WindowOn Trust Issues (Issue 29)

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We show you how to turn shoppers into buyers

Trust issues

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ISSUE29 SEPT2017

This 29th edition of WindowOn is based on: 1048 online interviews among a nationally representative sample of UK shoppers aged 18+ Fieldwork conducted by Populus Data Solutions Ltd

ISSUE ISSUE

29 29 SEPT2017

SEPT2017

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 2016 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.

We show you how to turn shoppers into buyers.

Welcome...

Trends Research...

How cynical are we?

2

Sweat the small stuff

4

Are shoppers all talk and no action?

6

What to do?

10

Has cynicism worked its way into the shopper mindset?

Danielle Pinnington,

Founder & Owner, Shoppercentric

Welcome to our 29th edition of WindowOn...

Over the last few years, with the rise of social media and 24/7 news, it has become clear that consumers are increasingly aware of shortfalls in the behaviour of the companies they buy from. In our day to day work with clients we’ve noticed a more obvious cynicism among consumers emerging, so we wanted to look at how deep rooted this is, and the degree to which a mindset can drive action.

If consumers are as cynical as it seems, then it highlights the need for brands and retailers to be more aware of how trust issues can develop and what they need to do to avoid this.

As always, the headlines here are a small part of the data we have collected. So if you would like to know more please do drop us a line at info@shoppercentric.com We love a good debate so would be delighted to share what we’ve learnt in more detail with you.

Best wishes

Day-to-day shopping is where retailers and brands need to ensure trust.

Companies and brands need to be open and honest.

A ‘how-to’ list to ensure trust.

Special Feature

The Bakedin Story

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Jo Munns reveals the story behind Bakedin and what plans they have for a bright future.

THOUGHT PIECE

Living by numbers

12

We are on a journey to present data in a more engaging way.

Regular Features...

The BIG Picture...

Shopper Talk...

Out and About & In The Press

www.shoppercentric.com

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FEATURE

By Penny Ericson

How cynical are we?

One of the most striking shopper trends over the last few years has been the emergence of a savvier shopper, with savviness extending beyond being able to root out a good bargain into a more thoughtful and considered shopper. Being savvy can be a huge benefit to shoppers, as they work their way through the claims made by retailers and brands alike, whether on posters, packaging or promotional materials. But it is a thin line between savvy and cynical, with the latter mindset having the potential to undermine the trust between a shopper or consumer and the brands or businesses they interact with.

When looking at the trust issues among today’s shoppers we firstly need to explore the degree to which cynicism has worked its way into the shopper mindset. Strikingly, 46% of UK shoppers fall into the ‘cynical bucket’: failing to agree at all with the statement that; they are trustful of others

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and these shoppers are also less likely to agree that: most people are trustful of others most people are trustworthy most people are basically honest

Fig.1: Consumer interest rating NHS

7.6

Police

6.8

Schools

6.8

Independent/local retailers

6.5

Food producers / farmers

6.5

Supermarket retailers

5.9

Clothing / fashion retailers

5.4

Manufacturers of grocery brands Internet / social media companies Opposition parties Traditional media Government Banks

What’s more, as Fig 1 shows, when shoppers consider different institutions and businesses in relation to the degree to which they put consumer interests first, corporate retailers and brands aren’t coming off particularly well.

The effective gold standard is the NHS which is most closely associated with putting consumer interests first closely followed by the police and schools. What is interesting is that Indie / local retailers and food producers / farmers are also in the upper tier, suggesting that their close proximity to the business coalface gives them real credibility when it comes to putting consumer interests first.

In comparison supermarkets, fashion retailers and grocery brands are closer to the lower end of the ratings, near to Government and Banks who themselves are rarely held up as shining examples of organisations who put consumer interests first.

Social and political institutions give us a valuable benchmark against which we can compare attitudes towards retailers and brands,

5.1 4.7 4.6 4.6

Mean score out of 10 where; 10 = Put consumer interests first 1 = All about their own interests

4.5 4.5

the key difference is that there is rarely a choice available. Whereas if shoppers don’t like what a retailer or brand says or does, they can vote with their wallets because they have choices available. At a time when corporate social responsibility programmes are supposed to be a core part of business principles, it should be a matter of concern that those retail-related businesses who have the financial ability to develop strong, positive programmes are least likely to be seen to put consumer interests first.

