The Role of Loyalty, Price & Promotion 2012 sample extract

The Role of Loyalty, Price andPromotions – The Shopper’sPerspective 1SAMPLE EXTRACT Evolution Insights Ltd Prospect House 32 Sovereign Street Leeds LS1 4BJ Tel: 0113 389 1038 http://www.evolution-insights.com www.evolution-insights.com SAMPLE SLIDE

About Evolution InsightsEvolution is a leading research consultancy specialising in shopper motivation and behaviour. We deliver off-the-shelf, tailored and bespokeresearch for manufacturers, retailers and agencies. Our research and analysis helps • Evolution offer a range of products & services for clients develop targeted shopper clients in the field of shopper research:- marketing initiatives designed to • Off-the-shelf research influence shoppers at the point of purchase. – Evolution’s off the shelf research publications deliver affordable insight into shopper motivation and behaviours in UK food, drink and grocery • Insight Plus – Insight Plus offers your business the opportunity to engage in any of our We use a range of research regular shopper research projects in advance of publication, tailoring the methodologies to discover genuine scope to suit your needs insights. Our research incorporates a broad spectrum of robust • Bespoke Consulting qualitative and quantitative research techniques. – As publishers of research, we are able to draw upon a wealth of existing proprietary data for consulting projects As a leading publisher of shopper – helping to better inform and shape research, we are ideally placed to any further research requirements. offer your business actionable shopper insight. Further information is available at our website http://www.evolution- insights.com Visit and sign up for Reflections, our free quarterly newsletter offering analysis and commentary on topical issues www.evolution-insights.com SAMPLE SLIDE

ContentsKey findings and executive summary 6 Summary 38The scope of the report 7 Loyalty in the food and groceries market 39Key findings and executive summary 8 Introduction 40 9 Loyalty cards currently carried around by the shoppers 41Key findings and executive summary (2) Loyalty cards and discount vouchers currently carried around 42Key findings and executive summary (3) 10 by the shoppersKey findings and executive summary (4) 11 43 Defining loyaltyKey findings and executive summary (5) 12 Loyalty cards 44Inflation and food retailer price war 13 Loyalty schemes 45Introduction 14 Tesco Clubcard 46Price wars 15 Nectar card 47Food price inflation 16 Boots Advantage card 48Food price inflation (2) 17 Superdrug Beautycard 49Summary 18 Coffee shop loyalty cards 50Changing shopping habits and different types of promotions 19 51 Other loyalty card schemesIntroduction 20 Summary 52Changing shopping habits in recession 21 Loyalty and price related drivers for shopping 53Changing shopping habits in recession (2) 22 Introduction 54Savings through trading down 23 Price-related drivers of store choice - in store and online 55Price comparison 24 Drivers for favouring shoppers’ most used supermarket – in 56Recession 25 storeMoney available to spend on food in the last 12 months 26 57 Drivers for favouring shoppers’ most used supermarket – onlineDefinition of value – what shoppers want 27 58 SummaryValue – relationship between price and value 28 59 Different types of promotionsFrequently promoted categories 29 60 IntroductionNumber of promotions at different retailers 30 61 Appeal of different types of promotions – in store and onlineProportion of branded products of all promotions at different 31 62 The online grocery shopper: at a glance – drivers of onlineretailers grocery shoppingAverage % saving on branded products on promotion 32 63 Online vs. offline dealsAverage % saving on own-label products on promotion 33 64 Offer appeal – in store and onlineWebsites offering vouchers and discount codes 34 65 The most attractive in store promotions by social group – inVoucher code websites 35 storePrice comparison sites 36 The most attractive in store promotions by household type in 66Why promote – benefits of promotional activity for 37 storemanufacturers and retailers Life stage and attractiveness of different promotions – in store 67 www.evolution-insights.com SAMPLE SLIDE

