Consumer behaviour in food retail

1. Consumer Behaviour and Food
Marketing – AE 613
1
Consumer & the shop
Week 6 – 4 June 2003

2. Consumer Behaviour and Food
Marketing – AE 613
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Sources
• East (chapter 9)
• Marshall (chapter 5)
• Lam (2001). The Effects of Store Environment
on Shopping Behaviors: A Critical Review.
Advances in Consumer Research, 28: 190-197
• Taylor and Nelson web site
http://www.tnsofres.com/superpanel

3. Consumer Behaviour and Food
Marketing – AE 613
3
Retail changes (T & N)

4. Consumer Behaviour and Food
Marketing – AE 613
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5. Consumer Behaviour and Food
Marketing – AE 613
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Consequences of the
retailing growth
• Saturation
• Price competition
• Out-of-town versus town centre
• Supermarket concentration

6. Consumer Behaviour and Food
Marketing – AE 613
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Gravity models for shopper
choice
• Trade is directly proportional to
population and inversely related to
distance
– Geographical vs. time distance
– Geographical vs. economic distance
• Central place theory (economic distance)
– Accounting for demographic differences

7. Consumer Behaviour and Food
Marketing – AE 613
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Huff’s Retail Gravitation
Model

T
S
A 
1
Selling area
Travel time
Attraction of a
shopping centre
Probability of using a
shopping centre:


 n
i
i
A
A
p
1
1
1

8. Consumer Behaviour and Food
Marketing – AE 613
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Some empirical results with
Huff’s model
• λ  2
• Adj. R2  0.25
• Does the consumer consider ALL
shopping centres?
• What are the effects of ignoring all
other details on the shopping area?

9. Consumer Behaviour and Food
Marketing – AE 613
9
Store preferences
• Store image: beliefs, attitudes and
feelings about a store
– What attribute does make the shop
attractive to consumer?
– Image is retained for long periods
(difficult to change)

10. Consumer Behaviour and Food
Marketing – AE 613
10
Main reason for choosing a
store in Britain (1994)
Source: Adapted from East (1997), original source CRU-
Kingston Business School
Sainsbury Tesco Safeway Asda Kwik Save Coop Average
% % % % % % %
Near 23 27 37 29 19 54 32
Good value 15 15 7 17 73 23 25
Wide choice 10 19 18 23 0 4 12
Good quality 30 13 8 8 4 4 11
Easy parking 4 9 9 9 0 2 6
Other 18 17 21 4 4 13 13

11. Consumer Behaviour and Food
Marketing – AE 613
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Supermarket vs local shop
(1991)
Supermarket Local food shop
Quality, wide choice 27 8
Convenient location 25 42
Good value, offers 14 8
Easy parking 14 5
Convenient operating times 9 24
Cleanliness 5 4
Friendly staff 4 10
Can get petrol 3 -
Source: East et al. (1991b, 1997)

12. Consumer Behaviour and Food
Marketing – AE 613
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Determinants of choice
• Salient attributes!
• One/two factors
• Store location is the most relevant
attribute in UK (several studies)
• In 1994 price was more important
than store location in the US.

13. Consumer Behaviour and Food
Marketing – AE 613
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1992 vs 1994
(and US vs UK)
1992 1994 1992 1994
% % % %
Near 32 29 25 33
Good value 14 24 34 29
Wide choice 18 13 13 12
Good quality 15 14 15 11
Other 21 20 13 15
UK US

14. Consumer Behaviour and Food
Marketing – AE 613
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Shopping trips
• “Main trip” customers
• “Secondary quick trips” customers
• Average consumer:
– One weekly trip (main)
– Supplements of secondary trips

15. Consumer Behaviour and Food
Marketing – AE 613
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Types of customers
• Principal component analysis (1992) on
Britain and US supermarket surveys
Heavy buyer: large income and household, aged
under 45, prefers large out-of-town stores, shop
later in the day and usually on a regular day
Congestion dislikers: dislike shopping, claim to
avoid busy times and to be busy themselves
(“reluctant shopper”)
Local shoppers: use small local stores, shop
frequently, spend little, often old and from small
households

16. Consumer Behaviour and Food
Marketing – AE 613
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Compulsive shoppers
• Buying something not needed
• Buying something that will not be
used
• Mood repair out of the process of
buying

17. Consumer Behaviour and Food
Marketing – AE 613
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The in-store environment
• It is a tool for market differentiation
• Store layout
• Atmospherics
• The store environment affects:
– Cognition
– Emotions
– Behaviours

18. Consumer Behaviour and Food
Marketing – AE 613
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Environment and actions
• Actions occur when the
environment presents:
– Opportunities
– Stimuli
– Rewards
• Example: try to find the exit in IKEA

19. Consumer Behaviour and Food
Marketing – AE 613
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Congruence
• If store environmental
elements/factors are congruent
with each other, their effects on
emotions, cognitions and shopping
behaviour will be magnified
• Match in cultural dimension

20. Consumer Behaviour and Food
Marketing – AE 613
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Store layout
• Optimising spending opportunities
– Delicatessen at the back
• Presenting purchase cues
• Making the store an easy and pleasant
place
• Place products to increase probability to
buy
– End aisle and displays
• Optimisation of space and location
devoted to a “Stock keeping unit”
– Optimal layout to maximise profits (e.g. move
profitable products to the eye-level)

21. Consumer Behaviour and Food
Marketing – AE 613
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Atmospherics
Music
Colour
Temperature
Layouts
Odours
Pleasure-displeasure
Arousal-non-arousal
Time spent
Exploration
Communication
Spending
ENVIRONMENT
MOODS
BEHAVIOURS
East (1997)

