Shopperstates: Six Dimension of the New American Shopper

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A new study from Y&R’s BAVLab breaks consumers down into six “shopperstates” based on buying habits and technological tendencies. After surveying 14,000 U.S. consumers, BAVLab broke shoppers into the following categories: bargain hunters, knowledge seekers, practical players, store reassurers, brand desirers and mobile warriors.

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Shopperstates: Six Dimension of the New American Shopper

  1. 1. Shopperstates SIXDIMENSIONS OF THE NEW AMERICAN SHOPPER ™
  2. 2. 1. The New Retail Landscape 2. The New North American Shopper 3. Introducing the Six Shopperstates 4. How Shopperstates Shift by Category 5. Using the Data to Drive Shopper Insights SHOPPERSTATES: SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER A BAV Shopper Report Summary from Labstore and BAV Lab, the creators of BrandAsset® Valuator - the world’s largest database and model on brands / 3 / ABOUT LABSTORE ABOUT BAV SHOPPER Labstore is WPP’s newest worldwide retail and shopper marketing network. We bring a global perspective and presence to our work with Labstores in 23 markets. We believe in the fusion of digital and shopper. And we have a process for creating Shopper Chemistry™ – igniting a reaction that results in a purchase – that starts with shopper insights. BAV Shopper is the latest research study from BAV Lab, the creators of BrandAsset® Valuator – the world’s largest database and model on brands. In the USA, BrandAsset® Valuator measures the health and imagery dimensions of 3,000+ brands in over 200 categories. BAV Shopper adds a new lens to the data, quizzing shoppers on their attitudes and behaviors, and linking the responses to the primary study. This report summary is based on two waves of BAV Shopper research. Wave #1 surveyed 9,170 shoppers in the first quarter of 2015. Wave #2 surveyed 8,891 shoppers in the third quarter of 2015.
  3. 3. GLOBALIZATION Retailers are rushing to expand across the globe – physically and digitally – and shoppers are more globally aware than ever. CPG brands are looking for global shopper marketing solutions. DIGITIZATION Retail continues to be transformed into bits and bytes: not just online, but also incorporating technology into physical stores. Products and services are also digitizing – Spotify and Uber are great examples. Digital is more and more mobile, and shoppers expect retail to be “on-demand”. POLARIZATION The middle of the market is disappearing – in both consumer and retail terms. Retail is polarizing from extreme value to ultra specialty. PERSONALIZATION Data is driving personalized communications - we are in the era of “me-tail”. Shoppers are demanding customized products and services. *Source: Time Magazine, May 14, 2015. According to a 2014 Canadian research study from Microsoft, people now generally lose concentration after eight seconds, about one second less than goldfish, highlighting the affects of an increasingly digital lifestyle on the brain. Still…if you zoom out a little from the blurred image it is possible to discern an overall picture. Here are four trends defined by Labstore that help provide a framework for understanding the upheaval in retail: Retail right now is one big blur. On the one hand it’s a blur of speed, as the pace of change continues to ramp up and customer attention spans shorten. (Fun fact: humans now have shorter attention spans than goldfish*.) On the other hand it’s a blurring of the lines between old and new retail. Digital has bled into physical retail (and vice versa), the wallet has merged into the smartphone, global retailers have moved into local markets, manufacturers have become retailers (and retailers, manufacturers)… and on it goes. The nice, neat dividing lines of times past have been obliterated forever. The result is an incredibly dynamic retail landscape. Our WPP partners, Kantar Retail, call it “the great Retail Reconfiguration”. / 5 // 4 / ACCORDING TO RECENT RESEARCH, HUMANS NOW HAVE SHORTER ATTENTION SPANS THAN GOLDFISH.* 1 THE NEW RETAIL LANDSCAPE SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  4. 4. A new American shopper has emerged on the new retail landscape. They are empowered by technology, enabled by availability and transparency of information and enlightened with a global perspective. Their shopping attitudes and behaviors have been permanently altered by the Great Recession and by interaction with two key retailers – Amazon and Costco. 