WindowOn Shopper Stock Take 2017 (Issue 28)

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This special edition of WindowOn is based on a national representative sample of 1108 interviews among UK shoppers aged 18+, conducted online. Interviews were conducted in December 2016.

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

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

Š Shoppercentric 2017 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... So, What’s New

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UK shoppers are looking for more than low prices

Danielle Pinnington,

Founder & Owner, Shoppercentric

Welcome to our 28th edition of WindowOn... This is the second year that we have conducted our Shopper Stock Take – a chance to add the shopper perspective to the sales results and retail news that invariably fills the media after Christmas. The reports on bottom line winners and losers always makes headlines, but all too often the opinions of the very people whose behaviour leads to the headlines are overlooked. In producing this report we hope to provide some of that context to the discussion about retail trends. As with all our WindowOn reports, the magazine covers the key headlines, so there is more detail available. If you are interested in hearing more, do please get in touch via info@shoppercentric.com Wishing you all a happy and successful 2017.

Little and Often

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More shoppers are moving away from the main shop

Make it worth it

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Make every trip shoppers make to a store worth it!

Going Digital

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Digital should be about making shopping easier.

THOUGHT PIECE

Identifying the right choice 12 A clear understanding of the why, how and what can help strengthen and grow the category.

Regular Features... The BIG Picture... Shopper Talk... An experts own view... Meet the Team...

www.shoppercentric.com

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FEATURE

By Iona Carter

So...What’s With so much happening around us last year, you might have thought that a stock take of shoppers’ claimed behaviour and attitudes would reveal considerable change here as well. Yet year on year changes are minimal. It seems that UK shoppers don’t react in knee-jerk style even to such seismic news as Brexit. But whilst shifts in our data may be undramatic in nature, there are a number of key differences that show there are nevertheless changes a-foot. Perhaps the biggest surprise came when shoppers were asked to indicate which factors were of critical importance to them in terms of their expectations of grocery retailers. As Fig 1 shows, product quality and service are now considered more important than competitive or cheapest prices. This reflects a growing sense among shoppers that the continual focus of retailers on pricing, particularly in the grocery sector, must not be to the detriment of retail fundamentals. It seems UK shoppers are looking for more than just low prices if retailers are to attract their custom. In the fiercely competitive grocery market low prices have almost become a given, with more added value elements now performing a more critical role in differentiating between competitors.

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The retail experience, of which service is a core part, is becoming more of a focus for shoppers. They want to feel they are important to the retailer, rather than just being a walking wallet. And they want their needs to be recognized and reflected, through retail experiences that save time and ultimately make life easier. Whilst competitive pricing seems less critical this year it would be a mistake to think that today’s savvy shoppers are less concerned about value for money. Instead we need to recognize that price is but one part of the value equation, along with time efficiency and satisfaction. Increasingly shoppers are prepared to put the effort in to find the right retail experiences for them. In our 2016 stock take it was clear that shopping around was now


Fig.1 Expectations of grocery retailers – % Saying critically important – Total (1000)

embedded behaviour in the UK, with shoppers visiting an average of 4 different stores / websites in the last fortnight. That figure hasn’t changed, but what we have seen is an increase in the proportion of shoppers who do lots of small shops and rarely / never a main shop – 16% up from 11% in 2016. What’s more, shoppers are seeing less benefit to putting all their eggs in one basket, so to speak. l 60% of shoppers agree ‘I save time if

I stick to stores I know well’ – a drop from 67% in 2016 l 51% of shoppers agree ‘fewer, bigger

shops is more efficient than lots of little ones’ – a drop from 58% in 2016

These changes in behaviours and attitudes are hugely important for the big four Grocers who are still coming to terms with the fact that big box grocery retail is not the future. And it is important news for the brands that supply these retailers, because small store distribution and ranging takes far more thinking than the onesize-fits-all template of the 90’s and 00’s. In our second article, we’ll look in more detail at what’s behind this shift, and who could be benefiting.

