WindowOn... Shopper Stock Take 2016 (Issue 25)

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This edition of WindowOn is based on quantitative research among adult shoppers: 1,000 online interviews of 18+ year old grocery shoppers in the UK. Nationally representative quotas were placed on gender, age, social grade and geography.

PUBLISHED BY: Shoppercentric EDITOR: Lisa Hutchinson DESIGN: Mike Higgs

e: We welcome ideas for future articles and reports. Guidelines on our preferred format and style are available from Lisa Hutchinson: e:

Š Shoppercentric 2015 All copyright is vested in Shoppercentric unless expressly stated otherwise. No permission is granted for reproduction, use or adaptation of the material, save as to provide for under Statute, and any such use must be accompanied by the appropriate accreditation.


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We show you how to turn shoppers into buyers.

Welcome... Trends Research...

Danielle Pinnington,

Founder & Owner, Shoppercentric

Welcome to our 25th edition of WindowOn... Happy New Year to you all. It’s likely to be another lively year for UK retail, with a number of trends impacting on the shape of the industry. Whilst the discounters and digital opportunities are driving some of the changes, it has become clear that shoppers themselves are also having a considerable impact. Not surprisingly each New Year brings a wealth of data around retail sales and shopper behaviours, which are analysed by businesses and commentators alike in an effort to forecast what might be coming up in the next 12 months. To add to the debate we felt it was time to complement the usual data with a look at how shoppers think or feel about the retail sector in the UK. So we’ve set a benchmark with our Shopper Stock Take, which we hope will broaden the perspective, and provide comparisons for future annual reviews. As always, the articles in this magazine are the key headlines as we see them. There is more data available, so if you would like to see more detail do please get in touch at

Savvy savers – or just plain sensible shoppers? Shoppers turning wise and taking a considered approach on how they spend their money.

Promotions commotion


Confusing promotions but most shoppers like price match.

Channel hopping – why do we do it?


Each channel has its benefits and each has its role in shoppers’ repertoires.

Increasingly connected shoppers


Mobile is a key catalyst to the growth of online shopping.


12 Thought Piece The predictable unpredictability of shoppers... Shoppers not behaving how they are expected to behave.

Regular Features... The BIG Picture... Shopper Talk... Diary Dates... An experts own view...


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8 11 11 16



By Penny Ericson

Savvy savers –

or just plain sensible shoppers? Much is spoken about the impulsivity of shoppers’ spending habits, and their lack of planning before venturing out to the grocery store. Indeed, there was a whole TV series in 2015 dedicated to helping those poor unfortunates who habitually bought more than they needed – an alternative take on retail therapy, if ever there was one! But, we are also seeing a postrecessionary trend in which many shoppers quell their impulsivity and take a more considered approach to their shopping. For these shoppers, it isn’t just about savvy saving, it’s about shopping and consuming wisely:


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Making what they buy go further and buying perishables on an as and when basis so they avoid waste, and don’t have to buy as much.


Planning more before they shop, so that they save the money they might otherwise spend on impulse.


Looking to save beyond the shopping basket itself, and shopping locally to save on fuel.

Fig.1: Considered shopping attitudes – % Total (1000)

These are all behavioural trends that retailers would be wise to keep an eye on – but, it doesn’t end there. This more considered approach links to a wider sense of ‘caring’ and sees shoppers being more thoughtful about how they spend their money: l 55% of shoppers nowadays believe

that their more considered approach to spending on groceries and household goods has made them more environmentally friendly l 58% say they prefer the money they spend

to benefit local businesses – although whether they walk the walk is another matter… but the sentiment is certainly there!

By understanding these different attitudes, and realising savviness isn’t just about price point, or promotions, smart retailers can start to have different conversations with shoppers. These more thoughtful shoppers aren’t completely price focused, as fig 1 shows there are plenty of points of consideration which a retailer or brand could target. So a purely price-based strategy could be too narrow to appeal to these shoppers. So by truly understanding these shifting dynamics a smart retailer or brand could start different conversations that potentially standout from the competitive crowd, and resonate with a more thoughtful shopper mindset.

