This special edition of WindowOn is based on a national representative sample of 1020 interviews among UK shoppers aged 18+, conducted online. Interviews were conducted in December 2017 by Populus Data Solutions.
ISSUE
3030 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 2018 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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WO Issue 30, Shopper Stock Take 2018
We show you how to turn shoppers into buyers.
Welcome... Trends Research... Danielle Pinnington,
Founder & Owner, Shoppercentric
Welcome to our 30th edition of WindowOn... This is the third 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 2017 festive period delivered good news for the likes of Next, John Lewis and Morrisons, mixed results at M&S, while Debenhams and Mothercare issued profit warnings. Obviously, there is a lot written by analysts on why the results turned out as they have. What our report seeks to deliver is the shopper perspective behind the behaviours that drive those sales results. How are shoppers feeling about the stability of their household budgets? If they are choosing to cut their spending, how do they intend to do that? How are their habits changing, and what do brands and retailers need to do as a result. As ever this magazine covers the key headlines. There is plenty more detail available, so feel free to get in touch if you want to know more. And in the meantime, we hope you all have a happy, healthy and successful 2018.
Times are tough – 2 but we are a nation of shoppers More people are making changes in their shopping habits.
Widening store repertoires
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The shopping pattern is becoming more complex.
When information matters
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Where and how reviews can help along the purchase journey.
Connected shoppers
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The importance of connecting with shoppers across all touchpoints.
THOUGHT PIECE
14 The impulse mindset Impulse purchasing can be triggered by a range of factors or circumstances.
Regular Features... The BIG Picture... Shopper Talk... Out & About... A view from the High Street... An experts own view...
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FEATURE
By Iona Carter
Times are tough – but we are a nation of shoppers Almost 10 years ago we found ourselves wanting to understand how shoppers were dealing with the credit crunch and subsequent recession. So, we started tracking perceived changes in behaviour, to give us the context to shifting shopping patterns. This work highlighted three key factors: At its worst, only 1 in 10 shoppers felt they were unaffected by the economic situation, which meant 9 in 10 were actively changing their habits to deal with pressures on household budgets
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Shoppers used a range of strategies to cope: economising was an initial knee jerk reaction, but was quickly overtaken by prudent behaviour which involved avoiding waste and temptation
The sheer scale of choice open to shoppers these days made coping with the downturn relatively easy, with shoppers picking and choosing the trade-offs they were personally willing to make to control their spending whilst still feeling they could maintain a certain standard of living
Fig 1 Changes being made to household spending due to current economic situation This is the background against which shoppers are now viewing the current economic situation. As fig 1 shows, shoppers aren’t yet feeling the same pinch as in the worst of the recession, but they are certainly starting to feel the pressure. Only 1 in 4 claims to be unaffected, with a considerable proportion of UK shoppers having to make minor changes to spending. The real news here is the speed with which the situation has changed – only 12 months ago the proportion of those making minor changes was just 16% vs 44% now. In addition, 26% of shoppers have noticed prices increasing a lot, and 56% have noticed small increases. Shoppers primarily put these increases down to the state of the economy (54%) and Brexit (50%), although the exchange rate, cost of ingredients and greedy companies are also ‘blamed’ by a fair proportion of shoppers. In order to deal with these pressures, we are seeing the same behaviours as before emerging: l 4 in 5 shoppers are “being careful to
avoid waste” l 3 in 4 shoppers are “avoiding being
tempted to buy things I don’t need”
l 1 in 2 shoppers are “going out of their
way to find the best prices”, and will “split shopping across different stores to get the best deals” l 3 in 5 are buying “own label where I can
to keep costs down” l 1 in 3 are using “online shopping to check
spending as I go” The key thing for retailers and brands to appreciate is that each shopper will be using a range of strategies to cope. So lowest price is not going to appeal to everyone, just as own label ranges will not be the total solution. Some shoppers will stop buying high end ranges, so they can keep other ‘luxuries’, but it might be the reverse for other shoppers. Which categories or sectors will suffer most is likely to depend on how the retailers and brand involved react to changing shopper needs. Keeping in close touch with shoppers’ behaviours and attitudes will be crucial in 2018. This is not the year to hunker down and hope the storm passes over with limited damage. Now is the time to get out and about amongst consumers and shoppers so that marketing strategies resonate with today’s shoppers, flexing as their needs flex to cope with whatever 2018 throws at them.
