The Checkout 4.10 - Shopping List Issue

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Penetration of the shopping list is fairly substantial, with 43% of general market shoppers reporting that they “always” rely on a shopping list. Still, more than half of consumers (57%) are shopping-list-free at least some of the time making impulse buying and in-store promotion a larger part of the buying decision. Though it’s good for shoppers, list usage can potentially have negative effects on retailers and brands by limiting time in store, reducing exposure to in-store marketing materials, the number of items in the basket per trip, and the number of shopping trips–especially the one-bag or impulse-trip types. However, some retailers, such as Whole Foods, have responded in clever ways by supporting shoppers’ use of lists via digital applications that provide recipe-driven ingredient lists, in-store specials, and coupon support, which serve to guide shoppers through the store and extend the amount of time they spend there.

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The Checkout 4.10 - Shopping List Issue

  1. 1. inside the in-store experience ISSUE 4.10 | SHOPPING LISTS IN THIS ISSUE Shopping lists: How shoppers are using traditional tools in the new economy • Two out of three shoppers regularly shop without a list • The person making the shopping list and the shopper are not always one and the same • Shoppers have significantly disparate levels of receptivity when it comes to media influence on the shopping list • Having a shopping list doesn’t prevent most shoppers from making impulse purchases Continued recessionary conditions have prompted shoppers to develop various coping mechanisms to stretch the family budget. These new behaviors af- fect the way they become aware, research, plan, and ultimately shop for groceries and CPG products. Not surprisingly, these changes in behavior are largely focused in the Pre-TailTM phase of the shopping pro- cess. This issue of The Checkout examines the shopping list and its role in guiding the shopper throughout the Shopper ContinuumTM (page 8). As a shopping aid, lists have been traditionally used to rein in impulse purchas- es, navigate the store, and keep household spending under control. But, given the increased pressure of a prolonged recession, are modern shoppers still using shopping lists the same way? Issue 4.10 powered by The Integer Group® and M/A/R/C® Research
  2. 2. 2 page The focal point of product decision-making is gradually shifting from store to home Despite a slight uptick in leading economic indicators, residual economic pressures on house- hold budgets and discretionary spending will most likely affect the wallets and psyches of the American shopping public for the near-term. ! On the tail of the worst recession in the last 15 years, beleaguered shoppers have dramatically altered the way they consume, plan, and shop for grocer- ITS NO SURPRISE THAT THE ECONOMY HAS ies and basic household goods. A prominent effect of prolonged recessionary CHANGED THE WAY PEOPLE SHOP pressures has been a shift to a home-centric and self-sufficient lifestyle, trading 3 page PEOPLE ARE DEVELOPING MONEY-SAVING BEHAVIORS TO STRETCH THEIR BUDGETS nights at the movies for DVD rentals, restaurants for home cooked meals, and MOST OF WHICH INVOLVE PREPLANNING specialty treatments for home remedies. From the kitchen and the living room ENTER THE to the garage and closet, brands and retailers alike are challenged with bringing THE SHOPPING LIST consumer-driven solutions to micro-economic realities. The prevailing shopper mind-set has shifted to one of conservation and retrenchment, exemplified by a greater emphasis on premeditated shopping behaviors and increased in- volvement in channel, retail, and at-shelf decision-making. The most significant change is that households are making more shopping decisions at home. For retailers and brands, the question is: Where is the critical point where the consumer becomes a shopper and is most receptive to a marketing message? The First Moment of Truth (FMOT), Graphic 1: Segment Definitions a term originally coined by Procter & Gamble, is defined as the critical Demographic Translation three-second decision interval where Attached Couples Married; Living together; other shoppers are exposed to brand Female Shoppers Gender: Female messaging and can potentially be converted from a shopper to a buyer. Anglo America Ethnicity: Caucasian It is at this moment that shoppers Focused Boomers Age: 46 - 64 consciously and unconsciously as- Generation X Age: 39 - 49 semble a mental consideration set of competitive and substitute products; Hispanic Thrivers Ethnicity: Hispanic/Latino weigh pros and cons; and suc- Unattached Singles Status: Single, divorced, widowed cumb to emotional reactions, which Networked Millennials Age: 18 - 24 ultimately lead to one brand being selected over another. Given the vast Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,203 www.shopperculture.com amount of information available to the general public, the lines between Pre-TailTM and Retail are blurring. This, coupled with economic pressures placed on most American households, has caused a shift in aspects of decision-making from store to home. Many marketers have dubbed this shift the emerging “Zero Moment of Truth.” As the decision-making process evolves, brands and retailers that decipher the emerging Zero Moment of Truth will be best positioned to reap the rewards now and, more important, when the economy recovers. Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research
