Six Key Shopper Trends for 2013
Many reports focus on retail and technology trends but overlook the shopper. In "Guidance for 2013: Acting on Key Shopper Trends," Barrington, Ill.-based consulting firm Willard Bishop explores the most significant changes taking place among shoppers and what they mean for retailers.
The research identified six key shopper trends:
1. Promotion Overload
Many shoppers today are overwhelmed by the glut of promotions they receive via email, text and online. Walmart reportedly posted 50 million ads on Facebook during the 72 hours of Black Friday weekend in 2012, according to the Willlard Bishop study.
The result? Locating the most relevant promotions in this cluttered environment has become increasingly difficult for shoppers. Thus, many promotions go unseen. Shoppers open only select emails and "unlike" Facebook pages from overzealous retailers and brands, the study says.
Though marketers must keep one eye trained on return on investment, the study cautions against potentially alienating shoppers with too many communications because of a short-term focus on return on investment.
Guidance: Retailers are urged to consider less saturated communications channels for their promotions. Long term, it's clear shoppers need help managing the large volume of promotions they receive. Retailers should consider using triggered promotions based on past shopping behaviors that can deliver the right message at the right time.
2. Emphasis on Value Capture
Through practices such as showrooming, shoppers are tilting the balance of power in the retailer-shopper relationship in their favor. Access to unlimited information about products at their fingertips has made the average shopper a virtual expert in features, prices and availability, even for hard-to-find products.
According to the study, these changes are reducing profit opportunities for retailers and shifting that value to shoppers. Shoppers also are layering promotions, perhaps combining a retailer promotion with a manufacturer coupon or rebate, to achieve greater overall savings.
In the future, the report suggests, shoppers might join together and provide potential vendors the opportunity to meet their collective demand through reverse auctions. Because privacy is a concern for some, shoppers could create so-called data lockers to ensure their personal information is under their control. Shoppers also could ask for compensation for sharing personal information.
Guidance: Provide website access to all savings opportunities to make it easier for consumers to take advantage of promotions. Assist shoppers with personal data management services to help them maximize the value they can capture across all purchases.
3. Enthusiasm for Peer Influence
Shoppers are turning to their social networks for trusted information about product features and performance more than to sales associates, retailers or manufacturers, the study says. Whether it's pinned on Pinterest, posted on Facebook or shared via Twitter, firsthand consumer feedback on products and experiences is abundant.
But where does this feedback have the most impact on shopping? The authors found consumers depend on local platforms like Yelp and consult them regularly for information. Bloggers with loyal followings also can be influential, and their endorsements can move shoppers to purchase.
Guidance: Instead of trying to tackle the entire universe of social media at once, find out where your shoppers are most active and start there, the report advises. Look to research and perspective from leading sources. For instance, the North American Coca-Cola Retailing Research Council has taken a formal look at the retail implications of social networking (www.ccrrc.org).
Identify key influencers, and recognize and encourage their advocacy. The trust and respect they enjoy from their peers, and your customers, can be invaluable.
4. Use of the Store
Though brick-and-mortar retailers will likely outsell online merchants for some time, the role of physical stores is changing for many digitally oriented consumers. To fend off online competition, develop in-store experiences that will draw shoppers. Concierge services and unadvertised sales can make the store a shopper destination and increase trip frequency.
Guidance: Search for and eliminate obvious issues such as long lines that discourage shoppers from coming into the store. Delve further by conducting research related to a single store: Identify a panel of core shoppers and track their activity and trip frequency to spot significant declines in visits and determine the reason.
5. Dependence on Digital Feedback
"Self tracking" may not be a household phrase just yet, but the study found increasing interdependence between technology and humans, particularly in the area of health and wellness. New wellness apps measure exercise and monitor health conditions, and the information is changing consumers' behavior.
So-called "self-trackers" report they are looking for ways to leverage their personal information for earned "rewards" for exercise or wellness activities. A greater interdependence between people and systems could have broad application in the future.
Guidance: Identify the self-tracking products and be aware of any related uptick in sales. Consider the opportunity to create new connections with shoppers, especially as self-tracking moves beyond bio measurements. Think of the drug store app that not only tracks a consumer's prescription history but also makes time- and cost-saving suggestions, such as offering to convert a prescription to a 90-day supply.
6. Confidence in Online Ordering
Research suggests more than one-third of shoppers have purchased at least one grocery product online, but less than 5 percent do all of their grocery shopping online. Many say they lack access to the system or don't fully trust it.
According to the research, the more aggressive the offline promotion of online shopping options, the more shoppers choose to use them. Brick-and-mortar retailers that offer online ordering with either pickup or delivery options will likely see positive growth. According to the report, supermarkets that promote online can see online sales reach 10 percent to 12 percent of total store sales.
Guidance: Enhance awareness of online shopping options among shoppers. Offline opportunities include printed promotional materials and in-store marketing.
Long term, work to allay customer concerns about online shopping with features like no-questions-asked returns. Use data to identify customer segments likely to be most receptive to online shopping.