Right now, shoppers are making new purchasing decisions that at first don’t seem a-typical. But with knowledge gained from insight, marketers can make sense of them after all.
For example, we’re seeing trade-down in non-emotional items, like toilet rolls and light bulbs, but upturn in the fortunes of ‘feel good’ range sales. In fact many ‘indulgent’ (typically, more expensive) categories are more popular in an economic downturn. Why?
15% of households are shopping for ‘Value’ Products and trading up their usual brands, all in the same shopping basket. (Datamonitor 2008)
Professor Ravi Dahr, Director of Marketing at Yale Centre for Customer Insights – expands on this theme: “Although we are all looking to save, we are all human beings. When you are not shopping, but planning to do it next week, you are in rational mode and feel able to resist temptation. But this isn’t necessarily the case when you are actually in the store.”
Shoppers are now interested in ‘trading their spend’. So, although the expensive night out is out, they’re still looking for a ‘good-times’ fix. They just treating themselves, with a cheaper ‘at home’ alternative.
In a nutshell, consumers are definitely feeling the financial pinch, but the choices they are making when shopping are, interestingly, being dictated by a range of emotional functional and self-esteem related factors. This is often resulting in a greater increase in impulse spend at the point of purchase.
Professor Dahr suggests: “I may no longer be able to afford a $1000 suite, but now a $2.50 latté seems a more reasonable price treat!”
Which retailers are benefiting?
Not surprisingly, Premium retailers are having a hard time and discount stores are getting the customers – as you’d expect. However, what is new is that shoppers going into stores seeking ‘Value for Money’, will not only spend more on the other price deals on key essential products they discover in-store, but, at the same time, their emotional triggers can be prompted for premium, branded ‘indulgent’ goods.
Clearly the retailers that are prospering are the ones offering a ‘Value for Money’ message. But this has to be reflected by the look and feel of the store experience and the retailing environment i.e. the store may have some good deals on offer, but unless it looks like it does, shoppers may not walk in.
Manufacturers
Datamonitor reports that the real win for manufacturers is to convey ‘Value for money’ on all products. Not necessarily by cutting price, but by showing extra benefits that justify price. The shopper needs to feel ‘I can afford this everyday luxury product’.
Empathy and understanding of shoppers and the decisions they make has become an essential factor for today’s successful retailer. Brand is still crucial and there are numerous factors which lead to a purchasing decision.
Purchasing Triggers
- Clear packaging messages allied to stand-out.
- Targeted point-of-purchase messages, linking product to need
- Purchase-friendly displays, leading shoppers to products that meet their needs.
Engaging shoppers with a real reason to purchase at every touch point, and changing their normal behaviour, is the method that is winning through.
The winning combination
The facts
In an average supermarket, a shopper is faced with between 50,000 and 70,000 product SKU choices. In the UK alone, more than £750 million is spent on in-store POS and POP materials each year. Yet, at least 80% of that investment is wasted.
A shopper’s mind can only process five to seven visual messages at any one time. At least 60% of a shopper’s fixation is on the product and packaging itself, with a further 12% of attention being given to the shelf edge. Impact is everything if in-store POP and POS investment is going to be well spent.
An insight into our approach to Insight!
At Quant Presky Maves we believe that brands are best positioned, customers better engaged and communications made more relevant, only when there is real knowledge about what is driving purchasing decisions and the buying process itself. Therefore, the strategies we create and execute for clients are always developed by combining data with behavioural and attitudinal factors - validating all of the who, what, where when, how and why’s. This, we believe, is true Customer Insight.