  3. 3. 3 page For one out of four men, shopping and list- making duties are split In-store marketing takes the lead Graphic 2: How Often Shoppers Use Shopping Lists [% of all shoppers] Penetration of the shopping list is fairly substantial, with 43% of general Attached Couples 52 % market shoppers reporting that they Female Shoppers 46 % “always” rely on a shopping list. Still, more than half of consumers (57%) Anglo America 46 % are shopping-list-free at least some Focused Boomers 44 % of the time making impulse buy- ing and in-store promotion a larger Gen X 38 % part of the buying decision. Though 37 % it’s good for shoppers, list usage Hispanic Thrivers can potentially have negative effects Unattached Singles 35 % on retailers and brands by limiting time in store, reducing exposure to 32 Networked Millenials % in-store marketing materials, the Source: The Integer Group | M/A/R/C Research 2010 March Checkout Study N = 1,203 www.shopperculture.com 1 in 4 number of items in the basket per * Statistical significance indicated by outline trip, and the number of shopping trips– especially the one-bag or impulse-trip types. However, some retailers, such as Whole Foods, have responded in clever ways by supporting shoppers’ use of lists via digital applica- The number of men tions that provide recipe-driven ingredient lists, in-store specials, and coupon support, which who shop off a list serve to guide shoppers through the store and extend the amount of time they spend there. made by someone else Men “flying blind” more often Graphic 3: Mens’ Weekly Chores Though in many instances, the shop- per and list-maker are one and the same, when it comes to attached male shoppers, there is a slight dis- parity. Nearly one out of four (23%) male shoppers report that while they are the primary grocery shopper, they are not the primary grocery shop- ping list maker as shown in graphic 3 (right). For retailers and brand manu- facturers alike, this highlights one of the main tenets of shopper market- ing–having a clear understanding of the differences between the shopper and the consumer–indicating that Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,203 * Note: Due to rounding, percentages may not add up to 100% www.shopperculture.com male Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research
  4. 4. 4 page The Zero Moment of Truth? grocery shoppers may present a greater opportunity to be influenced by in-store marketing ma- terials. Because two-thirds of list-makers (66%) do not record specific brands on their shopping lists, marketers can use this opportunity to provide assistance to male shoppers facing at-shelf confusion due to vague shopping lists written by someone else. It is clear that lists are a popular shopping aid and that shoppers are using them to guide their predetermined purchases in store. However, to what extent are they using their lists to make brand-level decisions? Product buy planned–brand not so much When creating a shopping list, more shoppers (81%) include the type of product, and not the brand, leaving the door open for brands and retailers to drive brand switching in-store via com- pelling marketing materials at-shelf. Respondents also report that their shopping lists also typi- cally include the quantity needed (67%), but not details like the size of an item or its price. This may indicate that most price-based decisions (price and/or price-per-unit valuations) are being made at shelf. Because the majority of brand (66%) and unit size (73%) decisions are being made at shelf, there is a substantial opportunity for shopper marketing programs to persuade value-concerned shoppers to reconsider brand-name products and entice unit size trade-up in that location. This can be especially potent when considering that most name brands will be compared to their private-label counterpart a few inches away. Brand inertia carries from home Graphic 4: Details Shoppers Write on Their Lists [% of list makers] to store When building their shopping lists, Product types 81% most shoppers (74%) are influenced primarily by the brand of the product Number of items 67% currently in use. However, one in four list makers is not brand-driven and Brand names 34% makes the decision of what goes on their shopping list based on other factors such as price, advertisement, Size of package 27% or word-of-mouth recommenda- tion. While it is not surprising that Store names 27% discounting plays a significant role in list development, roughly a third of Prices 22% all list-making shoppers are influ- Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,122 www.shopperculture.com enced by recipes (34%) and product recommendations (31%) from friends and family. Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research
  5. 5. 5 page When it comes to list-making, shoppers are creatures of habit This finding presents retailers and brand manufacturers with yet another opportunity to en- gage shoppers with more experiential shopper marketing tools built around meal solutions and occasion-based product assortments – other than margin-eroding price promotions. TV and Internet ads not making “the list” While the influence on list-making from the Internet and mobile phones is relatively small (11%) when compared to other factors, the explosive growth in shopping-list Web sites and mobile applications will have a sizeable impact on shoppers’ list-making habits in the near-term. The proliferation of mobile devices and technologies will only serve to redefine shopping-list making and usage as brands and retailers begin coordinating their marketing campaigns both in and out of the store–aisle-based shopping lists, anyone? Some retailers have already been making substantial headway into the list-making space, Whole Foods, Kroger, Safeway, King Soopers. Not to mention the proliferation of shopping-list Web sites like grocerywiz.com and grocerylists. org and applications such as Ziplist, GroceryIQ, and Epicurious. Graphic 5: Influence on Making the Shopping List [% of list makers] 80% Brands in use 70% 60% ons Coup 50% 40% 30% 20% Mobil e/Int ernet 10% 0% Female New Focused Anglo Attached Gen X Unattached Hispanic General Shoppers Millenials Boomers America Couples Singles Thrivers Market Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,122 www.shopperculture.com Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research
