The growth of digital, mobile and social technologies and media is changing shopper behaviour and thus the path to purchase, meaning more marketing opportunities for the convenience channel suggests ShopAbility, for Convenience World Magazine.
Previous articles we’ve written have discussed convenience channel segmentation, role and trip types. Here we’re going to look at some of the trends in shopper behaviour driving, or arising from, some of the newer technologies and some ideas for leveraging them in the convenience channel.
Let’s start with some macro themes are amalgamated from a number of conferences we’ve attended over the past 12 months in Australia, in Asia and the USA as well as numerous trade publications and articles.
Table 1 summarises some of the major shopping and retailing shifts.
|Mass produced||Customised and tailored to me|
|Command and control (manufacturer/marketing driven)||Consumers and shoppers drive the conversation|
|Fixed time and place shopping (bricks and mortar)||Shop anytime, anywhere|
|Local convenience||Global search|
|Processed products save time||Authenticity|
|Look for specials||Discount fatigue|
Table 1: Major shopper behaviour trends and preferences, 2012 © ShopAbility 2012
The abundance of choice means shoppers are looking for ‘curated’ collections by experts that will make their choice both easy and special. This isn’t purely about range rationalization, it’s about tailoring to various needs. Boots for women with larger calves. Gluten free meal components. Accessories to match specific outfits. If you’ve collected data on your customers via loyalty programs and your POS system you’ll be able to figure out what they buy with what and what the curated collection opportunities might be. Using your customer data, customization is also about tailoring offers to certain segments of the market rather than trying to be all things to all people with every promotion. Customisation provides a means for you to differentiate yourself from competitors so that everyone is not flogging exactly the same stuff. In convenience if you have customer loyalty data you can analyse it to see what they’re buying and offer specific bundles, and it may not just be on snacks and drinks. It might be on services, auto etc.
There’s a lot happening here. Consumers and shoppers are voicing their opinions on products and companies (customer service, corporate citizenship and behaviour etc) via social media like Facebook, Twitter, blogs and forums. Corporations are no longer in control, the game has become about responding quickly to and leveraging social media for advocacy. Monetizing social media remains a challenge for many (Facebook ecommerce pages are yet to set the world on fire), but some enterprising manufacturers and retailers are running social media exclusive promotions, using social media for new product research ideas, and distribution gaps.
Social media is formalizing traditional word of mouth and this means that it is becoming part of the path to purchase – both prestore (Zero Moment of Truth – active search) and post purchase (Second Moment of Truth – expressing your opinion of the product once you’ve purchased and consumed it).
Shoppers are also empowered by technologies like self scanning and mobile price comparison tools such as GetPrice, which are impacting their channel and retailer choice.
SHOP ANY TIME, ANYWHERE
We mentioned this in our previous article about virtual shopping walls. The game has changed from fixed time and place (bricks and mortar) shopping to shopping from my mobile wherever I am (including sitting on the couch watching TV – 60% of consumers now multitask eg use their mobiles or tablets whilst doing something else). It’s not just about PC-based ‘online’ shopping, the rate of shoppers shopping from their mobile devices is increasing exponentially.
Multichannel is becoming a shopper expectation. They want a choice of research in store, buy online (this is called ‘showrooming’), research online buy/collect instore (Coles Click & Collect is an example), research online and deliver to my door (eg Amazon, Light N Easy et al), research instore and deliver to my door (eg consumer electronics, furniture), research o
So even if your physical store is closed, you need a mechanism for having customer conversations and converting sales outside of your bricks and mortar trading hours.
GLOBAL SEARCH IN THE GLOBAL VILLAGE
Many retailers are now not just competing with the retailer down the street who may have item X cheaper than them. They are now competing globally. More than 10% of Australian shoppers’ retail sales went to overseas online retailers in 2011.(And that doesn’t take into account travellers physically shopping overseas in places like the USA whilst the Aussie dollar is strong).
Shop anytime, wherever you are translates into ‘from wherever I can get the product’. And it’s not just about the cheapest price (which is becoming a given, see below). It’s tied into Customisation … something that’s not available to me in Australia, something that is special because it came from somewhere else (there are some bragging rights attached to this … a pair of boots from Turkey are somehow more exotic and special than a pair purchased in a mall here).
