The horse meat scandal rocking supermarkets and their supply chains is sure to prompt a return to marketing that reassures people about quality and provenance – and even without the impetus of a food scare, brands would be right to do this, according to new research.
As many as 4.5 million people are ‘quality crusaders’, according to TGI data analysed by Kantar Media. The group demands good, healthy food and spends £83 a week – 12 per cent more than the average spend. They splash out a total of £374m a week at supermarkets, making them the single most valuable group of shoppers.
Those who focus on the environment (‘ethical empathisers’) or food provenance (‘conscious connoisseurs’) make up 3.6 million of the population and spend £280m each week, making a total spend of £650m for those who care about where their food originates. They are likely to do their weekly shop at Marks & Spencer, Waitrose, Sainsbury’s or The Co-operative Food.
Five million shoppers buy products based on the lowest price and spend a total of £360m each week – favouring Asda, Tesco and Lidl.
Supermarkets may do well to seek out the people who are happy to pay more for quality rather than just forcing the price message home, says Anne Benoist, a TGI director at Kantar Media. “Perhaps Tesco or Asda are missing a trick. The quality crusaders are a large group, accounting for 14 per cent of all shoppers. But these people seem cut out of the loop – for them, price is particularly unimportant,” she says.
This group tends not to have children at home and are in the AB demographic. They also prefer Waitrose and M&S. But Benoist suggests that a retailer such as Tesco could make more of its top-tier ranges to appeal to them and potentially steal market share from others. Those driven by quality when choosing products make up 13 per cent of Tesco shoppers. Of the big four, Sainsbury’s has the largest proportion of people who are after quality, with 17 per cent.
Benoist predicts that once the economy starts to pick up, there will be more of a focus on quality food by the general public. This could be good news for Morrisons, whose chief executive Dalton Philips has announced a focus on fresh food and expert staff, such as in-store bakers, but which has a falling market share. Of the seven types of shopper, Morrisons customers are most likely to be from the strategic savers group, which comprises 16 per cent of those who shop there regularly.
The ‘promiscuous purchaser’ is another type of shopper worth targeting, according to the research. Although they claim to be great bargain hunters who are driven by value, they spend £84.20 a week, which is 12 per cent higher than the average. They favour Aldi, Iceland and Tesco and make up 2.6 million of the population.
In order to appeal to them, marketers should look at their psychological make-up. Kantar has also worked on a research method it calls the ‘why code’, which looks at the reasons people choose particular brands.
The promiscuous purchaser has a high ‘cultural’ index, suggesting they are intelligent and educated. “You need to be switched on and be able to manipulate [price comparison site] mySupermarket to root out those deals. Promiscuous purchasers are canny and it shows,” says Benoist.
It is more likely to be strategic savers, those who are careful about what they spend, who do best out of deals. They make up the largest group of Aldi shoppers (17 per cent), and this may grow, according to a spokesman for the supermarket. Aldi has a market share of 5 per cent and its average basket size is only one to two items smaller than a typical Sainsbury’s basket.
The type of people shopping at Aldi is also evolving. “The socio-economic base of our customers is changing. We had an 18 per cent rise in the number of AB households shopping at Aldi in 2012 compared to 2011,” says a spokesperson. The supermarket attributes this to its products’ ‘brand-like’ quality and says that smoked salmon and quails helped boost its popularity among the middle classes over Christmas.
However, now Aldi has been swept up in the horse meat furore and has confirmed that 100 per cent horse meat has been found in some of its processed beef products, it will have to work hard to gain shopper trust. Although its spokesperson says the chain sources more than two-thirds of its core range from UK suppliers with a fresh meat range that is 100 per cent British and Red Tractor approved, it may be necessary to implement a campaign to reinforce the message.
The largest grocery shopping segment is made up of ‘accustomed acquirers’. The 5.1 million people in this group spend £62.60 a week, 15 per cent lower than average. But as the group is large in number, with an older age-profile, they are worth keeping hold of, according to Benoist: “Perhaps this is the group we are going to see more of in the future.”
She says: “It is important for a retailer to build brand loyalty now. If they can forge a bond with these people, they will probably stick with you because they are people of habit.” They spend a total of £319m a week, making them the third most valuable segment.