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FEATURE
By Penny Ericson
Widening store repertoires There has been much talk of the Little & Often grocery shopping trend. In 2017 we saw a continued increase in the proportion of shoppers who had abandoned weekly main shops in favour of shopping little & often – rising from 11% to 16%. This year, however, there has been no change in that figure suggesting this trend may have reached its ceiling. What has changed is the frequency with which shoppers buy groceries. On average, UK shoppers buy groceries in-store or online 5 times a fortnight - an increase from 4 in 2017. This means that shoppers are not only making the most of the wide range of options available to them, they are also regularly being exposed to different retail environments and propositions. As a result of this greater immersion in the UK grocery sector shoppers are able to make more meaningful decisions about the places that best suit their particular shopping needs at any given time.
Fig 1 Grocery shopping habits
% total
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Fig 2 Channels used for Grocery shopping in last month
As fig 1 clearly shows, UK shoppers are quite comfortable now with switching between stores, and fitting their shopping in around their busy lives. Of course, with both Discounters and Convenience Store brands continuing to increase their number of stores, the accessibility of choice is so much greater now than in the past. This makes store switching less of an onerous task for shoppers than it used to be. This more active shopping behaviour has considerable implications for retailers and brands alike:
1 2 3
If shoppers are picking and choosing between stores for particular items based on their own experience of how well different retailers deliver, there is even greater pressure to differentiate and create memorable in-store experiences Equally, avoiding or challenging misconceptions based on bad experiences becomes more important If shoppers are actively widening their repertoires then loyalty as we used to know it, is an outdated term
It’s also important to note that repertoires aren’t just widening, but are also fragmenting across a range of channels or store formats (see Fig 2). As shoppers get more active in this way it becomes harder to assign dominant shopper missions to different store formats. Gone are the days when we could assume large grocery stores were all about main shops and c-stores were just about top up. Fragmenting repertoires means that retailers not only need to keep their fingers on the shopper pulse to be sure they are delivering the right ranges and experiences to the shoppers coming into store or visiting online; they also need to be mindful of a range of competitors, not just the directly obvious ones. For brands, it is even more important to carefully plan distribution and portfolio ranging to hit the right sweet spot in each different channel or format. This requires a real understanding of changing shopping habits, and the needs of shoppers based on where they are shopping and what mission they are on. As shopping patterns become more complex, we all need greater clarity of insight to ensure that right range and right message are in the right place at the right time. Add to this the financial pressures that shoppers are under and the need to proactively persuade them to spend – and 2018 is lining up to be the year when shoppers’ needs have to be at the heart of business planning.
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FEATURE
By Susie Spencer
When information matters
One of the benefits of our new digital world is the ability to access information in unprecedented detail. Shoppers are one audience making the most of this access, particularly in relation to product reviews. 46% of shoppers will reference product reviews every time they are considering buying a large electrical item such as a TV or fridge, whilst 42% of shoppers will at least occasionally check reviews when buying clothes or shoes. Even when doing that most habitual of shopping trips, food & grocery, 38% of shoppers will at least occasionally check reviews. Should we be surprised that so many shoppers are referencing reviews? After all, the choice available to shoppers now can feel limitless, and with so much choice comes heavy responsibility – I want to be sure it’s the right choice. By accessing reviews shoppers hope to use others’ experiences to make better choices themselves. But as always with shoppers, nothing is straightforward! Fig 1 shows where in the purchase journey shoppers are looking for reviews to support them – and this can make a big difference in terms of the type of support that they need from reviews.
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If shoppers are referencing reviews early on to narrow their options, such as when buying a large electrical item like a TV or fridge, then reviews that help identify the most useful filters could be of most value. Reviews that focus on comparative differences will add most value to shoppers who have a shortlist already. Whilst all purpose thumbs up type reviews give the reassurance required when checking that final choice. Why does this matter? Quite a lot if you think about the number of times a purchase online leads to an email asking for a review of the product you just bought. The point for brands and retailers is that if you are going to ask for your customers to provide a product review, and you use the number of positive reviews as one of your measures of success, then make sure you put those reviews to best use. Don’t just log them in a long stream, think about how they can be curated to best support future potential buyers. Perhaps you could include a filter option, that means a shopper can see reviews relevant to where they are in their purchase journey. That might well add to the workload in terms of identifying under which heading each review should sit. But if it gets shoppers to the right information quickly and easily, it’s worth the effort.
As we all know, it’s not always just about quantity.