It’s also important to know that shoppers want to “feel good about the retailers I use” (74% agree), and “want the money I spend to go to companies I trust” (73%). So if there are trust issues it could have considerable influence over day to day decisions in a world full of choice, which can be magnified when there is limited apparent differentiation. If all else feels equal, such as price, range and accessibility it can be the sense of connection, or not, that can lead a shopper to remain loyal to their usual brand/retailer – or choose to go elsewhere.

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FEATURE

Sweat the small stuff

By Claire Pearson

At the 2012 Olympics the British Cycling team showed the sporting world that it is the small things that count. This is equally true of the relationships that shoppers have with the retailers and brands that they buy from, because trust issues are not only born of the one big event that shatters illusions, they can also emerge from frequent, possibly trivial looking disappointments.

Fig. 1 shows that there are a range of such irritations that may seem relatively harmless in isolation, but create real frustration and annoyance among shoppers. To see a considerable proportion of shoppers giving such high annoyance points for so many factors should be a red flag to retailers and brands.

In a world where choice is the name of the game, as shoppers we all know that we have multiple options when it comes to our day to day shopping. We can change brand, switch to an own label, change retailer or channel with relative ease. So, for retail-related businesses, it has never been more important to protect hard won loyalty by avoiding tripping up on factors that can so obviously irritate shoppers.

Many of these issues are day-to-day features in our shopping lives. How many times have you queued at the till to find one of the products you thought was in the pick and mix promotion was wrongly labelled? Or looked at the promotional small print to find that 2 for £1 isn’t a bargain when the single item cost is 50p? Or opened that huge bag of crisps at home to find you appeared to have bought a packet of air?

Interestingly, it is the trusting shoppers rather than the cynical bunch who are more likely to be irritated by the factors in Fig 1. It’s as if the cynics almost expect this kind of behaviour, whereas the trustful shoppers expect better from the businesses they spend money with.

That is all the more reason for businesses to work hard to avoid banana-skins, as it’s quite possible their more trusting customers will take the hardest fall.

As we all know, trust is hard won and easily lost.

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Fig.1: Annoyance factors when grocery shopping % scoring 8+ out of 10 Where 10 = annoying enough to not buy that product / use that retailer

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FEATURE

By Danielle Pinnington

Are shoppers all talk and no action?

Fig.1: The companies these ‘boycotters’ say they have stopped using:

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The real impact for business is when trust issues lead to a negative change in behaviour. 36% of UK shoppers have ‘stopped buying a brand or using a company’ because they were uncomfortable with something they did or stood for. Furthermore, having taken a stand in relation to one brand or company, 58% of these ‘boycotters’ say they are more likely to do the same again in the future. So, the ability to make different choices is combining with the desire to act when unhappy or uncomfortable with the behaviour of a business.

These are not insignificant brands, and the reasons given show the importance of being open and honest in this day and age of 24/7 media and social media: It was about the horsemeat scandal When they took over and said they wouldn’t cut jobs… then did Due to their child labour They don’t pay enough tax To be fair, these are big corporate issues, rather than some of the small irritations in our previous article… except for one company which was facing a backlash against... the rudeness of the staff.

And let’s not forget that acting doesn’t have to be about ‘boycotting’, it can equally be about making active choices:

55%

of shoppers always or frequently look for products that are transparent about their contents e.g. see thru packs / clear labelling information.

32%

always or frequently look for products that demonstrate their ethical policies.

The point really is that if 1 in 3 UK shoppers have taken action, this willingness to act is not limited to a small minority, and that is the context in which trust issues need to be viewed. Unless retailers and brands understand the potential impact that trust issues – big or small - can have on shoppers, they run the risk of falling foul of shoppers who are increasingly savvy, thoughtful and willing to act.

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thebigpicture

By Lisa Hutchinson

Bakedin Bakedin Founders Joe and Anna started their adventure in 2013 coming up with the idea of a time saving baking kit taking the hassle out of baking from scratch.

