New research shows grocery shoppers still looking beyond price
Nearly half of food and beverage category shoppers and almost 60 per cent of health/beauty and household goods category shoppers purchase their preferred brand even when a less-expensive alternative is available, with many shoppers using coupons and price promotions simply to justify purchasing preferred brands – according to an American-based study.
The initial findings of a shopper marketing study released by the Grocery Manufacturers Association (GMA), Booz & Company and SheSpeaks, titled Shopper Marketing 3.0: Unleashing the Next Wave of Value, concludes that price is not the only focus of consumers and also looks into the effectiveness of in-store promotions.
“This research shows us that even in a recession, more often than not, shoppers are making purchase decisions based on factors other than price,” said Brian Lynch, director of sales and sales promotion for GMA. “This key finding reinforces the notion that there is significant opportunity to influence shopper behaviour by having the right messages in place along the entire path to purchase.”
Impulse buying
The study revealed significant differences across product categories that make specific shopper marketing tactics more effective. For example, shelf signage and end-cap displays are nearly twice as effective in driving impulse purchases in the food and beverage category. This is reflected in a much higher incidence of impulse purchases for food and beverage shoppers (73 per cent of shoppers making at least one impulse purchase per trip) as compared to the household products and health and beauty categories (41 per cent and 39 per cent, respectively).
“This new study captures real consumer insight and behaviour, giving GMA and its members a much deeper understanding of the shopping experience and what influences purchases both in and out of the store,” said Aliza Freud, founder and CEO of SheSpeaks. “By enlisting an online community of consumers as part of this study, we uncovered significant opportunities to influence purchases throughout the buying process. For instance, we learned that more than three-quarters of shoppers conduct research, often for an hour or more, before they shop and that 41 percent of items purchased were brands that the shopper had a strong preference for before entering the store.”
Matthew Egol, partner in Booz’s Consumer, Media & Digital practice, added that manufacturers still had a lot of potential to improve their marketing strategies to ensure they could capture customer attention throughout the lengthy process of decision-making.
“Most CPG manufacturers have not yet aligned shopper marketing initiatives with other marketing capabilities that influence shoppers along the entire path to purchase such as trade promotions, relationship marketing and brand advertising,” he noted. “The lack of alignment leads to disconnected marketing messages, wasted spending, and missed opportunities to drive purchase. For shopper marketing to fulfill its potential, CPG companies must manage it as a strategic capability that is integrated throughout the marketing value chain.”
The report also cites the need to identify shopper marketing effectiveness measures that will help companies focus resources on the most successful shopper marketing tactics. While there is no silver bullet for addressing the measurement gap, models are emerging, with leading companies studying the incremental profit impact from shopper marketing programs and building dashboard metrics that gauge shopper marketing’s sustained impact on brand equity.
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Nice article, and the research supports many of the findings that we have found from various studies across many countries.
– Decision making varies wildly by categories. The oft-quoted 70% of brand decisions being made in-store simply does not hold true for many many categories and leads to a false belief (and mis-allocation of funds into trade) that poorly marketed brands can be saved in-store, or that well marketed brands need huge investment in-store to survive.
– Shoppers will buy on impulse – but it is important to recognize that even in impulse categories, the decision is informed heavily by pre-store input. For example, a shopper seeing a display of Pepsi may well be driven by impulse to buy, but only if they already have some affinity for the Pepsi brand.
– Could not agree more about the need to start measuring the effectiveness of shopper marketing activities, but let’s not worry about complex new methodologies. For many companies, to start by measuring uplift on activities – that would be a start.
– We totally agree with the need for an integrated approach to shopper marketing – see our article “The Integrated Shopper Marketing Revolution” s for more on this topic.