Fig 1 – When in purchase journey – by category %
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thebigpicture By Lisa Hutchinson
New website We felt it we time to freshen our web presence! This month sees the launch of our new website. We hope you like our new look. Visit us at
www.shoppercentric.com
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FEATURE
By Sharon Hodgson
Connected Shoppers In our Stock Take 2017 we noted that the business benefit of developments such as beacons and geofencing were potentially being held back by the lack of real growth in the use of smartphones as a shopping tool. Well, there has been quite a turnaround in the last 12 months because, with an increase of 18% year on year, 45% of UK shoppers have used their smartphone to shop in the last month (see Fig 1). This was by far the biggest increase both this year and since our series of Shopper Stock Takes began in 2016. Of course, the uptake of digital developments such as geofencing depends on shoppers seeing a benefit to themselves, which in itself requires that businesses understand how innovation can meet real shopper needs. It might sound simple to state that your digital plan involves improving ease of shop… but what does that actually mean? What is the barrier or frustration with the current purchase journey that you plan to resolve through digital development?
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For a start, it’s important to be thinking about the purchase journey as a series of stepping stones from trigger to transaction – bearing in mind that the purchase journey these days isn’t necessarily linear. Fig 2 looks at the key stepping stones for shoppers and the degree to which they are utilising their smartphones at each step. feature continues on page 12...
It is so easy to fall into the trap of stereotyping when we think of how different age groups use digital technology: millennials are all about screens; and silver shoppers rarely surf. Well it seems we need to update our thinking: whilst 18-34 year olds are those most likely to use their smartphones to shop (66%), even 65+ year olds showed a year on year increase of 11% to 16%
65+ year olds are just as likely as 18-24 year olds to shop on a computer / pc (64% vs 65% respectively)
65+ year olds are more likely to shop via a tablet than 18-24 year olds (32% vs 25% respectively)
Fig 1 Touchpoints used to shop in the last month %
Fig 2 Shopping activities on smartphone in the last month % Total smartphone shoppers
WO Issue 30, Shopper Stock Take 2018
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continued from page 10
Connected Shoppers... What is clear, is that whilst one key focus is around accessing the information that helps shoppers consider exactly which product to buy, they are increasingly turning to their smartphones across the whole journey from trigger to transaction. In fact, the most striking shifts in usage this year are at exactly the points of trigger and transaction – so motivating the purchase desire and closing the purchase. Each stepping stone is a quite different point in the journey with different needs, so each requires different solutions from a retailer or brand perspective. And let’s not forget that smartphones are not just a touchpoint, they are also a portal through which different digital options come into play, such as online shopping, apps, and social media. So, communicating with shoppers via their smartphones is a hugely complex business. You will only change shopper behaviour if you deliver the right message at the right time. We can see this in the fact that the uptake of mobile-based promotions continues to be relatively limited. Despite the considerable shift in shoppers using their smartphones as they shop, particularly in relation to actual purchasing, there has been only a small increase in the uptake of mobile-based promotions. Yes, you can deliver promotional campaigns relatively easily and cost effectively via m-commerce – but if those campaigns fail to appeal to or resonate with shoppers they simply won’t get involved.
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We all know that digital is a key component of any retail or brand strategy, and the jump in shoppers using smartphones to shop is a timely reminder of the need to connect with shoppers across all touchpoints – whether digital or traditional. But as the lack of interest in mobile based promotions demonstrates, just because you can, doesn’t mean you should. So, before you sign off the digital strategy, make sure you know which shopper need the strategy answers, or which shopper behaviour it is designed to influence. The shopper should always be the start point around which the strategy is developed.
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: fmcgnews.co.uk linkedin: goo.gl/7CwIzE
We are tweeting…
1 in 4 shoppers have seen prices increase a lot, 56% a little - so potentially some small relief ahead with latest CPI data. bbc.co.uk/news/business-42702752
We were quoted in…
Shopper Talk... Real words from the high street. Brought to you from the keen ears of the Shoppercentric team...
I go into Boots meaning to buy just wipes and end up with loads of other stuff, but the points make me feel a bit better about it! The brilliant thing with Prime Now is how convenient it is. You don’t have to leave your house, you book a slot, and they work around you. I tried 3 different shops when I’d run out of the formula I use and they were all out of stock. So out of desperation, I looked on Amazon, and it arrived in time for her next feed! I buy in bulk and get cheaper products delivered every month from Amazon Subscribe & Save. I think I was paying £13 a month and getting 11 packs of wipes. It was guaranteed, every single month I was charged the same, you do get a discount. It is one less thing that I have to buy in my weekly or top up shop.
