In previous NLN articles we have alluded to the changing purchase cycle and how shopping is becoming an activity, rather than a place. And the high degree of smartphone penetration in Australia (second in the world, and nearing 60%). Here we’re going to provide an overview of some of the key technology types for both transacting and marketing, which will be explored in more detail in subsequent articles.

Technology advances are changing shopping behaviour and the purchase cycle. They are democratising information and resulting in a higher level of pre-store planning, meaning retailers can’t just rely on chance footfall. The higher degree of pre-planning means it is also becoming harder to interrupt shoppers instore. Technology is providing shoppers a means to broadcast their satisfaction – or otherwise – with their shopping experience and product purchase via social media. Technology is providing the means to shop anywhere, anytime, 24/7.  And these changes are not temporary, they are permanent, if evolving rapidly. For retailers and brands alike, it is no longer about weathering the ‘current storm’. It is about evolving the entire way you do, and think about, business.

However, technology shouldn’t be considered as scary, or online ‘replacing’ bricks and mortar sales. Rather, technology should be embraced as a tool to speak to shoppers where and when they want to have a conversation or transact with you. Technology provides additional means to capture a sale. Technology is just as relevant to retailers as it is to brand marketers, suppliers and manufacturers.  ‘Going forward’, as our erstwhile PM Julia would say, it’s going to be all about how you best provide shoppers with a seamless omnichannel brand and transaction experience.

HOW IS TECHNOLOGY CHANGING SHOPPING BEHAVIOUR?

Understanding the path the shopper takes to make a purchase and the way digital technology can change this behaviour will help you to market your store and products in a way that meets their needs and drive incremental sales via targeted inititatives. Understanding the impact of technology will also help you to speak to the shopper when and where they want to have a conversation with you.

While early shopper marketing theory suggested that the path to purchase occurred predominantly instore, the widespread use of technology designed to assist the purchase process means that this is no longer the case. The shopper exists before the store, in the store and even post store. We will cover this in more detail in future articles, but in this one we will focus on the technologies and how they can be used. The possibilities are endless. The opportunity lies in uncovering which touchpoints along the path to purchase will best speak to your shoppers and then use them to your advantage to market your store or products.

The diagram below demonstrates not only the path to purchase but also the phases of the shopper purchase cycle shoppers go through to obtain products and services. Many of these phases may be subconscious and may also be impacted by the way the shopper views the category.

The level of involvement a shopper has with a category will influence how they progress through the shopper cycle. For example, take a wine buff versus someone who has limited experience or knowledge of wine. The wine buff is much more likely to give greater consideration to where they go to purchase and will potentially search out rare wines or research particular grape varietals. The shopper with limited wine experience may choose their store based on convenience rather than range and rely on store staff, POS or wine show ‘medals’ on the packs to help them make their decision instore. In this case, their level of experience with the category and level of engagement determines how they behave throughout the purchase cycle. Understanding your shoppers and knowing how they behave along the cycle will help you to determine how you should invest your marketing dollars.

So, how are shoppers using technology to shop?

Let’s look at just some of the technology that is changing the way products can be marketed, information can be provided or obtained and sales are transacted. Some are obvious, others are newer, emerging technologies currently being used in retail markets around the world. We’ve divided these roughly into Transacting technologies and Marketing technologies, but there are areas of overlap.

TECHNOLOGY AND OMNICHANNEL TRANSACTIONS

Shopping is now an activity that can occur instore, online, or indeed anywhere via transaction codes (see Figure 2 below).

Omnichannel retailing is becoming the new imperative. Shoppers demand multiple ways of dealing with retailers. Options include:

• Search mobile/online, buy instore
• Search instore, buy online
• Buy online and collect instore (click and collect eg Coles and the ‘new’ Woolworths ‘drivethrus’)
• Buy instore and have it delivered home (Sportsgirl do this well)
• Search instore, order it online whilst in the store (increasingly stores are installing Ipads for online transactions instore for additional or out-of-stock items)
• Buy anywhere via mobile (eg off a bus shelter or virtual shopping wall in a train station) and have it delivered home.

The idea is you need multiple ways to capture the transaction. Just relying on search instore/buy instore is not enough. You need to shore up the sale, however the shopper wants to make it.

IT’S NOT JUST ‘ONLINE SHOPPING’

We’ve all heard about the rise of online shopping and while currently the percentage of total sales taking place online (currently <15% of total Australian retail) are relatively small there is no doubt that it is a growing trend. The categories driving this trend are music (think iTunes), movies, books and fashion. At this stage, food and beverage (including liquor) sales transacted online are minimal, under 5%. This doesn’t mean that it is not an area of opportunity. Nor does it mean that the rise of online shopping will spell the demise of bricks and mortar retail.

There is no doubt that the major retailers have begun working on their online offer. Dan Murphy’s have launched their online shopping site, as have Liquorland. We leave it to your judgement whether these are good offers but We definitely suggest you look at what your competitors are offering and think about how you might compete.

Many shoppers are not interested in shopping online, however online stores may still have a part to play in the purchase process. Having these sites in place will help a shopper who is researching a product they wish to purchase. They may use the site to gain more information about a new spirit they have heard about or to understand if this product is ranged in a particular store. This demonstrates the dual purpose of establishing an online offer.

Many of you will have heard of ‘showrooming’ which talks about shoppers who research instore and then buy online but this is significantly less than the number of shoppers who research online and buy in bricks and mortar stores. An online offer can compliment your current bricks and mortar store. It is not something you should be concerned will undermine your current offer…unless you don’t do it and all your competitors do!

The other type of online store to keep an eye on are online auction sites such as Gray’s Online. While there are only a small number of shoppers who might look to purchase via auction they do provide another option for shoppers considering alternative channels.

Online retailing has, up until now, largely been driven by range and price. This begs the question, what does the role of bricks and mortar stores become? And the answer is, experience and service. Drive the showroom experience! You need to provide reasons for shoppers to visit your store other than having known brands at reasonable prices. That is now the cost of entry, not a point of difference.

TRANSACTIONAL CODES

Heard of QR (Quick Response) codes yet? Those small black and white barcode-like devices made up of small squares. When scanned with a QR code reader (which can be downloaded free onto mobile devices) these codes provide shoppers with access to value added content, more information on a product or brand or access to purchase a product online.

Codes such as QR, Digimark, Viewa etc are not restricted to valued added content. They can also provide shoppers with the ability to purchase anywhere, anytime. Imagine a bus shelter with an advertisment for a new brand of beer. The advertisment has a code in the corner. When this code is scanned it directs the person to a mobile purchase site allowing them to purchase the product and have it delivered to their home. One example of this type of code is a Sniip code which does exactly that.

As a retailer, this gives you the ability to attract shoppers anywhere, anytime if you have the back-end ability to process the transaction and make the delivery. You are no longer restricted to selling within the confines of the four walls of your store. You can speak to shoppers on the go.

TECHNOLOGIES FOR MARKETING

VALUE ADDED CONTENT MOBILE CODES

Heineken is just one example of an alcohol brand using QR codes to add value. During the last Rugby World Cup they offered their shoppers and consumers access to a free rugby themed game when they scanned the QR code on the back of their bottle.

How about Augmented Reality? Augmented Reality mixes virtual characters with the actual world distorting (in an entertaining or informative way) the viewer’s perspective of the real world. Coopers Clear Cut used AR in a promotion that offered shoppers the chance to win a diamond. It also gave Coopers the chance to speak directly with their shoppers (via Facebook) and share information about their brand in a fun and entertaining manner. And it reduced the need for instore POS.