After an introduction from one of the shareholders to Michel Roux, they are now fortunate to have their recipes exclusively developed for them by one of the world’s finest pastry chefs. Today Bakedin has hundreds of stockists including Lakeland, Hobbycraft, Tesco and Center Parcs. Their baking club subscription service was named in the Independents top 15 Food Subscriptions two years running, alongside brands such as Graze, HelloFresh and Hotel Chocolat.

See p14 for more of the Bakedin story.

www.bakedin.co.uk

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FEATURE

By Kristen Campbell Davis

What to do?

It’s hard, being perfect, isn’t it?

Aligning corporate public relations with a great purchase journey, perfect product packaging or delicious consumption experience may feel like herding cats. But getting it wrong could lead to losing a third of your customers.

Our data suggests there are four key areas to focus on:

Don’t let the small issues become a big problem

Fair prices, the right range and a positive in-store experience will only get you so far in the competitive UK retail sector Every touchpoint needs to reflect the principles and behaviours stated in the corporate message

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View the touchpoints on your shopper’s purchase journeys through the ‘transparency lens’ 1 in 2 of your shoppers could be arriving in-store with their cynical blinkers firmly in place – they will spot a ‘cover-up’ a mile off

Make actions speak louder than words

Learn from the connections small businesses make with their consumers/ shoppers

Integrity

Authentic

Transparency

Relevant

Consistency

Expert

The age dynamic There has been a lot of talk about how GenZ and Millennials are more willing to engage in the entrepreneurial side of life. We didn’t see evidence of this trend in our Trust Issues data. That’s not to say it doesn’t exist, but that it perhaps has yet to emerge.

What we can say, however, is that if the younger shoppers do prove to be more cynical about corporates, then all the more reason to make sure trust issues are not allowed to emerge.

Local shops for local people In December 2016, Liverpool launched its own pound - a digital currency aiming to encourage customers to use independent shops, keeping more money circulating inside the community.

Shoppers are incentivised with offers and discounts, whilst businesses save money on bank charges and have access to customer data. Research has found that every £1 spent locally is worth almost four times more to the local area than money spent with corporate chains, through investment in local jobs and added tax revenue.

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Living by numbers

‘Drowning in data’, ‘can’t see the wood for the trees’…we all know how hard it can be to find the number that leads you to that killer insight. By its very nature, quantitative data means a LOT of numbers, which we can (and often do) sift in a mind-boggling number of ways to find the golden nuggets.

That’s fine: that’s part and parcel of what we do and some members of our team would happily data mine until their dying breath.

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THOUGHT PIECE

Written by Claire Pearson

When it comes to reporting quantitative research, we have a real mix of clients: from those who want the full data tables so they can pivot table themselves into oblivion, right through to those who only want us to tell them what it all means.

But aside from the data-savviness of our key stakeholders, there is usually a much wider team of secondary stakeholders, who ‘just’ want the important insights at a glance. So, we are on a journey to present data in a more engaging way: no ‘death by powerpoint’; because no matter how compelling the story is, if it’s presented in twenty different bar charts, it’s quite hard to maintain the excitement. And it can get pretty boring for us too.

We’ll admit it’s not always easy to produce beautiful, inspiring infographics, but it gives us a welcome opportunity to get our creative juices flowing. And we know how powerful they can be in telling the story.

Their simplicity makes them a particularly efficient weapon in ‘evidence sharing’ to support strategic projects, like segmentation or purchase journeys. We were delighted to see that one of our clients had their segmentation posted in every central area in their head office recently.

We believe that getting real value from data is about ensuring the insight derived from it lands within the business. And from our experience, this is more likely to happen if the data is digestible and easy to disseminate: films, infographics, flyers etc.

Value is also about making sure the data is accessible for future interrogation. This may require a level of creativity as the parallels may not be initially apparent, but crosspollination does work. The ‘problem’ may relate to a different business area, but the

shopper perspective may be the same; for example, guidelines on packaging will generally ‘work’ across several brands.

In my client-side days, I regularly had the sinking feeling we were paying for research we didn’t really need, ‘if only’ it had landed and been filed properly the first, second or third time. And just occasionally, I would unearth someone or something that proved that sinking feeling right: we HAD done all this before, five insight managers before me. Granted, it sometimes needed a different lens (or god forbid, a new data cut), but essentially, the insight was in the building and was still relevant.

