Shopper Culture

Issue 5: The Checkout

The latest issue of the Checkout was released today, November 10, 2009. It features shoppers' attitudes for the holiday season, tools that retailers and manufacturers can use to win shoppers over, and a list of the top 5 "value brands" in the eyes of consumers. Finally we deconstruct what "value" actually means to shoppers. Click here do download Issue 5 of the Checkout.  

Keeping Shoppers Engaged and Interested - A New Loyalty Model?

All the stats show that loyalty and reward programs are on the rise (Colloquey Talk). Most shoppers are opting in simply to save money. (Forrester: Building Lasting Customer Loyalty). That makes sense, especially given the current state of the U.S. economy. However, is saving money enough to keep shoppers engaged and coming back for more?

I’ve come across some unique, different and creative ways brands are trying to recruit and keep shoppers engaged and, more importantly, keep them coming back. It’s a slightly different approach than the typical credit-card or loyalty-card program.

Receipt Treat – Starbucks® offers the following to all patrons who make a purchase.
 

Pick of the Week – Starbucks offers a free iTunes® download every Tuesday to all patrons.

Starbucks still uses its Starbucks Reward programs.

Free Nutritional Coaches and Nutritional Classes/Seminars From Vitamin Cottage® (a natural grocery store). No purchase necessary, no signing up, just free personalized and customized advice based on questions submitted by shoppers. 

First Drink on Us and 10% Off Food Items from Baker St. Pub & Grill®
A card handed out to nearby employees of businesses giving 10% off all food items and the first drink for free at all of their upcoming visits. No signup required. No expiration date.

These different approaches suggest the following:

#1 – Brands are relinquishing some of their control over shoppers. No required shopper information is needed to engage and interact with the brand in the above examples.

#2 – These retailers are giving value-added perks to all of their shoppers, not just to those perceived to be the most profitable. This flips the traditional CRM model on its head. Equality to all shoppers, not just to a select few.

#3 – These examples provide more ways for shoppers to benefit from a brand relationship versus just saving money on products. These acts by brands actually provide more value to shoppers, raise brand opinion, increase brand loyalty, increase store visits, and ultimately increase purchase amount and frequency.

A New Model?
At its very basic definition, the model of a traditional CRM/loyalty program is to determine how the brand can leverage shoppers in its database to its own advantage – in other words to maximize the brand’s profits. The above examples suggest the makings of a flipped model where shoppers benefit by receiving the most personally relevant value from the brand.

This leaves me pondering still more questions. What do you think?
•    How should brands determine what constitutes the strength of the relationship with shoppers, outside of financial profitability? What are these behaviors? Purchase, Web visits, downloads, posts about their brand on blogs, etc.?
•    Which model is the right model?
•    Should different models be used in different economic situations?
•    Is there any value in practicing both models simultaneously?
•    Should brands think about the strength of a relationship with shoppers vs. how profitable a shopper can be to them? Long term vs. short term?
•    What forms of value (other than savings and discounts) can brands give shoppers that are meaningful and relevant? That cost the brand little to no money?

Are Virtual Store Studies Any Good? Apparently Yes

Can you actually predict shoppers' behaviors by having them pretend to shop while sitting in front of their computer?

Apparently you can. Decision Insight from Kansas City claims a 90% correlation of their virtual research results with actual store sales data from IRI.

What have they tested? Shelf sets, packaging, SKU mix, promotions & displays, and even pricing. Grocery Headquarters has a Heinz ketchup case study about shelf sets; reducing the SKU count by 25% grew category sales--good for both Heinz and the retailer. Another example about Kellogg's Smart Start cereal packaging is at AFN.

These artificial, desk-bound, not-in-shopping-mindset virtual studies seem to be highly predictive of real-world results. Virtual store research might not just be good enough: it might be good.

