A changing shopper journeyWritten by 1HQ 01 October 2020
What is shopping behaviour?
We sat down with CollidaScope Managing Director, Lawrence Janes, and 1HQ Head of Brand Communications, Guy Hepplewhite, to discuss how the right data can drive effective communications.
How do you believe that shopping behaviour has been impacted by a world in transition?
LJ: There’s been so much written about this – whether we’re heading for a new retail world, accelerating what’s already been happening over recent history, or whether it’s just a temporary blip and the ‘new normal’ will end up the same as the ‘old normal’.
GH: A lot of commentators are telling us that shopping behaviours have changed – fewer visits, bigger shops, the increase in online shopping, people sticking to what they know and trust. Analysis of some of our clients’ shoppers’ behaviours has shown this to be the case... but only for the first 4-5 weeks of lockdown.
For example, one of our clients saw rapid sales increases of 25% for their ‘core’ products during March and April, accompanied by a decline in sales of their NPD. However, since then, behaviours have returned pretty much to normal, and they’ve just successfully launched some more NPD, using pretty traditional methods to do it - in-store PoS, a price promo and some on and off-line ad support.
LJ: Speaking as an analyst, the important information lies in what the data tells us about shopping behaviours. In the most fundamental of shopping behaviours – how we spend our money, there were already pretty rapid changes happening that the current circumstances have accelerated. Talking about the increase in online shopping, the speed of change is really dependent on the countries and sectors you’re looking at. Markets where digital infrastructure and supporting delivery services are mature and optimised. In the UK, South Korea and China, household, fashion, travel, financial sectors e-commerce has long seen significant movements from brick and mortar sales to on-line taking up the majority of trade, representing over 34% of sales. Whereas, in place, such as Germany and the US, e-commerce currently only accounts for 8% and 10% of sales respectively.
GH: The first edition of the EY Future Consumer Index suggests that 4 in every 10 UK shoppers will fundamentally change the way they shop as a direct result of C-19.
LJ: Which could include the sharp increase in online shopping. In the UK, it nearly doubled in volume to c.14% of all transactions in July, from 7% just before lockdown in March.
GH: And in the UK, behaviours have shifted again, with almost 3/4 of all shoppers buying only essential items. I expect that many will keep things tight as they continue to believe in the importance of price and believing that luxury is less important now than it was before the pandemic struck.
What’s the subsequent impact been on the shopper journey?
GH: Ask yourself this - when you last went shopping during the pandemic, did you find yourself taking part in a genuinely enjoyable retail experience? No? Exactly. The pandemic’s ripped the heart out of the shopping experience and turned it into either (a) something that arrives in a brown box with six letters and a ubiquitous smile on it or (b) a physical and time-consuming exercise that’s endured rather than enjoyed. The physical shopping experience features little, if any, form of social interaction, a predetermined walk plan (with arrows on the floor just in case you were in any doubt of which way to travel) peppered with hand sanitiser and touch-only transactions.
LJ: I agree, but moving away from the supermarket, higher interest categories still are showing a more complex shopping journey, with brand choice heavily influenced by price as awareness, research, consideration and purchase are intertwined within on-line marketplaces. This makes the requirement to find the optimum ‘sweet spot’ in your marketing KPIs such as impressions or TVRs achieved, reactions generated (sentiment, awareness, recall, likes, shares, reviews etc) & on or off-line sales achieved more crucial than ever. For lower interest categories, some of these complexities are less apparent.
The challenge is about raising sufficient interest in your brands to beat your competition and bringing in new shoppers and consumers through NPD as well as price promotions, whether on or off-line.
GH: Shoppers are also more informed than ever and crave efficiency over discovery. The role that social media and influencers have on guiding purchases is huge and, with the purchasing journey being shorter than it’s ever been, consumers value anything or anyone that can help them lock onto the quickest path to purchase.
Mobile is their Godsend – but the thorn in the side of physical retail. The shopper’s growing dependence on mobile has started to properly interrupt the physical shopper journey, erode in-store experience and on-shelf brand impact. So, successful brands are/will be those that connect what’s on screen with what’s in-store and make mobile an integral part of the in-store experience, not something that’s distanced or that detracts from it.
What does that mean for brands wishing to connect with shoppers in the most meaningful way right now?
GH: I don’t think there’s much doubt that shoppers are unlikely to change back to pre-crisis behaviours any time soon.
LJ: And we know that the days of taking biannual, annual planning and evaluation of campaigns is coming to an end. You’ll now need to continuously track your marketing and sales KPIs so you can course-correct your activities to meet changing circumstances and commercial objectives. At the same time, you’ll need to keep an eye on longer term brand equity.
GH: Absolutely. Brands will need to take greater responsibility than ever before as the scale and pace of changing circumstances ramps up. Changes that would likely have taken years are happening in a matter of weeks, highlighting the importance of the need for continuous tracking if brands are to forge relevant connections.
LJ: It’s not easy, but having a system to forecast the impact of different planning scenarios in different circumstances really helps. We work with a number of clients in both grocery and healthcare who have seen considerable sales growth recently through predicting and optimising their marketing mix vs. the sales and changes to shopping behaviours they drive in both on and off-line retail channels.
