDS
63%
11%
55% 66%
SUBURBAN
61%
WITH A SALES ASSOCIATE WITH A KIOSK WITH AN APP ON MY PHONE
25%
34%
7%
BOOMER
RURAL
27%
10%
PPL W/ KIDS
URBAN
PAGE 11
ALL MEN
3% 12% 28% 26%
18%
27% 9% 7%
25%
32%
MILLENNIAL WOMEN
MILLENNIAL MEN
GEN X WOMEN
GEN X MEN
BOOMER WOMEN
BOOMER MEN
Men really don’t like kiosks. In fact, the only generation with any affinity for kiosks seems to be Gen X’ers. Perhaps this is because they came into shopping maturity at a time when kiosks were the next big thing. But even this kiosk-accepting demographic tends to prefer their in-pocket phone or a real life human as a source of in-store information. When it comes down to it, people are social creatures and, providing sales staff is courteous and knowledgeable enough to get shoppers the answers they’re looking for, the majority of all consumer groups would rather interact with a sales associate than ask a phone app or digital kiosk.
WWW.KINGRS.COM
Shoppers were asked how they would prefer to be assisted with finding items, answering questions, etc. while shopping in a store, assuming they could get the answer they were looking for from each source.
IN-STORE MOBILE TRACKING When asked how they felt about retailersâ&#x20AC;&#x2122;
ALL
ability to track their personal, in-store shopping habits using their phone: I'm all for it. The more they know, the more personalized my shopping experience can be. I like the idea of retailers pushing notifications (coupons, alerts, offers) to my phone that are personalized to my taste.
17%
24%
I'm fine with it. I'm OK with the idea of retailers pushing notifications to my phone that are personalized to my taste, if I've given them permission to do so.
35%
24%
I'm fine with it but I don't want retailers pushing notifications to my phone. I don't like it.
RURAL
32%
URBAN
27%
16% 32%
14%
27%
MILLENNIAL WOMEN
21%
21%
SUBURBAN
20%
32%
MILLENNIAL MEN
27%
21%
15% 44%
GEN X MEN
38% 6%
19%
26%
26%
BOOMER WOMEN
19%
43%
23%
14%
38%
GEN X WOMEN
19% 29%
23%
29%
BOOMER MEN
5%
9% 33%
38%
24%
33%
25%
33%
BLURRING QUESTIONS GROCERY
In The Preceding 12 Months: BOUGHT GROCERIES FROM A NON-GROCER
62%
BOUGHT FRESH MEALS FROM A NON-RESTAURANT
62%
BOUGHT A SERVICE FROM A NON-SERVICE PROVIDER
32%
In the Coming 12 Months: 92%
WOULD BUY GROCERIES FROM A NON-GROCER WOULD BUY FRESH MEALS FROM A NON-RESTAURANT
89%
WOULD BUY A SERVICE FROM A NON-SERVICE PROVIDER
82%
62%
Which groceries are they buying at non-grocery stores?
COMPARED TO 2014 RESPONSE.
25%
CANNED/BOXED
DAIRY
BREAD
FRESH FRUIT/VEG
FROZEN
MEAT
2%
1%
10%
NO CHANGE
3%
>
41%
>
42%
>
50%
>
52%
>
69%
3%
PAGE 13
Hand-in-hand with that observation is the fact that “Quality” is climbing the list of values shoppers report as a decision making factor in where to buy groceries. While its overall ranking still falls just below convenience, the gap is much smaller in 2015 than it was in 2014. This could help explain why non-traditional grocers such as big box stores, pharmacies, and convenience stores (industries that struggle with highlighting the quality and freshness of their produce, meat, and dairy offerings) all lost ground in this year’s report while farmers markets, local stands, and bakeries gained ground in this blurring category.
WWW.KINGRS.COM
This year we’re seeing grocery stores regain their edge when it comes to selling their core wares. In last year’s report, 77% of consumers reported having purchased groceries from a non-grocery store in the preceding 12 months. This year, only 62% reported doing so.
In the preceding 12 months, 28% of shoppers made a grocery list intending to fulfill the entire list at a non-grocery. Shoppers were asked to rank their decision making factors in choosing where to buy groceries (including grocery stores). Both in 2014 & in 2015*:
1. 2. 3. 4. 5.
COST CONVENIENCE QUALITY SELECTION ACCESS TO NONGROCERY ITEMS
Regardless of generation, gender, income, or locale except: Gen X, Baby Boomers, those making >$100K*, Suburban, and Rural Dwellers Value quality above convenience *People making >$150K value quality and convenience over cost
*In order of importance We’re seeing a shift as “Quality” is climbing up the list of values. While its overall ranking still falls just below convenience, the gap is much smaller in 2015 than it was in 2014.
Where are people buying groceries? 59%
39%
36%
32%
32%
21%
9%
6%
BIG BOX
PHARMACY
C-STORE
DOLLAR STORE
FARMERS MARKET/ LOCAL STAND
BAKERY/ DELI
DISCOUNT STORE
DEPARTMENT STORE
7%
1%
7%
2%
21%
At 36%, for both genders, men and women are equally likely to purchase some groceries from a convenience store. At 27%, Millennials are more likely than Gen X (19%) and Baby Boomers (16%) to buy groceries at a bakery or deli.