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Promotions Commotion By Iona Carter

For the 364 days of the year that it isn’t Black Friday, UK shoppers are still presented with a huge array of offers and promotions when shopping for groceries. This is despite the fact that our core grocery retailers have each pinned their flags to a core value proposition of one kind or another: whether it is ‘pick your own offers’ in Waitrose; BrandMatch in Sainsbury’s; brand guarantee in Tesco; or price guarantee in Asda.

Shoppers can be forgiven for becoming a bit weary when trying to work out which of these offers the best value. Despite the fact that 84% of shoppers find the idea of price matching appealing, if everyone is price matching against everyone else where’s the real difference? And this is before we even consider the headache-inducing promotional


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complexity in every aisle that many shoppers complain about. Is it any wonder over half of shoppers (54% overall, and 60% of men) prefer an EDLP strategy vs. a hi-lo one? Or that nearly half the shoppers using Discounters do so because they don’t have to work out the promotions to ensure they get good value?

...if everyone is price matching against everyone else where’s the real difference?

That’s said, many shoppers do of course love to get a good bargain from the core grocery mults, and many are prepared to seek them out, with 51% of shoppers prepared to split their shopping across several stores in order to access the best promotions. But these shoppers’ endeavours are often thwarted by the seeming inability of retailers to deliver the plethora of promotions well on the shop floor: l Misleading promotions scored an average

of 8 out of a possible 10 ‘annoyance’ points amongst grocery shoppers l And out of stock promotions scored 7

‘annoyance’ points out of 10 Surely there is nothing worse than annoying shoppers at a time when the competition has never been so fierce? It’s clear that shoppers demand good value, but macro trends and their preference for EDLP

are also showing they want an easy life: so, whilst picking their way through SKU level promotions to achieve best value is something many are prepared to do (if they must), the retailer that enables them to do that without needing a lie-down in a dark room once they get home will surely win their hearts and minds. And furthermore, can we hope on behalf of shoppers that 2016 will bring with it greater focus on what really matters to shoppers when it comes to value? Yes, they want competitive prices – but underlying all of this is a sense that good value is about: ensuring what you buy is worth the money spent; buying products you know your family will like; and promotions that make those products accessible at better prices. Whilst everyone else is shouting about how their prices compare with competitors perhaps there is an opportunity for a brave retailer to focus on underlying values like these instead?

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By Danielle Pinnington

Channel hopping –

why do we do it? We’ve talked about the fragmentation of shopping trips before, and our latest data shows that shoppers continue to behave with a good degree of promiscuity – visiting, on average, 4 different retailers a month across an average of 2 channels for their grocery shopping. Some of this is down to hectic lifestyles (23% do their grocery shopping on the hoof as, when and where they can), and some of it is down to preference (28% shop in specific shops for specific items). But why do shoppers choose different channels, what are shoppers’ expectations of them and what, if anything gets their goat when they use them?


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Well, some of the ‘whys’ are pretty obvious to be fair:


of discount shoppers shop there because they’re the cheapest

Big 4 grocery shoppers shop there 49% ofbecause they can get everything under one roof – vs 12% of discount shoppers


expert & friendly staff

stood out as key differentiators for traditional specialists and they have a particularly niche set of drivers revolving around quality (52%), freshness (41%), and their shoppers’ desire to support the local economy (57%)

And there are those ‘whys’ that reflect the growing challenge of the Discounters:

19% 23%

shop discounters because of the superior quality of fresh foods shop them because of the unusual foods they sell


And a hefty

actually shop discounters in order to avoid the complexity of over-promotion (a lesson for the Big 4 perhaps!)

Then of course there is the challenge from online, with shopping patterns in the run up to Christmas showing further growth in that area. It seems UK shoppers need bricks and mortar stores to do more to differentiate from online, and what better way than with easily accessible, good quality customer service. In fact, ‘great customer service’ and ‘being treated with respect’ both scored 8 out of 10 when it came to shoppers’ expectations of grocery retailers (where 10 is critically important) – yet ‘rude, unfriendly staff’ and ‘staff who don’t care’ ranked amongst their most annoying experiences when shopping instore! It appears then that consistent provision of good, old fashioned personable service is what shoppers are really after from bricks and mortar stores, and if this isn’t forthcoming that’s another reason for giving up hope and moving on-line to take advantage of the time saving, relatively stress free shopping experience that channel offers. So, each channel has its benefits and each has its role in shoppers’ repertoires. From the convenience of c-stores to the breadth of offer delivered by the Big 4, from the time saving benefits of shopping on-line to the expert, friendly service & high quality products of the specialists. With these choices at their doorstep or fingertips shoppers are picking and choosing where and when they shop to suit their needs and wants on each occasion. But woe betide those retailers who don’t deliver against expectations, or don’t deliver their ‘point of difference’ vs. other channels – shoppers are a fickle bunch and they will vote with their feet! Moreover, keeping abreast of shopper needs as they evolve has become as imperative as the market itself becomes more fragmented.