2 THE NEW AMERICAN SHOPPER So how do you get inside the head of this new shopper? Our BAV Shopper research has identified six Shopperstates – statistically valid clusters of prevailing shopper mindstates and associated behaviors. These break down as: Bargain Hunter, Knowledge Seeker, Practical Player, Store Reassurer, Brand Desirer and Mobile Warrior. We’ve categorized the overall American population according to these Shopperstates and then looked at how individual Shopperstates change depending upon the category and brand being shopped. / 7 // 6 / THE KEY IS TO UNDERSTAND HOW THE SHOPPERSTATES OPERATE FOR YOUR BRAND, YOUR RETAIL PARTNER AND YOUR CATEGORY…AND HOW THAT INFLUENCES THE PRODUCT OR SERVICE YOU PRESENT, AND THE STORY YOU TELL SHOPPERS. In terms of Amazon, our BAV Shopper research shows that over 20% of all US households are now Amazon Prime members – which fundamentally changes shopping behavior on a mass scale. And when it comes to Costco, their sales grew $50 billion annually from 2000 to 2013 to become the nation’s third-largest retailer. Because these two retailers’ business models are based on membership/subscription, our new shopper is actually paying for the privilege of shopping with them. And as those retail relationships have developed, our shopper has been trained to expect free, fast on-line delivery and close to wholesale prices on big brands. Bargain Hunters Knowledge Seekers Practical Players Store Reassurers Brand Desirers Mobile Warriors 21.50% 8.84% 20.96% 15.71% 16.11% 16.88% WHAT KIND OF SHOPPER ARE YOU? of all U.S. households are Amazon Prime Members SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER Percentage of Shopperstates in US population 18+
  5. 5. 3 INTRODUCING THE SIX SHOPPERSTATES / 8 / / 9 / BRAND DESIRER To this shopper type, quality is a priority over price and brands matter. They choose brands that reflect their status and values, and like to buy the very latest, often being the first to discover and try new things. 15.71% of shoppers bias to Brand Desirers. BARGAIN HUNTER A “precision shopper”, the Bargain Hunter sticks to a strict budget and loves a bargain, getting a deal and saving money…often putting their family’s needs ahead of their own. 21.5% of the adult population biases to Bargain Hunters. PRACTICAL PLAYER A no-nonsense shopper, the Practical Player tends to buy the basics, keeps within their means, and wants a fast, easy, convenient shopping experience. 16.88% of Americans fall into this segment. MOBILE WARRIOR All our Shopperstates have a digital dimension, but we identified a small but important segment that is unusually digitally driven. More than most, Mobile Warriors use their smartphones to compare prices, get information, receive coupons and make purchases. 8.84% of our sample are what we call Mobile Warriors. STORE REASSURER In a digital age, the Store Reassurer prefers to shop at a store rather than online because they can touch and feel the product and be more confident they are buying the right thing. 16.11% in the BAV Shopper research leans towards this Shopperstate. KNOWLEDGE SEEKER Ratings and reviews junkies, Knowledge Seekers do their homework online before making a purchase, whether they end up buying in-store or digitally. 20.96% of our survey skews to this Shopperstate. SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  6. 6. BARGAIN HUNTER Skewing female, Bargain Hunters stick to a strict budget and love a bargain, getting a deal and saving money… often putting their family’s needs ahead of their own. They are distributed fairly evenly across age and income brackets. When the data is split by low and high income however, you get a more nuanced picture of the Bargain Hunter. Above $75k income, they are more digitally oriented in their hunt for a bargain - buying through Amazon Prime twice as much as those under $35k, being 63% more likely to research online, and 20% more likely to compare prices on their smartphones in store. The lower income Bargain Hunter is far more store-centric – 52% more than their wealthier counterparts - probably by necessity and because they want to ensure they are buying the right thing. / 10 / A More Highly Evolved Shopper? The fact that Bargain Hunters skew female is in line with a 2014 study* which notes that women are generally less impulsive than men - and when they do shop impulsively, spend less than men. The Bargain Hunter Mommy The female gender bias to Bargain Hunters is supported by a recent Y&R research study called “Who’s Your Daddy?” We found that Dads are considerably less frugal than their partners, with 33% trying to buy products on sale, versus 52% of Moms. / 11 / Bh PROFILE DASHBOARD 37.2% Male 62.8% Female 20.2% (18-29) 27.7% (30-44) 26.2% (45-59) 25.9% (60+) 18.7% (<25k) 26.8% (25-49k) 31.5% (50-99k) 21.6% (100-199k) 1.3% (200k+) F M 18 30 45 60 50 100 20025 0 $k Yrs GENDER GENDER POPULATION INCOME INCOME AGE AGE 21.50% *Source: http://www.creditcards.com/credit-card- news/impulse-purchase-survey.php SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  7. 7. Knowledge Seekers do their homework online before making a purchase, whether that purchase ends up taking place online or in-store. Though one might expect these internet-savvy shoppers to skew younger, they’re of all ages. In fact, they over-index with individuals in the 45-59 age range. / 12 / Knowledge Seekers are Representative of a Larger Trend 81% of people do online research before purchasing. 61% read product reviews. And on average, we visit at least three online stores before making a purchase.