MODULE ONE
Understanding shopper behaviour
Learn
Aim and purpose
This module will look at the topic of “the shopper” – what influences their behaviour, why they buy what they do, what’s involved in the decision making process in-store, and of understanding this can impact on improving P-O-P effectiveness in-store.
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More information can be found in the
POPAI Textbook See Chapter 2, page 19.
MODULE 1 | Introduction
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Learn
Module Introduction
The focus of this unit is to develop your practical understanding of the shopper. This module will look at: 1. Shopper types 2. Shopping missions 3. Shopper psychology and key influencers 4. Changing nature of shopping habits 5. How to communicate effectively with the ‘multi-individual’
MODULE 1 | Introduction
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Learn
Learning Outcomes After completing this module, you will be able to: 1. Identify different shopper types 2. Understand outline principles of shoppers psychology 3. Recognise different shopper missions 4. Explain basic emotional economics theory 5. Demonstrate your ability to ‘think like a shopper’
MODULE 1 | Introduction
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Part 1 Shopper & Consumer
MODULE 1 |
Insight
Shoppers versus Consumer
Understanding the shopper is at the heart of P-O-P campaign effectiveness. Attention in advertising is placed on knowing your target consumer. This can include demographics such as gender, age, social status as well as appealing to people with specific wider interests e.g. hobbies. Critically, within a P-O-P context, it is vitally important to understand that there is a distinction between the “shopper” and the “consumer”.
MODULE 1 | Shopper versus Consumer
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Insight
The “Consumer” is not always the “Shopper”
Female Shopper who is buying for herself = the consumer
Female Shopper who is buying for partner = the consumer
The “consumer” is not always the “shopper”. The “shopper” is the person who will buy the product as part of their shopping mission in-store, whereas the “consumer” is the person who will use or consume the product once purchased The shopper and consumer may be the same person, but they may be different. However, the same shopper may also buy male deodorant on the same shopping mission for her husband or boyfriend to later “consume” at home. Here, she is still the “shopper” not the “consumer”.
MODULE 1 | Shopper versus Consumer
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Insight
The “Consumer” is not always the “Shopper” One Shopper buying for mul>ple consumers
It is important to understand that the shopper may often be purchasing a product for multiple consumers, not just themselves. For example, a mum may make a purchase decision in-store taking into account the needs of herself and her family. In-store it is not simply about reinforcing the above-the-line advertising message aimed at the target consumer, but communicating how that purchase decision may also support wider purchase considerations e.g. refreshing drink for “me” and lunch time essential for “the lunchbox”.
MODULE 1 | Shopper versus Consumer
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Insight
The “Consumer” is not always the “Shopper”
Here is an examples specific to your industry. Someone may be buying tobacco products for their partner (the consumer), sometimes for a friend (the consumer) and, most often of all, for themselves (the consumer), but on each occasion they are “the shopper”. .
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Part 2 The Shopper
MODULE 1 |
Insight
The Shopper
The traditional marketing approach to consumer segmentation is relatively straightforward with audiences grouped by life-stage. For example, Young, Family and Grey market and by social status e.g. Working Class, Middle-Class and Affluent. Each with their own consumption needs, product preferences and income levels.
MODULE 1 | Shopper versus Consumer
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Insight
Traditional Segmentation
Young
Working-class MODULE 1 | The Shopper
Family
Grey
Middle-class
Affluent 12 Â
Insight
The Shopper
When it comes to segmenting “the shopper’”, it is not quite so easy. As retail marketers, you may be communicating to one person – for example, middle-class working mums – but that one person can be a different shopper, depending on her shopping mission, her mood and the time of day.
MODULE 1 | Shopper versus Consumer
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Business woman
Mum
Partner
Individual
MODULE 1 | The Shopper
Insight
One person, multi-shopper
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Insight
The Shopper
She can be a businesswoman; a mum; a partner; and an individual. She can be shopping in a rush on her lunch hour at work; doing a considered monthly shop for her family; seeking out a romantic treat for her and her partner; or indulging herself and relaxing with friends. Different mission, different mindset, but the same person.
MODULE 1 | Shopper versus Consumer
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Insight
The multi-individual Chef and Nutritionist
Fashion Stylist
Budget Calculator
“I am more than one person.”
Decision Maker
Individual MODULE 1 | The Shopper
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Insight
The “Consumer” is not always the “Shopper”
Again, here is an example specific to your industry. When getting ready for a night out, they may be open to buying tobacco products. They may choose not to smoke infront of their partner, changing their mindstate to one of being almost a non-smoker when in retail environments with them. And whilst being the same person, as a business professional, they may not wish their colleagues to know they smoke and so their mindset will be different.
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Part 3 Shopper Types
MODULE 1 |
Insight
Shopper Types
Broadly speaking, there are four key shopper types: 1. 2. 3. 4.
Quick Shopper Careful Shopper The Browser The Bargain Hunter
MODULE 1 | Shopper versus Consumer
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Insight
Quick Shopper
This type of person sees shopping as a necessary evil that must be completed as quickly as possible. Think about how you approach the trip to the supermarket at the weekend when it’s busy and you would rather be doing something else, but you know it has to be done. The Quick Shopper view the shopping process as simply completing a list of tasks and repeating previous behaviour. They therefore rely on P-O-P to signpost their favourite brands, signpost offers and support fast decision making about which products to purchase.
