Engaging the new shopper
Who is today’s shopper? It’s a simple question with a very difficult and complex answer. The fact is that shoppers are difficult to pigeonhole these days. They have access to more information than ever before, and their expectations are changing constantly.
Ever-changing consumer needs make it harder for retailers to keep pace and are forcing merchants to do everything in their power to understand who they are dealing with. This means developing strategies to figure out ways to not only get them to return to their stores, but keep walking out with purchased merchandise.
Some say that retailers just need to embrace the new culture and cater to their customers’ needs. For example, one of the biggest changes. Bill Bishop is noticing among retailers is a shift toward consumer advocacy. Bishop, the chief architect and co-founder of the Barrington, Ill.-based food industry advisory website Brick Meets Click, points to the new advertising campaign launched by Longo’s, the Canadian supermarket chain based in Toronto.
In an attempt to attract younger shoppers, the campaign stresses Longo’s family standards and emphasizes the grocer’s desire to offer millennials food they would not hesitate to serve to their own family members. The campaign’s objective is to show that Longo’s wants to meet consumers’ high standards and promote trust in its brand.
To illustrate his point, Bishop tells how a bakery might offer a well-behaved child a free chocolate-chip cookie. The cookie is a reward for the child, and it shows the store notices and advocates for good behavior.
“People will go out of their way, in my experience, to work with a retailer who they think understands them,” Bishop said. “That is not a normal tactic for bringing people into the store. It has nothing to do with price or item or promotion.”
This marks a shift and highlights the new role of shoppers-as-advocate, as Daymon emphasized in its global retail study, “From Shopper to Advocate: The Power of Participation,” released in June. Among the insights on the new consumer that the Stamford, Conn.-based retail strategist’s report offers is the fact that a large group of consumers now are interested in co-creation — having their ideas and feedback incorporated into the business strategy of a retailer they frequent. Keeping apprised of what shoppers want from their stores, the report says, is the key to innovation.
“The whole advocacy idea, I think, is rooted in a cultural shift that’s taking place where there’s increasing distrust of institutions, whether it’s the big medical establishment or government or big business,’’ Daymon’s director of thought leadership Carl Jorgensen said. “People feel that they really need to take matters into their own hands, whether it’s their personal health or whether it’s a change they want to see happen at their retailer, so you get this advocacy or activist mentality.”
The Daymon study points out that the new shopper expects “greater engagement with and personalization from retailers and brands.” It notes that segmenting shoppers by such traditional demographics as age, gender and nationality, is no longer enough, and that they must focus on shopper values, attitudes and lifestyles must be emphasized. To attract the new shopper retailers should make the store into a destination; stretch the concept of “fresh” to include prepared meals and local products; use technology to communicate and inform; and somehow, the study said, streamline and simplify the shopping experience.
“We’re fond of saying here that the pace of change has accelerated,” Jorgensen said. “As the consumer changes in ways that were unimaginable a few years ago, retailers and brands need to adapt with equal speed. Standing pat is no longer an option.”
Nicole Peranick, Daymon’s senior director of thought leadership, added that digital empowerment is not the only factor driving shoppers’ higher expectations. The pervasiveness of health-and-wellness trends, as well as more information about what constitutes a good diet, are also influencing consumers. The result is that shoppers look for new and better over-the-counter health and beauty products, as well as different foods and beverages to try.
“When you add to it just the overall economic uncertainty and skepticism, it’s really important for retailers and brands to take a stronger position on topics and be a catalyst for change to make a more positive impact on shoppers and their in-store experiences,” Peranick said, adding that although the economic indicators are positive, people are spending strategically and have new perceptions of value.
John Stanton, a professor of food marketing at Philadelphia’s Saint Joseph’s University, said supermarkets must focus on the shopping experience because it is something online competitors can’t duplicate. In his study, “The Changing Retail Environ and the Impact On Produce Marketing,” Stanton noted the increase of in-store restaurants. Kroger, for example, is opening comfort food restaurants in or near its stores, and West Des Moines, Iowa-based Hy-Vee is revamping its Hy-Vee Market Grille restaurants to cater to on-the-go consumers while offering a full-service bar for those who want to stick around. Hy-Vee also is set to soon open the first of 26 Wahlburger restaurants.
Stanton also pointed out that one Philadelphia supermarket he recently visited offers a series of upscale fast-food type restaurants to customers as they enter the store. “If you look at some of the successful companies like Costco, there are tons of sampling places,” he said. “It’s just kind of fun to go there and try this and try that. You know what else? You never know what’s going to be there on sale. They might have coats one week. They might have Mandarin oranges the next week. It’s like a treasure hunt when you go there.”
In its study, Daymon mentions several examples of in-store innovations that enhance the shopping experience.
CVS Pharmacy has “discovery zones” inside its stores that take a holistic healthcare approach, product assortment and education addressing health, sleep/mood and immunity problems;
Peranick pointed out that Walgreens’ New York City banner Duane Reade offers a sushi bar, a juice bar, hair salon, nail salon and complimentary beauty services at its Wall Street flagship store;
Hy-Vee has a program that enables various customer groups to use store kitchen equipment to prepare a recipe together, and then divide up the meals they’ve made and take them home;
Lowes Foods, based in North Carolina, invites shoppers to its community table to try locally produced food products and attend cooking classes offered by local chefs; and
With a nod to customer advocacy, Peranick cited the Dutch grocer Marqt, which has a bulletin board on which customers can post comments and have store employees respond for all shoppers to see.
Private brands are another way retailers can separate themselves from the competition. As David Rogers, president of DSR Marketing Systems in Northbrook, Ill., pointed out, private-brand penetration in Europe is more than 50% — a much higher percentage than it has in the United States.
“With private brand, they make a better margin to support their costs, and they’re supporting themselves rather than some other firm,” Rogers said of E