One group of people that typically gets smaller during a recession is the ‘ethical empathiser’, suggests Kantar’s research. These people favour Fairtrade products, consider an animal’s welfare and are keen to protect the environment. They make up one of the smallest groups at 2 million, and are spending £72.60 a week, which is just below average.
However, ethical concerns are far more important to this group than any other. They are six times more likely to think about environmental considerations. They also look at a product’s origin as well as its ingredients and prefer to shop at Waitrose, M&S and Sainsbury’s.
Yet this group may remain static, says Benoist. “One thing we have found is that other shopper types’ commitment to buying green has dropped off, now that we have been in the downturn for so long. It makes ethical empathisers stand out all the more as they have stuck to their guns and refused to compromise.”
The convenience market is also being targeted by big names. Waitrose is to open 10 convenience shops this year and 10 regular stores. Morrisons has also signalled its intention to push into the convenience market by purchasing 49 Blockbuster stores, after the video rental chain went into administration. Those keen to shop at the store most accessible to them make up 4 million of the population – and these ‘convenience kings’ spend £73.20 a week. Driven by recommendations from family and friends, they favour The Co-operative Food, Iceland and M&S.
For brands trying to find that extra bit of market share, a sharp focus on a particular group of shoppers could be the way forward. Benoist says: “The supermarkets are trying to be all things to all people, but the danger is you end up being nothing to anyone and then it all gets reduced back down to price.”
Convenience kings – driven by convenience in terms of locality, parking and opening hours
Ethical empathisers – think about the environment, Fairtrade and animal welfare
Accustomed acquirers – like routine, have narrow brand repertoires and are likely to shop at only one supermarket
Promiscuous purchasers – love value, bargains and do not like sticking to a few brands
Quality crusaders – keen on superior quality and happy to pay a premium for it
Conscious connoisseurs – foodies who get knowledge from magazines and professionals
Strategic savers – shop around for the lowest price to meet a strict budget
We ask marketers whether our ‘trends’ research matches their experience on the ground
Head of insight
These findings are not surprising as our customers tell us that they like shopping with us for ethically sourced, quality food and drink that is fairly priced.
We also know that our essential Waitrose range and Brand Price Match scheme continue to attract more people and existing customers to buy additional items, as they give customers confidence that they are receiving great value for money without any compromise on quality.
Our strong sales growth over the past few years has been down to our combination of great value and innovative products.
Head of marketing
The Co-operative Food
These findings are interesting and reflect some discoveries made by our own customer segmentation project, which was commissioned in 2011 and interviewed 5,000 shoppers in the UK.
We found that the largest proportion of our shoppers tend to be family focused with ethical values, which aligns with these TGI findings showing that the largest percentage of ‘ethical empathisers’ shop with us.
It’s also no surprise that a large number of our customers are convenience-led as we have a store in every postal area of the UK.
This year the Co-operative Group launched its new brand strapline ‘Here for you for life’, which sums up these values. The ethos has been designed to help customers understand what we offer as a family of businesses and the role we can play throughout their lives.
Head of marketing
It doesn’t surprise me that there are lots of similarities between Iceland and Aldi – for example, at the heart of our business is high street retail. So [the fact that 14 per cent of Iceland shoppers] are ‘convenience kings’ doesn’t surprise me. We are not a primary shop for most, we are a secondary destination because of convenience as much as anything.
There is quite a lot of movement in the customer types in the research. If you were to track them back over five years as opposed to a current picture, people are [now] much more open to where they shop than before.
We do some deals but a lot of it is clear pricing, which we call ‘round sum’ pricing. Other retailers do that but we are also known for value so potentially sit with Tesco and Aldi. I think the promiscuous shopper expects a good deal or good value with us.
Many promiscuous purchasers are prepared to shop around. Grocery retail at the moment is quite aggressive and people are trying to find different ways of dressing up value.
Value will become more important because of the economic climate but the expectation from the consumer now versus four or five years ago is higher. Primark started it by making it acceptable to get a bargain and be proud of it.
Value has always been our bedrock and we have the same challenge as everyone else to keep that alive and fresh for people.