MODULE 1 | Shopper Types
Get in, get out Task oriented Brand loyal Know store layout
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Insight
Careful Shopper
This person spends time reviewing brands, product features, benefits and prices, spending time in categories and being concerned with finding ‘value’ rather than bargains. Great examples of this are ‘high involvement’ purchases where there is a lot riding on the purchase decision you make. Think about buying a new car seat or pushchair for your baby, or investing in a new washing machine or TV. They rely on P-O-P to help compare products and reaffirm what they have found through pre-research before entering the store. MODULE 1 | Shopper Types
Spends time reviewing brands Feature and price based decisions Happy to dwell in categories Wants to find ‘value’ not bargains
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MODULE 1 | Shopper Types
Insight
The Browser
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Insight
The Browser
The Browser is someone who sees shopping as stimulating, who is prepared to compromise on price for a more enjoyable shopping experience. Sees shopping as stimulating They want to take their time in-store to find new Prepared to compromise on price inspirations and ideas. Apple Stores are a great example Seeks enjoyable retail experiences of this. While Apple products are available from many Takes time to find inspiration & ideas retail outlets, core Apple shoppers would rather visit the Apple Store for its experience, even though they know they may not be getting the best deal. They rely on P-O-P to help educate and inform them about unfamiliar product features and benefits. MODULE 1 | Shopper Types
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Insight
The Bargain Hunter
The Bargain Hunter is concerned primarily with finding the best deals in-store. 
 They are very price driven and seek ways to save money. A bargain hunter shopper mindset has very high involvement with a high level of conscious activity. They are constantly shopping in a heightened state of alertness for the best deal and will often switch between different brands as a result. They rely on P-O-P to help them along the shopper journey. Types MODULE 1Shopper | Shopper Types
Price driven Wants to find the best deal High level of conscious activity Rely on P-O-P to navigate shopping
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Work mode
 On the go
Insight
Different times, different mindset
Home mode On the hunt Always busy
While these typologies are helpful to improve our understanding of shopper mindsets during the journey in-store, the difficulty for marketers, as already explained, is that we are all multi-individuals and can switch our shopper type depending on our needs, missions or even time of day.
MODULE 1 | Shopper Types
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Insight
The “multi-individual” One female shopper can be all of these shopper types. She can be stopping off at the supermarket for top-up shopping essentials on the way home from work – the quick shopper She can be completing the main monthly shop or buying new school clothes for her children – the careful shopper She can the buying a gift for her partner’s birthday – the browser And she can be spending wisely on the regular monthly shop in the run up to Christmas to spend a little extra on presents – the bargain hunter Shoppers can also be different shopper types within different categories – know alcohol brands and be loyal or can be a bargain hunter when shopping for frozen ready meals.
MODULE 1 | Shopper Types
We’re all multi-individuals with different needs at any given time of day.
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Insight
The “multi-individual” Take a few minutes now to think about this in your own market context again. Tobacco shoppers will be in a quick shopper mindset when buying as part of a bigger shopping mission in a supermarket environment, or visiting purely on-the-go for immediate consumption. If switching from traditional tobacco products to e-cigarettes for the first time, they may become a “careful shopper” keen to review different brands, features and prices. They may also become a “bargain hunter” on a ‘night out’, possibly having to budget for the evening, or when trying to pay for a taxi home. Likewise, the same mission can be different depending on the time of day. For example, buying tobacco products on the way home from work, or from a bar during a busy night out, although with less competing brand messages, whereas the social environment will put other challenges in front of marketers.
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Part 4 Key Influencers
MODULE 1 |
Intended purchase
Insight
Key Influencers
Actual purchase
When shoppers enter the store, they are not alone. Even when they are shopping by themselves. Often there are several influencers who will shape the final purchase decision that a shopper makes at in the aisle or at the fixture. Many of these influencers are the final consumer of the product. How many times have you gone to pick up a product and put it in the basket, only to swap it for something else because you know your partner won’t like.
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Intended purchase
Insight
Consumer influence on purchase
Actual purchase
Even if the intended purchase has an on-pack promotion or is on discount, sometimes consumers can still influence the final purchase decision. This knowledge can be used by retailers and brands to their advantage. Cereal merchandised on lower shelves can attract the attention of a major influencer on purchase decision during the supermarket shop – children!
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Mobile world means consumers can influence even if not present
MODULE 1 | Key Influencers
Insight
Consumer influence on purchase
But modern technology also now means that consumers can influence purchase decisions remotely during a shop. How many times have you seen someone walking around a supermarket talking to their partner on their mobile phone as they go? Asking “Do you want this for dinner tonight, or this?” or “Which wine do you think your mum and dad would like for dinner when they come over tonight?” 31
Insight
Accompanied versus Solo
Accompanying shoppers also provide a second opportunity to bring P-O-P to the attention of the final purchase decision maker. Whilst it may be missed by the primary shoppers, others less focused on “the list”, may engage with in-store messages and highlight them for consideration. Or in the case of children, bypassing the decision maker and putting items straight into the trolley for mum or dad to find when they get to the checkout. Or, for the less observant – when they unpack at home!
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Insight
Together = navigating store more
Research conducted by POPAI in the US shows that families shopping together navigate more of the store, breaking the routine of unconscious behaviour – only shopping from a list – and instead exploring new areas of the store. The same research showed that accompanied shoppers who recall or engage with P-O-P during the grocery shopping mission actually leads to an increase in spend of 69%.
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1.04%
Insight
Gender – Influence on P-O-P Men look at more retail displays
0.95%
Gender also plays a significant role in influencing not just want shoppers buy, but also how they shop. Research released by POPAI UK & Ireland in 2012 as part of its Grocery Display Effectiveness Study into 7 million shopper transactions within the grocery sector revealed that men look at each piece of P-O-P that passes their field of vision more than women. Some women would argue that this is because men are so rubbish at grocery shopping, they need all the help they can get! But it is an interesting statistic, especially when you consider how important accompanying shoppers are to increasing overall basket spend.