NEW STUDY

The NACS/Coca-Cola Retailing Research Council Study

Fast Forward  Emerging Opportunities in Convenience Retail

Today’s, C-stores are challenged across several fronts.  While competitors open new, smaller formats offering increased levels of convenience, the average C-store operator is limited not only by physical space and location, but by a set of outdated conventions and assumptions. 

The Integer Group challenges those constraints and offers a fresh perspective in this latest report published in conjunction with the NACS/Coca-Cola Retailing Research Council (www.ccrrc.org).  Through rigorous shopper research and their proprietary approach to problem solving, The Integer Group identifies unique store types and shoppers segments based on usage, motivations and behaviors at retail.  A hierarchy of convenience shopper needs is defined and a multitude of tactics are applied to ensure growth through the introduction of new audiences and increases in shopper spend.

Comprehensive, yet easy to navigate and implement into action, Fast Forward  Emerging Opportunities in Convenience Retail, provides a “retail roadmap” that ensures retailers can develop a more meaningful relationship with shoppers by consistently exceeding their expectations. Click here to download the study.

Tension around sustainability

There is a number of growing tensions and emerging paradoxes in the world surrounding sustainability.  One in the US at the moment revolves around some basic food staples - principally those that use corn as an ingredient.

The US is currently experiencing growing interest and support for the production of corn based ethanol because;

- It promises a reduction in the dependence of petroleum resources from other nations.
- There is a perception that it will reduce carbon emissions from driving*.

Trouble is, the use of corn for the production of ethanol is reducing supply for use in food production, causing a rise in the price of some food products.  Food manufacturers are now competing for their raw ingredient with ethanol manufacturers and the increased prices they have to pay are finding their way to shoppers.

Hence the tension.  Wherever you stand on the corn based ethanol issue, it's difficult to ignore the pull, that will only increase, between what we need and want to buy as shoppers and the impacts and effects of our purchases in other areas.  Where will the tipping point come?  When will the realization that the cost of our weekly food shop is rising because of our growing thirst for cleaner cars? How, as shoppers and consumers, are we to balance these tensions?

Our Shopper Culture Study looked at the issue of sustainability and we concluded that, while there is growing awareness of the need to be more responsible, it is not yet a mainstream issue in the US. 

But, will the increase in basic food staples start to raise the consciousness of such effects with US shoppers? 

How much does it have to hurt the purse or wallet each week for people to start asking questions?

What impact will it start to have on other nations (like Mexico) if the US starts to take the bulk of corn production (corn is of course the base of tortillas, a basic food staple in Mexico). What impact will US consumption patterns have on other cultures?

A development that we will be keeping an eye on in the coming months and years.

*For a counter view, that creating ethanol from corn is actually more damaging to the environment and is seen as Unsustainable Subsidized Food Burning, click here.

Post-Shopping Regret

This quote came into today on an email from the Henley Centre HeadlightVision. Dr. Michelle Harrison was quoted in an article in The Daily Mail entitled Beware post-shopping regret as saying ...

“Consumption is becoming laced with guilt. Going forward, I suspect that shoppers will continue to feel ‘I’m entitled’, but they will begin to feel guilty about overdoing it. We’re still a long way from women wanting fewer shoes, but I can see changes in the way we feel about shopping.”

The article talks about a growing phenomenon that is gripping the shires in the UK called Post-Shopping Regret - or PSR. The article was a particular dive into the world of dresses and shoes, but it got me wondering as to in how many other categories this particular phenomenon might bubble up? How many Apple iPhone users for example are starting to feel it now that their first bills are turning up from at&t in a box?

How far do we push our need for indulgence and when do we begin to feel some regret of our actions? By creating engaging and exciting store environements, discovery, exploration and theatre, could we push shoppers too far, get them too carried away and find we're growing a new field of opportunity for theropists?

So what do you find you shop for and then feel a twinge of regret afterwards?