Talking Retail on the Morrisons results on 9th January 2018. https://goo.gl/Zzcq7e
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THOUGHT PIECE Written by Danielle Pinnington
The impulse mindset One of the new behaviours we’ve recognised among Little & Often or Top Up shoppers is that of mission morphing. An example of this is when a shopper enters the store planning to buy food for tonight, but basket analysis shows that they leave with just as many toiletry items as food in their bag. In this example a food for tonight mission has morphed into something quite different – seemingly on impulse because the toiletries were not planned for that shopping trip. Behaviour like this reminds us that impulse purchasing is a mindset that can be triggered by a range of factors or circumstances. We have spent time looking to understand impulse in more detail than simply as an unplanned purchase. As a result, we developed our 3 pillars of impulse: Pure Impulse – The classic: ‘see it want it’ Reminder Impulse – When the visual cue is a trigger: ‘see it, remember I need it’ Opportunistic Impulse – When an offer brings a longed-for product into reach: ‘see it at best value’. These pillars inform the design and interpretation of research that requires a true understanding of unplanned purchases. By drilling down beyond the basic unplanned nature of the purchase, and identifying the context to the seemingly impulsive decision, we can better guide our clients on how to trigger impulse purchasing.
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Pure impulse, it is important to think about triggering the desire by improving visibility in-store, using treating cues, and promotions that support the purchase rather than push it
l With
reminder impulse, the solutions are around secondary siting, to trigger the reminder
l With
with opportunistic impulse it is about promotions that draw attention in terms of value and visual, and using value cues to drive home the eye-catching deal.
l And
This granularity is becoming increasingly important because of the macro trend around small shopping trips. Small, more occasionbased trips are a prime breeding ground for impulse purchasing. A savvy retailer or brand will do the research that identifies the best opportunities to proactively trigger impulse purchasing or even mission morphing, so that the right shopper marketing is targeting the impulse mindset, and increasing the shoppers spend accordingly.
A View from the High Street Feature on Missguided getting into Bricks & Mortar By Danielle Pinnington
Despite the continuing talk of the demise of the high street, there are retailers out there willing to take a glass half full view of the future of bricks and mortar. And it’s always particularly noteworthy when it’s a pureplay online retailer taking that leap. Missguided are the latest to do so, with the opening of their first store in Westfield Stratford. So, we popped along to take a look. In designing this first store, Missguided’s store designers have talked about wanting to create a real experience, delivering fun and the unexpected along with Instagrammable moments. On arriving at the store, it is the unashamedly “girly” pink colour scheme that first grabs attention, and then as you step in the sound system is anything other than subtle. This is a retailer who wants to be noticed.
Walking around the store there was good use of zoning through different design materials, and strong references to the website delivered with a clear call to action. What was perhaps a little too subtle, however, were the Instagrammable moments – which seemed more recessive than the designers suggested. But there was so much product in-store that perhaps the desire to physically show off the range meant theatre had to take a back seat. The teen shopping with us didn’t buy anything – preferring Bershka across the aisle! That said she was delighted to be able to actually see Missguided products in the ‘flesh’ and gauge the general quality level. She certainly left the store feeling she would be more likely to buy from the website in future as a result.
www.missguided.co.uk WO Issue 30, Shopper Stock Take 2018
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An Experts Own View Name: Dr Ali Goode Job Title: Cognitive Scientist, Gorilla In The Room
Virtual Reality (VR) is set to be a $65 billion industry by 2020. The technology has developed in leaps and bounds in the last few years and is still advancing quickly. Most VR has been focussed on experiential marketing and gaming, but Virtual Reality also sets up the possibility of changing the research industry, including shopper research. It’s a world where you can create any shop, with any product, any shelf configuration and point of sale, that can all be changed at the touch of a button.
But is it real?
The killer proposition?
The evidence thus far is that there is a very high correlation between real behaviour and that in Virtual Reality, from both the business and academic world, and it has been proven to be far superior to self report.
What VR potentially offers is that theoretical scenarios and more importantly multiple scenarios can be researched with single respondents. There are enough VR capable smartphones / devices now to start giving quantitative samples qualitative experiences. Moreover, as the more households get VR systems, we will be able to research how people shop without them even leaving their own homes. We have only just started but the potential impact of VR on shopper research is wide and far reaching.
Are consumers tolerant of VR? We recently completed a study with the Royal Shakespeare Company where respondents had to sit in VR for a total of 3 hours to watch a play. All of them did, and enjoyed it, so yes people are very tolerant of VR.
www.gorillaitr.com 16
WO Issue 30, Shopper Stock Take 2018
We show you how to turn shoppers into buyers
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Please visit shoppercentric.com for the full story WO Issue 30, Shopper Stock Take 2018
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