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Insight
Gender – Influence on P-O-P ales m e f d n a e l Ma tly to n e r e f f i d d n respo ur o l o c d n a e size, shap gery a m i l a u s i v and Another interesting influence of gender on the way we shop is how we interact with the world around us as we do so. Male and females respond differently to size, shape and colour, and visual imagery. You will notice this with many types of product packaging and how feminine or masculine they look in terms of shape and colour. Similar visual cues within P-O-P design can have a significant impact on whether an audience sees and engages with a display when in-store
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Female
Insight
Gender – Influence on P-O-P
Male
Better at translating imagery More emotive
Easily susceptible to P-O-P More functional
How both genders engage with P-O-P in-store also differs. POPAI research shows that females are typically better at translating the intended meaning of visual imagery and respond to more emotive creative and messaging. Males on the other hand, whilst more susceptible to P-O-P in the first place, respond better to more functional, obvious communication MODULE 1 | Key Influencers
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Insight
Age
20-35 year old shopper
45-60 year old shopper
One area of influence of purchase decision making that is often overlooked is shopper age We live in a world with an ageing population, but also a world where we are aging more slowly. Old people are in many ways getting younger.
 Today, grandparents are as likely to be buying the latest technology products such as Apple iPads or iPods and Kindle Fires as people in their early 20s.
MODULE 1 | Key Influencers
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Insight
Age
Whilst the desire to buy the product may be the same, the way they shop and their ability interact with P-O-P is very different. Many physical and sensory changes occur as we age. We slow down the pace at which we can process information, our dexterity reduces and we have difficulty in processing multiple tasks and graphic animations.
 As a result, P-O-P displays that require older shoppers to over-reach, or interactive displays with too many messages or animations will be less appealing to this type of shopper. Clearly, it is therefore very important to understand who you shopper is, or what the diversity of your shopper audience might be when designing P-O-P campaign activity, MODULE 1 | Key Influencers
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Part 5 Shopper Mission
MODULE 1 |
Insight
Shopper Mission
The shopper mission refers to the purpose of a particular trip into store – the context of the shop and the considerations that impact upon it. Various studies have shown that shoppers have different needs and requirements on different shopping missions.
MODULE 1 | Key Influencers
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Insight
The Shopping Mission
I have to…
I need to…
I want to…
We have to shop for essentials (food, clothing, fuel) – ensuring our cupboards and car’s petrol tank are kept full, or making a distress purchase to buy a missing ingredient for that night’s meal. Often we need to shop – buying a gift for birthday’s and Christmas. Other times, we simply want to shop – as a way to relax, socialise or indulge ourselves.
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Insight
The Shopping Mission
I have to…
I need to…
I want to…
To deliver targeted P-O-P solutions, we must recognise why the shopper is shopping – what is their ‘Shopping Mission’ Shoppers want different things from a store and from P-O-P communication not only when they are shopping for goods in different product groups, but also when they are shopping for goods in the same product group on a different mission.
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Insight
Shopper Missions
There are 5 main mission types: 1. 2. 3. 4. 5.
Main Shop Top-up Shop Immediate Consumption Emergency Shop Occasion
Whilst we will now look at them individually in a more detail, it is important to remember that all these missions could be completed in the same store. A shopper may also be on multiple missions during the same store visit, or a different mission in the same store depending on the time of week or day.
MODULE 1 | Key Influencers
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Insight
Main Shop
The first is the “main” weekly or monthly shop – the planned visit to the supermarket. Changes in shopper behaviour mean that these big planned shops to grocery retailers are becoming less frequent, with an growing number of shoppers making smaller and more regular visits to either major multiple grocery retailers, convenience format version of the large retailers or a mix of large and independent retailers.
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Insight
Top-up Shop
Next there is the “top-up” shop. Within grocery retailing this is the additional visit made in between the main shop to restock on essentials that you may run out of – milk, bread etc. Outside of grocery retailing, top-up shops are also carried out for clothing – basics such as shirts, t-shirts, socks etc., and even items such as electronic goods e.g. printer ink and paper etc.
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Insight
Immediate Consumption
The next type of mission is for “Immediate Consumption”. This relate to products such as sandwiches and coffee at lunch, to take back to the office or enjoy on the go. It can also be a mission to buy dinner on the way home for work to eat that evening, or to pick up a bottle of wine or beer for you and your partner, or in preparation for friends coming over to see you that night.
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Insight
Emergency Shop
The next mission type is the “Emergency Shop” or the “Distress Purchase” as it is otherwise called. If you’ve ever bought a toy as a birthday present and forgot to check if you had batteries in the house before they unwrapped it, then you’ll understand a shopper mindset on this type of mission. Emergency shops can also refer to things such as buying petrol, missing meal ingredients or running out of milk just before you know your parents are on their way over to see you.
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Insight
Occasion
The final common mission type is the “occasion”. For example, this can include birthday’s, Christmas and special events. Within grocery categories such as Beers, Wines and Spirits, leading brands are now working together to explore new ways to promote products through a focus on what marketers have termed ‘occasionality’ This is where marketers link a product to a specific occasion use within in-store communication. For example, whisky as a gift for Father’s Day.
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Insight
Mission based merchandising
By understanding the “Mission”, retailers and brands can develop more effective merchandising techniques. Take the convenience store environment where shoppers may be buying a meal as a last minute shop on the way home from work, or for a special meal that evening.
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Insight
Mission based merchandising
+
+
+
Products can be ranged differently to bring them together in a way that meets the needs of the shopper, provides usage ideas and pairing suggestions and, ultimately, making it easier for shoppers and saves time – especially important to convenience stores shoppers who are looking to grab-and-go. For example, you will often see pasta, pasta sauces, garlic bread and wine merchandised together in the ‘Food to Go’ areas of a store.
