Retail research

Editor's Notes

1. The way that we shop is constantly changing and it’s a subject that gets quite a bit of media coverage, it’s impact and relevance across a whole range of businesses and categories means that it’s a relatively hot topic.… There is a genuine need to evaluate and understand the way people shop and other organisations have also been researching in this area. Newsworks and How People buy is a recent example that is particularly relevant for us In addition, the latest research from the IPA’s touchpoints 6 has pulled together a few highlights that put some numbers behind it consumer shopping habits – most interesting is the number of people that now shop with Lidl and Aldi has doubled in the last 3 years…
2. So why are we talking about this now? Well as we’ve just highlighted there are countless changes taking place in th way people shop, and it continues to evolve. Changes sparked initially by the recession when shoppers were looking to save money and seek better value but now also due to changing busy lifestyles. Our frequent shopper research in 2014 confirmed that a high proportion of consumers shop 4+ times a week and this is becoming the norm. In addition to this the hard discounters have been growing at a phenominal rate and are attracting new customers with the no frills shopping but consistent low prices and good quality. Lidl and Aldi have a combined market share of almost 10% are are gradually chipping away at the likes of Tesco, Sainsburys and Asda. In fact in our survey, more than 1 in 10 (13%) respondents selected Aldi or Lidl as the supermarket they shop with most regularly, which is a greater proportion than said they shopped with Morrisons (10%) or Waitrose (3%) most regularly. So in this increasingly competitive and changing market and one in which customer loyalty is more fragmented than it used to be the challenge remains how to attract and maintain shoppers, and particularly for the big 4, how to protect their market share.
3. So with this research our aim was to understand what influences peoples decision to shop where they shop, and identify any opportunities to help overcome the challenges in the market
4. In addition to this, we carried out desk research across a number of sources such as Mintel, and existing reports from supermarkets themselves. We also incorporated data from TGI, Touchpoints 6 and the recent newsworks research we mentioned on ‘how people buy.
5. People are adopting a little and often approach to shopping – a main weekly shop is less important and in fact a series of smaller top up shops are much more relevant today as they fit better with a busy lifestyle. Different age groups have entirely different priorities when it comes to grocery shopping and different factors will influence their decision as to where they shop. In some ways this seems obvious but it’s important to highlight this as from a marketing perspective messaging needs to be very different to attract different groups Differentiation is a real challenge for the major supermarkets and consumers really struggle to identify much of a difference between them – essentially they all sell the same things and offer the same service so you can kind of see why this is a problem. SO we’ve looked at ways that can help create an element of differentiation
6. People are adopting a little and often approach to shopping – a main weekly shop is less important and in fact a series of smaller top up shops are much more relevant today as they fit better with a busy lifestyle.
7. With 3 in 4 people now shopping more than once a week (compared to 1 in 4 pre recession), we are definitely shopping more often, but with people starting to favour smaller top up shops over a large weekly shop, little and often very much reflects shopping habits for many people. It reflects a much more adhoc spontaneous lifestyle approach in general, something which ties into the way people are living their lives in terms of making social plans, holiday commitments and so on. People are just more spontaneous now and planning an entire weeks worth of meals just doesn’t work for many people anymore. And when you look at it this way, it can help cut down on waste as shoppers are tending to buy what they need as they need it. Perhaps supermakets should be encouraging this approach more? The Coop is an example of a supermarket that is addressing this way of shopping in their current campaigns And this approach is even more apparent in the younger generations – 18-34 year olds are 28% more likely to agree with both of these statements Which makes sense as they are more likely to be students, young professionals, single, no family commitments so their life can be less routine, less organised. And this is something that is perhaps going to increase more in the next few years as people become more impulsive and spontaneous with their leisure plans in general. People’s Fear of missing out is a key driver to this and can even be leveraged in marketing campaigns #FOMO And with all this increased shopping frequency, this is a good thing for supermarkets – it just creates more opportunities to get people in store
8. And it’s not just us talking about this, waitrose’s Food & drink report 2015 highlights how people are shopping like they do when they’re on holiday – we plan ahead less, shop locally and focus on buying fresh food for that evening. Similarly, the coop’s back to the future report highlights a trend in the way people are shopping like they used to in the 60’s – smaller basket sizes and shopping every few days The reasons back in the 60’s where more due to the fact food didn’t keep so long, freezers were just being developed. http://www.co-operative.coop/corporate/press/press-releases/Food/back-to-the-future-co-op-report-marks-50-years-of-modern-shopping/
9. So with all this in mind, it stands to reason that they are also shopping in more places…. One in 3 main shoppers have shopped in 4 or more different places in the last week for their groceries, that’s more than 10 million uk main shoppers And more than half are shopping in 3+ places And with so many more shopping occasions there are many more opportunities to target shoppers with different messages and different products.