America's Relationship to Shopping

Reprinted from the In-Store Marketing Institute

By Meg Kinney, The Integer Group

OAK BROOK, IL -- Shopping is a game of clear winners and losers, with retailers assuming the role of "worthy challengers," according to half of the participants in a new qualitative research study by The Integer Group. The other half viewed shopping as a personal journey of discovery and inspiration, with retailers serving as "trusted editors" who feature products that enrich our lives.

The study challenges the usual assumption that shoppers are task-focused when on routine shopping trips, said Meg Kinney, executive vice president of strategic planning for The Integer Group, during a presentation April 20 at the In-Store Marketing Summit. The reality is that many shoppers tap into deep psychological rewards when shopping, prompting Integer to characterize time spent shopping as "productive leisure."

"When we talked to folks we realized that everyday shopping really is a hybrid activity," Kinney said. "Yes, there's task accomplishment, but there's also a recreational component. It's a little bit work and a little bit play."

The year-long qualitative study, dubbed "An Exploration of America's Relationship to Shopping," recruited 32 "highly involved" shoppers in four markets: Des Moines, IA, Orange County, CA, Houston, and the Bronx, NY. The study examined everyday shopping behavior for products purchased or replenished at least once a month primarily through food, drug and mass channels.

Researchers audited store trips, compared shopping lists to receipts and collected more than 100 hours of in-home interviews. The team also did shop-alongs with video cameras attached to participants as they shopped the stores. The videos were played back to participants later, giving them a chance to share their thoughts and feelings at different points in the trips.

Most in-store messaging today is designed with the idea that shoppers are on a clear mission and that their personal lives are left behind when they enter a store, Kinney said. But that approach may be missing opportunities to speak to shoppers in ways that acknowledge the more emotional and rewarding parts of the shopping experience.

"Let's all start thinking about all of these emotions -- spontaneity, excitement -- and start thinking of this as rich new territory that we can access when we sit down to develop in-store programming," Kinney said. "What if the psychological rewards of shopping were the well that we drew from for the way we engage shoppers in-store?"

As researchers compiled interviews, two types of shoppers emerged as archetypes that help characterize their relationship to the shopping experience: shopping as "Muse" and shopping as "Master," or challenging teacher. The two aren't to be thought of as traditional shopper segments, but as models that provide a new context for developing in-store messaging, Kinney said.

Shopping muses value discovery and spontaneity in the shopping experience. Unplanned purchases are a given for them, and they assume the retailer is a trusted editor picking the assortment to spark new ideas. Their positive emotions peak when they're actually in the store, and are lower during trip planning and unloading groceries afterwards.

Shopping masters are driven more by value and outcome, and their performance as a "good shopper" hinges on not making unplanned purchases. They assume the retailer is a worthy challenger that helps sharpen their skills at finding deals. Unlike muses, their emotions peak during trip planning and preparation, such as while clipping coupons or making lists, and at checkout, when they get their receipt and see how much they've managed to save.

Kinney urged audience members to consider which of the two models best describes the shopping environment and categories in which their brands are sold. Is enough being done to reward muses' desire for discovery and spontaneity? Are masters being rewarded at checkout with messages that praise their performance and highlight their savings?

"The inspiration here is that the shopping relationship can be a whole new context for messaging," Kinney said. "It could be a whole new way of looking at the existing tools in our toolbox."

The study also found that participants believed the cumulative effects of their purchase decisions had the power to change the planet -- for good and bad. Participants generally felt good about buying products touting cause overlays, sustainability and corporate responsibility, but only if the price premium for such products wasn't too steep. The term "pragmactivism" comes close to describing the combination of responsibility and practical adherence to budget. Shoppers want help from retailers in picking "redemptive" products, Kinney said.

"Shoppers expect us to make shopping responsible," Kinney said. "What if sustainability or responsibility becomes the new borrowed equity? What if we use sustainability or responsibility as a badge?"

Published: June 2007

Source: In-Store Marketing Institute