SHOPPER MARKETING
SECTION ONE
SECTION TWO
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How Digital Solutions Are Changing Shopper Behavior
Digital technology is changing shopper behavior in several ways. It is redefining the
traditional path to purchase in stores. It is creating “Xtreme Shoppers” who seek
value wherever they can find it. And it has sparked creative new retail formats that
deliver unique experiences.
Those were the key points contained in Future Buy, a new study of U.S. shoppers
conducted by GfK Custom Research North America.
There is a new group of value-seeking consumers called “Xtreme Shoppers” who are seizing the new path to purchase. But retail is certainly not standing still just watching all of this go by. Store operators are trying new things.
The linchpin of change has been the Internet which has captured the attention of consumers. Three of four of them use the Internet more than one hour per day, two of three access it at least seven hours every day, and three of ten are online more than 17 hours per day, according to the research.
This is a huge opportunity for marketers and retailers to actually study what impact is this going to have on people’s lives. The Internet is very much involved every day. The evolution has been from emails, Google, and online shopping to Facebook, Twitter, and text messaging. Young consumers today are jumping over text messaging to go right to Twitter. And it’s still early along the digital path.
Change will continue via smartphone and tablets, as more consumers purchase them to connect with each other and to gather and evaluate stores, brands and everything in between.
The shopping process has changed. It used to be very linear. Go to the store to buy something, take it home, hope it works, and return it if it doesn’t. A new shopping process has taken hold and consists of evaluating needs; sourcing info, products, and channels; selecting brands; maximizing value post-purchase; and advocating via word of mouth and social media.
At the same time, the number of “shopper touch points” has grown to include:
- Online (Google, retailer websites, shopping sites, brand websites, social media, etc)
- Mail (newspaper flyers and brand direct mail from retailers and brands)
- In-Store (kiosks, product demos, info broadcasts, store circulars, POP displays, etc)
- Word of mouth (opinions of friends, family and colleagues)
“Xtreme Shoppers” are now 37% of all shoppers. They are seven of 10 who find products on the Internet and the six of 10 who purchase products online as they drive the purchase of most product categories. Four of 10 Xtremes are online more than 17 hours a day. They are five times more likely than non-Xtremes to use the Web for tips on deals and coupons. They are one-third more likely to believe retailers need better rewards programs and that current programs are too complicated.
These people are engaged. They don’t just have the Internet on. They are using it to guide key decisions in their life. Some of them became power shoppers as a result of being enabled digitally. They probably will continue to grow.
The question is: Are non-Xtremes going to become more like Xtremes? The answer is Yes. They have grown by over 20% over the last year. They are far more pro-active. They are controlling. They want brand and retailers to have less influence on them, and not more. They are much more likely to negotiate a lower price.
Meanwhile, a growing group of diverse retailers are offering a better customer experience in stores. Some of these best-in-class chains that offer clean, neat and organized stores are Target, Footlocker, Sephora, and Apple.
Other retailers are expanding services to offer a complete solution to shoppers. For example, CVS/pharmacy has retail stores, e-commerce, mail order, in-store clinics, and a card-based loyalty program. Best Buy stresses service with its Geek Squad for help with computers and related equipment.
The research indicates that retail must follow the shopper and deliver unique experiences. Sometimes that is taken literally. For example, “pop-up stores.” If people aren’t going to come to the big mall anymore, retailers need to bring stores to them. So pop-up stores have been created. They can go anywhere and it’s just as nice if it’s in a mall or a free-standing store.
Several creative websites that are way “out of the box.” For example, quirky.com where consumers invent products that are later sold, and checkpoints.com where shoppers earn points for going to stores and using their smartphone to scan barcodes on products.
Shoppers are under tremendous pressure to obtain value. That is not going away any time soon.
This essay was derived from a presentation on the “Future Buy” study by Lewis Paine, Senior Vice President, Consulting - Consumer and Retail at GfK, at the Shopper Insights in Action conference in Chicago.
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SECTION THREE