10. The second theme we wanted to cover was the way in which different age groups have entirely different priorities when it comes to grocery shopping and different factors will influence their decision as to where they shop. In some ways this seems obvious but it’s important to highlight this as from a marketing perspective messaging needs to be very different to attract different groups
11. So when we look at all respondents these are the top 3 reasons, and probably what you would expected. Location (or a convenient location) is the number one reason why people choose to shop somewhere. And this tends to be a key driver for all customers when you break them down by where they shop most often – although regular co-op shoppers are particularly influenced by location – over 80% select location. So having well located stores is of primary importance for all supermarkets. Prices – The second most popular reason, but interestingly price is the number one reason cited by those who are regular Lidl (78%) or Aldi (86%) customers, location is second for them. At the moment they are willing to travel a bit further to enjoy these prices, but perhaps with their current expansion plans this will no longer matter soon. Loyalty scheme, 3rd most popular reason, but has a much greater importance for those who shop in Tesco (46%) or Sainsbury’s (48%) most often. The are the second most important reason to shop somewhere for these people and perhaps a good indication that the clubcard and nectar card schemes are attractive to those who have them and offer good incentives to continue shopping there. For those who shop regularly in Iceland, Location 58%, prices 52% and customer service 30% But it’s worth looking at this in more detail, since we found vast difference in what was important to people of different ages. Again, you may say well that’s obvious but we found very little evidence it was being recognised in advertising campaigns across the category. We already identified on an earlier slides that the under 35’s are much less likely to be doing a main weekly shop, so what else is different? Worth noting, Mintel research from Loyalty to retailers also highlighted location as the top reason for why people use their supermarket – selected by 52% of respondents.
12. So when we look at different age groups and rank factors by index to see which are more or less important to a particular group we see that there are vast differences. Which highlights the importance of the right messaging when it comes to marketing The under 35 audience are place much greater priority on things like the range of other facilities that a larger store can offer - so a pharmacy, coffee shop or dry cleaners, as well as non food related items for sale – an indication that they might prefer to get everything in one place. The are also the group that are most likely to be influenced by advertising and word of mouth. And they are most price sensitive group – they are more likely to shop in a budget friendly supermarket when it’s getting close to payday. The 35-54 are more likely to be influenced by special offers and promotions as well as a loyalty scheme – chances are they are shopping for a family and so special offers and loyalty rewards will have more of an impact on their shopping. Opening times are also important to this group – possibly shopping evenings, after work or school. The older audience over 55 are more likely to be influenced by good parking, good quality and good customer service. Interestingly they are the only group to over index for the quality of the food, but this does make sense considering the findings from the Waitrose report that this group are much more experimental in the kitchen now. Loyalty scheme was another influence for this group which perhaps ties into the importance they place on customer service. And one other thing to note about this group is that they are least influenced by low price – they are more likely to disagree that they shop around for their groceries or that they are prepared to pay more if it saves them time - quality is more important to them. An easy to use website and good delivery options were also listed in this question – it was the under 35’s who were more likely to consider these important factors while over 55s were less likely to prioritise them.
13. It was very hard to find an example of this from within the supermarket category – which perhaps is the point, many supermarkets run the same copy across all media as part of a wider campaign.
