In the past twelve months there have been a bevy of reports about a ‘return to the village economy’ and shoppers shifting from grocery or mass to local specialty stores. As ‘localisation’ gains momentum, retailers and suppliers are responding with an increased focus on segmentation and clustering. But here’s the rub: where shoppers live and what they earn is a fraction of the story!
If geo-demo profiling is the only yardstick, how do we explain the success of Aldi in affluent suburbs? Or high sales of luxury products in non-affluent areas?
Price consciousness is not just a function of how much we earn and where we live. It is also partially about personality and values.
Personality governs to what extent various factors are important to an individual shopper. For some shoppers, functionality and value is key – they want the thing to do the job and why buy a Rolls Royce when a Toyota Corolla will do. For other shoppers, emotional connection with a brand and sensory experience are far more important. Others just want the quickest, easiest way to tick the to-do item off their list, while some want information about ingredients, footprint and ethics.
Most categories and channel segments will have one or two ‘default’ shopper personality profiles to whom they skew.
In addition, shoppers themselves can move within a certain range among the personality profiles according to which categories they are shopping for.
Enter Nielsen’s ‘shopper modality’ – demonstrating that shoppers have four main modes of shopping that change according to the category: Auto Pilot (grab & go), Buzz-activated (open to buzz and engaging advertising), Variety-activated (seeking new tastes and formats) and Price-activated.
So, what is the point here?
That simple geo-demo shopper profiling of shoppers and the resulting segmentation and clustering by retail stores barely scratches the surface, and is inadequate when looking at real sales drivers.
But it all seems too complex and too hard!?
It needn’t be. It’s a case of determining:
- To which key shopper profiles is my category (for suppliers) or channel segment (for retailers) most likely to appeal?
- Among my shoppers, in what mode are they likely to be shopping?
Then, what does that mean for how we execute our offer – the increased or decreased importance of various factors in store:
- Sensory, experiential, theatre
- Product and ethics information
- Price and price promotion
- Ease of navigation and proximity to front of store
- NPD and new pack formats
- Buzz-based advertising
- Simple POP and pack communication with a focus on functionality and quality
Why do this?
Well, if you’re using price promotion for a grooming product that is likely to attract experientially-driven shopper types shopping in buzz-activated mode, you’re potentially shaving not just legs – you’re shaving off profits!
Default shopper profile > shopper category modality > tailored in store execution = profit!
