Retail: what’s new and different, what stays the same…
August 7, 2008
B & T Magazine’s Sophia Russell interviews Norrelle Goldring, Director of Shopportunity, about what’s happening in Retail Land in 2008.
1. Have there been any major shifts in consumer shopping behaviour in the last year (in general, but also amongst specific demographics)?
Rather than a right-angle turn in behaviours in the past 12 months, there has probably been more a continuation of what we’ve been seeing over the past 5 years, particularly the rise and rise of single person households, which now account (according to a Mosaic report last week) for just over 25% of Australian households. These households are predominantly urban white collar, with a high amount of disposable income and a highly social lifestyle.
This is contributing to the decline of traditional stock-up shops and the rise of top-up shops, where people are now shopping for their dinner tonight up to 5 times a week.
Having said that, the big one over the past two years, in line with climate change awareness and concerns, would be the rise in importance to shoppers of sustainability - ethical and carbon neutral products, food miles etc. Region of origin (the closer to home the better) will become more important across a range of categories. We are seeing the development of a shopper group who shop philosophically based on their (ethical) values. ‘Hippie’ values are becoming mainstream. This same trend, combined with Tribalism, is behind what Michael Morrison at ACRS (Australian Centre for Retail Studies) refers to as the Village Economy – people are shopping closer to home because it’s their local, they’re known by the store staff, they believe the quality is better and that goods have not had to travel as far. Viz the growth of IGA local supermarkets in recent years.
There are a number of other longer term consumer trends also impacting shopper behaviour. These include Premiumisation (trading down to private label for goods of lesser importance so I can spend more on gourmet and premium items); Personalisation; Ageing (and the denial of this – the role of anti-ageing products); Urbanisation (thus shopper and retail segmentation will become increasingly important); and Anxiety (and the role of day spas and R&R/health and wellbeing products).
2. Are there any groups spending noticeably more time in the shops? Any spending less?
This depends on the retail channel (type of store) and reason for going (shopping mission).
In general, the groups spending most time in stores are those for whom shopping (browsing occasion) is a leisure activity or who have more time on their hands. This includes teens, and pairs/groups of women 25-40 (often SINKs/DINKs), and the over-55s.
The quick trip and destination type shops (I’m going for these one or two specific things and that’s it) are growing to become the dominant type of shopping trip – a convenience oriented trip where shoppers are in and out quick. Combine this with the growth of online for research (and a thus the consideration set being solidified before the store is entered) means that overall time in store is decreasing. It’s therefore important that stores are clearly laid out and uncluttered, and highlights the role of instore media to facilitate quick easy decision making among the shopper’s pre-formed consideration set.
At the other end of the spectrum, the past 5 or so years has consolidated the role of shopping as leisure activity for shoppers in malls and factory outlets/outlet centres. Shoppers on these types of leisure trips are likely to spend several hours in a mall and are more likely to have a higher basket spend. Who these shoppers are again depends on store type – a trip to Bunnings is a kind of leisure browsing activity for blokes, where women are more likely to pair up and go to the mall and include lunch in the outing. Shopping-as-leisure trips are highly open to influence.
Globalisation and the internet has seen the rise of online retailing. Still only a small percentage of retail occasions (under 10% in Australia, and that includes travel etc) it is growing quickly. The key reasons shoppers use the internet are that they can get something overseas that they can’t get here (variety and uniqueness), and/or it’s cheaper online. This is mitigated by barriers such as perceived quality and freshness (eg for perishable groceries) or risk of poor sizing/fit (for fashion). Those shopping retail online are mostly a consumer group known as Neos who use the internet to facilitate all aspects of their lives from dining out to finances. Neos are likely to be time poor, white-collar Generation X in well-paying jobs (and thus often also SPUDs).
3. Are there any new categories of shoppers that advertisers should take note of?
SPUDS (single person urban dwelling). [See the Shoportunity article on this on our blog].
The ethical/conceptual type shoppers referred to in Q1, who will accept or reject a brand or product based on where it comes from and how it’s made. And you need to a) act fast – first mover advantage - ie the new Green Beer - will only last for the next 6 months or so, and then being green will be the cost of entry rather than a source of competitive advantage; and b) be able to back up your claims as shoppers will become cynical about green statements all over everything.
Because the same shopper’s behaviour can vary across retail channels, categories, and shopping mission types, I also see a greater role for occasion based messaging in instore advertising (and above the line advertising) to get cut through. Product and price alone isn’t always enough. Show the product in its usage occasion, or talk to the shopping mission eg ‘The Perfect Gift solution’. What occasions can you own or become known for with your product?
4. Recent figures show older people in the 40-54 age bracket are visiting malls the most frequently. Is this unusual? Why? What typifies their shopping behaviour?
Young Families (ie kids under 10, with parents mostly 26-38) have the least time. 40-54 age bracket is more likely Older Families, who not only have more time (teens more independent) but are more likely to take the kids on shopping trips as a leisure activity.
5. Who is spending the least amount of time in shops, and why?
My hypotheses:
* Parents of young families – too much of a hassle/too expensive to take the kids, budgetary constraints, too busy ferrying kids around. Life is about the kids in general with less ‘me time’
* SPUDs/NEOs – time poor, convenience driven, out of home a lot due to work and socialising. (Exception – shopping-as-leisure-outing occasions).
