Alan Treadgold. The Multi-Channel Shopper and the new engagement landscape for retailers and brands


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Alan Treadgold. The Multi-Channel Shopper and the new engagement landscape for retailers and brands

  1. 1. The Multi-Channel Shopper and the newengagement landscape for retailers andbrandsDr Alan TreadgoldGlobal Head of Retail StrategyLeo Burnett Group16th International Food Business Russia SummitMoscow, February 2011
  2. 2. Multi-channel shopping:The defining theme forretailers and brands 2
  3. 3. Understanding the Multichannelshopper: Our key questions• Who is the multichannel shopper?• Is there a “psyche” to multichannel shopping?• What are the motivations (or barriers) to multichannel shopping?• Are there different kinds of multichannel shoppers?• What purpose do different channels serve?• How do multichannel shoppers shop different product categories?
  4. 4. Our Research in Russia13markets • Moscow • St. Petersburg • Novosibirsk • Kazan • Chelyabinsk 685 • Rostov-na-Donu • Nizhny Novgorod • Ufa • Volgograd respondents • Ekaterinburg • Perm 12 • Samara • Omsk categories •Skin Care •Carbonated soft drink10 •Laundry detergent •Chocolate bars •OTC Medicine •Electronics •Tobacco •Mobile phone hardware channels •Hard Liquor •Beer •Automobiles •Designer clothes •Store •Mobile phone •Web •In-home parties and door-to-door sales •Mail order catalogue •Magazines •TV (infomercials, home shopping channels) •Direct mail •Land line telephone •Store produced newspapers, flyers, circulars
  5. 5. The Headlines
  6. 6. A highly engaged shopper…86% of respondents use more than oneshopping channel when shopping a categoryAcross the 12 product categories, the averageshopper uses 5.2 channels to shop
  7. 7. Multichannel shoppers spend a lotof time shopping Time Spent Shopping for: Packaged Goods DurablesMinutes Hours 250 60 52 200 200 50 40 150 30 Light 30 Light 100 Heavy 20 Heavy 50 22 10 0 0*Note: Heavy multi channels shoppers defined as the heaviest 25% of shoppers within a category, Light MCS definedas the bottom 25% in a category
  8. 8. They use all channels –but online dominates Channels used when shopping for: MINUTES CPGs (in mins) HOURS Durables (in hrs) 250 60 52 HOURS 200 MINUTES 50 CIRCULAR 200 MAIL 40 MAGAZINE 150 IN‐HOME PARTY 30 HOURS MOBILE PHONE 30 LANDLINE TELEPHONE 100 20 INFOMERCIAL MAIL/CATALOG 50 22 MINUTES 10 ONLINE IN‐STORE 0 0 Light Multichannel Shoppers Heavy Multichannel Shoppers Light Multichannel Shoppers Heavy Multichannel Shoppers*Note: Heavy multi channels shoppers defined as the heaviest 25% of shoppers within a category, Light MCS definedas the bottom 25% in a category
  9. 9. While multichannel shoppersshare some common traits,therearedifferent types of multichannel shoppers
  10. 10. The 6 Key drivers of multichannelshopping Bargain Hunting Exploratory Low Price Premium List Driven Habitual
  11. 11. Profiling the Multi-channel shopper in Russia Bargain Hunting Exploratory Opportunistic Adventurer 11% / 95 Strategic Savvy Saver Passionista 12% / 130 37% / 107 Low Price Premium Dollar Quality Defaulter Devotee 5% / 117 27% / 80 Efficient Sprinter 8% / 121 List Driven HabitualPercent: Heavy Multichannel ShoppersIndex: Heavy Russian Multichannel Shoppers / Total Shoppers in Russia* Overall shopper archetypes are based on overall attitudes towards shopping
  12. 12. The multichannel shopper in Russiacompared with ‘the West’ –more aboutstyle; less about saving moneySegment Name Western Russia GapStrategic Savers 29% 12% -17Opportunistic Adventurer 15% 11% -4Saavy Passionista 14% 37% +23Quality Devotee 16% 27% +11Efficient Sprinter 13% 8% -5Dollar Defaulter 13% 5% -8Source: Leo Burnett / Arc multichannel shopper research 2009 & 2011
  13. 13. Why…are people multichannelshopping?