The number of codes and techniques is growing. Take the time to look at a Pacific Magazines publication to see their new Genie application that provides their readers with value added content, ACP’s version called Viewa, or even codes like Airlink used for valued added content by the Sydney Morning Herald. These types of codes are only going to continue to grow in popularity as a means to communicate either pre or post store with shoppers and consumers – both through value added content and through promotions and ability to transact. Shoppers Stop (the equivalent of David Jones in India) has been using Augmented Reality catalogues for nearly 12 months, allowing shoppers to scan ads in print media and be taken to their online catalogue that contains additional ‘secret’ offers in the augmented reality content. Ikea recently announced the launch of its augmented reality catalogues for 2013.

Augmented reality and mobile codes can also be used post-store. For instance, Gatorade’s G Series Fit provided shoppers with custom video workouts only available on mobile/online with proof of purchase.

An up and coming area to watch is that of Near Field Communications (NFC). Paypal have just launched an NFC based mobile payment system. NFC allows you to do ‘Location Based Marketing’, that is, to market (provide offers) to people who are in the immediate vicinity of your store or of a specific product or category.

SOCIAL MEDIA

There is no denying that social media sites such as Facebook, Twitter and even Pinterest (the new kid on the social media block) are impacting how shoppers make decisions on the products and services they buy. More people seek advice from trusted peers by surveying their friends and/or followers via social media than trust what a retailer or manufacturer says. These social media sites also provide an opportunity for shoppers and consumers to share their opinions and experiences of different products and retailers. What are your shoppers saying about you on Facebook?

Alcohol brands are also using these social media platforms to communicate with their consumers and shoppers. Take Swedish cider brand Rekorderlig which is a relatively new entrant into the cider category. They recently celebrated the fact that they now have 100,000 fans on their Australian Facebook Group. That’s 100,000 loyal consumers they can speak to directly whenever they choose to. How does this impact retail? They’re telling their loyal fans which outlets are stocking their products and driving traffic to stores and bars who are supporting their products.

Social media is not just about broadcast and brand building. Importantly, it can (and should) be used for driving repeat purchase, such as ‘Like us on Facebook and receive x% off your next purchase’ (a digital discount coupon is enabled once the user has ‘liked’ you).

These technologies are just a sample of the digital technologies available to shoppers to assist in their purchase process whether it be driving their choice of product, store choice or influencing others via word of mouth through social media.

All of this means you have a plethora of new opportunities to reach and repeatedly communicate and transact with your shoppers, both within and outside the bounds of the store.

Who are your shoppers and how would they like to engage with you, your store and your brands? How can you use technology to reach them in an increasingly connected and tech savvy world?

We’ve all heard the old saying; there are two sides to every story. Well, the same can be said if we look at common retail issues from the perspective of the shopper versus the retailer. Here we will look at some typical front of house (shopper) versus back of house (retailer) issues and try to find common ground with a solution that will work for both parties.

The ultimate goal for a retailer is to sell more (AWOP), to more people (traffic), more often (frequency). To do so, it helps to put yourself in the shoes of your customers (or prospective customers), think about what they see and how you could make it easier for them to shop your store. Enhancing the shopping experience for your customers will not only encourage them to spend more in an individual shopping trip but will also improve the chances of them returning to your store as the result of their previous experience.

So, let’s take a look at some common shopper and retailer issues, and some possible solutions.

ISSUE #1:

Shopper Issue: I couldn’t find the yoghurt spoons, Slurpee straws, etc. so I left the store without buying anything.

Shoppers who are purchasing food and beverages in convenience stores are looking for solutions. They have a problem they need to solve and they are looking to you to provide them with a quick, easy solution. These problems are the reasons they come to your store (e.g. “I’m hungry”, “I’m thirsty”, “I need an energy boost”). If there is an element of the solution missing (e.g. a spoon or a straw) then you are creating another problem rather than a solution. In this situation you risk losing a sale altogether.

Retailer Issue: If I leave spoons, straws, napkins, salt, pepper, etc. out on display they get stolen

Shrinkage is an issue that retailers face on a daily basis. Small items such as straws and spoons are easy targets. Because of the disposable nature of these items some customers do not think about the fact that these items are an expense to the retailer. They therefore may not have the same level of consideration for these items as a retailer does.

Solution:

Saving a nominal sum of money to avoid theft of these items at the risk of losing multiple sales is crazy. Provide solutions to your shoppers, rather than more issues and make it easy for them to buy. It might be a simple calculation to quantify the value of spoons and straws but it is impossible to quantify the value of the sales you have lost over time. If theft is particularly bad in your store, clearly communicate to your customers at the point of sale (at the slurpee machine, where the yogurts are etc) that these items are available at the register.

ISSUE #2:

Shopper Issue: What I came in to buy isn’t there (out of stock).

Shoppers get frustrated when the product they come into buy is not in stock. They have an expectation that a convenience store will have a core range of products. They don’t expect you to stock everything but they will expect a reasonable range of products in the core convenience categories.

Retailer Issue: With deliveries arriving at different times of the day and days of the week, it is difficult to keep the shelves full all day, everyday.

Managing inventory is core challenge of running a retail business so it is important that you get it right. Challenges such as delivery times and days and inventory holdings all need to be taken into consideration when considering store design, layout and ranging.

 Solution:

When considering your range think about each category individually. What is the role of that category in your store and therefore what breadth and depth of range do you need to stock? If you have an issue with out of stocks, implement a system to calculate days of supply vs shelf space so that you have a better idea of how much stock you will need to order to cover you between deliveries. A product can’t sell from the store room so if you have particularly products you regularly run out of on shelf, consider deleting a slow moving line that isn’t adding value to your range and open up on facings.

ISSUE #3:

Shopper Issue: Once I am at the counter paying it is too late to ask me to if I want an extra packet of chips, drink, etc. I don’t want to have to go back to the shelf or fridge.

Particularly in convenience stores, where shoppers just want to get in and out quickly, customers are unlikely to want to break queue, especially to spend more money. Therefore, offering them a second item for “just a few cents more” once they have already reached the counter – or have already begun their eftpos transaction – is unlikely to be as successful as communicating the offer before they reach the counter.

Retailer Issue: The only time my staff have to try to uptrade shoppers is when they are at the counter

It is much easier to sell to a customer who is already instore than it is to drive additional foot traffic into a store. Therefore, uptrading customers at the point of purchase is a good tactic to employ to drive basket size and ultimately sales. In most convenience stores, staff are unlikely to be working on the floor and therefore will not come into contact with shoppers until they reach the counter.

Solution:

Make it hard for them to say no to promotional offers by removing as many barriers as possible. Where possible merchandise a small selection of ‘uptrade’ products on or near the counter so the customer does not have to go too far to take advantage of any special offer. In addition, ensure that all offers are communicated effectively before the customer reaches the counter via POS or alternatively staff who are restocking shelves on the shop floor.

ISSUE #4:

Shopper Issue: The staff aren’t interested in serving me, they make me feel like I am interrupting them.

We’ve all been in a situation where we walk into a store to make a purchase and the staff are on their mobile, chatting with other staff members or eating their lunch. It doesn’t make for a very inviting experience, does it? Shoppers in this situation feel like they are a disruption when they should feel like that member of staff is waiting to assist them and is happy to help.

Retailer Issue: It is too expensive to have a manager on duty all the time to supervise junior staff members.

We all know good help can be hard to find and staying focused in a retail environment on a slow day can be difficult. Finding junior staff that can maintain their level of engagement can also be difficult particularly when they are expected to operate unsupervised.

Solution:

Assigning roles and responsibilities will empower staff and help them take ownership of tasks within the store. When it is quiet in-store staff should take the initiative to ensure the store is well presented. Also, consider incentivising staff to make business improvement recommendations. Encouraging them to use customer feedback as a source of insight will help them realise that shoppers are a valuable source of information that may unlock business improvement opportunities for which they will be rewarded and will also encourage them to be more attentive to their needs.