So whilst upping the game in terms of project output – infographics, films, mousemats, posters etc – may add a little onto the project budget, if it means using the research to inform a multitude of business decisions, or driving real change or simply not repeating the same research a few years later, it feels like money well-spent.

Ultimately, we believe that our job is to help our clients find and nurture the insights that will drive their business. So as a first step, we’d always recommend reviewing current knowledge, no matter how well hidden or old it is, before diving into new research. We can and do regularly help our clients with this.

And then once the real gaps have been identified and researched, share those insights like your business depends on it: because we believe it does.

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SPECIAL FEATURE

The Bake Business Model

Setting us apart

We spotted an amazing opportunity at Bakedin. With the baking industry worth £3.4 billion and the rise of recipe subscription boxes – Bakedin was born. Our core business is baking kits, trendy mug cake mixes, celebrations cakes, gifting and our monthly subscription box. We produce all our products in-house in our SALSA accredited factory in Basingstoke using only the best quality ingredients, using only local when we can.

We have over 200 stockists and have a presence in over 1000 shops across the UK. Our retail products are sold in high street retailers such as Lakeland, Fenwicks, Booths, Tesco, Hobbycraft, Topshop, Brown Thomas and Center Parcs as well as online on Amazon, Ocado, Littlewoods, Wicked Uncle, and Prezzy Box. We are doubling turnover year on year.

The quality of ingredients and no nasties policy set us apart from the home baking brands on supermarket shelves. Having a chef with Michel’s reputation endorsing our recipes also gives instant credibility. We are one of the only brands successfully coupling products on the shelves of high street retailers with a direct to consumer subscription service. The fact that our subscription kits are unique, one-offs means that the two offerings complement each other with very low risk. We often use the monthly baking clubs as a mechanism for feedback. If we receive amazing feedback from our consumers we often consider if we should develop this into a retail product.

Our online subscription service is called the Baking Club. We market and sell direct to the consumer through our digital platforms and partnerships with other businesses.

We invent a new recipe approved by top pastry chef Michel Roux OBE every month, which we package up with the ingredients required, to our subscribers for £7.99 a month.

It was named in the Independent’s top 15 food subscriptions alongside brands such as Graze, HelloFresh and Abel and Cole.

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Why did you decide to start Bakedin?

I went straight from Uni to join IBM and worked my way up from a software engineer to a senior management position. It was a great career and developed me as a leader, but I was never really passionate about Bank’s ATM software (which was one of the main products we developed and supported). I’d always yearned to be more in control of my own destiny and one of my last roles was in mergers and acquisitions working with a small software company we had acquired to integrate them into IBM. As I spent more and more time working with them, I realised that being part of a start-up was something that really appealed

din Story

An interview with Joe Munns, Bakedin co-founder

What has been the most challenging thing about starting a new business?

to me. I also had a strong desire to work on something that I was genuinely passionate about, and for me that was either going to be something to do with food or golf. I wasn’t good enough at golf, so food it was!

I’d noticed the rising popularity of recipe boxes, with the likes of Hello Fresh having just launched, and thought it would be a good idea to try something similar but for baking. The idea was a kit that gave you all the ingredients in the exact right quantities so you still have the baking from scratch experience but with a little less fuss and no food waste. When you see TV chefs rustling something up with all the ingredients weighed out it looks so easy - that’s the experience we were aiming to recreate.

We tested the market with a few kits in brown paper bags, sold at food markets and food festivals and had an amazing response. The business grew slowly alongside our day jobs until it reached the point that we had major high street retailers asking for our products and we had received an invite to present our products at 10 Downing St. I decided to quit my day job, raised a round of seed investment, built the factory we now operate from and started Bakedin as it is today.

For me it has changed throughout the first few years. To start with it was trying to sell product into an industry where you have zero contacts or influence. We were lucky to get some of our early breaks with the likes of Selfridges and Lakeland almost by accident, but as we have attended more trade shows that has become easier. As the business got off its feet the hardest thing by far has been managing cashflow. Ours is quite a cash intensive business, with some customers holding out up to 120 days before paying us, as we need to be able to fulfil orders rapidly we incur a large chunk of those costs many months before the customer even orders. Balancing growing the business and being able to take advantage of the opportunities as we create them is a constant balancing act with keeping enough cash in the business to enable this growth.