ContentsThe most attractive in store promotions by social group – online 68 Introduction 97The most attractive in store promotions by household type 69 Proxy categories for survey questions 98online Deal appeal 99Life stage and attractiveness of different promotions – online 70 Deal appeal – a 4 pint bottle of milk 100Summary 71 Deal appeal – a 4 pint bottle of milk (2) 101Understanding promotions 72 Deal appeal – a box of washing powder (850g, 10 washes) 102Introduction 73 Deal appeal – a box of washing powder (850g, 10 washes) (2) 103Figuring out complicated offers 74 Deal appeal – instant coffee 104Lowest price per unit – washing powder 75 Deal appeal – yoghurt 105Lowest price per weight – yoghurt 76 Deal appeal – beer 106Lowest price per item – soft drink 77 Deal appeal – beer (2) 107Percentage discounts 78 Summary 108Summary 79 Multi-buy deals and online grocery shopping 109Single item vs. multi-buys – finding the tipping point 80 Introduction 110Introduction 81 Willingness to buy in bulk in store and online 111Tipping point for different categories 82 Willingness to buy in bulk in store and online (2) 112Finding the tipping point for bulk-deals – when is it worth it to 83 Willingness to buy in bulk in store and online 113get two instead of one? Bulk-buying online 114There is a loaf of bread available for two for £2 or one for the 84 Summary 115price below. Different retailers’ current promotional strategies 116There’s a box of your favourite washing powder (850g, 10 85 Introduction 117washes) available for two for £5.50 or one for the price below. Promotions leaving shoppers confused 118A pack of your normal toilet rolls (18 rolls) is available for two for 86 The cost of promotions 119£12 or one for the price below. Retailer price strategies in 2011 120Tipping point for different product categories 87 Asda’s strategy on promotions and pricing 121Summary 88 Shoppers mostly shopping in Asda 122Price expectations in convenience stores 89 Tesco’s strategy on promotions and pricing 123Introduction 90 Shoppers mostly shopping at Tesco 124Convenience store prices 91 Sainsbury’s strategy on promotions and pricing 125Convenience store prices – perceptions by age group 92 Shoppers mostly shopping in Sainsbury’s 126Convenience store prices – perceptions by social group 93 Morrisons strategy on promotions and pricing 127Convenience store prices – perceptions by life stage 94 Shoppers mostly shopping in Morrisons 128Summary 95 Waitrose’s strategy on promotions and pricing 129Deal appeal – determinants of choice 96 www.evolution-insights.com SAMPLE SLIDE

ContentsShopper perceptions on prices and promotions at different 130retailersCheapest retailer in relation to primary store of choice 131Best deals in relation to primary store of choice 132Price matching 133Everyday low pricing vs. promotions 134Discount retailers 135Effectiveness of pricing strategies and campaigns – Christmas 136performance in 2011Methodology 137Methodology 138Methodology: quantitative survey 139Glossary 140 www.evolution-insights.com SAMPLE SLIDE

The scope of the reportThe economic downturn and food price inflation are challenging household budgets andshoppers need to find ways to cope with the squeeze. This report investigates how shoppersfeel about food prices, what kind of promotion types they prefer. We also tested the tippingpoint for ‘2 For’ offers using a number of proxy categories to demonstrate differences. Acomplete section of the report is dedicated to testing whether shoppers understandpromotions and how they deal with confusing or difficult offers. We also look into the effectson store loyalty when food retailers are at constant war on prices, and what are the price-related drivers of store choice.The report also provides a good overview of the current promotional strategies adopted bythe big four retailers and existing loyalty schemes offered by the fast moving consumergoods retailers.The understanding of this vital area of shopper understanding places us in a good position toundertake bespoke research at an individual category level. www.evolution-insights.com SAMPLE SLIDE

Food price inflationThe extent of inflation on food prices varies between different retailers and is dependant on promotional activity. The economic downturn has resulted in inflation and higher taxation which is also affecting food prices. The cost of food has increased by approximately 5.0% in the last 12 months. The British Retail Consortium 8.0 has however estimated that about 40% of groceries 6.9 7.0 6.3 6.3Percentage change on year earlier 6.1 6.4 are bought on promotion. When promotional pricing 5.5 5.8 is factored in, the cost of food has increased by only 6.0 6.2 6.2 5.0 4.8 5.1 4.5 4.6 3% in the last 12 months. According to The Grocer 5.0 4.3 4.4 4.4 5.2 price Index the cost of food was up by 5% compared 4.1 3.7 4.0 4.2 5.0 4.0 3.4 3.7 3.3 3.2 3.3 4.5 to a year ago and by 4% when promotions were 3.0 3.1 3.2 4.5 4.5 4.1 4.0 considered. There is some variation between 3.0 2.0 3.1 3.1 different retailers. Whereas Asda shoppers are only 2.8 1.8 2.0 paying 2% more than a year ago, prices in Tesco have 1.9 1.0 gone up by 8%. Promotional activity and discounting isn’t showing any signs of slowing down though and 0.0 promotions appeal to all age and social groups. Aug-10 Aug-11 Apr-10 Oct-10 Apr-11 Oct-11 Mar-10 Mar-11 Jan-11 Jun-10 Jul-10 Jun-11 Feb-11 Jul-11 May-10 Sep-10 Dec-10 May-11 Nov-10 Sep-11 Nov-11 Retailers are in constant competition to be the cheapest. Asda has, however, changed its strategy and is gradually shifting away from promotions to CPI (overall index) Food and non-alcoholic beverages everyday low prices. How long the other retailers can keep going remains to be seen but it is possible that the impact of promotions is smaller in the future. www.evolution-insights.com SAMPLE SLIDE