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FEATURE

By Claire Pearson

Little and often

As already mentioned in our first article, the move away from a weekly or fortnightly main shop has continued, with 16% of UK shoppers now rarely or never doing a main shop, an increase of 5%. That increase has been gained directly at the expense of the traditional main shop – with only 1 in 4 shoppers now claiming to do a main shop and trying to avoid top up shopping in between. Apart from a skew towards single households, this emerging cohort of shoppers who do small / frequent shops is primarily distinguished by their attitudes and behaviours rather than their

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demographics. On average these shoppers visit 6 different stores a fortnight – so that’s typically shopping every other day which means they can cover a lot of ground, experience a lot of retail environments, and can therefore be very clear on who delivers well, and on what. Not surprisingly these shoppers doing small/ frequent shops are more likely to be found in c-stores and local specialists, and it’s worth reflecting on the fact that these are two of the channels showing growth (see box opposite on Channel Changes), reflecting a mutually beneficial relationship. These shoppers are


Channels used for Grocery shopping in the last month genuine fans of these channels, being more likely than the average UK shoppers to describe c-stores as ‘quicker to shop’, ‘easier to get to’, ‘open longer’ and even ‘cheaper’. And they talk about the positives of using Local Specialists as ‘supporting the local economy’ and ‘cheaper’. They also feel they gain from the shopping around that they do: 56% agree that ‘I go wherever the best deals are, even if it means splitting shopping across different stores; and 38% agree that ‘I switch stores based on what I need because I know the best places to get what I want’. Attitudinally these shoppers are less likely to plan their shopping, but enjoy the benefits to be gained by actively shopping stores for the best prices or deals. They are less likely to see any efficiencies to be gained from always shopping familiar or large stores, and there appear to be fundamental reasons why they choose to avoid the traditional main shop type of trip: l 40% agree that the thought of a big

shop is daunting and stressful vs 26% of UK shoppers l 34% agree grocery shopping is a chore

they don’t enjoy vs 29% of UK shoppers This cohort is the one to watch. Whilst small / frequent shopping trips won’t suit everyone, they appear to be in the ascendency. Of course the sheer choice and accessibility of stores plays to this trend, but choice is there to be flexed, and this cohort is learning to make an art of that. The fact they are not solely playing the price or promotion game is a reminder that today’s shoppers are getting more choosey, and will take more effort to court.

Of the five key channels we talked to shoppers about, supermarkets were the only channel in decline – all others, including local specialists, saw increases in claimed usage. This reflects the pressures that supermarkets are under, both from online retail and because of the move towards small / frequent shopping trips. Convenience stores saw the biggest gains, reflecting their fit with changing shopping habits. There was also good news for Local Specialists, which was reflected in a positive shift in attitudes towards British & local businesses: l 66% of UK shoppers agree

‘I prefer it if the money I spend benefits British businesses’

l 67% of UK shoppers agree

‘I prefer it if the money I spend benefits local businesses’

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Make it worth it By Sharon Hodgson

The continuing challenge from the online channel means that a visit to a physical store has to be worth the effort these days. This isn’t just about keeping bricks and mortar stores top of mind, it is about maximizing the benefits that only bricks and mortar can deliver. These retailers need to make every effort to deliver a positive in-store experience, which means understanding shoppers’ needs and reflecting those needs in every element of the store offer. As we saw in our first article shoppers expectations are on the increase. What we are also now seeing is a growing sense of frustration alongside. The proportion of shoppers who are seriously annoyed by a range of factors has increased since 2016. In 2016 on average each shopper scored 4.2 factors at the top end of the annoyance scale. This has now increased to an average of 4.8 factors in 2017. As fig 1 shows, the key areas of increased frustration include promotions running out too quickly, messy shelves and lack of staff. Arguably these are some of the basics of retail, but they are also the elements that can be

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affected by cost cutting measures, and crucially from what shoppers are saying, they are the factors that can undermine a positive retail experience. Of course all things are relative, and the standards expected in a Discounter are different from those expected in a premium Supermarket. But the fact is shoppers are clearly becoming more critical, and more willing to switch stores on the basis of factors beyond price. There is a very real need for retailers to get back to basics, and this starts by thinking long and hard about the actual experiences shoppers get in store. Arguably there is as


FEATURE

Fig.1

Annoyances about grocery stores – % scoring 10-9 annoyance points Ranked in order of increase since 2016

much value for brand manufacturers to think about shopper experiences at the category. At a time like this there is nothing better than for leadership teams to get out of head office and into stores. But not on an executive visit where a group of suits sweep through casting a business eye over the store. To really understand how and where improvements for shoppers must to be made, the key decision makers would be far better off actually going shopping with real shoppers on real shopping trips, so that they can see and hear firsthand how well the experience in-store delivers against expectations and needs.

As we start another tough year for the retail sector, understanding the typical experience in-store from your shoppers’ perspective has never been more important. Make every trip shoppers make to a store worth it!