This means you need to consider your range and how it can be globalized … not just parallel importing, but rather what will make your range more global, more exotic, more interesting, more special. Not just ‘snacks and drinks in the sin channel’. And it has impacts on your opening hours as well. Do you have an opportunity to adjust your hours to be open earlier/later as a point of difference?
This is another big one, encompassing a number of things. Concepts like slow food. Food miles. Provenance. Sustainability. Real food (natural, not processed).
This ties into the curating thing. What’s the retail translation of ‘Cootamundra Lamb’, ‘Marlborough Sauvignon Blanc’? Can you communicate that the milk you range comes from Farmer Brown’s cows in paddock X in Smithville? Should you add more ‘authentic’ products to your range? (Again, mitigating the ‘convenience as sin channel’ perception).
Low price is becoming a given, and it’s deflated the value of categories and stripped profit margins out of businesses. But we are where we are. You need to figure out what ‘value’ actually means for your various shoppers, and communicate that. As Jon Bird from Ideaworks says, 70%off is the new 50%off, and where do you go from there? EDLP, or forms of it, are becoming the cost of entry or cost to play, rather than a differentiator.
The definition of insanity is throwing more money at discounts, trying to trade your way out of a hole via lower prices, when price is just one of a number of shifts in shopper behaviour.
WHAT ARE DIGITAL, MOBILE AND SOCIAL MEDIA MARKETING, AND WHY IS IT IMPORTANT?
What does this have to do with me? you ask. Here are a few statistics for context:
- Australia is second only to Singapore in leading global smartphone penetration. According to DigitalMarketingLab, Australian smartphone penetration is currently above 50%, it will be 60% by end of 2012 and 90% by 2015. So it’s not just teens using smartphones, it’s actually more likely currently to be professionals and mums, who are heavy users to stay connected
- Tablet (Ipad etc) penetration in Australia is above 15% and expected to reach 25% (or 1 in 4 Australians) over the next 2 years
- Within the next 12 months, more Google searches will be done using mobile devices than desktop PCs
- According to Yahoo/Nielsen, 86% of web users now use a mobile device while watching TV
- Australia is the global leader in per capita Facebook subscribers and time spent per week
- An average 3-6 digital touchpoints per week are influencing shopping decisions
- ‘Showrooming’ is on the rise (off a small base), where shoppers research a product instore and then go home and buy it online.
So there is a shift from desktop PC-based web usage and surfing to mobile.
So bricks and mortar retailers are competing not just with other physical retailers or with ‘online’, they are now competing for mcommerce – shop anytime anywhere.
Social media (things like Facebook and Twitter) are increasingly being used by consumers for reviews, opinions, recommendations and content. Social media provides options for smart marketers for social media specific/exclusive deals and coupons/codes. Ben Grill of NewsLife media lists 8 social media platforms impacting the shopper path to purchase: Facebook, Twitter, YouTube, 4Square, Group deal sites such as Groupon, Yelp and other review sites, Communities and forums, and blogs. This means shoppers are also now more likely to be influenced by what friends (and strangers) say about something than what retailers and manufacturers say.
The macro shift is from traditional command-and-control retailer and manufacturer based marketing to consumer-empowered marketing where the consumers are creating their own conversations.
HOW IS IT IMPACTING SHOPPING BEHAVIOUR AND THE PATH TO PURCHASE?
So shoppers can now buy instore (fixed hours), online (at home, any time), or mobile (on the go, any time).
For many types of retailers this means just being the closest or most local – and relying on your location for store traffic – isn’t good enough anymore, as shoppers are on the move and can shop from anywhere.
Conversely, they are becoming more planned in their shopping behaviours.
As fuel prices increase and shoppers’ discretionary spend on traditional ‘impulse lines’ in convenience reduces, fuel sites’ ‘front of store’ category sales will be challenged. The question is how to maintain the role of impulse categories, or at least to mitigate reduced sales in these by increasing the profile of ‘distress’ categories or to be known for something specific (ie auto). This will depend on your site type ie promoting breakfast if you’re an inbound arterial site, quick meals if you’re outbound arterial, or drive traffic via services and/or promoting extended opening hours for distress purchases if you’re a local/neighbourhood site. Using various mobile offers for front-of-store categories, coupled with instore complementary selling skills, theoretically would mean an additional sale once the shopper is in your store.