  14. 14. Perceptions of Risk and Reward explainlevels of multichannel shopping HIGH RISK EG: Banking EG: Designer Clothing LOW HIGH REWARD REWARD EG: Household Basics EG: Books LOW RISK
  15. 15. Risk / Reward perceptions and theRussian Shopper Burden High Risk Passion Automobiles 86% Electronics 89% Smart Phones 92% Designer Clothes Skin Care 85% Products High Low Reward 94% Reward Over The Counter Medications Hard Liquor Candy 63% 57% Beer 52% 63% Laundry Carbonated Detergent Soft Drinks 70% 51% Routine Low Risk Entertainment*Note: Numeric % represents the percent of category shoppers shopping 3 or more channels
  16. 16. In Russia the presence of the different Shopperarchetypes varies widely when viewed throughthe lens of the type of product being purchased Consumer Package Goods Skin Care 162 Laundry detergent OTC Medicine Tobacco Hard Liquor 123 Beer Carbonated soft drink 123 Chocolate bars 91 Durables 39 Electronics Mobile phone hardware 37 Automobiles Designer clothes Consumer Package Goods Durables Quality Efficient Dollar Strategic Opportunistic Savvy Devotee Sprinter Defaulter Saver Adventurer Passionisita
  17. 17. When are the differentengagement channelsbeing used in the shoppingjourney?
  18. 18. The experience in Russia – less focus on one or 2 engagement channels only EARLY Assess needs. Gather ideas. 113 Learn. Consider options 106Trigger THROUGHOUT 113To Start 112 MIDDLEShopping PROCESS Define criteria Compare options Seek advice Experience 133 106 105 114 115 LATE 123 105 Select. Buy INDEX: Likelihood of using a channel in a phase
  19. 19. Example: The electronics‘path to purchase’ in Russia 35.0 30.0% of electronic shoppers 25.0 20.0 Store 15.0 Web 10.0 5.0 0.0 Beginning Early Middle Late End Search Purchase
  20. 20. Implications for Retailers and Brands 20
  21. 21. #1 Effectively engaging the multi- channel shopper requires 3 lenses of insight 1 2 3 Shopper Channel Category Within a category Depending on theThe most essential lens different shoppers category and thefor understanding the employ very different shopper, channelsmultichannel shopping shopping strategies, or vary in their ability is the category “archetypes,” each to address different with its distinct shopper needs motives
  22. 22. A 360oapproach ismandatory for effectiveshopper engagement
  23. 23. Mobile commerce willbe the next keyengagement platformfor many
  24. 24. New SchoolConvenience:The wholeworld in yourhands(50% of US shoppers willhave a smartphone byChristmas 2011)
  25. 25. Retailers mustre-imagine the role oftheir stores
  26. 26. “Multichannel defines the newlandscape. Retailers are goingto have to adapt and make surethey’re not disintermediated.” Ian Cheshire – CEO, Kingfisher Group UK NRF Convention, NYC, 01/11
  27. 27. Re-imagining the role ofthe retail store - dial upexperience, stimulationand ideation
  28. 28. Apple, NYC
  29. 29. Sainsbury’s:Inspirational food ideas instore
  30. 30. And finally...Strong brand ideas must be atthe heart of winning in themultichannel landscape
  31. 31. The key questions What kind of retail experience do I want to offer? What is the compelling brand idea to bring the desired experience to life? What does the physical store experience need to be? How should the brand idea be delivered across multiple channels?
  32. 32. Tesco: The brand idea is at the heartof their multichannel strategyThe kind of retail experienceyou want to offer The store that makes shopping easyDefine the experience witha compelling brand ideaOptimise the physical storesto deliver the desiredexperienceUse the brand idea to helpdetermine how to deliveryour brand across multiplechannels
  33. 33. Thank YouAnd if you’d like to know more:Alan TreadgoldGlobal Head of Retail StrategyTel: +44 (0)7958