14. We questioned lack differentiation as a reason why shoppers would still choose the place they usually shop as the best place for everything, is it because they see no difference to shopping in Sainsbury’s instead of Tesco when they can get the same things at the same price. And nearly half say there is little difference between them It’s a challenge for supermarkets
15. And if we look at Mintel findings from their supermarket report (Nov 2015) we can see that ‘big 4’ are scoring somewhat lower in terms of differentiation than other more premium supermarkets, but also Lidl and Aldi. They do however, score well for trust so they are in a strong position but by improving their level of differentiation would be a key step in challenging the likes of Lidl and Aldi Although the coop looks to be a in a fairly bad position, it hasn’t changed since the previous year and in addition it is associated closely with some positive traits such as good customer service and socially responsible. It is however also considered tired and boring more than other supermarkets which perhaps explains it’s position on this chart. Aldi and Lidl score well against metrics such as innovative and trendsetting, although are also considered basic. Iceland has improved it’s position and is now doing better against metrics such welcoming and reliable. It’s also considered more exciting which could be linked to the recent Peter Andre campaigns.
16. But you can kind of see why shoppers feel this way Supermarkets are all going out with similar adverts, promoting the same products
17. But you can kind of see why shoppers feel this way Supermarkets are all going out with similar adverts, promoting the same products
18. With similar imagery and many offers are almost identical Making it very confusing and difficult to tell one from the other
19. With similar imagery and many offers are almost identical Making it very confusing and difficult to tell one from the other
20. Almost half are likely to switch shop if it is going to be quicker than where they currently shop – indicating that there is little difference to keep them loyal to their current store. Even when we asked about individual product aisle to see if there was a particular supermarket that was considered more popular for certain items, for example M&S for ready meals, or Aldi for fresh meat, there was no indication this was the case – on the whole, people considered the place where they shopped most often as the best place for all items – and this was the same across all age groups. So this would imply that no supermarket was considered superior for any particular product category.
21. Whereas Own-label products are different and have become increasingly popular, with consumers switching branded products for these in order to save money. This is reflected by the relatively high proportion (43%) of consumers who cited a ‘good own-label range’ as a factor for why they shop at their preferred grocery retailer. It might be a better tactic to forget about price matching on brands but instead focus on own label ranges, promotions, meal deals around these ranges as well as value offered. And address other issues in the market such as food waste
22. So although respondents didn’t select an alternative supermarket to where they normally shop for any particular product aisle, the large majority of them were able to name a product or range from a particular supermarket that they are willing to make a special trip for. Which highlights the fact that product led messaging can be a key driver as can focus on a particular occasion. And also highlights the importance of promoting own label ranges – if they are good people will make a special trip for it. This is also perhaps the best way to take on the hard discounters.
23. When it comes to a special occasion dinner at home, M&S is the top choice. M&S place a lot of emphasis on the quality of their own label range and they communicate this well in communications. It’s therefore the obvious choice in the mind of the consumer when planning a special meal at home. 1 in 4 selected M&S as the place to go if they were shopping for a special occasion dinner at home, with their partner/family. Tesco and Sainsburys were jointly second chosen by 13% Similarly for other special occasions that required entertaining at home (a sit down dinner or party food in general), M&S is the top choice chosen by 18% of respondents in each case. Tesco is the second most popular choice followed by Sainsbury’s. And when we look at this by age group, M&S is still the top choice for a special occasion dinner at home regardless of age – the only difference was for the under 35’s who selected Tesco, Asda, and Sainsburys above M&S for a dinner party or party food – it could be assumed that due to the larger quantity required for these sort of special occasions they are influenced by price.
24. You were recently introduced to the Guardian’s Influential Brands research This explored how advertisers can use brand activity to become more influential It identified the key drivers of influence for advertisers: that is, the messages they should employ in their brand activity to most effectively boost their influence levels For retailers the most crucial thing was to have interesting things to say. N.B. Our research is all about branding, and branding has been empirically proven (for example in the IPA’s ‘The Long and Short of It’ to be linked to long term effectiveness.