GH: As you say, data is one of, if not the most important tool for brands wishing to understand changing shopper behaviours and to respond in the most meaningful and relevant way.
And what does it mean for retailers – especially when it comes to the bricks and mortar stores given how it’s suffered as a direct result of the growth in online shopping?
LJ: People are more averse than ever to touching technology and it seems clear that this isn’t simply some over-blow, short-term fad. We’ll see a rise in the use of styluses, improved mobile payments and, yes, the much maligned QR codes as a way to pay, whilst having a longer-term strategy for the trajectory towards being completely touchless. That’ll take us on a journey through haptics, voice and gesture as well as mobile devices facilitating a much broader set of interactions beyond payments alone.
GH: To survive, retailers will have to play their part in transforming the High Street into a place that people want to return to, shop and, above all, enjoy. That means becoming an occasion that delivers more than just the opportunity to buy a product. More than ever, brands need to define what they stand for and then bring that to life with imagination and via experience. More moments of delight – simply addressing consumers by their name, offering a free beverage for high-value shoppers, the delivery of more efficient and impressive collection services. Or elevate the experience by making your retail space work harder for you and provide shoppers with even more reasons to visit. Look at the yoga classes run by lululemon and Patagonia before their stores open or Apple’s experiments with turning over some of their stores into open classrooms so people have the opportunity to explore the full power of their devices.
What is the future of the high street?
LJ: Over the next 2-3 years we will unfortunately see a steady decline in the fortunes of our High Streets. Footfall data shows what was a steady decline of 10% over the last 7 years in both traditional High Streets and shopping malls has accelerated over recent months, even taking into account some short term increases as lockdown eased.
Retailers with either ill-defined propositions, poorly integrated online capabilities or both will really suffer. These already include some household names who, regardless of the brand equity they’ve built over a long time, have failed to track successfully the changes in shopping behaviours and to optimise their propositions accordingly.
GH: I agree in part with what Lawrence says. But I also think this could be the greatest opportunity for our High Streets. It could be transformative. As Michelle Norris says, ‘The great pause needs to be the greatest recalibration.’ But that will only be possible if landlords and retailers reset their thinking and find ways to work together in a more progressive, imaginative and above all, a mutually beneficial way.
LJ: You know, we talk about walled gardens for e-commerce. But the same applies to the High Street. It needs to become a walled garden of its own that draws shoppers in and provides them with what’s needed to engage and connect with them when there.
GH: Big out-of-town operators such as Ikea need to continue innovating with small format spaces. Shop space needs to be turned over to dynamic soft play areas for kids, creative galleries for adults, retail experiences where products are there to be enjoyed, not retailed. The High Street doesn’t need to revert to what it was – because what it had become was homogenised, bland and uninspiring. I also think we need to draw the independents, the craftsmen and women, the artisans back to the High Streets. More greengrocers, florists,
patisseries, butchers, bakers and, if need be, candlestick makers. Because these are the operators that will get the High Street’s heart beating.
As with everything else, technology has a vital role to play. If it can draw these independents together in a way that gives them the type of collective influence they’ve rarely, if ever, enjoyed to date, more power to it and them. Apps like bubltown need to be applauded and, ideally, really encouraged by local authorities and national governments alike. Because they provide us with a wonderful, yet crucial, opportunity to help reshape the High Street of tomorrow.
How a brand can improve the customer journey
Finally, if you could suggest three top tips for brands to heed over the coming months, what would they be?
Don’t believe all you read (except this article!)
Be granular in your approach – different markets, sectors and categories, always change, especially at the moment, but they change in different and sometimes unexpected ways, and certainly at different speeds. A one size fits all approach will not work.
Use a wide variety of data-sources and empirical evidence to make your commercial and marketing investment decisions. In such a transitional world, no one is going to get it totally right. So, frequent monitoring of shopping behaviours, consumer reactions, environmental considerations such as government announcements, C-19 cures, good and bad economic news and the like will help inform what you need to do, especially if you have the capability to forecast the impact on sales of all these factors in conjunction with your marketing mix.
Following on from what Lawrence says, do whatever it takes to become more agile and responsive to change. The world feels like a big place. But, if COVID’s taught us anything, it’s how the macro, not just the micro, can pivot in the blink of an eye. Brands (and their agencies) must anticipate changing times and find ways to scenario plan different creative and media options by their predicted impact on sales and behaviours.
Brands need to engage shoppers through experience. For retailed brands, that experience starts with your ingredients and how you present yourself on shelf to how you contribute to the wellbeing of people and planet. For retailers, it’s about the digital and physical shopping experiences you deliver. Work with, not against, the brands you retail to deliver a shopping experience that makes your shoppers glad they’ve journeyed to you, not a sterile destination that’s homogenised, bland and meaningless.
Entertaining customers and giving people a reason to return isn’t about cheap thrills; it needs to address an unmet need or mission for shoppers whilst perfectly capturing what the brand stands for.
Formerly 'What do you think the future is for the great British High Street?'