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Insight
The Shopping Occasion
Shopper who is buying for himself – Something for tonight Once again, the same shopper can have a very different shopping occasion which will influence their purchase decisions and the needs that they will have from P-O-P communication. A shopper may be buying for himself – “Something for tonight”, where communication at the point-of-purchase may need to reinforce the ‘value’ comparison between product choices in terms of number of serves (Vodka – 20 serves versus Wine – 4 serves) or variety of mixes possible from that serves (Vodka and Coke, Vodka and Cranberry, Vodka and Orange versus just a glass of Wine) MODULE 1 | Shopper Mission
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Insight
The Shopping Occasion
Shopper who is buying for friends – Something to impress Alternatively, the same shopper may be buying a bottle of alcohol to take to a friends house party, where he will be keen to impress. P-O-P communication that educates him about the quality and provenance of the wine and which dishes it goes well with, will be important to him for this type of shopping occasion.
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Insight
The Shopping Occasion
Shopper who is buying for family – Someone special Finally, the same shopper may be buying the same bottle but for a gift occasion such as a birthday or Father’s Day. Here, price, region and quality may be important communication messages as the shopper will have a budget in mind, most likely know that his father prefers wine from a certain region and will be keen to buy a quality gift that he will appreciate
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Part 6 Shopper Psychology
MODULE 1 |
Insight
Shopper Psychology
Are we all rational beings who make rational decisions?
Many academics and industry analysts have explored the rationale behind the decisions that shoppers make. Conventional theory has always believed that shoppers are rational in their actions It believed that we make choices as part of a problem-solving exercise. Others, however, believe that as shoppers we effectively possess what is a ‘black box’ into which stimuli flow and behaviour occurs. But are we rational beings that always make rational decisions?
MODULE 1 | Shopper Mission
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Insight
Shopper Psychology
Convention assumes we compare value of all options and take the best course of action.
MODULE 1 | Shopper Psychology
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Insight
Shopper Psychology
If a product is being promoted with a discount for buying two, we will make the rational decision to buy two – because, in the long run, we are saving money. We will also buy that product instead of a competing product that is not on offer. Because they are both rational decisions. MODULE 1 | Shopper Psychology
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Insight
Shopper Psychology
This rational approach however is not realistic within the context of the modern retail shopping environment, at least not within grocery. The 2012 POPAI Grocery Display Effectiveness Study highlighted that within a typical Tesco supermarket there are around 11,322 items of P-O-P display material and around 8,050 within Asda Walmart stores. Down every aisle, shoppers are confronted with a blanket of Half Price, 3for£3, £1 Rollback, Brand Match, Great Offer, 1/3 Off messages… and more. Even the most what we would class a intelligent human beings would find it almost impossible to complete a main shopping mission based on entirely rational behaviour MODULE 1 | Shopper Psychology
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Insight
Shopper Psychology With thousands of products and message fighting for our attention, we do not have the ability to process everything.
We do not have the ability to process every promotional message.
MODULE 1 | Shopper Psychology
That is especially true, when you consider how much retailer P-O-P promotions can sometimes add to the confusion of shoppers Is 2 for £4 really a good deal, when I can buy them for £1 each? Is £14.99, really a great saving compared to £14,99, or its original price of £17.99? Even if every promotion did make sense, it would take us hours to complete each shop on this basis
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Insight
The world is too complex…
Making rational decisions is simply too tough because the world in front of us is just too complex. The average supermarket carries thousands of products, by hundreds of brands – each claiming to be the only one we should buy. As shoppers we naturally simplify this choice to a select few core brands – it’s not rational. But it is essential. MODULE 1 | Shopper Psychology
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From this…
Insight
De-selection is crucial for shoppers
To this…
As shoppers, it enables us to manage what is a truly daunting proposition. From thousands of choices…. …to just a basket or a trolley full. A process of de-selection that makes it much more manageable.
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Insight
Shopper Psychology
Research has shown that, as shoppers, we are particularly good at it. From the thousands of items available to us in a supermarket, most shoppers only buy from a list of 300 products a year.
From thousands of items in supermarkets and stores, most shoppers only buy 300 products a year!
As a result, trying to find ways to engage shoppers through P-O-P communication to break onto that list is hugely important, but also very difficult. MODULE 1 | Shopper Psychology
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Insight
We limit our ‘considered’ set It’s not just within the supermarket environment where we shop in this way either. For most product categories we have a “considered set” – a mental shortlist of brands we would normally consider when we need to make a new purchase. Cars are a good example. If you want to buy a new small prestige car, there are probably up to 10 brands that you could choose from. But that is too many. Comparing each of them and making a ‘value’ decision as the “careful shopper” that you are, would take ages. In fact, they would probably bring out a new model before you have chance to make a decision. So, as shoppers, we refer to our “considered set” – BMW, Audi, Mini and Mercedes, for example. Brands that are aware of, that fit with our aspirations and help us to limit the number of choices we need to make. Other brands would have to do something very special for us to consider them.
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Insight
The importance of behaviour
As shoppers we are not always rational. But, whilst our behaviour may not always be rational, our irrational behaviours are systematic. In other words, we repeat them over and over again. For example, even though Product X may be on offer, a shopper may still Product Y because they are brand loyal and “always buy that one”.
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Insight
Learned Behaviour Most of our shopper behaviour is learned over time. Within most supermarket shopping missions we operate at a subconscious level – almost working on autopilot to complete our journey in-store. Some purchases may require low-involvement purchase, such as which scent of detergent to buy from a pre-selected choice of two that we usually alternate between. The goal for retail marketers is to push shoppers into a conscious state, so that they are open to new products, promotional messages and offers – in the hope of engaging them and driving sales conversion outside of their normal purchase behaviour.