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thebigpicture By Lisa Hutchinson

Grand Central, Birmingham

A great design. Brilliant architecture. It feels special and there is a lovely flow from one shop to another. A perfect complement to The Bullring…

Just a few of the many comments from people who have visited Grand Central since it opened in September.

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By Susie Spencer

Increasingly connected shoppers We couldn’t possibly do a Shopper Stock Take without including a look at the subject of ‘connected’ shopping. After all a new smartphone is likely to have been on a lot of wish lists this Christmas, taking us ever closer to 100% Smartphone ownership in the UK. So the opportunity to digitally connect with shoppers will surely continue to be a key consideration for brands and retailers alike in 2016.

IMRG data suggests sales in November 2015 made via smartphone grew 97% yoy, and that mobile is a key catalyst now of the growth of online shopping. Our data shows that 1 in 4 UK shoppers use a smartphone to shop, and it seems they are quickly getting used to using their smartphones right across the purchase journey for shopping, including instore. Two particular areas of interest within the purchase journey are around CONSIDER and SHARE. CONSIDER is the core opportunity to persuade a shopper - the point at which they may compare price, promotions and brand benefits. If they are whipping their smartphone


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Activities on smartphone in last month – at all vs in-store % Shoppers using smartphones to shop (236)

Shopper Talk... out instore at this point, are you as a retailer or brand ready to communicate relevant information to them? SHARE is an interesting feature of modern purchase journeys, and one that has only emerged with the growth of smartphones. This is a feature entirely driven by shoppers themselves, for example when they take photos of potential purchases to either remember them or share with their peer group before purchasing. Is this something you are ready for, and more importantly able to take advantage of? A fashion retailer, for example, may have introduced branding into their changing rooms, so it is clear where the photo is being taken. An FMCG brand might look to create a social media campaign around sharing. But let’s not forget that being connected isn’t just about smartphones within bricks and mortar stores. It is also about connecting to online shopping - anytime, anywhere. The commuter whiling away their journey home on the train, the mum waiting in the car at school pick up, or the teenager multi-screening at home. One of the standout sales figures of 2015 was the increase in online shopping, and our ‘anytime’ purchase journey data reflects in part the way in which shoppers are making use of easier access to online shopping. Whether you are a brand or a retailer you need to be thinking about the connections you can make with shoppers – whether instore or online via smartphones, tablets, pcs and the like, or any of the other opportunities. Don’t take it for granted shoppers will connect with you – make sure you are encouraging them to connect, and that you make the most of the opportunity created.

Real words from the high street. Brought to you from the keen ears of the Shoppercentric team... You’re not going to make an effort for your husband, are you? He’s just your husband! Maybe I would’ve before we got married. My life is so complicated I can’t commit to a packet of ham. I think Black Friday is a bit of a con: I bet they put their prices up the week before. I make our sandwiches as if they’re on a conveyor belt – whack, smack, splat. I prefer to do my shopping online – you usually save money and it’s hassle-free. I do go to my local high street too, but it’s usually more of a social thing. They (supermarkets) seem to have forgotten they need to SELL stuff to us.

Diary Dates... Danielle will be speaking at the Shopper Marketing Conference at the Retail Design Expo, Olympia, London Wednesday 9th March

15:30 – 16:10

Panel: Understanding Shopper Insights to Motivate Brand Growth Location: Shopper Marketing Conference Theatre Category: Shopper insights

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THOUGHT PIECE Written by Iona Carter

The predictable unpredictability of shoppers


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So here we are at the end of January, having just experienced yet another Christmas trading period that brought cause for celebration for some, but not so much for others. The one common theme was that shoppers didn’t really behave as most people expected; most notable of course was the fact that they didn’t flock to the shops en masse on Black Friday, causing more than a few frayed nerves amongst retailers left with mountains of unsold stock. Is it, then, getting more difficult to predict what shoppers will do? Certainly, trade press predictions were hugely varied (and often wrong!) as we made our way through last year’s Christmas trading period, indicating that it is indeed getting trickier. And frankly, we’re not surprised – shoppers are changing... and cleverer than they’re often given credit for.