ISSUE #5:

Shopper Issue: Prices in convenience stores are much higher than supermarkets; I might as well just go there to get what I want.

In recent years supermarkets have been focused on driving the overall perception of price via deep discounting on staple grocery lines – $2 milk for example. While the primary focus of this is to secure grocery foot traffic away from its direct competitors rather than shift traffic from other retail channels, it has had a flow on affect for extremely price sensitive shoppers e.g. students who will go out of their way for the cheapest price on an item. That said, there are other shoppers who are not as price sensitive who are willing to trade price for convenience. These shoppers are higher value shoppers and have always been the core shopper base for convenience.

Retailer Issue: I can’t compete with the prices offered by supermarkets.

From a convenience retail perspective it is near impossible to compete on price with Coles and Woolworths on grocery staples such as 2L milk and a loaf of bread. Increasingly these retailers are trying to make themselves more available to shoppers because they understand the role of convenience. While it may feel like the major supermarkets are targeting your business and stealing your customers, the shoppers who are willing to go out of their way to get their chocolate bar or bottle of water at the lowest possible price should not be your core target.

Solution:

Most shoppers are willing to pay more for immediacy. If you provide them with an in store offer which is enjoyable to shop, has great service and can solve their problem quickly, most shoppers will take that over a supermarket any day. Think about how you differentiate your offer based on your site type, dial up convenience by providing solutions and make yourself a destination by understanding your core customer base.

Convenience isn’t just being in the right location at the right time. It is providing the shopper with a streamlined shopping experience that helps them fulfill a need with minimal effort. To understand your shoppers, the first step is to start talking to them. Ask them about their experience, how you could improve your store, your service, your range. They may just help you to see your store from a different perspective and unlock some new opportunities.

Aside from technology, there are a number of macro trends impacting both consumption and shopping that represent opportunities for retailers to leverage. Some of these include authenticity & heritage, provenance, health, indulgence, time shifting and time snacking, localization, and customization.

Following on from a number of comments in The Insider in the past few issues of Convenience World where store staff, store managers and some manufacturers highlighted the one-size-fits-all approach of some head offices versus what’s actually required for an individual store, here we’re going to discuss two of the trends – localization and customization – and how you can achieve this through segmented execution.

Back in the Sept 2010 issue of Convenience World we posited a potential way to segment the convenience channel (fuel: local, arterial, roadhouse; and non-fuel: minimart, transit). Segments need to be meaningfully differentiated – both of the channel and of various shopper types – based on not just how they operate differently, but what you  would actually need to DO differently in order to talk to the various types of shoppers, based on your site’s channel segment and location.

Here we’re going to flesh this out a bit further by looking at what the components of ‘segmented execution’ are, how you arrive at it and how you can put it into practice.

For argument’s sake we will refer to the hypothesized channel segments from 2010 listed above, but you may choose to segment the channel differently (we would love to hear your thoughts on how best to break up the channel!)

SUGGESTED CHANNEL SEGMENTS AND DEFINITIONS

An overview of the channel segments we listed in 2010 is below so you can see how they might play out. The key principle is that aside from fuel/non fuel, your location – where you are -  largely dictates who your shoppers are and why they visit.

Fig 1: Convenience Store hypothetical segmentation. © ShopAbility 2010

WHAT COMPONENTS CONSTITUTE ‘SEGMENTED EXECUTION’?

The basic point of purchase (POP) drivers for a start which we term RSVP3 (+C).  They are Range, Space & Layout, Visibility and Display, Pricing, Promotion, and Persuasion (store staff upsell, incremental sell etc). Plus Communications – how you message your materials both instore and prestore and the types of communications media you use to drive traffic and repeat purchase.

Range: if you’re a Local store and there isn’t an IGA within cooee, then you have an opportunity to ramp up your general merchandise (and potentially range more fresh and meal solutions) in order to become an IGA equivalent (depending on your floorspace). If you’re a Minimart located in the CBD and you get a lot of tourists then you should be selling maps, tourist guides, restaurant guides etc as well as traveller’s needs like mini shampoo sizes, insect repellent, band-aids.

Space: the range piece based on channel segment then has a natural flow on effect to what space you allocate to your various categories. Whilst beverages and tobacco are likely the biggest categories irrespective of site type, there will be other variances. Meal solutions would get more space in an Arterial and possibly Minimart sites. General merchandise would get more space in a Local.

Visibility and display: should be linked to your shopper types, their trip types and the categories they are buying on destination vs impulse. But it’s not just about what you put on offlocation display or at the counter (all the usual suspects like energy shots, confectionery and gum etc). If you’re a Local you may choose to provide more instore visibility of various services you offer such as trailer hire, party ware hire in order to communicate that you are a destination for those services. You might even do this as a ‘Services Menu’ for instance.

Promotion: your site type and the types of shoppers would determine the types of promotional mechanics you employ based on the retail drivers (is your issue traffic, frequency, AWOP, spend, basket penetration of non-fuel categories?) and your major categories and trip types.  If you’re an Arterial site a major opportunity is daypart marketing to drive higher traffic (penetration of passing traffic) – depending to an extent on whether you are inbound or outbound. Inbound sites are obvious for breakfast. Outbound sites are naturals for afternoon snacks (including homecoming/wind-down cheese and crackers) and evening meal solutions (on the drive home to save going to the supermarket). If you’re a Local or Minimart then what you’re probably after is frequency. So you need to look at promotions that will drive frequency such as ‘enter draw each time you purchase X’ (prize should be available for that store), ‘buy X number of Brand X (separate trips) during Month Y and receive a free Z’. The free thing could be a service, it doesn’t have to be a product.

Persuasion: it’s not just about suggesting they upsize their potato chips or getting them to buy an extra chocolate bar, though that’s a good start. If you’re a Local and you have shoppers coming to your auto mechanic for car registration renewals and checkups, you have an opportunity to sell them oil and other auto related products whilst they are there (car cleaning products, perhaps). If you’re a Minimart you might suggest a dessert or donut to go with their main meal purchase (even if it they came in just for several bowls of noodles).

The POP drivers are, however, just the rational or transactional component. Thought also needs to be given to the emotional component, since depending on the source used the % of shopping decisions made subconsciously and/or on emotion can be quoted as high as 95% (and rarely do you see a figure below 75%).

A useful framework for starting to think about emotional components might be Dr AK Pradeep’s 7 shopper experience dimensions. As listed in his book The Buying Brain, these are Information, Education, Interaction, Entertainment, Simplicity, Self Worth, and Community. Note that Simplicity (easy to shop, clean store etc) is only one of the 7 dimensions.

How might these play out depending on your channel segment?

Local stores are obviously going to have a higher part to play in Community than would an Arterial or Transit site, for instance. What community based programs can a local store get involved in, or create? Bunnings do a simple version of this with their community and charity run sausage sizzles on the weekends, for instance, where the sizzle at each store is run by community members local to each individual store. Local sites also have the opportunity to be the community notice board (if the closest IGA or newsagent isn’t already doing it), and this could be linked to local council news. This may help drive traffic.  Minimarts also have this opportunity at a micro level if they are located in ‘apartment cities’.

Transit stores may have an opportunity to provide more Information, pertaining to the transit types (bus, tram, train, ferry etc) local to them and/or range transit related products and services from bus tickets to travel pillows.

Arterial sites, given their high throughput in peak periods, need to talk to Simplicity with hygiene factors like having enough registers open to allow fast transactions and to gain loyalty from efficiency.