MODULE 1 | Shopper Psychology
Conscious Low involvement processing
Subconscious
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Insight
Learned Behaviour
As we’ve already shown, some stores are simply too complex for shoppers to process. As a result, they develop a mental map of the store with over 80% of shoppers sticking with one store to complete the main grocery shop. It is an approach that helps us to shop in our unconscious state because of surroundings are familiar and routine to us. When we do respond in-store to communicate, we respond to known signals. For example, category signage to help us navigate our journey through the store. It’s one of the primary reasons why retailer Tesco chooses a consistent yellow colour to highlight all promotional offers on-shelf and gondola ends. As shoppers we know “this is a good deal” and respond accordingly whilst being able to stay in the relative safety of our unconscious state of mind. MODULE 1 | Shopper Psychology
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Insight
Conscious versus Subconscious Take shopper out of subconscious mindset
= Conscious consideration of product or service
Regular visits, repeat purchase and de-selection due to the number of products that a supermarket stocks means that moving shoppers into a conscious state of mind is very challenging
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Insight
Breaking shopper habits Whether we have a physical or mental shopping list, we are often in a state of repeated, rather than rational behaviour - buying only what we know we need in the hope that we can complete the mission as quickly as possible. POPAI research shows that it is possible to break shopper habits, particularly when they enter a store without a physical shopping list. As shown by the chart, shoppers without a list typically buy 4% more items than those with.
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Insight
Conscious versus Subconscious
✔ Habit-driven and learned behaviour The notion of branding itself is essentially irrational. Our rational minds would compare 3 different types of baked beans – their ingredients, their flavour and their price, before deciding which to buy. In many cases, being rational may result is us buying own-label. But instead, we routinely by our “favourite” branded product without question. That’s not to say that shoppers do not often purchase a brand or product that differs from their original plans. MODULE 1 | Shopper Psychology
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Reminded or linked purchase
Brand switch or substitute
Insight
Planned versus Unplanned
Buying from a list
Typically, there are a couple of key reasons for this change in behaviour. P-O-P can often play an important role in reminding shoppers of a purchase decision or linked purchase. For example, “I usually have a drink when I’m eating crisps”, even though they had original only planned to buy the crisps. P-O-P can also be used to highlight linked purchases. For example, If I am buying a joint of beef for Sunday dinner, then I need to buy gravy granules. One of the biggest reasons for changes to purchase plans, however, and a key challenge for retail marketers is that of brand switching or substitute purchases, typically caused by availability issues such as out of stocks, which causes the shopper to change their planned purchase in favour of a competitor brand.
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Insight
How?
Brands, however, can also drive shoppers to switch brands and substitute product choices through the targeted use of disruptive, engaging and informative P-O-P to influence purchase decisions
MODULE 1 | Shopper Psychology
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Insight
Aid the shopping experience Outside of grocery, the use of P-O-P to aid the shopping experience can also influence the final purchase decision in-store, even if the shopper had a predetermined purchase in mind when they entered. By providing shoppers with product comparisons, educating them on usability issues and offering live demonstrations, shoppers can be moved from one purchase consideration to another.
Shoppers are loss Crucially, they can also be encouraged to take up additional products and services beyond averse and will the intended purchase. Foravoid example, after-sales support. decisions that may lead to loss, but will not bother going out 
 of their way to gain something. MODULE 1 | Shopper Psychology
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Insight
Aid the shopping experience
• Educate shoppers on usability • Enable product comparison • Live interactive demonstrations • Promote after-sales support
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Insight
Shopper Psychology A great influencer on shopper decisions is the way in which the promotional proposition is communicated to them. Shoppers are inherently loss averse – they will seek to avoid decisions that may lead to “loss”. However, they will not go out of their way to gain something. Therefore, a crucial tool for marketers is finding ways to give shoppers a sense of ownership Starbucks recent promotion is good example of how this can successfully be activated to engage shoppers. Essentially, they were giving away a free coffee. Simply offering a free coffee is rarely, in itself, a sufficiently strong giveaway to drive shopper engagement.
Shoppers are loss averse and will avoid decisions that may lead to loss, but will However, by also offering a personalised cup, it gave not abother out– “this is not just a free shoppers real sensegoing of ownership coffee, this is my way free cupto of coffee”, It makes for a much of their gain more compelling proposition. something. Ownership focuses on what we might lose – we make an attachment. MODULE 1 | Shopper Psychology
Starbucks Free coffee plus personalised cup
= Giveaway + sense of ownership 74
Insight
Shopper Psychology
In the same way, “trial” helps shoppers to form an attachment to a brand by seeing themselves as a ‘champion’ of something new. “Free” also reduces the possibility of loss. Even though it’s irrational – how many of us really need another mug? – it will incentivise behavioural change, especially if it focuses on ownership, such as the example of the Cadbury’s ‘Photo-Mug’ or PG Tips ‘Free Mug” promotions.
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Insight
Choice is de-motivating Limited–selection display Out of 260 customers, 40% stopped and 30% purchased
Mass selection display Out of 240 customers, 60% stopped but only 3% purchased.
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Insight
Choice is de-motivating It may not be obvious, but the way in which choice is presented to shoppers really can influence their behaviour. In these two examples, researchers merchandised the same product in two very different ways. The limited-selection display included a much smaller selection of jams for shoppers to view.