  6. 6. 6 pag e Shopping basket bulk-up still common Despite pre-planning, most shoppers Graphic 6: Number of “Off-List” Purchases [% of list makers, per trip] still make “off-list” purchases It is no surprise that when properly de- signed and executed, in-store marketing is an effective way to communicate with 10 or more items; 3 None; 10 % % the shopper and drive incremental pur- chase. Nine out of ten shoppers routinely 7-9 items; 5 % make impulse purchases with nearly a 1-3 items; 61 % third (30%) adding four or more items to their basket per trip. The magnitude of 4-6 items; 21 % the implication is tremendous, consider- ing that the average shopper makes 6.9 grocery-shopping trips per month and that most large-format grocers only real- ize meaningful economic benefit when Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,122 www.shopperculture.com consumers make three or more addi- tional purchases. For a leading retailer like Safeway, getting an additional 10% of existing shoppers to add three more items could amount to more than $1.5 billion in banner sales a year. The shopping list is not a barrier to impulse purchases Shoppers were most often (78%) driven to make “off-list” purchases by sales, indicating that the old adage of “priced too low to resist” is even more relevant in today’s economic environment. However, even the staunchest of penny pinchers were receptive to in-store marketing efforts with nearly a fourth of all shoppers citing that their purchase was driven by something they saw or read at-shelf. The visual appeal for 17% of shoppers was rooted in fun and/or attractive packaging and signage. In terms of effective messaging platforms, communications playing to entitlement Graphic 7: Primary Reasons for “off list” Purchases [% of list makers] and pampering drove three out of ten Was on sale or special promotion 78 shoppers to make an impulse purchase. % Interestingly, the strongest factors linked Found a good coupon for it 33 to off-list purchases–sales information, % promotion messaging, and coupons–can Wanted to pamper myself 28 % be specially tailored to each shopper Something on shelf convinced me 24 and delivered to digital shopping lists % on mobile devices. This provides retail- Looked fun and attractive 17 % ers using branded shopping lists with a Thought someone else would like it way to encourage impulse shopping by 16 % (gift) promoting smarter shopping. Ultimately, Didn't buy anything not on the list 7 % the shopping list is not a barrier but an in- cremental touchpoint to promote further Other 6 % engagement among the retailer, brand, and shopper. Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,122 www.shopperculture.com Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research
  7. 7. 7 page Shopper summary tables Graphic 8: Data Summary by Shopper Segment Lower income Millennials >$25k personal income/annum 18-24 years of age DATA SHOPPER BEHAVIOR DATA SHOPPER BEHAVIOR Increased preplanning, Much higher incidence of Shopping-list Shopping-list usage Shopping-list usage price-watching, and preplanning and shopping usage slightly above average greatly below average shopping involvement involvement While much more brand Higher emphasis on Retrenchment into basics- loyal, will remain List Slightly higher emphasis package size and prices, only mode with package experimental but within components on brand and less on brands downsizing existing brand tiering Social shopping and group Higher influence exerted decision-making will be Refocus on value brands by existing brand, word- Influences Less brand loyal and private-label offerings of-mouth, mobile/Internet, bolstered by in-store usage of digital shopping and TV commercials. aids Significantly higher Stringent adherence to Significantly less impulse frequency of impulse Emphasis on fun, and shopping list and meal Off-list purchases; purchases purchasing, but less items instant gratification, with planning with increased shopping driven by coupons with per trip; driven largely by higher emphasis on self- receptivity to in-store less “indulgences” attractive packaging and identification with brand marketing vehicles at-shelf messaging Lower shopping frequency but higher Higher incidence of cross- Lower shopping Shopping spend* at: channel substitution and frequency and spend frequency Walmart: +$25.64 stock-up trip types across all channels Grocery: +$22.48 C-store: +$19.12 *Per trip spend differential compared to sample average Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,203 www.shopperculture.com Graphic 9: Data Summary by Shopper Segment Hispanic Boomer 46-64 years of age DATA SHOPPER BEHAVIOR DATA SHOPPER BEHAVIOR Shopping-list usage Increased in-store Casual usage of the Shopping-list Shopping-list usage on significantly below shopping involvement shopping list with slightly usage par with average average with less preplanning higher preplanning Higher brand loyalty and Retrenchment into basics- Slightly higher emphasis List overall shopping inertia will On par with average only mode with package on brand, price, and components downsizing retailer keep