Roadhouses, due to their higher dwell times whilst shoppers stop for a snooze or a meal, are naturals for Entertainment – both in product range (toys and games for kids, including electronic, music etc) but also entertainment related services – mini-theatres for watching hot TV series, for instance (rather than just dotting screens randomly around the site) as well as things related to electronic devices used whilst travelling – mobile phone and Ipad charging stations, for instance.

HOW DO YOU DETERMINE HOW AND WHAT TO CUSTOMISE?

Understanding who your shoppers are and why they are there helps identify ways you can grow, and they will differ slightly by segment. There are obviously reports you can buy or obtain from people like AACS, HIM convenience channel shopper data etc.

But you and your staff may already know more about your shoppers than you think. You could collect what you and your staff have observed, or you could spend a week physically observing shoppers and maybe asking some of them why they visited you today (trip type, which you wouldn’t get by simply observing them). You may also have scandata or your own POS terminal data you can analyse.

The main things to understand are what we call the 5Ws and 5Hs.  These are Who (age, gender, lifestage ie kids/no kids, who buying for); What (products they buy); When (times of day, days of week); Where (do they go in the store?); Why (trip type, consumption occasions); How (shopping behaviour ie browse, planning, impulse); How much/many (spend, number of units per transaction); How Often (frequency – you’d need loyalty or Eftpos transaction data to track individual shopper frequency); How Long (are they spending in the store)?

And you can correlate any of the Ws against any of the Hs. For instance correlate How Much against What (biggest spend or volume items/transactions – likely tobacco for spend but may be some other things for volume) or against When (when are they spending the most and least?)

Once you’ve collected and analysed your 5Ws and 5Hs shopper data, you need to:

a)     Look at your site type and location, and who your immediate local competition is for your major trip types. This will help with differentiation  Then you need to …

b)    Look at implications by RSVP3 (Range including services etc; Space; Promotion yada yada) and against the 7 shopper experience dimensions (Entertainment, Simplicity, Education etc). And last but not least …

c)     Derive implications for how and where (both prestore and instore, and post-store to drive repeat purchase) you will communicate with your shoppers.

Yes it’s quite a bit of work, probably several weeks at least, but it’s better than doing the same ol’ same’ol and expecting a different result, or shooting in the dark. And you may well uncover some as-yet unthought-of opportunities.

Happy segmenting!

In the first of a number of ‘shopper’s eye views’, here we interview Shirley* and Trevor* about how they shop for groceries and what supermarkets can do to make their lives easier.  An Adelaide-based retired couple in their 70s with adult children who left home 20 years ago, Trevor is on the pension and Shirley has superannuation.  It demonstrates the impact of changing lifestyles and living arrangements on shopping behaviour, and how shoppers of even modest means place more value on things other than lowest price when shopping for groceries.

ShopAbility:

What does a typical week buying groceries look like for you?

Trevor:

I tend to shop almost daily at the Foodland 5 minutes down the road from us, and I probably get 3 or 4 things a day there. It’s also close to the other non-food services like the post office, chemist, and bakery so I do it as part of a local shop.

We buy meat from Woolworths at Marion [super regional Westfield shopping centre], also so we can have a coffee while we are there. We can judge the quality of the meat better at Woolies than Coles because their packaging is better. Occasionally we will go to a proper butcher for cuts the supermarkets don’t have, like oyster blade steak.

We also buy our fruit & veg from a specialist veggie shop at Marion because the quality is better, although we might occasionally buy potatoes and carrots from Woolies or Foodland.

Shirley:

Woolies say they’re the Fresh Food People – their veggies are quite good quality where Foodland is not as good. We’re all about the quality for fresh, rather than the price, so we are a bit haphazard about where we get it from.

Otherwise, I shop a couple of times a week at the Marion Woolies 10 minutes away when I’m after specific things, particularly if I’m cooking a certain recipe, because I know they’ll have the things I need. I don’t shop at the Foodland where Trevor goes, because their range isn’t as good. Having said that, I used to think Foodland had less variety but it has become more attractive now that Woolies and Coles have so much home brand and Select, Select, Select. I think Woolworths has reduced the number of brands, and I only buy the well known brands like Rosella tomato soup, for instance. [This is typical of shopper studies we have run where we’ve found empty nester and elderly lifestages are rusted onto to longstanding brands they know and trust – ShopAbility].

SA:

Why do you shop there?

Trev:

The Foodland is the closest supermarket so it’s convenient and I do the other shopping chores in the other local shops while I’m there. The prices are good, I know what is where and I can get in and out quickly. Also most of their products are Australian made, and the manager will get in specific things for me from time to time.

 Shirl:

[Smirks] Foodland is Trevor’s social outing for the day, along with the pharmacy and the bakery. He likes that all the staff know him.

Where I prefer to just get all my grocery shopping done and get out as fast as possible so I can go clothes shopping in the rest of Marion. I couldn’t give a toss whether the people in the supermarket know me.

I would like to support Foodland because of their philosophy, and I will occasionally go there with Trevor for Australian made things, but the store is poky and hard to get around. Woolies is roomier, better set out and easier to find things. The new IGA on Brighton Road is brilliant, but I go to Woolies at Marion because there are other shops there, as well as the coffee shop.

SA:

What kind of shopping trips do you do?

Trev:

I get whatever we need for that day or the next couple of days. [This means top up, emergency/run out, or destination trips – ShopAbility].

I reckon I would probably spend between $20 and $40 a day, depending on how many things I’m getting.

Shirl:

We don’t do the big stock up shops anymore. The issue with this is the stuff isn’t necessarily there on hand if I want to cook, I would prefer to have a stocked cupboard. But on the other hand, the good thing about Trevor going to the shops every day is that everything is always fresh, and it’s not me having to do it!

I only really go to the supermarket when I need specific things for specific recipes. [This is a destination trip – ShopAbility]. But I would spend maybe around $120 once or twice a week at Woolies.

[This means between Trev and Shirl they are jointly spending somewhere between $240 and $480 a week on groceries including fruit & veg and meat – ShopAbility].

SA:

What do you like and dislike about grocery shopping, and what do you think supermarkets could do better?

Trev:

I don’t like the queues at the checkout. Express or Fast checkouts aren’t. They used to be 6 items, now it’s 15 and half the time people go over their 15 items. Express checkouts need to go back to 6. Also the signs at the end of the aisles only say what’s at that end of the aisle and not at the other end, so you wind up going up the next aisle and back around. There should be more detailed labeling on the ends of the aisles.

I do like the message you get at the bottom of the docket that says “You have saved $X on your purchases today”. It makes no difference to my current trip or what I just did, but it makes me feel a bit better about it.

Shirl:

I hate having to push past other people with trolleys. I like nice spacious aisles. The car parking at Foodland is too hard, I can use my disabled sticker for Woolies at Marion so I can park easily there. Coles’ layout doesn’t have enough detail in the overhead signs and their meat is crap.

I also don’t like them trying to tempt us to spend more, it’s pretty obvious what they’re doing. This is what the Rewards card does. The Woolies Sticky promotion I tried the other day, it’s a bit of a gimmick, a bit of a joke. With my $126 I spent I only got 2-3 stickers. I can save the same looking at the ordinary specials in the aisles. But I can see that it might make you try things you wouldn’t normally, or might make you buy additional things.

It’s clear from my above conversation with Shirley and Trevor that price is not the first consideration for supermarket shopping, and even overall value takes a back seat to convenience and particularly known, preferably Australian made, brands and product quality. The individual stores they go to are their perception of the entire chain.

For these guys, they value the practicalities of product quality and ease of navigation (and for Trevor, recognition) without obvious attempts to increase spend. And their weekly spend is already considerable. Stores attempting to break into these types of shoppers’ more frequent traffic consideration set (within a set location radius) should be looking at not just spend and saving mechanisms but promoting both the improved shopping experience, range and proximity to other services.