* Knowledge Seekers are the 21% of shoppers who do the most online research. And they are Older than You Might Expect Online research is not just for Millennials. 56.2% of Knowledge Seekers are above the age of 45. / 13 / *Source: GE Capital Retail Bank’s second annual Major Purchase Shopper Study (conducted by Rothstein Tauber) KsKNOWLEDGE SEEKER PROFILE DASHBOARD 53.6% Male 46.4% Female 19.6% (18-29) 24.2% (30-44) 31.6% (45-59) 24.6% (60+) 14.4% (<25k) 23.4% (25-49k) 33.2% (50-99k) 26.5% (100-199k) 2.5% (200k+) F M 18 30 45 60 50 100 20025 0 $k Yrs GENDER GENDER POPULATION INCOME INCOME AGE AGE 20.96% SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  8. 8. Practical Players are diverse— they come in all shapes and sizes (and ages and income brackets). What differentiates them from other shoppers is their focus on convenience and sticking to a strict budget. They over-index slightly male, low income, and older, but there are many who don’t fit those demographics. / 14 / Buying Store Brands is a Matter of Practicality, as Well as Price Practical Players are 17% more receptive to buying store brands over name brands. Bargain Hunters are only 9% more receptive to store brands. On the other end of the spectrum, Brand Desirers are 52% more likely to choose name brands over store brands. / 15 / PRACTICAL PLAYER PROFILE DASHBOARD Pp 53.1% Male 46.9% Female 18.4% (18-29) 26.6% (30-44) 28.1% (45-59) 26.8% (60+) 24.7% (<25k) 24.8% (25-49k) 29.7% (50-99k) 18.8% (100-199k) 1.9% (200k+) F M 18 30 45 60 50 100 20025 0 $k Yrs GENDER GENDER POPULATION INCOME INCOME AGE AGE 16.88% SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  9. 9. PROFILE DASHBOARD These shoppers prefer the experience of going to a store over the convenience of shopping online. Though you might expect them to skew older, store shoppers actually over-index younger (18-29) and under-index older (60+). / 16 / The Store is More than a Showroom 73.5% of our respondents would “rather shop in a store than online because [they are] more confident that [they are] buying the right thing.” 79.7% of our respondents prefer going to the store because they “can touch and feel the product.” For some Shoppers, it’s the Opposite of a Showroom A December 2014 Harris Poll found that 45% of U.S. adults planned to “webroom” as part of their holiday shopping. Webrooming is the opposite of showrooming—it’s researching your purchases online before buying them in store. According to a 2014 report by payment company Cayan, 69% of people with smartphones in the 18-36 demo have webroomed, while only 50% have showroomed. Among 37-48 year olds, 71% have webroomed versus 53% who have showroomed. This trend supports the hypothesis that physical stores continue to fulfill a deep shopper need. / 17 / STORE REASSURER Sr 49.6% Male 50.4% Female 27% (18-29) 28.3% (30-44) 28.7% (45-60) 16% (60+) 22.1% (<25k) 23.5% (25-49k) 31.1% (50-99k) 20.2% (100-199k) 3.2% (200k+) F M 18 30 45 60 50 100 20025 0 $k Yrs GENDER GENDER POPULATION INCOME INCOME AGE AGE 16.11% SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  10. 10. PROFILE DASHBOARD These shoppers pay close attention to the many facets of a brand—its ethics, what it stands for, product quality, and customer service—and how that brand reflects on them as a person. They skew ever so slightly male; and interestingly, over-index with both low income (<25k) and high income (200k+). / 18 / Bridging the Gap between High and Low Income 79% of people making below $25K a year and 74% of people making above $200K love “getting a deal, and saving money” 73% of people making below $25K and 76% of people making above $200K “choose brands and products that reflect who I am as a person” The two income brackets that most strongly agree with the statement “I prefer brands that make responsible choices about ethics and the environment” are low income and high income: Less than $25K and above $200K. / 19 / BRAND DESIRER Bd 52.3% Male 47.7% Female 25.1% (18-29) 27.5% (30-44) 25.5% (45-60) 21.9% (60+) 21.1% (<25k) 22.6% (25-49k) 30% (50-99k) 22.4% (100-199k) 3.9% (200k+) F M 18 30 45 60 50 100 20025 0 $k Yrs GENDER GENDER POPULATION INCOME INCOME AGE AGE 15.71% SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  11. 11. PROFILE DASHBOARD While all our Shopperstates have a digital dimension, the smartphone is the most important weapon in the Mobile Warrior’s shopping arsenal, whether it’s used to store coupons, research alternative products, or make purchases. This shopper skews significantly younger, but these behaviors and attitudes are by no means limited to Millennials. In fact, 68% of Mobile Warriors are above the age of 30 — and 31.9% are above the age of 45. / 20 / A Millennial Myth-Buster? In Telefonica’s 2014 Global Millennial Survey (conducted by Penn Schoen Berland), a surprisingly low 37% of US 18 to 34 year-olds said that mobile technology had significantly transformed their purchasing behavior.