25. And we know from the research that brands that are more influential tend to inspire greater loyalty from shoppers – see the correlation shown on this chart. N.B. Our research is all about branding, and branding has been empirically proven (for example in the IPA’s ‘The Long and Short of It’ to be linked to long term effectiveness.
26. They provide gentle persistent reminders. The latest piece of research from newsworks on ‘how people buy’ highlights that constantly reminding consumers of a product or brand through repeated exposure through adverts, keeping them middle-of-mind For Longer purchase Journeys: Whenever consumers are dithering; often serves as a reminder that a decision needs to be made, And sometimes, even after a purchase priming consumers ready for the next one – this is particularly relevant for groceries given the repeat nature of purchasing groceries The habitual nature of Newsbrands consumption means they lend themselves well to this and can provide the soft but steady reminders that consumers often need to encourage them into action. A combination of paid advertising in both print and digital and editorial keeps brands on people’s radar, and national newspapers are in fact 3 times more effective in doing so compared to the average advert (across any media) The questions were asked of a base of 2000 UK adults, newspaper consumers
27. Here we’ve had a look to see where across the Guardian platforms you’re most likely to find the different age groups and even though these are fairly broad audiences you can see differences – using ANP we’d be able to look at a more specific target audiences for your brand and get a more accurate plan
28. Guardian Brand Aid We have over 3000 panellists on the Guardian brand aid panel and we can test campaigns across all platforms either individually or cross platform We can also add in a small selection of bespoke ad hoc questions, relevant to the individual brand or campaign to be tested Ad effectiveness testing allows us to measure ad recall, brand perception metrics and purchase intention Creative pre testing allows us to test various creative options to determine which would deliver the most positive brand perceptions or greater purchase intent In both cases results can be measured against different audience age groups. Results from past tests highlight that cross platform campaigns are more effective than single platform campaigns, improving on recall, brand perception and purchase intent. More specifically results on food and drink campaigns deliver particularly high ad recall when compared to the average campaign tested on the Guardian, and they are also considered to be more relevant. And if we refer back to the John Lewis example on an earlier slide, (a pre and post test was carried out for this campaign) there was a clear uplift in perceptions of John Lewis and purchase intention following the campaign. In addition to campaign effectiveness testing we can use the brand aid panel for standalone ad hoc surveys – these are particularly useful for niche products or categories where information on TGI is quite basic. Further more brand can allow you to use open box questions to get verbatim around a particular topic. And lastly the brand aid panel can be used for creative pre testing.
29. The campaign at a glance: The aim of the campaign was to launch Kerrygold’s illustrated book: Tales of city Sue. 6 week campaign that explored the themes of the book in print and digitally in a warm and family friendly tone. Components: Print – DPS, coverwrap Digital – content hub and traffic drivers, HPTO and section takeovers (life & style, family) results: 1. Distribution of 490,000 copies of Tales of City Sue 2. Guardian Labs first with the 8x10 co-branded front page strip 3. Total page views 48,116 4. 36,397 unique visitors + 85% on KPI 5. Average time spent on the site 3m 29 secs + 1m 44 sec on KPI 6. The research revealed favourability scores increased from 26% to 41% during the campaign period 7. The competition drove 6,421 entries which is 535% higher than the KPI
30. The campaign at a glance: The aim of the campaign was to launch Kerrygold’s illustrated book: Tales of city Sue. 6 week campaign that explored the themes of the book in print and digitally in a warm and family friendly tone. Components: Print – DPS, coverwrap Digital – content hub and traffic drivers, HPTO and section takeovers (life & style, family) results: 1. Distribution of 490,000 copies of Tales of City Sue 2. Guardian Labs first with the 8x10 co-branded front page strip 3. Total page views 48,116 4. 36,397 unique visitors + 85% on KPI 5. Average time spent on the site 3m 29 secs + 1m 44 sec on KPI 6. The research revealed favourability scores increased from 26% to 41% during the campaign period 7. The competition drove 6,421 entries which is 535% higher than the KPI