*names have been changed.

It’s obvious to say that shoppers go to a pharmacy when they have a medical problem for which they need a cure but you would also expect that a shopper would consider visiting the pharmacy channel to purchase products that promote good health and prevention of medical issues in the first place. Unfortunately this is rarely the case and we rarely see prevention as a motivator for a trip to the pharmacy during our shopper research projects.

Shoppers perceive the pharmacy as the place they visit when they have a problem to solve. “I only go there when I am sick or to have a script filled” seems to be a common attitude towards the channel. But does this need to be the case?

To answer that we should probably think about the channels shoppers choose visit to purchase healthy living categories, or the ones that spring to mind when they are deciding where to shop for these products. The first port of call for shoppers looking for advice and categories such as aromatherapy, skin and body care, sports nutrition, water purification, super foods and organics, etc. is a health food store. They also shop for categories such as vitamins and minerals, weight management, condition specific infant formulas, etc. in this channel. The interesting thing is that many of these products are available in pharmacy but pharmacies are still not top of mind as a destination.

Is this restricting your sales? Of course it is. Is there a way to alter this perception? The optimist in me believes that there is and it comes down to altering shopper perception.

Many pharmacies carry a range of products appropriate to prevention; it is just how they are represented in store that is driving the current shopper perception. And we’ve all heard the old saying “perception is reality”. The question is how do we alter this perception?

Location

Where are the prevention categories such as vitamins and minerals, weight management, liver and kidney cleansing products, etc. located in your store? Are they mixed in with other categories? Hidden at the back of the store while tissues, washing powders and cosmetics fill the front of store? Or are they in a prominent location? I suspect that they are mixed in with cure categories and have a relatively low profile in the store. If that is the case, put yourself in the shoes of the shopper entering your store. The most visible categories will drive your perception of the purpose of the store.

Our shopper research studies have shown that the most frequent trip type in the pharmacy channel is script fill. A fact I doubt comes as a surprise. But you may not know that the other most prevalent trip types are distress and emergency. These shoppers aren’t going to be browsing your store to discover what else you range on your shelves. They are going to get in to the store, find what they are looking for and leave. Therefore to shift their perception, prevention categories need to be given a higher profile in the store.

How? Consider grouping prevention related categories and signposting them, shifting them to the front of store or alternatively create a store within a store. All of these tactics will increase visibility and help to alter the perception of the store.

Communication:

Are your catalogues focused on advertising cure-related categories, or do you also advertise prevention categories? Have you go the mix right? Could you be giving healthy living categories a higher profile in your marketing communications? Could you have a health feature in these catalogues to help drive the shift in perception?

Once again, consider putting yourself in the shoes of your customer. Start out the front of your store and look at what your shopper sees. Think about the message your shopper gets as they enter the store. Are you communicating to shoppers that your store is there to promote good health or are you just focused on curing the ill?

Every time the shopper comes into contact with your store, whether it be via advertising or in-store communications, you have an opportunity to shift shopper perception. Consider how you use these tools to your best advantage.

Services:

Health care services can be a good tool to use to boost the profile of healthy living in your store. Think about how you communicate the services you offer. Is there an opportunity to communicate them more clearly or put a more positive prevention message into the communication? Are you offering the right services? Are there others that would reinforce this shift in focus?

Making services visible within a pharmacy can be a challenge. Consider using the front of store so you are communicating to people who pass by who may not have visited your store. You may be able to attract new customers who were not previously aware of the services you offer while also shifting perception.

Range:

Pharmacies in international markets such as the US and the UK have used fresh food as another method of driving the healthy living message. They offer healthy on-the-go food offers in metro stores, which give customers an alternative to fast food and other unhealthy food options. They also range organics, super foods, condition specific foods, etc. which appeal to a health conscious shopper.

Is there opportunity for you to think about your range and dial up categories that promote good health? They may not be food related, but they may also provide you with another option to compete not only with health food stores but also with supermarkets who do not currently range these products.

All of this is really just food for thought. Would you like to attract shoppers who are interesting in prevention as well as cure? If so, are you doing everything you could be with your current range, space, visibility, communication and services? You may find a few small changes could make a world of difference to the health of your business.

Back in the April issue of RP, when we covered digital, mobile and social media, we discussed how important the young family lifestage is to pharmacies and how digitally connected mothers are.

In the first of a number of ‘shopper’s eye views’, here we interview Jennifer*, a new mum, about how her pharmacy shopping has changed since the birth of her now 5 month old son Jack*. It demonstrates just how valuable this lifestage is to pharmacies and some things pharmacies can do to increase the frequency and traffic of new mums.

ShopAbility:

How would you describe your use of pharmacies before you had Jack, when it was just you and your partner?

Jennifer:

I really only ever went to pharmacies to get a script filled, and I had multiple pharmacies I would do that in depending on where was closest to me at the time. I’d buy cosmetics from Priceline because they were cheaper there, or from department stores because they had a better range of the more upmarket brands I like to buy, like Clinique. And I would buy vitamins from the supermarket. I had never shopped from an online pharmacy.

SA:

What’s changed since you had Jack?

Jen:

When I first had him, my mum said ‘You’ll be in the chemist every second day for something’. I didn’t believe her. But I really was, for the first month or two, because I didn’t know what I was doing, I wasn’t really set up properly and I needed advice on all the things the baby requires, or there was always some new issue cropping up.

That’s slowed down a bit now, but what has really changed is that I buy for my baby rather than myself. And I buy in bulk. Pharmacies are my one-stop-shop for baby products. So it’s easier and cheaper to do that online or in discount chemists like Chemist Warehouse.

SA:

Where do you shop pharmacies now? How many pharmacies do you shop at?

Jen:

A few different ones, for different reasons.

I shopped at The Pharmacy Leichhardt online twice in 4 months. I like them because you get free delivery with transactions over $100 and it’s pretty easy to get to that amount when you’re buying nappies and disposer unit refills in bulk. And they deliver to my home which saves me the whole rigmarole of putting the baby in the car seat and having to drive somewhere.

I was going to Chemist Warehouse weekly but that’s slowing down a bit now. They have a nappy loyalty program, something like buy 10 get the 11^th free, that we use.

We also go to YouSave Chemist because they have a baby club that we earn points in, I’m not sure what we can use the points for though, as my husband signed us up for that. But what was great about the baby club was when we joined we got a sample bag, which is fantastic when you’re a new mum and you don’t know what you’re getting into and what products are any good. You can try a whole bunch of things for nothing. It takes some of the risk away … if they’re in a sample bag, they must be alright.

I also sometimes go to a local pharmacy in Lane Cove near where I live because I can get a park easily there.

SA:

What are the most important things you look for in a pharmacy?

Jen:

Aside from the loyalty programs and the ability to buy in bulk cheaply, there’s a few things I expect pharmacies to have.

Firstly that they have nice, proper brands that someone else has recommended to me, not just brands you see in the supermarket.

Specialist baby products like shampoos for babies with ‘cradle cap’, thermometers you put above their eyebrow not up their bum or in their ear, and curved nail clippers.

And discounted nappies and refills for nappy disposal units. These are the biggest ticket items we have to buy all the time and they are the number one hot topic in our mums’ group. They are the traffic driver and dictate what pharmacy we are likely to choose that week and we tell each other what’s on special where. I will occasionally buy nappies in the supermarket rather than the chemist, along with infant formula, if they’re on special.

SA:

What do you thing pharmacies could do better to cater to new mums?

Jen:

Advice on all the things likely to happen to the baby or that it will get, that I will need to have treatments and solutions for.

The ability to actually get the pram into the pharmacy! Lots of them have narrow doors or aisles and I won’t go there because it’s too hard and I’m worried about knocking things over. Pharmacies need ramps to make it easier, and this applies for old people in wheelchairs too. Make it easier for new mums to physically visit.