(See previous answers).
6. Are there any untapped markets or demographics in the retail space?
Men in general aren’t adequately catered to in terms of shopping experience – either shopping alone or in mixed company – when you consider that men are nearly 50% of grocery shoppers in Australia. (So much for Mum being the ‘main grocery buyer’!) In terms of categories, I see a real role for skincare and grooming products for ‘the average Aussie bloke’ (not just ‘meterosexuals’ who are generally sneered at by the aforementioned Aussie bloke). And given the recent baby boom, and number of men becoming fathers for the first or second time, there is a role for more ‘macho’ baby strollers etc.
While we’re on the baby boom, many stores don’t cater to parents with strollers (one of the ‘hassle factor’ reasons parents of young families stay away from stores). Stores wishing to attract parents of young children need wide aisles and helpful friendly staff – these parents just want their job made easy and decision made for them!
Also the retail and FMCG sectors don’t yet adequately cater to the ageing population with layouts, product heights, signage (failing eyesight) etc. If you have a product targeting 55+ year olds, print the product name in a LARGE font with a big picture. Functional wins every time!
7. What do shoppers generally want from their retail experience?
In general order of priority:
1. Convenience and Accessibility:
Is it nearby? Does it have (lots of) parking? Can I get in and out quick?
2. Range and variety:
Does it have what I need today/the brands I usually buy? Can I find something new there?
3. Layout:
Can I get around the store quickly and easily? Is it obvious where each category is? Can I find my category/product quickly without hunting about?
4. Service:
Do they acknowledge me? Do they know me and what I like? Do they know what they’re talking about? Do they leave me alone if I want to be left alone and not jump on me the minute I walk in the front door?
5. Value:
Is it good value for money (not necessarily ‘the cheapest’)? Is it good quality for the price?
6. Fun and ambience:
(This is the one most retail is lacking in Australia!) Is it fun shopping there? Will I learn or see something new? Can I interact with things? Is the store clean, well lit, smells nice and a relaxing or stimulating environment with nice music? Do I feel encouraged to hang around and discover new things?
8. How would you profile the personality of the 2008 shopper?
Schizophrenic!:
* Trade down on the basics so I can trade up on the gourmet and premium stuff
* Quick trips and destination shops for the basics so I can spend more time shopping for leisure
* Seeking happiness, health and wellbeing but increasingly anxious
* Becoming more global in my research and status brands, but more local in where I shop and where the products I buy come from.
9. Is the busyness of life and general reduction of time an issue when it comes to shopping?
Absolutely as it reduces the ability to influence instore. The game is about making shopping trips quick and easy. Price is increasingly used as a mechanism to make a quick decision rather than the reason to buy in and of itself. The more relevant you are the more likely your product is to be selected.
The role of instore advertising is reminder via disruption. Advertisers need to find ways to disrupt shoppers in non-irritating ways through both placement and messaging. Occasion based messaging will cut through.
10. Are shoppers in malls to spend money, or browse? Do they make most of their purchasing decisions there and then?
This comes back to shopping mission (trip type). The most common reasons for visiting malls, in order, according to Newspoll include:
* Grocery shopping
* Clothes shopping
* Gift shopping
* Browsing (social/recreational)
* Specific store shopping
* Services shop (eg financial and roads/infrastructure services).
70% are there to shop for something specific, with somewhere between 12 and 20% there to browse. So you most shoppers are there to spend money rather than suss out the lie of the land for a later purchase.
11. Where do you think consumer retail is headed in 2009 and beyond?
I think we will see the market polarise into big box retailers, large chains, and small/niche players. The small and niche players will start to populate the smaller malls (which are growing in number), the large chains will stay in the large malls, and big box retailers will be strip destinations.
I’d like to see retailers spend more effort on providing a fun experience – a bit of theatre instore, not just product and price. Show usage occasions. Provide education and interaction. Shoppers who handle a product are 50% more likely to buy it.
I also see there is a big opportunity in cross channel retailing that we are only just starting to tap into here – ie ordering via catalogue or online and then picking up instore, or ordering instore and having the product delivered to your home.
Lastly, the smart money will be on retailers who can localise – who are able to tailor their ranges and offer to different consumer demographics in different locations on a store-by-store basis. This has been done in the USA for the past 5 years at least, we’re yet to start it in a meaningful way here. Retail media companies are able to provide this level of segmentation, but retailers, suppliers and media planners are yet to take advantage of it.
ABOUT NORRELLE GOLDRING AND SHOPPORTUNITY
Norrelle Goldring is one of the directors of Shopportunity, an Australian based strategic shopper marketing company that specializes in creating and implementing InStore Marketing and Category/ Channel Development strategies and initiatives.
The Shopportunity offer extends across Insight development, Strategy, Implementation, Capability and Training.
Shopportunity offers training courses for marketers, including shopper insights training and a shopper and instore marketing fundamentals course. Two fully hosted retail study tours to the USA are also being offered for May 2008.
For more information, visit www.sh-opportunity.com.au
Norrelle Goldring
M: +61 411 735 190
E: norrelle@sh-opportunity.com.au