Shoppers are loss averse and will avoid The alternative mass selection display attracted 60% of the 240 customers that passed it – a decisions that may higher figure. But only 3% went on to purchase the product. lead to loss, but will These two examples highlight the marketing theory that often presenting too much choice and not bother going out information actually stops shoppers making a decision through fear of making the wrong one. And so, would ratherto notgain make any at all. of they their way something. Out of 260 customers, 40% stopped to look at the display and a total of 30% actually went on to purchase the product.
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Merchandising standards PERFECT + NOT TOUCHED = NO SALE
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Merchandising Standards
In contrast, research has shown that displays that appear touchable and have been lightly shopped sell better.
Shoppers are loss averse and will avoid decisions that may lead to loss, but will not bother going out of their way to gain something.
Research shows that when people touch things they're more likely to buy them. That means not-perfect displays—where things are a little off-kilter—because people are more comfortable picking things up that way.
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Merchandising standards NOT PERFECT + TOUCHED = £££ MODULE 1 | Shopper Psychology
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Merchandising Standards
Merchandising standards can also impact on the likelihood of shoppers buying from a display. Some stores set up such intricate displays that shoppers are afraid to touch them. Source reference – Respected industry author/psychologist, Paco Underhill. Whilst some brand owners and retailers, such as Morrisons in the UK, used to advocate “perfect” fully faced fixtures at every opportunity, psychologically shoppers are actually put off from shopping the display because it they feel afraid of messing it up.
Shoppers are loss averse and will avoid decisions thatyou may So if you’re a perfectionist, need to resist when it comes to displays. lead to loss, but will not bother going out of their way to gain something. MODULE 1 | Shopper Psychology
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Merchandising standards POORLY STACKED + DAMAGE = NO SALE MODULE 1 | Shopper Psychology
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Merchandising Standards
However, it is important to maintain a level of acceptable merchandising standards as POPAI research shows that displays that are poorly stocked or look damaged are more likely to be ignored by shoppers – resulting in sales being lost.
Shoppers are loss averse and will avoid decisions that may lead to loss, but will not bother going out 
 of their way to gain something.
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Merchandising standards POOR REPLENLISHMENT + LOW STOCK = NO SALE MODULE 1 | Shopper Psychology
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Merchandising Standards
If P-O-P displays are poorly replenished then the likelihood of converting sales transactions will also be affected. POPAI research has shown that shoppers do not shop displays with only one or two products on them.
Shoppers are loss averse and will avoid decisions that may lead to loss, but will not bother going out 
 of their way to gain something.
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Insight
Our Shopping Mind
Often it is context which drives a lot of our intuitive thinking. We make our decisions based on our surroundings, or in the case of the retail environment – the way the display around the product is presented Take the two examples on the following page.
Shoppers are loss averse and will avoid decisions that may lead to loss, but will not bother going out of their way to gain something.
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Our Shopping Mind
Context drives a lot of our intiuitive thinking. The light blue circle in the middle on left appears larger than the light blue circles in middle to the right. But this is all due to the context of how they are being presented If we remove the outer circles, you can see that both circles are, in fact, the same size. MODULE 1 | Shopper Psychology
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Thinking in practice Shoppers generally use rule of thumb to make decisions. This psychology is regularly used by retailers to help frame the purchase decision, especially within categories such as Beers, Wine & Spirits. High priced items are often used to frame the next one down through techniques such as “Good, Better, Best” This enables retailers to nudge shoppers to appropriate value, price and quality, which often gives higher profit margin. In order to inspire shoppers we need to make it as simple and easy for them to reach decisions.
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Insight
See, like, buy It is for this reason that P-O-P performs several important functions, which we will discuss in more detail in later modules of the Course. In general terms, these impact 3 key stages of the purchase journey – See, Like, Buy. Why P-O-P is important and integral to the success of general merchandise.
- Act as a signpost for key product categories for ease of navigation - Highlight range, price and value - Draw attention to promotions and new - Engage shoppers and aid decision making – features and benefits - Create purchase ideas and usage suggestions for shoppers - Showcase new and existing product ranges
- Make browsing easier and more enjoyable - Aid convenience and effective decision making - Increase sales and cross merchandising opportunities
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Part 7 Emotional Economics
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Insight
Emotional Economics
As we have seen, we are far from rational in the way we shop. Indeed, current retail environments such as supermarkets make it increasingly impossible to be rational
Shoppers are loss averse and will avoid decisions Instead, this school ofthat thoughtmay suggests that shoppers are driven by emotion lead to loss, but will not bother going out of their way to gain something.
However, behaviour or emotional economics believe that humans are not designed to think rationally, anyway.
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Behaviour or Emotion?
Focus on behaviour and data to drive loyalty This presents a problem to FMCG retailers who have always focused on evaluating shoppers’ behaviour in order to predict what they will do next. They have developed many tools to enable them to do just that – just as store loyalty cards, to capture data and drive loyalty.
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Right phone, right plan, right tariff…?
Insight
Frustration = Disconnect?
Is there any value to discounts?
However, asking shoppers to shop based on reasoning can cause them to lack engagement with P-O-P displays and the purchase process. Traditionally, mobile phone retailers were a great example of this. They would organise their phone and tariff packages in a very methodical way – yet from a shopper point of view, trying to choose the right phone, plan and tariff proved confusing and frustrating. Supermarket retailers too base their promotional messages on discounts believing that shoppers will always buy product on offer that saves them money. This is not always the case, or easy to do. And the difficulty is, with so many products on offer – do discounts really carry any value anymore? If everything is on promotion, it no longer helps the shoppers to decide what to buy. It just adds further confusion MODULE 1 | Emotional Economics
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Frustration = Disconnect? Displays like this lead shoppers to three actions: 1. Refusal to shop at retailers if displays are confusing 2. Grab-and-go, leading to later dissatisfaction 3. Decrease in browsing
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Make sense?