It’s clear from my above conversation with Jennifer, which was eye-opening in a number of respects given I don’t have kids, that pharmacies succeeding in baby have specialist baby brands and products, probably a loyalty program, competitive nappy and disposer refills pricing, a direct delivery option and a physical store that prams can actually traverse.

There’s a tension between price and convenience, but in talking to Jen it sounds like convenience might win if the price offer is good enough (but not necessarily too good).

And because the mothers’ group word of mouth is so strong, member-get-member programs or similar would work a treat once you’ve earned their trust.

Get those things right and you’ll attract mums with very high spend per transaction. And it’s very frequent spend.

*names have been changed.

In the first of a number of ‘shopper’s eye views’, here we interview Stephanie*, a corporate department head, and John*, who runs his own business, about how their liquor shopping behaviour is changing. They’re a professional couple in their late 30s who have been together nearly 10 years but don’t have any kids or pets. It demonstrates the impact of changing lifestyles and living arrangements on shopping behaviour, and that shoppers without many financial encumbrances seek things other than lowest price when shopping for liquor.

ShopAbility:

What types of alcohol do you typically drink at home?

Stephanie:

I try not to drink during the week, and I drink mostly wine on the weekends or if we’re out, and sparkling in the summer and at Christmas.

Before John and I started living together, he used to drink a lot more beer. Over the past few years since we’ve been living together he has gradually shifted to wine, because we can share it. He drinks a lot less beer now. [Note: this is a trend significantly impacting beer consumption in NZ, as women buy wine for the household in supermarkets - ShopAbility].  Now John buys beer mostly for entertaining. He might have a beer after work with his workmates during the week, then when he gets home he’ll open a cider instead of a wine because cider has lower alcohol levels and he reckons it doesn’t make him bloat as much as beer does.

Neither of us drink spirits at home and we don’t even really have a ‘bar’ for entertaining, also because we don’t have all that much space. The last bottle of spirits I bought was Tennessee Honey whiskey because some of the recipes in Porteño restaurant’s recipe book called for it.

SA:

Where do you mostly buy your alcohol from?

Steph:

I don’t know how typical we are, but we buy some of our wine through a broker and some from Dan’s and other chains, which is also where John gets the beer and cider from.

The broker came about because John and his mates were drinking all the ‘cellaring’ wine I bought so I had to put it offsite in storage, which was at WineArk. The broker was attached to WineArk and he calls me once a month or so. So I buy through the broker in ½ dozen or dozen lots but I have to buy the same thing, I can’t mix my cases very much.

If we’re being a bit more planned we also buy from Dan’s because they’ve got a large range, it’s easy to park, they’re close to home and we can mix our dozens and even mix half dozens.  Often we’ll buy a single or maybe two bottles of wine there. Otherwise, if we’re out we go to whichever bottleshop is closest to us at the time, but we’ve got stuck doing that a couple of times like in Campbelltown where the bottleshops don’t really have much over $12 or the kinds of things we drink, but then we’re not they’re local market. [Note: this is evidence of some local range tailoring as the point was also made that someone from Campbelltown would wonder why a store on Sydney’s lower north shore didn’t range anything under $15 – ShopAbility].

We don’t like shopping on foot so it tends to be car-based, which means we are buying from the chains or from bottleshops that are part of pubs.

Occasionally we also buy from wineries themselves when we’re visiting, but we don’t tend to order from them online even if we’re on their mailing list. We’re still on a lot of email lists but we don’t see anything new or different on them, just the new vintage of the same stuff only on special, so we don’t tend to buy from those.

SA:

How has this changed from what you used to do?

Steph:

Before the broker, we used to order through Vintage Cellars. But you had to buy a case of all the same thing and if you tried one and didn’t like it, you’d be stuck with the rest of it. I got burned a bit doing that because they would sell me what was on special and then I wouldn’t necessarily like it.

I also used to buy from Kemenys online, but now I prefer the broker because he knows what I like and I like him choosing stuff for me. It helps me to experiment, like with new regions you wouldn’t otherwise have come across, and there’s less risk. And it’s not just about trying or being sold whatever is on special.  Because I like things being chosen for me rather than having to wade through a whole bunch of things myself, I haven’t really explored auction sites all that much.

I’ve heard good things about Wine Selectors and a friend loves GetWinesDirect. Mum loves David Jones wine club.

SA:

What do you think bottleshops could do better in order for you to buy more wine there and less through the broker?

Steph:

Have a broader range of interesting things. Most bottleshops all have the same stuff, particularly Vintage Cellars. Help me to try new things and make sure I actually like it before I buy it. Tastings and things like that for individual brands help but I would be really interested if a bottleshop did a tasting on, say, an entire region. That way I could try a whole lot of different things and mix and match my dozens.

It’s clear from my above conversation with Stephanie that price is not an important consideration for this couple across any of the categories they buy. They value convenience, service, and for wine particularly relationship (knowing what the customer wants) and offering a low-risk ability to experiment.

Get those things right and you’ll attract couples with very high spend per transaction. And it’s a pretty frequent spend.

*names have been changed.

In earlier Convenience World articles ShopAbility has referred to the path to purchase (P2P) and shopper purchase cycle (need, plan, search, compare, decide, buy, use, tell) and discussed the fact that the P2P is no longer considered to be linear. Rather, it is a cycle that incorporates pre-store, in-store and post-store. Here we will look at the impact of this cycle on the way you do business and how taking a holistic approach can work to your advantage.

If we are saying that the shopper exists outside the four walls of a store, what is there that you can do as a retailer pre-store and in-store that will compliment the activities and initiatives you are implementing inside your store in order to maximise your POP opportunities?

To get our heads around this, let’s consider which phases of the shopper purchase cycle happen pre and post-store. Once we understand this we can look for opportunities to use pre and post to drive traffic, increase frequency, drive repeat purchase and generally support POP initiatives, which will in turn generate incremental sales for your business.

PRE-STORE

 NEED:

Every purchase begins with a need or desire to acquire a product. It sounds obvious but it is worth considering for a number of reasons. Firstly, what is there that you can do to stimulate this need or desire while at the same time offering your store as the solution? Think about using motivators such as thirst quench or afternoon energy kick within the calls to action in your communications linked to beverage and snack categories in the external environment (e.g. advertising, external signage, etc.) and reinforce these messages in-store with consistent communication at the POP.

Also, think about the reasons why shoppers come to your store. What are you famous for? What would you like to be known for? How can you shape shopper perception of your store pre-store to ensure your store is top of mind or a destination to fulfill particular needs? Think about your strengths and make sure your business is famous for something, based on your site and location type. Communicate this to shoppers so you stand out from the crowd as a destination.

PLAN:

Once a shopper has established a need they will start to plan their shopping trip to fulfill this need. This may happen at a subconscious level, especially if they are in an area they are familiar with. They will mentally run through a list of potential stores in their head and assess the best solution for their immediate need. Are you top of mind with your local customers? What could you do to ensure you are?

The other thing to consider is that increasingly, shoppers are digitally enabled. They use their smartphones and mobile devices to plan their trip. Where will they go? What store is close by? Think about the sites shoppers might use to look for a convenience store if they don’t know the area. Are you represented on these sites or in these apps? If more people know your store is close by when they are looking to make a purchase then it makes sense that this will drive traffic to your store

SEARCH & COMPARE:

Search and compare is a phase in the purchase cycle that is most likely to be relevant to higher dollar purchases or high involvement categories. However, there are products and services that convenience stores offer that shoppers may search for information on. Think trailer hire, petrol prices or store locations on long or unfamiliar journeys. Would shoppers find you, your store, your services, etc. if they went searching?