NOT REPORTED IN 2014
2%
1%
Ladies take the lead & bring up the rear in c-store grocery purchases… WWW.KINGRS.COM
In 2014, the demographic most likely to purchase some groceries at a convenience store was urban, male, Millennials (YOUNG CITY GUYS). In 2015, rural, female, Millennials (YOUNG COUNTRY GALS) took the lead (62% do it) with urban, male, Millennials falling to the second mostly likely slot (52% do it).
Top 20 favorite places to buy groceries
#1 AGAIN! #2 AGAIN!
FARMERS MARKET / STAND
Generational Preferences…
RANKING Dollar General
>
RANKING
Cost Plus World Market tied for the #20 spot for Generation X.
RANKING RANKING
NOT REPORTED IN 2014 RANKING
>
BAKER, BUTCHER, DAIRY, DELI
RANKING &
NEW TO LIST!
RANKING RANKING
>
Marshalls & Meijer bumped out Ross Dress for Less to make the Top 21 (due to a tie) for Baby Boomers .
RANKING
>
#3 AGAIN!
(THAT AREN’T GROCERY STORES)
Marshalls & QuikTrip bumped out Sam’s Club and BJ’s to make the Top 20 for Millennials.
PAGE 15
The demographic least likely to purchase some groceries at a convenience store: urban, female, Millennials (YOUNG CITY GALS) at 22%.
RANKING RANKING NEW TO LIST!
RANKING NEW TO LIST!
#20 AGAIN!
BLURRING QUESTIONS FRESH PREPARED
In the preceding 12 months, 61% of shoppers reported purchasing fresh prepared meals from a non-restaurant. While grocery stores ranked as the most popular type of non-restaurant retailer, big box wasnâ&#x20AC;&#x2122;t far behind. In fact, the two most popular brands in this blurring category were big box leaders Walmart (#1) and Target (#2).
Shoppers were asked to rank their decision making factors in choosing where to buy fresh-prepared meals (including restaurants)*:
1. Quality 2. Cost 3. Convenience 4. Selection
Regardless of generation, gender, income, or locale except: INCOME <$50K value cost over quality INCOME >$150K value convenience over cost
*In order of importance
Where are people buying fresh prepared foods? 75%
35%
18%
GROCERY
BIG BOX
C-STORE
9%
10%
>
>
1%
9%
PHARMACY SAME AS 2015
Just as many U.S. shoppers (62% in both 2015 and 2014) reported theyâ&#x20AC;&#x2122;d bought some fresh prepared foods from a non-restaurant in the preceding 12 months. But, where those people are buying their fresh prepared foods has shifted. While grocery stores have maintained a strong hold on fresh prepared sales, big box and convenience retailers have seen their #s decline.
Rural dwellers (62%) and suburbanites (62%) are slightly more likely than urbanites (57%) to buy a fresh-prepared meal from a non-restaurant.
Top 25 favorite places to buy fresh prepared meals (fam of stores)
RANKING
>
#2 AGAIN!
RANKING
>
RANKING
>
RANKING
RANKING
RANKING
> >
RANKING
>
RANKING
>
RANKING
RANKING
>
NEW TO LIST!
RANKING BAKER, BUTCHER, DAIRY, DELI
>
RANKING
NOT REPORTED IN 2014 NEW TO LIST! NEW TO LIST!
NEW TO LIST! NEW TO LIST!
NEW TO LIST! NEW TO LIST! NEW TO LIST!
PAGE 17
RANKING
>
#4 AGAIN!
WWW.KINGRS.COM
(THAT AREN’T RESTAURANTS)
#1 AGAIN!
BLURRING QUESTIONS SERVICES
In the preceding 12 months, 32% bought services (from medical treatments to pet sitting) from a non-service specific retailer and 82% would consider doing so in future. So, what are services shoppers looking for? Cost, quality, and convenience top the list. This means low cost haircuts wouldnâ&#x20AC;&#x2122;t entice most shoppers to purchase a trim from a pharmacy. However, high quality cuts at a low price point would likely do the trick.
Shoppers were asked to rank their decision making factors in choosing where to buy services (including service providers)*:
1. 2. 3. 4. 5.
COST QUALITY CONVENIENCE SELECTION ACCESS TO NONGROCERY ITEMS
Regardless of generation, gender, income, or locale except: GEN X, MALES, RURAL DWELLERS ALL Value convenience over quality >$100K/YEAR Value quality and convenience over cost
*In order of importance / NOTE: this mirrors 2014 results
SERVICE QUALITY LOSES ITS EDGE.
Though it maintains the #2 spot, the per-demographic ranking of quality has gone down since 2014 when groups like Baby Boomers, women, >$100K/year, and urbanites all valued quality over cost when choosing a service provider. In 2015, only those with >$100K/year income ranked quality over cost.
Where they buy services…
53%
17%
16%
15%
10%
WWW.KINGRS.COM
BIG BOX
PHARMACY
DEPT STORE
GROCERY
C-STORE
PAGE 19
2%
What they’re buying… 38% 27% 22% 17% 11% 9% 5% 2%
Top 10 favorite places to buy services
1%
$ #1 AGAIN! RANKING
>
Medical Exam/Care Car Care Hair Cut/Grooming Banking Mani/Pedi Petsitting/Grooming Massage Child Care
1%
#3 AGAIN!
(THAT AREN’T SERVICE PROVIDERS)
RANKING RANKING
(fam of stores)
RANKING
>
15%
1%
RANKING
NEW TO LIST!
RANKING RANKING
NOTES
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