this segment stable Greatly influenced by TV Slight refocus on value commercials, word-of- Slightly higher influence Stick with familiar brands Influences mouth, and existing brands and private-label from store ad or circular but will seek the best price offerings brands Longer time spent in store Average impulse purchase and more frequent Disciplined shopper with Accustomed to fluctuating Off-list frequency; significantly shopping trips will slightly less impulse economic conditions less shopping driven by at-shelf translate into even greater purchasing – except when likely to trade down and messaging shopper marketing coupons are involved more likely to buy bulk receptivity Average shopping Higher shopping While slightly more prone More frequent fill-in trips frequency but higher frequency and greater to channel switching, bulk Shopping to mass and C-stores spend* at: spend* at: buying will keep much of frequency with much of the stock-up Walmart: +$45.86 Club: +$53.04 their spending at usual done at club stores Grocery: +$27.39 Drug: -$9.86 retailers Drug: +$32.71 *Per trip spend differential compared to sample average Source: The Integer Group | M/A/R/C Research 2010 February Checkout Study N = 1,203 www.shopperculture.com Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research
  8. 8. 8 page Shopper mind-sets and behaviors change along the path to purchase The shopping process has changed dramatically in the last decade. Our sources of product and brand information have multiplied exponentially. We trust the opinions of complete strangers, shop online with our social network, and even become “fans” of brands. We watch commercials on YouTube®, then skip over them with TiVo® and satellite radio. We read reviews on Amazon®, then go and play with the products in-store, check in on FourSquareTM, take a vote of Face- book® friends, buy them with our mobile phones, and then Tweet about our experiences with our friends. Where, then, is the First Moment of Truth? The Shopper ContinuumTM is Illustration 1.0 The Shopper ContinuumTM a proprietary Integer framework Pre-Tail™ that helps us understand and Entering a store or Web site articulate the role of communi- cation and marketing actions during three distinct phases of shopping behavior. Browsing, Retail comparing, researching and selecting Pre-Tail™ includes all the items actions people take when preparing to shop and se- lecting a retailer, including how we respond to all the things brands and retailers = points of action, behaviors Post-Tail™ Using the ing t g th product Purchase rch h moment do to influence us. Copyright © 2010 The Integer Group Retail is all the activities that take place in a real or virtual retail environment. This includes the behavior of the shopper and the actions of the retailer and brands on the shelves (real or virtual). Post-Tail™ encompasses what happens after a purchase. It includes what retailers and brands can do to reinforce and celebrate the purchase and encourage shoppers to repeat their behavior. The Shopper ContinuumTM framework is one of the tools employed by The Integer Group to identify the questions we need to ask about our shoppers, how we go about getting those answers (the data), and then what we do to improve our strategy (the analytics). Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research
  9. 9. 9 page The Integer Group® is one of America’s M/A/R/C® Research is a brand develop- largest promotional and retail marketing ment firm dedicated to helping clients create, agencies and a key member of the TBWA evaluate, and strengthen their brands. Our Marketing Services portfolio. The Integer teams design and execute qualitative and Group resides At the Intersection of Branding quantitative, traditional, and online solutions and Selling® and creates strategic marketing while adhering to a client-service ethic built solutions for clients in categories that include on being easy to work with and delivering beverage, packaged goods, telecommunica- what is promised. Our core competency is tions, fast food, home and shelter, and power measuring attitudes and behaviors to accu- sports. Join Integer® in a conversation on rately explain and predict market share, shopping culture and brand strategy: revenue, and bottom-line impact of a client’s actions. We help our clients address con- The Integer Group sumer, channel, and B2B marketing issues to Craig Elston launch better products and services attract Sr. VP, Insight & Strategy and retain valuable customers, and build celston@integer.com stronger brands. Our proven, marketing-is- 7245 West Alaska Drive sue-focused solutions support clients’ brand- Lakewood, CO 80226 building efforts. tel +1.303.393.3474 M/A/R/C Research Randy Wahl EVP, Advanced Analytics Visit us at www.shopperculture.com Randy.Wahl@MARCresearch.com 1660 North Westridge Circle Download the Shopper Culture application from the Irving, TX 75038 iTunes store today Join The Shopper Culture group on Linked-In Visit us at www.MARCresearch.com/thecheckout Friend us on Facebook The Checkout is based on a nationally representative survey of 1,200 U.S. adults conducted monthly by M/A/R/C Research. Please contact us to learn more about the data we collect or additional Follow us on Twitter at twitter.com/shopperculture analysis. ©2010 by The Integer Group® and M/A/R/C® Research. All rights reserved. The data contained in this report may be reproduced in any form as long as the data is cited from The Integer Group and M/A/R/C Research. www.ShopperCulture.com. Issue issue 4.10 powered by The Integer Group® and M/A/R/C® Research powered by The Integer Group ® and M/A/R/C ® Research

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