POST-STORE

USE:

Use is obviously the phase where the shopper becomes the consumer or they provide the product to the end consumer. Are they likely to have a good experience from the product or service they purchased in your store? Was the food fresh, the soft drink cold or the coffee hot? A bad experience is enough to stop a shopper returning to your store. Think about the products and services you sell. How can you give your customers the best possible experience to keep them coming back more often and make your store top of mind to visit next time a need arises.

TELL:

Word of mouth has always been around but the fact that most people are now connected more than ever via social media to large groups of friends, family, followers and fans means that word spreads even faster. Shoppers talk about experiences and others listen. You only have to look at the recent social media stories that have made mainstream news to see the power of the tell phase of the purchase cycle.

Think about the service you provide, the experience shoppers have in your stores and the way you can generate positive word of mouth. Local stores could get more involved with local causes and charities to drive good will and buzz whereas arterial stores may look to implement shopper loyalty programs in-store to keep shoppers coming back and recommending your store to others.

Ultimately, if your objective is to sell more, to more people, more often then when you break it down it is very simple. Activating pre-store will attract more people (traffic). Post-store will help you bring them in more often (frequency). And in-store is where you work on selling them more with promotions that drive AWOP and spend. What that highlights nicely is the fact that you really can’t just rely on in-store anymore. You need to take into consideration pre and post to help drive your POP initiatives harder and ultimately grow your business

Summer in this country is the most social time of year for both the onpremise (people going out) and the offpremise (people entertaining at home). Not just pubs for pre-Christmas drinks, but throughout the January school holidays as people catch up in restaurants and cafes for lunchtime or sunset meals in the sun.

But it’s also the biggest time of year for entertaining at home as people take advantage of the sunshine and use their patios, balconies and backyards to get together with family and friends.

Entertaining is one of the core shopper trip types in specific Convenience channel segments, particularly Locals and Minimarts (and to a lesser extent Arterials). So here we will have look at some of the multitude of types of entertaining occasions and how you can tap into them.

There are more than 100 individual types of entertaining occasions, so you have opportunities to activate against lots of different kinds before you bore your regular local shoppers with ‘wallpaper’!

There are a number of variables within entertaining occasions that have a bearing on how much shoppers buy, of what (categories, brands, pack formats/sizes) and how much they spend:

• How many people are invited/attending
• Level of formality, which is impacted by relationships
• Relationship of the participants to the host (distance/closeness in intimacy terms, not geographical) – ie close family, distant family, close friends, acquaintances
• Whether the event is a meal based (eg bbq) or drinks based (with a few snacks)
• Energy level of event eg ‘go off’ vs relaxed
• Day or night time
• Theming (including themed drinks).

Some of the more obvious summer entertaining occasions include:

• Christmas Day lunch/dinner
• Pre-Christmas drinks
• Pre-Xmas/holidays get together (often for friends, as Xmas itself is traditionally spent with family)
• Australia Day bbq
• Extended family get together (family that may only see around Xmas time)
• Blokes/mates on the couch watching the Boxing Day Test and other cricket
• ‘Orphans’ events over Xmas and January for those (temporarily) without family

General entertaining occasions that also happen to take place during the summer include:

• Event related party eg New Year’s Eve party
• Other event related parties eg birthday milestones (30, 40, 50 years young)
• Casual meal eg bbq
• Family get together (regular event for close family eg some families have a regular Sunday meal together)
• Girlie brunch (likely to be weekend)
• Chicken and champagne breakfast (likely to be girls)
• Casual ‘pot luck’ lunch or dinner where everyone ‘brings a plate’
• Formal meal eg served ‘dinner party’ (although big in the 80s and 90s, these are going out of fashion and being replaced by more casual events and pot luck style meals).

The shopper may be the guest (‘what do I bring?’) or the host (‘what do I give them?’). Both require solutions, albeit convenience stores are more likely to see the hosts (more on this below) where bottleshops will tend to see the guests.

There are some interesting informal (unwritten and unspoken, but generally acknowledged) rules around the various types of occasions that inform what hosts serve and guests bring. Sydney Morning Herald columnist Richard Glover wrote a very funny article published in the Spectrum not so long ago dealing with barbecue etiquette

(Link: http://www.smh.com.au/opinion/society-and-culture/hits-and-near-misses-your-essential-summer-barbecue-survival-guide-20110929-1kxu3.html).

Two premises in this article relating to guests’ alcohol behaviour illustrate the difference between hosts, guests and levels of formality: “Don’t bring a bottle of cheap red wine when your intention is to drink the host’s beer”, and “Don’t try to hide the half-decent red you’ve brought for yourself”.

These talk to two different occasions from the guests’ point of view: a) gatherings with people you know, where it’s assumed everything gets shared because everyone knows what everybody else drinks (eg you bring the slab of VB in); and b) gatherings with people you don’t know (where you’re more likely to keep your better wine for yourself, or use it to impress, or bring your 6pack of special imported beer in and keep the rest of the case in the boot of the car).

Similar idea from the host’s point of view, with regard to who they’re hosting. If it’s an event with a lot of lesser-knowns then safe and likely well known brand choices at low-mid price points that are likely to appeal to the masses will apply (unless they’re trying to impress). If it’s an event with familiar friends and family it’s a combination of forgiveness for pulling out what’s already in the fridge, and having some better stuff on hand because you’re happy to share it with them and you know their taste. But typically what we see with entertaining occasions is people using brands (not private label).

If it’s a smaller gathering the host is likely to spend more per head. For larger groups the host is likely to spend less per head and just stock the basics for the thronging hordes.

What all this means is that you have a number of opportunities to talk to shoppers on their chosen categories based on the type of event they are attending or throwing (and who is attending), and to sell them more depending on the size of the gathering they are having.

Some of the key opportunities around occasions are thus to:

• Probe customers on their reasons for store visit, if for entertaining ask the how many, who are they, what do they like questions (you’ll get an idea of this if you see them shopping multiserve softdrinks in the fridge)
• Provide cross category bundles of basics – softdrinks, snacks – for different event types, including add-ons such as ice. Bundle items together for a price point eg ‘2 dips & 2 cheeses for $14.99’, or AWOP specials on multiserve (large) cold drink sizes eg ‘2 x 1L drinks for $7’. (Price points are examples, not RRP). You could even go all out and offer a ‘bbq in a box’ that contains a selection of the above key entertaining needs for a set price (eg your ‘bbq in a box for $49.99’).
• Vary the bundles by level of formality eg casual bbq = softdrinks and chips, upmarket BBQ = dips and vintage cheese. Or bundle add-ons such as gas bottle refills and ice
• Create an event/party specific area of the store. Range all your chilled party foods together and all ambient shelf party items together to provide an occasion based solution. Signpost it clearly
• Communicate occasions eg ‘perfect gift for host’ (eg box chocolates such as Favourites, Roses, Ferrero Rocher)
• Make your store the go-to backup for social events and occasions – think about services you can provide such as hiring out glassware, bbqs, eskies for the ice (so they can carry the ice home easily!). Could you hire out emergency furniture (plastic chairs) or sell cheap deck chairs?
• Think about ranging add-on categories such as sauces and mustards for the bbq. You could go as far as setting up a bbq needs area of the store
• It’s not just about softdrinks, salty snacks, dips, cheese and crackers (although bundling those is a good start). You could put together an entire occasion solution based around those plus things like Aeroguard and insect repellents, plateware, crockery, cutlery and napkins. Maybe balloons and candles (if you’re having a true ‘party’ as opposed to a casual bbq). Even sunscreen.