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thebigpicture By Lisa Hutchinson

Jumbo FoodMarkt

The Netherlands The Netherlands based Jumbo FoodMarkt has been gaining attention for its food concept ‘Eat it, make it or Take it mission statement. The supermarket has been inspired by the needs of the shoppers – fresh, easy and healthy food for the lowest price. This shopping experience encourages shoppers to eat their purchases in store. Their pick n’mix tomatoes have been a success. Shoppers can fill a pot with their own mix and kids have their own character pots! A great way to encourage healthy eating.

hallo.jumbo.com/foodmarkt

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FEATURE

By Susie Spencer

These days we could hardly call it a Shopper Stock Take if we didn’t consider how digital developments are impacting on shoppers attitudes and behaviours, as this is an area of huge interest to retailers and brands alike. M-commerce is at the forefront of these changes, with lots of apps and marketing campaigns being developed to tap into our growing attachment to our smartphones. In 2016 the development of beacons and geofencing took up the innovation baton, promising lots of benefits to businesses and shoppers alike. Fig.1: Touchpoints used to shop in last month – %

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Fig.2: Shopping activities on smartphone anywhere in last month – % Total smartphone shoppers If we look at the touchpoints used to shop in the last month (fig 1), we can see that smartphones saw the biggest shift, but this was only a 3% increase year on year. With so much innovation focused on m-commerce this has to be disappointing. It seems that for now shoppers are playing hard to get in the digital space. And coyness is not just about smartphone usage, it also relates to their awareness or involvement in m-commerce marketing: l 33% of shoppers had never heard of

mobile phone based promotions – and 75% of those who had heard of them had never use them l 24% of shoppers had never heard of

promotions you can access by scanning the barcode or a QR code – and 66% of those who had heard of them had never used them For all the excitement around the digital innovations, it is hugely important to remember that just because you can, doesn’t mean you should. If shoppers don’t see a role for your innovation in their purchase process, they will simply ignore it. Digital, or any innovation for that matter, should be about making shopping easier or more interesting, about removing points of friction rather than adding more frustration into the purchase process. And the only way to be sure your innovation supports the purchase process rather than adds friction is to anchor it to shoppers needs. So, if there has been an increase in shoppers using their smartphones as part of the shopping process, where have those changes occurred if not to lap up the innovative new marketing campaigns in-store?

Well, as fig 2 demonstrates, shoppers are using their smartphones to improve their access to the information that helps them make choices – whether in terms of researching the right items for them or in terms of considering the options in front of them. 1 in 2 shoppers who used their smartphones in-store used it during the consideration phase of the purchase process. So it would seem that for some of our shoppers, when the retail experiences they are receiving aren’t delivering what they need, they reach for their smartphones. This isn’t quite the ringing endorsement of stores or of digital marketing campaigns we hear so much about.

If we offer one belated piece of advice for your business New Year’s resolutions, it would be to get amongst shoppers, see retail through their eyes, and build the stores, merchandise the categories and create the digital solutions that truly support the purchase process. It’s definitely the way to go for 2017.

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THOUGHT PIECE Written by Danielle Pinnington

Identifying the right choice One of the key features of the last 18 months in the grocery sector has been the reduction of ranges by the Big 4 Mults, not entirely unrelated to the fact that the discounters are in significant growth with much smaller product ranges on their shelves. Clearly there are strong commercial forces at play here, which lend themselves to rational decision making by the buying teams. No doubt those teams have spent a lot of time pouring over various data sets in order to make the ‘right’ decisions. Sales data and substitution analysis is obviously a valuable start point, but with our shopper hats on we would argue that they are just that – a start point. By supporting the sales data with a clear understanding of the why, how and what of shopper behaviour perhaps your business will be in a better position to answer or cope with ranging challenges. Essentially data beyond sales provides an explanation of the context to purchasing and how shoppers buy. It allows us to explore the softer side of purchase behaviour and the role that individual SKUs play from the shopper perspective – potentially as a filter to the harder commercial factors of the trading perspective.

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After all we need to be mindful that taking out a particular SKU could lead to lost sales if that SKU has a niche but unique role to play in the category – something that may not be fully appreciated when looking purely at sales data. Let’s not forget that a category in-store isn’t just a shelf or a bay on which to stock products, it is also about: l The creation of an arresting fixture

where shoppers can see new or added value products l Providing ideas about product usage l Generating inspiration by making

it interesting to shop l Tempting shoppers to a category,

or to buy something they hadn’t planned to buy


Shopper Talk... Real words from the high street. Brought to you from the keen ears of the Shoppercentric team...