Reason leads to conclusions, emotions lead to action. This is the fundamental belief of emotional economists. Reasons only lead to conclusions. For example, “that is a good offer” or “that isn’t a good offer” Emotions, however, lead to action – “That’s healthier for me, I must have that”
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Emotional Economics We are feeling machines that think. Not thinking machines that feel. The belief of emotional economists is that, as shoppers, we are not thinking machines that feel. We are feeling machines that think. In other words, we respond more to feelings that facts. Marketers must therefore build a positive association with the brand experience if they want to disrupt behaviour and cause reconsideration This recent advertisement by BMW for its new 4Series is a great example of how emotional drivers are key to influencing purchase behaviour The desire to purchase does not start from the information we are given. Instead, it begins from the way we are made to feel.
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Insight
We behave in emotional ways
By focusing on emotional capital, brands can deliver more powerful in-store activity that is more likely to interrupt shoppers. In many ways, it’s far from a groundbreaking concept when you ‘think like a shopper’ We all shop with our emotions. Seeing a product generates positive emotional feelings make us stop and want to buy it For example, take women and shoes.Research suggests that the average woman own 20 pairs of shoes but only regularly wears 5 of them. So why buy so many? Because they enjoy the process of shopping for them and buying a new pair makes them feel good. It appeals to their emotional senses. MODULE 1 | Emotional Economics
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Emotional Purchase
Must lose weight
Bad day at work
Buy chocolate
Shoppers make purchases even though they know it is irrational behaviour. Such behaviour is not rational. You wouldn’t buy 20 tins of baked beans if you knew you weren’t going to eat them. But shoppers are not rational, they are human. Take the example of a woman trying to lose weight. She joins the gym, knowing that by going and watching what she eats, she will achieve her target. Then she goes to work and has a bad day at the office, so she stops at a retailer on the way home and buys chocolate. She knows it will undo the work in the gym, but her purchase isn’t centre around rational thinking. It is driven by emotion – “eating chocolate will make me feel better” MODULE 1 | Emotional Economics
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Emotional Perception
Such emotional triggers are often used by retailers to display their products. For example, women will be less willing to spend £99 on a luxury cashmere jumper if the retailer mass merchandises them in-store. The shopper wants to feel as though they are buying something exclusive, not an item of clothing that everyone they pass in the street will also be wearing. As a result, retailers only merchandise a small number of the jumpers on display at any one time, instead choosing to replenish them more frequently as they sell.
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The Challenge It is important to recognise that as modern shoppers, we actually need to purchase very little. In fact, the majority of the purchases that we do make are simply things we want. The challenge for retailers, and brands, is that they cannot create ever increasing discounts instore and must find new ways to engage and inspire shoppers. To do this, they must create triggers that motivate shoppers and move them out of a subconscious mode and into a more active purchasing mindset. Understanding the emotional influences on shopping and purchase behaviour and introducing emotion into P-O-P communication will better inspire and does satisfy shopper needs. We cannot create ever increasing discounts Marketers must create triggers that motivate shopping, and move shoppers into an active purchasing mindset Brands want to create inspired and satisfied shoppers Understanding the emotional influences on shopping and purchase behaviour
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Case Examples Applied
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Importance of Consistency
This is a relatively new concept within approaches to retail marketing, but one that has been welldeveloped over the years in traditional TV and press advertising. Emotive advertising that appeals to the way we feel, and therefore influences what we think. Sadly, this has not always been carried through into store.
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Importance of consistency
The above-the-line advertising campaign for Pantene hair shampoo, developed for Procter & Gamble, focused on the emotion associated with using the product and having great hair. Sadly, for P&G, the retailer was too focused on responding to behavioural thinking for the in-store execution, resulting poor activation of the ‘emotive’ brand experience within grocery retail.
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Achieving integration success However, P&G was able to focus on more emotional engagement for its Olay Regenerist launch within health & beauty retailer Boots. The activation reflects P&G approach of putting in-store at the heart of marketing thinking. Research showed that shoppers found the skincare category particularly hard to shop. Skincare is also not a planned purchase, so disrupting the shoppers was particularly important. The key objective for the programme was that P-O-P should not get caught up in delivering a price message, instead fusing the best of the above-the-line campaign with an instore creative execution that zones in on what shoppers really look for, how it makes them feel and how they want to interact with the product.
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Feels right, sells more
Increasingly retailers and brands are recognising that done well, it is possible to inspire shoppers in-store and turn a functional experience into one that is experiential, irrational and inspiring.
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Bringing the brand to life in-store
Recent examples of engaging, emotionally-driven P-O-P campaigns: Audi A3 Sportback Play block, Virgin Holidays in-store AR, Molton Brown innovative tester P-O-P,
As shoppers, we seek out: • • • •
Positive, enjoyable shopping experiences Positive emotions and the experiences that enable us to feel good. Thinking too much about choice makes it difficult to make a decision. Increasing our cognitive load makes behaviour more impulsive Fun, fast and easy decisions versus ‘cause and effect’ which guides abstract thinking.