Take Black Friday, for example: An unprecedented success on-line (diluted margins notwithstanding, of course), but not so on the high street. Why? Because shoppers have learnt that they can get better deals on line... quicker, easier and with considerably less risk of being punched on the nose! Like for like, year on year November sales slipped by 0.4% (and they weren’t ‘all that’ in November 2014 either!). Why? Because shoppers were waiting for the bargains to appear.

Some of the so called “best deals” didn’t sell like hot cakes. Why? Because they’ve cottoned on to the fact that the massive saving is often off a price that only appeared in the shops for the briefest of periods prediscount. And therein lies the story: shoppers watch what retailers do, learn from it... and respond accordingly: “Wait a while (even beyond Black Friday)”, they said, “and the prices will surely tumble again”. And tumble again they did! The average price reduction on “Panic Saturday” (every trading day before Christmas now gets a label apparently!) was thought to be 45%! Retailers and shoppers pitting themselves against each other in a battle of nerves... who would hold out the longest, who would win? Well, it very much felt like the shopper was in the driving seat this past Christmas, as far as we can tell!

The predictable unpredictability of shoppers continues overleaf...

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THOUGHT PIECE Written by Iona Carter

Now, let’s not be too hasty and throw the baby out with the bath water. There is some logic involved in big sale events, after all: We humans are subject to the influences of much more than the conscious, deliberate and reasoned thought processes we like to think we’re driven by. Lurking beneath the surface are a much more ancient, unconscious and innate set of influences that, for the most part, we are blissfully unaware of. Though we may not know it, our actions are highly influenced by unconscious motivations and needs that have been hardwired within us ever since we started to walk on two legs, or indeed well before that. For example, we are generally risk and loss averse. We also have a tendency to shop very much like we used to hunt or gather. We have always valued things that are scarce because we don’t know when they’ll be available again; the rare mammoth kill had more value than your common or garden rabbit back in the day... and as with a rare mammoth supper, so with a good bargain. This is called scarcity value: the theory is that we know (or think!) Black Friday will only be with us for a limited period, so we feel compelled to get involved in order to maximize value, minimize cost, reduce the risk of the purchase - and of course, avert loss. (Amazon know this well... a lot of their deals are super-time limited... even within the Black Friday / Cyber Monday period).


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And this is all mixed in with an innate desire to want it now. We are therefore prone to something called hyperbolic discounting which means that we have habit of placing much less emphasis on future consequences than we do on the here and now. The risk of missing the bargain outweighs the headache of the credit card bill... at least until a day or so after, or when the bill arrives. (By the way, this explains why return rates on big sale event purchases can be much higher than normal: we’ve been whipped into a frenzy of acquiring things, but when we reflect upon our actions and calm down a bit – those very same ‘things’ don’t seem like such good ideas anymore!)

We’ve now come full circle back to reflection again... we humans do, of course, have a unique ability to reason and reflect. And if there’s anything we’ve become better at reasoning about over the very recent past – it’s shopping and more specifically, sale shopping. We’ve become savvier shoppers... We are better at playing the game now; we have learnt some of the tricks of the trade. So, quite deliberately, we have started to curb our spending in the earlier part of the Christmas shopping season in preparation for the deals and bargains that will surely appear later (be this on Black Friday, Cyber Monday, Panic Saturday... or Beige Thursday!) However, we have also started to calm our inner caveman’s desire to grab the scarce mammoth bargain... as quite frankly; it isn’t that scarce any more. We have a pretty good idea that another (possibly better) bargain will appear hot on its heels – so why rush out now?