I like going to Aldi to see all the weird and wonderful things they’ve got in there. Shopping in Waitrose – I enjoy the experience. Everywhere else I go because I need to get something. The value that shopper insight data could add to the sales story includes: l understanding shoppers’ perception,

You need some frivolity. My kids call the treats ‘jokes’... you need some jokes in the cupboard.

awareness and consideration of brands l identifying the context and product

features that influence purchase decisions, including substitution If we understand these factors then we can determine if particular SKUs or brands provide a key dimension to the range that would be missed by shoppers if it were removed. Using tailored qualitative or quantitative research among shoppers to identify these points could be a very worthwhile exercise, and can be done relatively cost effectively. As a result of going through this more detailed process, the range rationalisation exercise moves beyond a simple cull of SKUs and becomes a more holistic appraisal of how range components play a part in the success of the category as a whole. And in this way we believe businesses are better able to define a range that meets the needs of today’s shopper, and that drives tomorrow’s aspirations for the future strength and growth of the category.

You wouldn’t take your Tinder date to a fancy restaurant, would you? I think money is a huge factor. If it’s payday I’ll be feeling flush and spend more than the end of the month. Fast-food makes me feel happy and sad at the same time... 30 seconds of pure happiness and joy, but it doesn’t last. Meeting someone for coffee doesn’t mean its coffee anymore... it’s ‘a thing’ now. I would say I now receive at least 1 picture a day of either food or drink that a friend wants to share with me.

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An Experts Own View Emily Hayes, Semiotician

How Semiotics and Shopper Research Works Together Combining traditional shopper research with a healthy dose of semiotics is the way forward in our increasingly complex multi-channel world says Emily Hayes, Semiotician and Owner of Semiotics For Brands. No shopper ever makes a purchase empty headed and I’m not just talking about having a shopping list. Every choice, every online click, every product flung in our trolleys or lovingly wrapped and placed into a ribbon-tied bag, is influenced by an array of subconscious cultural associations. If we want to understand why those purchase decisions are made, and crucially, how we can influence them in the future, we need to interrogate not just our consumers but the culture that influences them. Commercial semiotics does just that: looks at the culture that drives and influences consumer behaviour.

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Q So what is semiotics?

Semiotics focuses on how symbols convey meaning for people in culture. A symbol or ‘sign’ can be anything people come into contact with that influences choice: language, visuals, packaging, store layout, advertising, celebrities, TV programmes, past brand experiences or historical reference points. All these signs come together to create automatic associations and unconscious meaning which then influence choice. When these associations are explored and analysed they can unlock exciting commercial opportunities and hidden insights.

does semiotics work commercially? Q How

Cultural associations are often so deeply engrained that shoppers don’t articulate them directly. Many of these ideas, particularly in split-second purchase contexts, live beyond the rational. We don’t tend to articulate that organic products should be packaged in rough/textural/ earthy tones: it just forms part of our cultural expectations. We feel pleasantly satisfied if our blow-the-budget make-up compact closes with the heavy ‘click’ reminiscent of an expensive car door but we probably wouldn’t tell you that in a focus group. But if you want your organic coffee to reveal its earthy story at a split-second glance, or your compact to feel reassuringly expensive when we play with it in Space NK, it’s worth knowing about those signs and manipulating them to increase appeal.


Think Like a Semiotician 1 does semiotics Q How work with shopper research? Semiotics works brilliantly with traditional consumer research: the two disciplines are entirely complementary. The consumer side starts with people and works outwards while semiotics starts with the cultural associations that create those people’s thoughts and feelings. By interrogating both consumers and their cultural context we build up the fullest picture possible.

is semiotics so relevant now? Q Why

As consumers continue to navigate the increasingly fragmented shopping and media channels they too are tuning into mini-cultural analysts curating, creating and negotiating their own complex cultural worlds. In order to grab and hold attention, brands need to resonate and stand out within those worlds. Let’s listen to what shoppers say. Observe what they do. Mine their data and analyse their habits. But let’s also take a close look at the culture, signs and emerging patterns behind all those numbers, behaviours, thoughts and opinions.

