Shopper Culture

What We Say vs. How We Shop

A while ago, we recounted the story of how a simple divider in a shopping cart can radically change shopping behavior. In fact, the little sign that said, "place produce here, all other products there" doubled fresh produce purchases during the experiment.

Additional secondary research by Collin Payne and Mihai Niculescu found that this was massively more effective than other produce marketing methods (shelf labeling, advertising, coupons, etc.), which often only increased sales a couple percentage points.   

But we began to wonder if such a persuasive marketing method would ever survive the standby of shopper research: the direct response survey of purchase intent. So we fielded the question to a panel of 4,593 US shoppers.

We found that a cart divider ranked last in what people claim would influence them to buy more produce.

When asked directly if a cart divider would influence their produce purchases, an overwhelming majority said it would have no effect.

Paper Versus Plastic

According to the National Retail Federation, in 2012 Americans spent $50 billion on retail via credit/debit, which equates to $427 in transaction fees per household.  If shoppers were fully aware of the hidden fees bank/credit card companies imposed upon retailers; 2% of each credit card transaction, would we see a shift in shopping behaviors? If retailers were required to post the fee amount, would people stop shopping at stores with high fees or use a different form of payment?

A number of small businesses, boutique retailers and restaurants around the country have shifted to cash only or set minimums for credit card transaction.  For example, the famous steakhouse Peter Luger in Brooklyn, NY only accepts cash and if you don’t have the cash you can use their debit card machine.  The large club store retailer Costco only accepts cash, checks, debit cards, or American Express. Per Costco’s website, they don’t accept other major credit cards because their “exclusive arrangement with American Express helps to assure the lowest transaction fees available, which in turn helps keep prices low.” Costco shoppers are okay with this policy because they value receiving low prices over paying with plastic and earning rewards points and Peter Luger customers prefer to receive quality food.

For some companies curtailing transaction fees may lead to higher revenues and/or lower product prices, however traditional grocery retailers may want to consider a hybrid approach. Given the economic condition of our country and the fact that a number of households depend upon their credit cards for survival, this practice would alienate a large portion of customers.  As an alternative, these retailers could specify day(s) of the week featuring cash, checks, or debit cards only and offer storewide savings.  The savings the retailer generates from not having transaction fees could compensate for the storewide sale, generate more traffic and/or new customers. Times are changing and who knows when a shift in shopping behavior will occur. 

 

Tesco Recaptures the Shopper's Imagination

Tesco’s rise to preeminence in the UK occurred on a wave of innovation, both in products offered to customers and in customer service. Recent years have brought global expansion for the retailer, the development of its own label, and laterally venture brands, alongside the continued quest for outstanding value dominating the Tesco agenda. The shoppers’ in store experience began to take more of a supporting role.

Tesco recently announced its likely departure from the U.S. with the sale or closing of the Fresh and Easy banner. This announcement coincides with a greater focus on what the retailer does best, with 2012 bringing in-store revamps to UK Tesco stores that shoppers deserve. The best example we’ve seen of this is in Bracknell, Berkshire, where we get a glimpse of what the UK supermarket experience of tomorrow could look and feel like. Here are five things that caught the eye of Integer London.

Emotional Advertising for FMCG Retailers

There must have been something potent in the British air this year. A summer of celebration and a nation coming together has seemingly spilled out into the Christmas campaigns created on the backdrop of the Jubilee and Olympics.

There’s been a common theme of emotional advertising in a category that is generally about price drops and saving shoppers money. Retailers are focusing more on identifying with shoppers by representing family moments that only Christmas can bring.

Sainsbury’s has created a lovely integrated “12 Days of Christmas” campaign. The TV advertising brings to life 12 special days that happen in the run up to Christmas. The Christmas section on their website not only helps you plan your Christmas day, but also links to the 12 days campaign by detailing gifts, recipes, and easy click-to-buy options surrounding each day. 

The Australian Grocery Channel in Review, 2012

As 2012 comes to a close, we take time to review the grocery landscape in Australia, how it has evolved, and the notable trends we’ve observed throughout the year.

While smaller retail groups such as Aldi, IGA, and Costco have begun making inroads in the Australian market, the powerful duopoly that is Coles and Woolworths has continued to dominate.  

Loyalty Program in Japan Extends to Vending Machines

Japanese media and retail behemoth Tsutaya has a well-known loyalty program with over 35 million members.  Shoppers can earn “T Points” at any of the over 46,000 participating retailers and redeem them for an equally diverse array of rewards. Recently, they added a new variety of retailer to the mix: Kirin beverage vending machines. Thirsty patrons need only swipe their loyalty cards when they buy a drink to earn points. 

