As consumer confidence has taken a knock in recent months, shoppers are trading down. The high street convenience stores are losing out as their customers switch to the large supermarket chains. At the same time, these chains are themselves losing business to discounters.
People are considering more carefully what they spend and, as a result, are taking fewer shopping trips that are more planned. British buyers may soon adopt or adapt a trend that is emerging in the US – the monthly, bulk shopping trip.
To make sure they are on peoples’ shopping lists, brands and businesses need to understand exactly what makes people buy – whether this is marketing, advertising, promotions or store layout.
To help with this, there are two important elements for businesses to consider: category roles of products and the decisions that sit behind why people buy.
It is now accepted that the influence of mass advertising is dwindling in the face of increasing media fragmentation. People no longer watch live TV in their multimillions; many view shows through their computers, video-on-demand connections or spend more time surfing the internet than engaging with soap operas.
This means it is vital for companies to make sure they use as many media channels as possible to make sure they attract consumer attention wherever people are likely to be most responsive.
Despite the use of planned shopping lists, many choices are still made in-store. Many retailers and brands are still unclear exactly how their buyers and potential customers shop, however, and how this may impact on everything from their packaging to their advertising.
For example, some categories of product, such as bread, have a short dwell time and low involvement. People don’t want to think too heavily about their bread type; they simply want to make a quick decision and move on.
Categories like this are highly planned – always on the list – and frequently shopped. As such, they need clear signposting to facilitate navigation and ease of shopping. But there is no need for stores to convey much additional information beyond this; it would be wasted.
In a category such as cosmetics, however, which is intrinsically interesting to people, there is high interaction and involvement. Women like to browse and absorb what is on offer. Stores need to present opportunities to educate, inspire and encourage trial: an involving category entails consumers making decisions at the point of purchase. Additionally, if the goods are bought infrequently, the category may be confusing for shoppers so they need more detailed guidance.
It is also important to know why a category is high involvement. It may be because it is intrinsically interesting, like cosmetics, or because it is something complex and muddled. In the latter case, the shopper’s needs are very different. They may need good navigation aids but not too much involved information, as this could complicate matters further.
Anyone seeking to understand shoppers must also understand how decisions are made. Decisions that are really important to people, like their choice of car, are made consciously. They often reflect status and entail purchases of high financial value.
These choices are likely to be initially based on rational research. But in the final analysis, emotion plays a strong role, for example in the choice of brand. People know that Skodas are now good quality cars but may still shy away from buying them because of a stigma attached to the brand from many years ago.
Advertising plays an awareness role but purchasers look to peers or trusted editorial for endorsement. With so many blogs and social networks now available to people, they are used to passing around information about their views on companies, brands and product efficiency.
Decisions that are less important involve much less research. The items in this area, such as breakfast cereals or coffee, are useful but have relatively little impact on status. These are often commodities that are purchased on a regular basis and therefore shoppers’ “choice” is habituated: they don’t make continuous, performance-related decisions. Advertising plays a stronger role, although ultimately any conscious decision is more likely to involve rational parameters such as price and value.
Finally, there are items that are really not very important, such as stain removers or blank DVDs. Shoppers are very unlikely to do any research, instead relying on a retailer to have pre-selected a range of simple options on their behalf. They generally use very simple tools such as price to confirm their choice. They may be influenced by word of mouth but their choices, while rational, are ill-informed.
In fact, many of the choices that shoppers make are more or less arbitrary; even the most significant decisions include irrational elements. To use this knowledge in a strategic way, it’s vital for companies to understand the ramifications.
To have success in 2009, brands must tie together understanding of their products’ categories with knowledge of what really drives consumer decisions. In a recession, people are thinking much harder about what they buy, but for smart marketers, this is where the opportunities begin, rather than end.