Price comparison The majority of shoppers (60.9%) are more price conscious compared to 12 months ago. I’m spending more time looking at prices in store compared to 12 months ago • Majority of shoppers claim to pay more 60.9% agree attention to prices than 12 months ago. It 35 seems though that what shoppers say and 31.9 what they do is different. In reality shopping in convenience stores is on the rise even 30 though shoppers admit convenience stores are more expensive than supermarkets. 26.5 • Lots of little shops instead of a big weekly 25% primary grocery shoppers shop expose shoppers more to impulse buying which can increase the food bill. 20 • There is also a growing trend towards meal for tonight deals at different retailers. 14.9 Shoppers aren’t planning their shops which is 15 14.1 an expensive way of shopping. 10 7.0 5 3.0 2.5 0 Strongly Agree Agree Undecided Disagree Disagree Strongly agree somewhat somewhat disagree www.evolution-insights.com SAMPLE SLIDE

Voucher code websites Groupon is known by nearly 75% of shoppers whereas the most of the other voucher code websites are unfamiliar to most grocery shoppers. Moneysavingexpert.com is the most used, with 9.5% using it often and 17.5% using it occasionally. Are you aware of the following types of voucher code websites, and if so, have you used them? Groupon.co.uk 25.6 44.3 8.2 17.5 4.4Moneysavingexpert.com 39.5 28.3 5.2 17.5 9.5 Myvouchercodes.co.uk 42.4 30.6 7.1 16.4 3.5 Kgbdeals.co.uk 60.4 26.1 4.8 6.8 1.9 Wowcher.co.uk 71.5 21.3 2.7 4.1 0.4 Livingsocial.com 73.1 16.2 3.8 5.8 1.1 Hotukdeals.com 75 13.2 2.9 5.8 3.1 Mysavings.com 80.7 14.2 2.22.40.6 Wow-coupons.co.uk 81.5 13.3 2.9 20.4 Vouchercloud.com 83.3 10.1 2.6 3.6 0.5 0 10 20 30 40 50 60 70 80 90 100 % primary grocery shoppers Not aware Aware but havent tried it Aware, have tried but dont use anymore Aware and use occasionally Aware and use often www.evolution-insights.com SAMPLE SLIDE

Loyalty cards currently carried around by the shoppers So what’s in your purse/wallet? www.evolution-insights.com SAMPLE SLIDE

Online vs. offline dealsThere is no real belief that prices are better online than in store. This is interesting because outside the category of foodand groceries online prices are absolutely considered cheaper. Online offers are better than offers in stores 20.7% 27.7% agree disagree 51.6% I would shop online more undecided Why aren’t online offers better? For other shopping often if the offers were better than in stores. you can get good bargains online! www.evolution-insights.com SAMPLE SLIDE

Convenience store prices – perceptions by age group Majority of shoppers in all age groups expected convenience store to be higher than their normal supermarket prices. If your shopping came to a total of £50 in your normal supermarket, how much • Younger respondents (18 to 24) were more would you expect to pay for the same items in a convenience store?100 likely to expect convenience prices be lower than in a supermarket. 90 80 • The oldest group expected lower prices than 28.6% of 18 to 24 year olds expected the total price to be less than £50. the younger groups, apart from the youngest 70 age group. 60% 50 • The mean averages for different age groups are 40 • 18 to 24: £54.60 (9.2% more expensive) 30 • 25 to 34: £58.67 (17.3% more expensive) 20 • 35 to 44: £60.28 (20.6% more 10 expensive) • 45 to 54: £59.65 (19.3% more 0 expensive) 25 30 35 40 45 50 55 60 65 70 75 • 55 to 64: £59.65 (19.3% more expensive) £ • 65+: £57.84 (15.7% more expensive) 18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 and over www.evolution-insights.com SAMPLE SLIDE

Methodology: quantitative surveyTopics of questions in quantitative survey Demographic profiling • Detailed shopper insights were gained from a survey of 1,007 UK adults who say they regularly shop for food and grocery. The samples were fully representative of the UK population. Main supermarket information • The survey contained 28 questions relating to health and nutrition – in addition to standard Loyalty demographic profiling questions. • The survey was undertaken by a third party MRS Price-related drivers for shopping – in store and online partner and is therefore bound by the MRS code of conduct. Promotion appeal • The survey was carried out online during the week commencing 17th October 2011. Understanding pricing and promotions Multi-buy appeal in different categories and finding the tipping point Awareness and use of price comparison and voucher code websites Perceptions on discount retailers Changes in food available to spend on food Source: Evolution Insights www.evolution-insights.com SAMPLE SLIDE

Contact us Evolution Insights Ltd Prospect House 32 Sovereign Street Leeds LS1 4BJ Telephone: 0113 336 6035 e-mail: craig.bradley@evolution-insights.com Web: http://www.evolution-insights.com Company No. 07006001 Country of Incorporation: United Kingdom www.evolution-insights.com SAMPLE SLIDE

The Role of Loyalty, Price & Promotion 2012 sample extract

by Evolution Insights - Dale Henry

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The Role of Loyalty, Price & Promotion 2012 sample extract Presentation Transcript