It’s not enough to just do these things though, although that’s a great start. You need to shout about them to your shoppers that you are offering them, and communicate prestore as well as instore.  Local area marketing using smartphones would be great here, as would communicating direct via your regular shopper database (if you have one, and if you don’t you need to build one or at the very least be telling your regulars about your summer entertaining solutions when they come in – ‘Got a BBQ coming up? We can help’). At-store communications should include forecourt communications and signage, particularly around the bundle offers, add-on products/services, and that you range ‘BBQ essentials’ for instance.

These are all activities that will help you not only give your store a point of difference, but drive traffic and spend via relevance.

Happy entertaining!

I recently attended the Path to Purchase Summit, and it got me thinking that there is an ever growing amount of “stuff” impacting on our decision making. The days when TV advertising equalled driving people to shelf are over. The days where store influence equalled purchase are becoming a distant memory. Nowadays there are iPhones, tablets, apps, Facebook, Twitter, QR codes, AR codes, Google, YouTube, blogs, Haul videos, product reviews, CHOICE, loyalty programs, e-commerce. The list goes on and on.

Don’t get me wrong, advertising still matters, stores still matter, but all this “stuff” now makes influencing a shopper more complex and difficult.

At the very heart of influencing shoppers sits decision making. Understanding decision making helps us to manage a number of aspects that influence shoppers to varying degrees. Decision making has always influenced packaging, communication, range, new product development and layout (see Figure 1). But now, with a more complex path to purchase, we need to think more and more about how pre-store, in-store and post-purchase impacts on shopper decisions.

Figure 1: Decision making impacts.© ShopAbility 2012

If you get these right then ultimately you have a more satisfied and loyal shopper. Now for the hard part, how on earth do we make sense of this new and complex world?

MEASURING DECISION MAKING

“The trouble with market research is that people don’t think how they feel, they don’t say what they think and they don’t do what they say”.

What David Ogilvy said then is as true now as it ever was, except now there’s more “stuff” which makes it even harder to understand. I love this quote because it actually hits at the very heart of what we are trying to understand when it comes to making decisions: how people think, what do they say and how do they feel.

I wish I could say I had all the answers, but I don’t, and I haven’t seen anyone yet who has all the answers either. In my research, however, I have come across some key points to think about when looking at decision making. There are many ways to skin this cat and each have valid points. But before you start to understand any decision making process, ask yourself this, what do I want to do with this? Figure 2 illustrates some different lenses for measuring decision making.

Figure 2: Decision making measures.© ShopAbility 2012

Claimed vs Derived

As we know, people have a hard time saying what they think. For example, it’s hard to tell you what I thought about when buying that carton of milk. Shoppers don’t necessarily know (ie they are on auto-pilot), or they might be able to tell you what’s important (eg full fat, pack size, brand, etc.) but have a hard time telling you which one is more important than the other.

The key here is that we don’t just measure what they say but also measure what they do. By studying actions, together with what people say, gives us an insight into how people make decisions and more importantly what they do and what they say they do. Measuring ‘what they say they do’ is just as important as ‘what they do’ but they have different applications. ‘What they do’ can be useful in uncovering new product development opportunities, designing layouts and range; while ‘what they say they do’ is paramount to developing communication on the path to purchase.

For example, if you think about pet food, one of the key aspects that will determine whether a shopper will buy it is whether their pet will eat it. This immediately divides the products into will buy and won’t buy. This is a ‘soft’ measure that could be touched on in communication but would never really come out from derived data. This also raises the point that shoppers aren’t always rational beings (are they ever?) so qualitative research is often very useful to really uncover why they do what they do.

One thing to keep in mind is do not to think that just because you understand what they do, you can now design a layout. Take care to understand how people navigate the aisle, which is just as important as decision making. For example, there are a number of categories such as beverages and feminine hygiene to name a few where colours and logos are vital for shopper orientation. These aspects are often not measured in decision making and yet are fundamental to shopper decisions at shelf.

At shelf vs outside the store

With almost all shopper research we as researchers and manufacturers often feel that you need to talk to shopper at shelf to get to the heart of the matter. And most of the time, I’d agree. Decision making is no different, though I would argue that with a more complex path to purchase you need to talk to shoppers about the different points in time where they made decisions.

When talking to shoppers at shelf one can really get to what are the most important things that determine why a shopper picked up a particular product. However, this is the last decision in the process! Obviously this is important, but it tends to ignore how the shopper actually got there.

For example, let’s assume that a shopper is shopping for a beverage. When asked about their decision making process at shelf, they might say they bought this brand because it was on promotion. The logical conclusion from this is to pour all your funds into promotion to influence the shopper at shelf. The issue here is that when asking someone at shelf why they bought something is naturally going to lead a shopper to tell you about the last decision they made.

Suppose, however, that this same shopper had decided to choose the supermarket channel (as opposed to convenience, petrol, etc) because they needed to buy a number of items for a children’s birthday party, they then decided they were going to buy Cola (vs. other flavours) because that’s what kids like, they had decided pre-store that they would only buy Brand A (vs Brand B) because none of the kids like Brand B and once they got instore they decided to buy a 2 litre pack size over and 3 litre pack size because it was better value. Only by looking at the decision making process along the entire path can we actually tell that price is actually the last decision to be made and the reason is to decide between pack sizes. If you own Brand B in this situation you can have the best promotions and it is not going to help you because the brand decision has been made way before they have actually got to shelf.

My advice here is to ask both in-store and away from the store to really get a feel as to what matters.

Longitudinal vs Occasional

Decision making is often asked about the last occasion a shopper shopped for a certain item. This is seen as the best way to get to get an accurate read on the actual occasion rather than what shoppers ‘generally do’. Interestingly, there are other ways of measuring decision making over a period of time (ie looking ‘longitudinally’ at the decision making processes of the same people over a period of time).

This is actually a very good way of understanding decision making over multiple occasions. The difference between the two is minimal, however, the applications are vastly different. The occasional measures help to develop layout decisions while longitudinal measures help to develop range and NPD ideas. The most important thing to ask yourself is, what do I want to do with this?

WHAT INFLUENCES DECISION MAKING?

The world would be a lot easier if we could stop there, but understanding how people make decisions is only part of the equation. When looking at decision making it’s also important to look at several other lenses: who are our shoppers, what occasion are they shopping for and when or where do they make decisions?

Fundamental to all shoppers’ decision making process is understanding who they are. Who they are guides their decision making. For example a female in older family (ie with teenage kids) makes their decisions on a completely different basis to a female in a DINK (double income, no kids) based household. But it doesn’t just stop there.  What sort of involvement do they have in the category? Are they a heavy or light buyer? Where do they live? Etc etc. The point is that a shopper’s decision is partly based on who they are, so we shouldn’t just look at decision making as a whole but also based on who our different shopper types are.

Occasion based marketing hasn’t really taken off in this country yet, but when it’s done properly it can be lucrative. As we’ve seen from previous examples, understanding occasion is key. If we don’t know our beverage cola shopper is buying for a children’s party, then how do we know that we should be bundling with other flavours and other products? Occasions link both shopper and consumer in that a shopper buys for a particular occasion and a consumer consumes for a particular occasion. The problem here is that it either hasn’t been done very well or it’s in the ‘too hard basket’.

Finally, location of decision making is becoming more and more important with the infiltration of technology in our regular day. Jim Lecinski from Google said it best when he coined the “Zero Moment of Truth”. That is, the shopper is now informing themselves to make choices before they get to the store. Once they’ve bought, they are also offering their points of view in the “Second Moment of Truth”. Smartphones are only making this ‘moment’ even more important. While some may look at this as adding complexity, what it presents to others is an opportunity to bypass traditional routes of communication. And when it comes to decision making we need to be able to understand what they decide on pre-store, at shelf and post-purchase, as this will ultimately determine what shoppers buy and whether they come back.