22. Consumer Behaviour and Food
Marketing – AE 613
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Some examples
• Smell in the Body Shop
• Handwritten prices in Oddbins
• …
• Case study (essay by Clara Ikemeh
and Ravinun Bovornsantisuth,
2003)

23. Consumer Behaviour and Food
Marketing – AE 613
23
“The Treat Store”
Ambient Factors
Mixture of soft/strong lighting tones
Floral Fragrance
Design Factors
Very Modern
Pictorial Representations
Use of Subtle colours (Green/Silver)
Numerous strategic positioning tills
Extremely wide aisles
Simply and very orderly layout
Social Factors
Affluent, more upmarket shopper
Specialist shopper (e.g. organic)
Crowd haters
Strong customer service emphasis
Formal staff uniform

24. Consumer Behaviour and Food
Marketing – AE 613
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“The Hypermarket”
Ambient Factors
Use of contemporary music
Bright/intense lighting
Food Aroma
Design factor
Significant use of subtle colours display
(Green/Yellow)
Wider aisle
Pictorial representation
Use of stimuli (e.g. sound bites-“cock a
doo” in egg section)
Social Factors
Heavy shopper
Younger shopper
Casual staff uniform
High level floating staff

25. Consumer Behaviour and Food
Marketing – AE 613
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“The Local Store”
Ambient Factors
Use of Music
Moderate/poor lighting
Design Factor
Old Fashioned/Outdated
Use of Bright Colours (Red & Yellow)
Simple Layout
Social Factor
Older Demographic profile
Cost saving shopper
Low level of staff flow
Limited Range products

26. Consumer Behaviour and Food
Marketing – AE 613
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Direct Stimulus-Response
effects: some examples
• Red is more arousing, lead to quick
decisions
• Rhythm of music influences speed of
customers through the store
• Classical music leads to buy more
expensive wine
• Lighting level in a cellar
– Affects amount of handled wine
– Does not influence time spent or amount
bought

27. Consumer Behaviour and Food
Marketing – AE 613
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Time of store use
• Food is perishable
• Different environment at different
times
• Different level of consumption over
the year (seasonality)

28. Consumer Behaviour and Food
Marketing – AE 613
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Weekly timing
Main shopping trips (%)
0 5 10 15 20 25 30 35
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
East (1997)

29. Consumer Behaviour and Food
Marketing – AE 613
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Day timing
Time % of trips by hour
9 am 3
9-10 am 13
10-11 am 16
11-12 pm 12
12-1 pm 7
1-2 pm 7
2-3 pm 10
3-4 pm 7
4-5 pm 6
5-6 pm 8
6-7 pm 9
7 pm- 2
East (1997)

30. Consumer Behaviour and Food
Marketing – AE 613
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Segments by time of use
• Full time employed mainly shop on
Friday and Saturday and in the
evenings (62% after 2pm)
• Not full-time employed on average
shop earlier in the week and in the
day (70% before 2pm)
East (1997)

31. Consumer Behaviour and Food
Marketing – AE 613
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Reasons for shopping on
different days / times
• Days
– Near weekend (28%)
– Day not working (16%)
– Store less busy (13%)
– Needed specific food (13%)
• Time of day
– Fitted in with other shopping (25%)
– Store less busy (25%)
– Left work then (13%)
– Car / lift / help available (13%)

32. Consumer Behaviour and Food
Marketing – AE 613
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Food retailing methods
• Concentration of retailing in western countries
• Small shop disappearing
• Economies of scale
– Labour costs
– Economies of “scope” for the consumer
• Price, services and range
differentiation/segmentation
• Specialisation
– Kwik save
– Iceland

33. Consumer Behaviour and Food
Marketing – AE 613
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Non-price competition
• Multi-buy
• Link-save
• Shopper loyalty schemes
• Retail format
– Differentiation
• Specialisation
• Diversification

34. Consumer Behaviour and Food
Marketing – AE 613
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Retail marketing strategies
Wide and
deep range
Narrow
range
High price
Low price
Discount superstore
Food superstore
“Hard” discount
store
Warehouse club
Delicatessen
Specialist Food
Convenience store
Conventional
Supermarket
Department store
food hall
Marshall (1995)

35. Consumer Behaviour and Food
Marketing – AE 613
35
Retail own brands
• Expansion of retail own brands (labels,
sub-brands)
– First/second generation RB
• Substitutes of well-known brands at a discount
price
– Third generation RB
• Low price, but close to leader quality
– Fourth generation RB
• Added value product, differentiation from
competitors, not significant price discount,
competing with premium brands, customer
loyalty
• Lower advertising costs
• Quality control – link between product and retailer
name

36. Consumer Behaviour and Food
Marketing – AE 613
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Own brands and price
perception
• Consumer search and shopping costs are
too high to search for different own
brands
• Consumer usually select a single store /
retail brand
• Price comparison is made on price of
main item retail brand
• Price of main item retail brand becomes
the surrogate of the perceived price level
of the whole store

37. Consumer Behaviour and Food
Marketing – AE 613
37
Use of information
• Scan data: item data at the point of sale
– Efficient shelf and store layouts
– Matching of checkout labour to shopper flows
– Effectiveness in buying by the retailer (cost
reduction)
– Capability to have link-save, consumer
loyalty programmes (panel data)
– Improved stock management

38. Consumer Behaviour and Food
Marketing – AE 613
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Other management
strategies
• Product internationalisation
– Higher margins
– Variety
– Store operation in other countries
• Strategic alliances
– International buying consortia
– Marketing groups
– International joint venture