Vending machine loyalty programs have been done before, but hooking them up to a larger network is definitely new news. It seems there is no end in sight for loyalty programs, and it will be interesting to see what opportunities emerging technologies such as NFC could allow in the future for this space.

Contributed by Integer Asia-Pacific

Photo source: ubergizmo

Hot Dogs Are the Hot Item for the Fourth of July

Like many Americans, I equate the Fourth of July with hot dogs, hamburgers, and beer. Despite the abundance of Fourth of July sales by retailers attempting to turn this patriotic holiday into a shopping holiday, I think the spotlight truly shines on the good-ole hot dog.

Almost 90% of adults will celebrate the Fourth of July with an estimated 40 million cookouts (BIGInsight^TM Monthly Consumer Survey June 2012). This is expected to generate a lot of demand for hot dogs. Last year, shoppers spent $1.7 billion in supermarkets just on hot dogs. That’s a lot of hot dogs. In fact, while enjoying the festivities, Americans will consume an astounding 150 million hot dogs, enough to stretch cross-country from D.C. to Los Angeles more than five times. That’s more than seven times as many hot dogs as Major League ballparks will serve during the entire season.

Men and Unmarried Couples are Biggest Spenders for Valentine’s Day

The 2012 Super Bowl Commercial by Telaflora featured Adriana Lima saying, “Guys, Valentine’s Day is not that complicated. Give and you shall receive.” It has been classified as sexy and effective. Why? Because it features Adriana Lima, but also because it targets men, a group that spends up to $200 on Valentine’s Day gifts with the number one gift being flowers, the main offering of Telaflora.

According to Big Research’s January 2012 study, men are not just spending money on flowers. They plan to spend, on average, $200 on jewelry and $100 on clothing with a preference to shop at department stores. The amount women plan to spend is nominal by comparison. In addition to shopping at discount stores, this spending gap could be the result of women’s focus on sentimental gifts like handmade cards and romantic dinners at home.

Although targeting male shoppers is an effective marketing strategy, there are other attractive shopper segments among the 60 percent of adults that celebrate Valentine’s Day, a 17.6 billion dollar holiday. Unmarried couples are perhaps a bigger opportunity, especially with marriage rates at a low. In fact, unmarried couples that live together and single, never-married shoppers plan to spend $20 to $30 more on their significant other for Valentine’s Day than married, divorced or widowed shoppers (Big Research January 2012 study). In addition, these shoppers are resourceful. They shop multiple outlets and utilize technology, like smartphones and tablets, to do research and compare prices before making a purchase.

While it makes a lot of sense to focus on men, is it necessary to be gender specific when marketing for February 14^th? What if the Telaflora commercial targeted unmarried couples? Instead of being called sexy and effective, critics may have said it was creative and tactful. How do you plan to increase your share of this $17.6 billion dollar holiday? Will you target men or take a different approach and target unmarried couples?

Contributed by Kimberly Chatman and Kira Torgersen 

Starbucks Bounce-Back

My husband is a coffee freak! It is an absolute no-no to talk with him before he has had his morning coffee. And he likes GOOD coffee. Which means spending somewhere between $8 and $12 a bag (whole bean, of course). Oftentimes, I have had to contemplate taking out a second mortgage just to support his habit. Which is why I was pleasantly surprised and delighted to find out that Starbucks offers their customers a little pay back.

On their packaging they have this great bounce-back offer that allows shoppers to get a FREE tall coffee at participating Starbucks if they bring in their empty bag. 

Data Transparency Can Encourage Participation and Improve Relations

I have recently fallen in love with ever-growing trend of discount and exclusive online wine clubs. One in particular, mywinesdirect.com, recently solicited my opinions in a survey, but more importantly, in the invite email, they demonstrated how they have been actively responding to the feedback they have received.

As you can see, they note where they are working on some areas (i.e. a loyalty program), have directly acted to others (i.e $0 shipping) and in cases where changes can't be made, they offer an explanation (i.e. point 6 about merlot selections). After reading this, I realized that immediately it made me think of them in comparison to other services I use and how much more positive I felt about their offering. It made me think, "they really listen to their users."  So, I immediately set about offer up my opinions in their survery. (The $20 credit didn't hurt either.)

More importantly, this got me thinking about all the data we collect as marketers and how it often gets treated.  At best, we are using to make informed decisions about our consumers/shoppers and maybe its feeding a CRM program. At worst, the data is getting store in a big machine somewhere, where no one is looking at it.  However, you don't often see companies letting consumers behind the data curtain to see what respondents ask for, and more importantly, what the company is doing about it. I found this a refreshing use of data to improve consumer/shopper relations.  How is your company using your data? 