For more info on semiotics please visit Emily’s website: www.emilyhayes.london

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Next time you buy something new, take a step back to analyse your subconscious behaviour... What was it that grabbed your attention in the first place? Something about the packaging, the shopping context, or the brand’s tone of voice? Was it a favourite brand? If so, why do you trust/feel comfortable with it? What about the actual product itself: how does it feel/smell/taste to use/wear/eat? What’s unique about it? Next, think about what external influences could have affected that purchase. Was it connected to a childhood memory, a conversation with friends or maybe an article you read in the Sunday papers? Does it resonate with your core beliefs, the demands of your family or expectations of your social group? Had you seen any advertising that influenced you: maybe not even for that brand itself? Think wider than just the product in your hand. Does your purchase fit into any wider cultural movement or trend that feels new and different? Does it fit with an emerging way of thinking or being? Now, think about what would – or just as importantly – wouldn’t make you buy that product again. Did it live up to expectations? Finally, how would you redesign that product, store or website it came from – or any part of the shopping journey – to make it more appealing?

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meet the team... We are a small group of highly experienced shopper research experts and aim to lead the way in shopper insight. Between us we bring years (over 150!) of industry experience, gained both client side and within leading research agencies. We focus only on shopper research and are method neutral, using a bank of tools and techniques to uncover insights that are real and lead to tangible actions. Iona Carter

Director iona.carter@shoppercentric.com Ex Head of Retail and Shopper Research at Research International, Iona brings to the project nearly 30 years of retail and shopper research experience across a wide spectrum of categories, channels and markets. Iona has an amazing eye for detail – a real 360° thinker, and a regular contributor to local and national BBC programmes, she is their ‘friendly voice of reason’.

Sharon Hodgson

Director sharon.hodgson@shoppercentric.com Sharon’s career started at Ipsos where she was instrumental in establishing the agency’s first Retail division. She led the Retail & Shopper specialism there for 10 years, also heading Ipsos’s Shopper Centre of Excellence for Western Europe. She left her role as Managing Director of Retail & Shopper Research in 2009 to join Shoppercentric. Sharon is an experienced number cruncher with a qual sensitivity and a creative eye – and she loves an audience!

Kristen Davis

Director kristen.davis@shoppercentric.com Kristen is a qualitative researcher in consumer and shopper motivations with over 20 years of experience. In a former life, she was Trends Forecaster for Initiative Media and Qualitative Director for Hall & Partners. Thoughtful, rigorous and insightful, Kristen turns complexity into clear-thinking.

Lisa Hutchinson

Marketing & Operations lisa.hutchinson@shoppercentric.com Lisa has 16 years’ experience in marketing and administration roles. She is responsible for project managing WindowOn... and promoting our industry presence. She also enjoys organising the feisty team at Shoppercentric!

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Claire Pearson

Director claire.pearson@shoppercentric.com Claire has almost 15 years’ insight experience gained at Tesco, Cadbury and Sainsbury’s, meaning she has coal-face experience of supplier and retailer commercial practicalities. Claire also has a wealth of experience of retail and property/format strategy. Claire’s experience includes a year-long stint on the shop-floor as a graduate trainee with John Lewis, where amongst other things, she discovered exactly what antimacassar pins are.

Danielle Pinnington

Founder & Owner danielle.pinnington@shoppercentric.com Danielle spent her first 12 years as a researcher specialising in the world of NPD, branding and sales volume estimation. She reached the position of Deputy MD at Research International before joining Incite Marketing Planning as a Board Director. Here her specialisim in shopper began to develop. In 2004 she took the decision to set up Shoppercentric – and is now often asked to give the shopper perspective at conferences, and on radio and TV for the likes of BBC and Sky News.

Penny Ericson

Director penny.ericson@shoppercentric.com Penny has 25+ years of varied research experience, spanning sports marketing, media, customer satisfaction, retail & shopper. She is Ex senior Director at Ipsos and Acacia Avenue. Thoughtful, intelligent, organised & commercial – Penny makes things happen.

Susie Spencer

Director susie.spencer@shoppercentric.com Ex Head of Research, Marks & Spencer. Prior to that at Millward Brown International specialising in Brand & Comms, Susie brings 10 years of client-side experience, with a clear understanding of how to land insight into businesses. Susie is a big picture thinker with a keen focus on commercial reality!


We show you how to turn shoppers into buyers

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Please visit shoppercentric.com for the full story WO Issue 28, Shopper Stock Take 2017


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I thought you did a great job, and everyone was really pleased with how the session went and the output from the qualitative research. Insights Manager- Manufacturer We have definitely been implementing changes based on the learning’s from the recent Shopper Research that you conducted. Brand Manager, Manufacturer The team agreed that the presentation was really useful, so thanks for all your efforts on the project. Senior Insight Manager Every time I present your data internally it is always well received – the team have real confidence in Shoppercentric’s expertise. Shopper Insight Manager, Manufacturer The richness of what you’ve said today is already miles ahead of other agencies. Consumer Insight Manager, Manufacturer

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