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Part 8 Changing Shopper Habits
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Insight
Blurring of the lines
The way we shop is changing. Some of this is being driven by technology, which we will focus on within the Multichannel Module, but much of the changes are as a result of increasingly blurred lines between how and where people shop. Traditionally there has been clear segmentation in where people would shop. Discount retailers served the needs of the less well off with a large range of own-label products are reduced prices, while high-end supermarket provided more affluent shoppers with high quality produces at slightly premium prices. Today that model no longer exists in its traditional form. Within the UK, retailers such as Aldi have entered the market with good quality own-label products at affordable prices and are now attracting affluent shoppers who are keen to seek value on certain ‘core’ purchases. Meanwhile, quality has become more affordable to the masses, with retailers such as Marks & Spencer running highly successful promotions such as their ‘Dine in for £10’ campaign. MODULE 1 | Changing Shopper Habits
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Trading down
Branded
Own Label
Another recent trend emerging amongst shoppers within the UK market is their willingness to trade down on certain ‘core’ ranges. This has largely been driven by the global economic crisis, with shoppers keen to protect their level of spend on certain essentials in order to free extra budget for affordable luxuries such as Beers, Wines and Spirits and ‘Meals in’ MODULE 1 | Changing Shopper Habits
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Affordable luxury
Going out
✗
Staying in
✓
With the cost of living increasing, many shoppers are now deciding to go out less frequently and instead are buying products from their local store and staying in with friends for entertainment
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Insight
Blurring of the lines
In other sectors too, luxury has been democratised with a ‘push for posh’ - retail design and display standards within mainstream retailers such as Primark and Topshop are now almost on a par with brand experiences in high-end retailers such as Burberry. These new and improved retail experiences are not only raising best practice standards, but they are also becoming to be expected by shoppers everywhere As a result, the industry as a whole is continual being pushed to explore new boundaries in instore display This presents a challenge to marketers of “what next?” MODULE 1 | Changing Shopper Habits
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Rise of the frequent shopper
w o n m u em g a r e v th. a n o m The a es m i t 9 1 shops
Shopping frequency is also on the rise. Traditionally, most households would complete a monthly or weekly shop for the main grocery products. According to research, the average mum now shops 19 times a month As a result, shoppers are spending less time in-store, and journeying through less of the store when they are there, but visiting stores more regularly
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Smaller, local. Fewer, better.
Growth in Thisconvenience trend has led to the growth of the convenience market within the UK. sector Growth across large grocery remains flat, however, convenience growth currently stands at 4.9% presents new year-on-year, with all large grocery retailers now having a convenience presence – Sainsbury’s challenges for ‘M Local’ etc. Local, Tesco Express, and Morrisons retailers and brands This trend, however, presents new challenges to retail marketers, with much smaller retailer footprints, fewer product lines and less opportunities for in-store activations It appears that shoppers are also becoming much cynical about large retailer corporations, with a growing demand for retailers and brands to communicate with them on a much more localised and personalised level. MODULE 1 | Changing Shopper Habits
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The evolution of convenience
In many developed countries around the world including the UK, US, France and Germany, the retail standards within convenience are being rapidly elevated. With major grocery retailers entering the convenience market, traditional convenience stores – both symbol groups and independents – are raising their game in order to remain attractive shopping destinations for shoppers. Retail standards, in-store communication and customer service now play a crucial role in creating happy shoppers.
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Insight
To this‌
In many developed countries around the world including the UK, US, France and Germany, the retail standards within convenience are being rapidly elevated.
 Convenience and independent retailers are beginning to invest more time, energy and resources on this market. Creating engaging and enjoyable retail experiences.
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Insight
To this…
85% of UK shoppers now use a c-store each month according to research by the IGD (Institute of Grocery Distribution). The growing importance of convenience is now a similar trend around the world. In Europe, retailers RSH and Valora saw a 72% and 85% uplift in store numbers year-onyear to June 2012, while Verdict research has identified significant c-store growth driven by Zabka in Poland, 7Eleven in Scandinavia and Franprix in France. Over in the US year-on-year growth reach 1.4% (2,062 stores) to December 2013. According to research by RNCOS, Asia too is seeing rapid growth in c-stores. MODULE 1 | The Shopper
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A future of convenience… “An emerging channel that is ripe for in-store investment” Major brands such as Mars are now turning their attention to the convenience channel. These were the words of Andy Page, Instore Marketing Controller for Mars at a recent POPAI event: “We need to embrace smaller retailer accounts as growth opportunities where we can bring a lot of expertise to an emerging channel that is ripe for in-store investment.”
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Value and values
Managing the changing convenience channel brings with it it’s own set of specific challenges however. Convenience retailers are increasingly centring the emphasis within store environments around bringing value to the local community and promoting ‘community values’ – such as supporting local producers and communicating provenance behind the products they sell in-store.
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Competitor pricing Another a key difference to the approach in-store within this channel is that of competitor pricing or price matching within P-O-P displays. Retailers across several sectors are increasingly showing competitor pricing in-store on a case by case basis. This has been relatively common in big-ticket sectors (brown goods, white goods) but is now appearing in dry goods sections and other areas of FMCG retailers – e.g. UK retailer Tesco displays ASDA and other competitor prices for everyday products such as drinks and snacks.
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Competitor pricing
According to research by retail analysts IGD, whilst price is important to convenience shoppers, competitor pricing is unlikely to be adopted within the c-store sector, except very selectively.
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Summary
MODULE 1 |
Learn
Learning Summary
Congratulations. After completing this module, you should now be able to: 1. Identify different shopper types 2. Understand outline principles of shoppers psychology 3. Recognise shopper missions 4. Explain basic emotional economics theory 5. Demonstrate your ability to ‘think like a shopper’
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Key Learnings
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Key Learnings Remember: 1. 2. 3. 4. 5. 6. 7. 8.
The “consumer” is different to the “shopper” A person’s shopper type can change depending on the shopping mission, product and time of day Shoppers mindsets and needs change based on mission Purchase decisions can be influenced by others Shoppers often shop based on emotional factors Instore is too complex for rational thinking all the time Brand delivery must be consistency across media Changing shopper habits and growth in convenience = new challenges to retailers and marketers
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