So, is it really difficult to predict what shoppers will do and how they will respond? Well, not if you understand them, it isn’t! And as we’ve just discussed – one of the tricks is in knowing whether Caveman, or 21st Century Man is in the ascendance... and what cues and language to use in talking to them. It’s also in understanding that our rational brain learns new behaviours in response to the retail environment around it, and informs how the irrational brain responds – so the same tactics can’t be expected to work time and time again (e.g. caveman brain is less likely to think a bargain is scarce if 21st Century brain has worked out that it or similar will appear several times for consecutive weeks!). Much is spoken, these days, of how shopping is all about the caveman within... and no doubt, he is almost always there in the background, credit card at the ready. However, it feels to us that 21st Century man is equally busy learning about what’s going on out there in retail-land, moulding behaviour accordingly... and as things stand, staying one step ahead of the retailers!

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An Experts Own View Name: Simon Liss Job Title: Managing Partner, Strategy & Innovation, Omnifi

well do you think retailers meet are the likely big wins for digital the connected shopper’s needs? and for shoppers? Q How Q What Most multi-channel retailers now offer shoppers a decent experience across connected devices, but many still struggle to understand customers across channels and respond to connected shoppers when they are in their physical stores. It’s often the case that shoppers with smartphones have access to more information than store colleagues and shopping online has heightened their expectations in terms of information availability and transparency. For me the key here is not to change the physical store environment per se, but to empower retail staff via smarter, more integrated in-store eComm and CRM tools. Doing this can enhance the in-store environment in a progressive, non-disruptive way. I like to call it ‘old-fashioned service through technology’.

For me mobile payments are an obvious win-win. On one hand they deliver customer convenience and for retailers they tie CRM and loyalty activity into the offline channel. While barriers remain, adoption is growing and the vision of offline payments that seamlessly integrate with Single Customer Views and loyalty/CRM efforts is within reach. Perhaps the most fundamental advantage of mobile payments is that they bring genuine customer value. Paying is a pain, but not doing it is unfortunately illegal. Queuing at the till and the staff contact at the point of purchase doesn’t add value, it’s purely transactional, so if shoppers can simply scan and pay as they shop, then I think this is going to lead to wins for retail experience across many verticals, especially Grocery and Restaurant.

you had any light bulb moments In your view, what will be the key Q Have Q when shopping and seen a really issues for retailers and shoppers good example of digital making in the future? shopping easier?

Yes, there are a couple of experiences that stand out for me. From a service and staff-empowerment point of view Carphone Warehouse’s Pinpoint App is fantastic. It’s a tablet based sales tool that takes the store customer through a series of questions that narrow down their myriad mobile phone options in real time by plugging into product and service plan data. I am still a big fan or Argo’s joined up thinking when it comes to creating online-to-offline journeys, although the store environment often lets them down. And while supermarkets still lag behind in terms of digital tools, both Sainsbury’s and Waitrose are now moving into mobile scan and pay, which I think is a very interesting area for 2016.


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There’s a lot of talk about Artificial Intelligence, Machine Learning and Predictive Marketing in retail. As offline and online channels get increasingly merged and blurred, a retailer’s ability to gather, analyse and use customer data in communications, offers and pricing is going to increase. While using customer data to provide a more personalised and intelligent service might seem like a win-win, it’s open to abuse, and the cleverer it gets, the more it may feel like an invasion of privacy. Handled correctly, data is hugely powerful, but when it’s stolen, mis-used or mis-handled it can seriously damage consumer trust and brand reputation. One for retailers to embrace cautiously.

We show you how to turn shoppers into buyers

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thelastword... We thought we’d let our clients have the last word by telling you what they think of us... A really solid deck so thank you – some really great insights here. Category Controller, Manufacturer

Thank you for a great debrief. Really clear and generated a lot of discussion which was fab.

Iona spoke to Steph McGovern on BBC Breakfast in November and BBC Radio 5 Live on 21st December about the changes in shopping patterns in the run up to Christmas and the impact of key sale events e.g. Black Friday and the growth of on-line shopping.

Head of Insight, Manufacturer

Thanks so much for yesterday, was really informative and great to see that it supported a great deal of our assumptions and thoughts, really, REALLY insightful. Category Controller, Manufacturer

The insight from your last project was so clear that it helped remove all the internal debate and discussion.

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Research Manager, Manufacturer

Thanks very much for your hard work in pulling this presentation together. I was very pleased with how it went. Head of Insight, Manufacturer

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