What next for Bakedin?

We have some exciting opportunities on the horizon that we can’t talk about just yet, but there will be new products coming out in all our retail ranges. Our stockists are constantly growing across the UK and we now export to 7 countries – I certainly expect to see our reach internationally grow. We are doubling the size of our factory over the coming months to deal with increased demand and have plans to grow our B2C sales significantly in 2017.

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Shopper Talk...

Real words from the high street.

Brought to you from the keen ears of the Shoppercentric team...

I have a friend who buys loads of stuff on-line and gets a huge buzz... but she’s in massive debt!

Women use more stuff than men do... they’ve got creams for every part of the body... they get sucked into what’s in it... ‘extract of monkey feet’ and all that. That’s why shops put much more space to women’s stuff than men’s.

For me there isn’t an interesting area of a supermarket other than the road out. If I had to choose it would be the homewares.

So, I decide after the 3rd shop in a row where something has leaked over a bag of shopping from Ocado (this morning at 7.30am it was a pot of yogurt – which gets everywhere!!!), that it’s time to ring customer services...

Out & About and in the Press We’ve been blogging…

Have you missed our two monthly blogs? We regularly contribute to the FMCG blog and our own LinkedIn Blog. Follow us on the links below: fmcgnews: goo.gl/jJyg4d linkedin: goo.gl/7CwIzE

We are tweeting…

If you still haven’t got a fan, there are other ways of cooling down.

Now THAT’S shopper marketing.

We were quoted in…

“ I’m afraid I’m ringing with a complaint” says I. “ We don’t call it complaining, we call it feedback” says the Ocado customer services chap!

CStore Magazine, ‘Grow your ethical sales’ article goo.gl/v1Lw6W

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Our families have been…

Birthday celebration

The Shoppercentric family enjoyed a fabulous meal at The Orrery in Marylebone to celebrate a 50th birthday and a great year. The incredible service and exquisite and delicious dishes were a perfect start to our week on a Monday lunchtime!

Triathlon X

Lisa’s husband Brett took part in an extreme Triathlon in the Lake District.

At over 17,000 ft of climbing in the mountains, Triathlon X is seen to be the world’s toughest extreme triathlon.

A 2.4 mile swim In Lake Windermere, 112 mile cycle followed by a 26 mile marathon to the top of Scafell Pike and back.

Etape Dragon

Muddy Dog

Dogs, mud, raising money and a 5k run all sounded too good to be true, so Claire dutifully entered her husband (Olivier) and dog (Rosie) in the Battersea Dog’s Home Muddy Dog Challenge at Windsor Great Park in May. With the range of dog varieties only surpassed by the number of hot wash cycles and baths needed to get humans and canines looking respectable again, it all looked great fun from a safe distance; so much so, that Claire’s even tempted to give it a go herself next year.

Susie’s husband Jon took part in the annual Etape Dragon ride on Sunday (which is less exciting than it sounds).

Basically, a 150km bike ride in the Brecon beacons. Hence the dragon bit rather than literally riding a dragon.

He’s pretty chuffed with himself so lord knows what featuring in our mag will do to his sense of achievement!

Have you missed an Issue?

Please contact: lisa.hutchinson@shoppercentic.com and we’ll send you a copy.

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thelastword...

We thought we’d let our clients have the last word by telling you what they think of us...

Just wanted to thank you both for the focus groups, we were really pleased with how they went and the information we gleaned. Really look forward to getting the report.

Marketing Manager, Manufacturer

Did you enjoy this magazine?

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I had some discussions during your presentation with members of the team and they are really happy with the actionable insights. There is definitely work to be done now for the shopper team!

Marketing Intelligence Manager, Manufacturer

There’s so much detail here, but you do such a good job at highlighting what’s important and what we need to do now.

Category Manager, Small Electricals Manufacturer

I can’t believe how you worked a mind-blowing brainstorm into such a clear and concise presentation – it was seriously impressive.

Consultant

Thank you so much for your time and dedication to this. I can see a lot of effort has been put into what is a very strong and thorough proposal.

Senior Shopper Strategy and Insight Manager, Manufacturer

PO Box 435 Harpenden Hertfordshire AL5 2WX

01582 468047 info@shoppercentric.com www.shoppercentric.com