* Along the same lines, we found that only 24.4% of people between the ages of 18 and 29 are “Mobile Warriors.” Both of these data points temper our assumptions about Millennial shopping behavior. While “Mobile Warriors” do bias younger, by no means are all Millennials shopping with their smartphones in hand. / 21 / MOBILE WARRIOR *Source: Telefonica’s 2014 Global Millennial Survey (performed by Penn Schoen Berland) Mw 46.6% Male 53.4% Female 31.7% (18-29) 36.3% (30-44) 19.4% (45-59) 12.5% (60+) 19.7% (<25k) 23.6% (25-49k) 33.5% (50-99k) 19.6% (100-199) 3.6% (200k+) F M 18 30 45 60 50 100 20025 0 $k Yrs GENDER GENDER POPULATION INCOME INCOME AGE AGE 15.71% Most Americans won’t buy online if they have to pay shipping costs SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  12. 12. While Shopperstates are broadly representative, they naturally shift when you look at individual categories. You can think of it like a shopper version of DNA – we all have a dominant gene (and certainly the Bargain Hunter Shopperstate is prominent in the make- up of many shoppers). But we also have a recessive gene that can spring to the fore given the right circumstances. 4 HOW SHOPPERSTATES SHIFT BY CATEGORY / 23 // 22 / These nuances affect how we map out the Integrated Purchase Journey for our shoppers. In Electronics, the right information in the right place at the right time is extremely influential. In Grocery, making the store experience easy, enjoyable and tactile is key (as well as arming the shopper with the information to make the best decision). And in fashion, whether shoppers buy online or not, they want to try the item before committing. Take the CPG* category versus Electronics. Customers prefer to shop in-store rather than online 40% more for CPG than other categories. “Brand” and “Price” both over-index for this shopper. At the same time, they are 20% less likely to research products online or use their smartphones to compare prices before purchasing. When shopping for electronics though, the Knowledge Seeker is the dominant type.. Shoppers are twice as likely to research products and read online reviews before purchasing. That’s where the journey starts. Next they look for the brand they desire. But ultimately, even though experiencing the product first hand is high on their wishlist, they may well end up buying online. Our data shows that electronics are shopped online versus in-store 25% more than other categories. SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  13. 13. 5 USING THE DATA TO DRIVE SHOPPER INSIGHTS / 24 / Besides analyzing how people shift shopping attitudes and behaviors in different categories, we can also analyze how shoppers approach specific brands—3,000 of them, to be precise. This puts us in the position to offer a variety of actionable, data-based shopper insights. We can help both manufacturer and retailer brands better understand their target shoppers, and we can see how a brand stacks up against its competition and the category at large. / 25 // 24 / TIDE VS. METHOD: BEAUTY IS IN THE EYE OF THE SHOPPER Both Tide and Method are BrandAsset® Valuator power brands, but shoppers see them very differently. Practical Player shoppers see Tide as 46% more differentiated than any other shoppers, but at the same time, Tide is most relevant to Brand Desirers. This may provide opportunities (for example) to emphasize the price per load value equation of Tide to Practical Players, while ensuring the iconic identity and brand BAV Shopper research can help in terms of assessing the fit between retailers and brands. This case shows that while Sears resonates most with Bargain Hunters, its own Craftsman and Kenmore brands appeal to Mobile Warriors and Store Reassurers. This may have implications for distribution strategy, to get the brands in front of the right shoppers. SEARS VS. KENMORE AND CRAFTSMAN: SQUARE PEGS IN A ROUND HOLE? TARGET VS. WALMART: REFINING YOUR PITCH Target and Walmart appeal to very different Shopperstates. This can help guide touchpoint and messaging strategy in shopper marketing campaigns. Target is a brand high on the radar of Mobile Warriors, so it’s important to embed your brand in the retailer’s digital ecosystem. Walmart is first and foremost a Bargain Hunter retailer, so it’s critical to develop and communicate a powerful value proposition to attract that shopper Differentiation Relevance Mobile Warriors Store Reassurers Bargain Hunters Mobile Warriors use Target 32% more than other shoppers Bargain Hunters use Walmart 17% more than other shoppers proposition of Tide stands out in store to the Brand Desirer. Meanwhile Method appeals to Mobile Warriors, who view the brand as 43% more differentiated than Tide. You can view this literally, as an opportunity to think through the digital path to purchase for Method, or more broadly that it is attracting a younger and “smarter” shopper. SHOPPERSTATES SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER
  14. 14. CREATING SHOPPER CHEMISTRY™ labstoreshopper.com
  15. 15. Shopperstates SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER For further information please contact jon.bird@yrlabstore.com michael.sussman@yr.com

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