Online Shopper Engagement: Good Deals Vs. Fostering Relationships

When it comes to online engagement with brands, online coupons were the most used interaction by shoppers; higher even than visiting brand Web sites. Within this category, Food brands led the surveyed categories with 21 percent of shoppers saying they had downloaded online coupons. Interestingly, a mixed bag of categories (Entertainment, Household Products, and Apparel) follow closely behind—showing that the Web-savvy shopper is looking for discounts across the board.

Where Does Social Media Fit In?

Increasing brands’ presence within the social media space is the cost of entry for many manufactuers, so it’s interesting that only 6 percent of consumers overall reported following a brand via this channel. It’s not surprising to see Entertainment brands (movies, music, books, etc.) lead social interaction as they are often popular topics shared on the Web. However, it’s at a meager 4 percent of social share for all consumers. Even apparel brands, which could potentially offer some amount of social badging and status, reach less than 2 percent of consumers.

For more information on the converging worlds for digital and retail, download the latest issue of The Checkout here.

Panera Bread Honor System Paying Off

Good news, there is reason to have faith in the goodwill and fairness of mankind. As it turns out, people, when given a choice, will pay a fair price for a good meal. The Panera Bread non-profit experiment is proving to be a success after the chain implemented a pay-what-you-can policy for its patrons.

Operated by Panera Cares, the non-profit feeds almost 4,000 people daily. The bakery cafe suggests a recommended price for each item, but customers pay what they can or think is fair. Around 65% pay the recommended price, while the others either pay more or less. Some pay nothing at all. To date the restaurant has nearly broken even.

According to the New York Daily News, "Panera hopes to open a similar location in every community where it operates. Other nonprofits have opened community kitchens, where customers set the price, and the idea has spread among food enthusiasts and philanthropists. But Panera brings new scale to the idea—its community restaurants will use the company's distribution system and have access to its national food suppliers."

The question now is will the community sustain a concept like this indefinitely?

Will those who can afford to pay more feel obligated to pick up the tab for those less fortunate?

What other channels of trade might pay-what-you-can business model support? Grocery? C-store?

 

- Contributed by Paul Ballew

All The Coffee in Brazil

While on a recent visit to the Integer Group office in Sao Paulo, I took some time out to visit a bit of Brazilian retail.

Brazil has some interesting things going on, and the retail landscape is far less concentrated than it is in more developed markets. Having said that though, it felt very familiar.

In a high-end mall, I stumbled across this McCafe format.

Somewhat incongruent to my western eyes, there were a couple of interesting observations. First,this is a stand-alone, coffee only McDonald's format. Second, the context in which it sat surrounded, by high-end fashion stores. I found it interesting that the brand is in a position to be accepted in that context and in a high-end location.

Continuing on the coffee theme, Nespresso has some very cool outlets for their coffee machines and for the cartridges that go within them.

I have to confess, this is not a retailer I have noticed in the U.S. (are they sold through branded stores?), but the environment they created is very cool, selling only their range of machines and the coffee cartridges they take. I particularly love the colour coding of these and how they create a huge wall of colour that you cannot help find appealing, making selecting your favourite coffee style really simple. This is terrific merchandising.

So what to conclude? Apart from the obvious fact that coffee is an important part of Brazilian culture, I think it shows how global brands are tailoring their offerings to the context of the local market and how they are using global strategy implemented with cultural nuance in local markets. Something for every brand to consider is how to use the local retail environment and culture in different ways, in different markets, to achieve overall global brand objectives.

Findings from NACS/Coca-Cola Convenience Store Pilot Test

 

The NACS/Coca-Cola Retailing Research Council's has released their findings from the latest convenience store pilot initiative. Testing supports the Shopper Hierarchy of Needs Model that was revealed last year which identified a shoppers' basic, fundamental, and emotional needs. The test aimed to further previous findings by testing solution-oriented merchandising fixtures designed to increase simplicity and ease of shopping to see if it, in turn, engaged shoppers and increased sales. The report reveals that:

• 78% of shoppers say they choose a c-store based on whether or not the store "always has what they need"
• Cravings drive impulse purchases
• Brand specific purchases can be influenced

To read more of the findings you may download the full report here. 

Instant Feedback

On a recent trip to Key West, my husband and I ate at a lovely restaurant called Bagatelle. When we got the bill, my husband pointed out the scale at the bottom of the receipt where customers are asked to “rate your service today.”  

Being in shopper marketing, I immediately found this intriguing and thought it was a simple, clever way for the restaurant to get instant feedback.  After we left, my mind went to thinking about what they do with the information.  Do they compare the amount of the tip to the rate they receive? Do they have other questions like “rate your meal today” or “rate our décor today”?  And could there be other Post-Tail™ tactics that could be executed in the same fashion to build a rapport with the shopper? Interesting thoughts.  If you have observed a similar tactic or message, let us know about it. And if you are a merchant, I’d love to hear about how you use this information.