LEVERAGING THE NEW BEHAVIOURS
There are lots of different models for the path to purchase. Forrester Research, who run a lot of studies into online behaviours and shopping, describe the stages as discover, search, purchase, networking, and advocacy.
Loosely you can divide these into prestore (advertising and marketing stimulus, ‘zero moment of truth’ shopper-driven active search); instore (purchase, ‘first moment of truth’), and post store (‘second moment of truth’ – product usage, networking/socialisation, advocacy).
The good news about the path to purchase is that mobile and social media give you opportunities to market to your shoppers along each of the stages of the path to purchase.
Mobile marketing, such as text and email offers and mobile website exclusive offers, can not only be used prestore to drive traffic, they can be used as retention and loyalty tool.
Best Buy, an American equivalent of JBHiFi, has established a Twelpforce (play on Yelp), an online and mobile specialist customer service team which provides instant after-service updates for its computers and other equipment. Or you may have received SMS texts from your car service provider post-service asking to rate their service. This is a form of post-purchase mobile marketing (or at least, customer service based) … their next step would be to provide an offer, or prompt the next car service.
So mobile can be used as a retention and loyalty tool as well and therefore as a repeat traffic driver. This has applications for convenience stores that have an auto offer … database marketing for post car registration check services for instance. This assumes you have developed a customer database and have their details already, which you can achieve a number of ways … collecting details when they bring their car in for a check, or by running a promotion where they have to provide their details to enter the draw.
Social media can be used to provide ideas, content, and offers … it’s not just about being ‘liked’ on Facebook. The trick is to monetize it and create conversions in a way that is non-exploitative. You can use social media prestore, instore eg for social sign on and ‘check in’ and obviously post-purchase for testimonials and recommendations.
Some shoppers will Tweet/Facebook or word of mouth your store/their shopping experience … the majority of the time this is positive, it’s not just haters venting (and negative posts are an opportunity for you to turn the disgruntled shopper around and into an advocate). Ask for a testimonial.
One person’s recommendation (second moment of truth) becomes the next person’s active search result (zero moment of truth).
APPLICATIONS, EXAMPLES AND OPPORTUNITIES
Who’s doing stuff in this space? Some examples:
- Mobile only offers with the redemption code in the email/text you send (so you don’t have to print or mail physical vouchers). Queenspark apparel here do this well
- Mobile phone app enabled rewards (loyalty program based) – Macys and ShopKick (similar to GetPrice here) run joint promotions for points for mobile only
- In pharmacy, script renewal services with mobile prompts – Boots (UK), Superdrug (UK), CVS (US) and RiteAid (US) all do this as a matter of course
- Boots and CVS pharmacy chains offer mobile order placement with collection instore or home delivery
- Day-of-week specific promotions run by a large Indian department store chain called Shoppers Stop. They promote their Thursday ‘master classes’ via Facebook and Twitter
Some other ideas:
- Use your website and mobile for relevant category content (auto for fuel based sites for instance, particularly those with a mechanic offer for rego checks etc)
- QR code/app-based loyalty card (no need for physical loyalty card) … I’ve seen independent coffee shops in Melbourne do this and in 4 months have transitioned most of their buy 9-get the 10th free- coffee drinkers to mobile redemption … saves them the costs of printing coffee cards. Could you do an app based loyalty card buy 9 get 10th free for your destination categories, such as beverages?
- SMS vouchers for instore traffic/acquisition … that they can forward to a friend (or neighbor, in the case of local/neighbourhood store types)
- Online mini-catalogues set up for mobile – ‘what’s new’ or ‘what’s seasonal’ … could be menu based, summer bbq bundles etc
- Develop applications, where relevant (ie automated script renewal and prompt)
- Use mobile content to promote services – trailer hire, gas refills, Moneygram etc.
And the beauty of all of it is that it’s relatively cheap to do, it’s as applicable for a single store enterprise as for a chain, and you build relationship with your shoppers in the process.
It’s about changing your thinking from having to be cheapest or shouting loudest to one of one-on-one connection with your shoppers … wherever they are.
Taken together, you can see that the new retail game is about leveraging digital, mobile and social technologies for a more one-on-one relationship with your shoppers based on a solid reason for being, rather than leaving traffic to chance.