Shopper Culture

Integer To Participate In 2009 PMA Shopper Marketing Summit

The Integer Group will be participating in this year's PMA Shopper Marketing Summit in Dallas on May 6th and 7th. Both Craig Elston and Paul Ballew will sit on expert panels during the two day event. 

Craig will participate on the Making Insights Happen: Agency Perspective panel, which will discuss how agencies are approaching insight generation and securing retailer cooperation. Paul will sit on the Fast Forward: Emerging Opportunities in Convenience Retailing panel, building on the release of our recent report, "Emerging Opportunities in Convenience Retailing". Integer will join NACS members, including MillerCoors and 7-Eleven, on May 7th. 

The summit will also feature the results of the 2009 PMA Shopper Marketing Study and keynote presentations from Dr. Brian Harris, the founder of category management (Is Shopper Marketing the Next Generation of Category management?) and Dr. David Bell from Wharton (Shopper Marketing 2.0 Understanding the Layered Influences on the Shopper Path to Purchase). 

If you're going to be in Dallas and are interested in attending you can visit the PMA website for a complete agenda and registration details. If you're already planning on attending the event please stop by, say hello and sit in on our panels. 

What is Culture, Anyway?

(This is a long post.)

On this blog we often write about behavior, psychology, technology, marketing, business, promotions, design, and of course retail. But what is culture? And why does it matter for shopping?

Rather than a definition, let’s start with illustrations. Culture is why a rural Tuvan man would feel lost at the Super Bowl—not just understanding what this spectacle means, but basics like assigned seating, being an audience, and credit cards. Culture is why a yellow ribbon, a Yankees logo, a cross,and a Starbucks logo can elicit powerful feelings—feelings which could be quite different for different people.

Culture, in other words, is the vast and mostly unwritten rule system that tells us how to interpret events, behaviors, objects and symbols in our lives. It’s shared meaning. To an extent, culture is also the objects and symbols themselves: Super Bowl tickets, foam #1 hands, the Lombardi Trophy. But crucially, culture is the mental code book of meaning that a group shares to encode and decode those symbols. And different groups have different code books, even for the same events (dinner) behaviors (kissing), objects (high heels) and symbols (the stars & stripes).

In shopping, culture is what distinguishes the vibe at Whole Foods from the vibe at Rite Aid. Culture is the knowing glance you share with another shopper about the old woman in front of you who still pays by check. Culture is the message Walmart’s reusable blue bag sends about you.

 

Culture is any one of these things, and more:

-    Rules for social interactions (who’s next in line; what to say to sales staff)
-    Roles (greeters, cashiers, samplers, stockers, shoppers)
-    Beliefs about concepts like gender and time (men hate to shop; time is currency not to be wasted)
-    Taboos (don’t scream in a store; don’t take things from someone else’s cart)
-    Systems of trust (Amazon vendor ratings; product guarantees)
-    Rituals (roaming the mall after school, holiday displays)
-    Shared goals (make shopping fun; reduce time at checkout)
-    Symbols of group membership (a football jersey; Bloomingdale’s Brown Bag)
-    A special language or lexicon (freebates; Tweets; one-click)

But do we need to understand shopper culture? Can’t we just do with behavioral studies, purchase data, and the cool new neuroscience stuff? Not quite. Because without culture, we can’t even interpret everyday symbols correctly, much less comprehend how those meanings are changing or how we can influence them.

A small example: the loyalty card. To shoppers it’s a link to a brand, a system for discounts, a symbol of Big Brother. To retailers it’s their brand equity, better customer behavioral data, competitive advantage. To store staff, it’s a hassle, a way to ‘get some extra’ (use one with cardless customers & get their points).

All those meanings packed into a little piece of colored plastic. And they’re changing. But how? And how can these meanings be managed? This is why culture matters in shopper marketing. And not just how the broader culture impacts shopping (like the green movement), but the culture of shopping itself.

This is why our blog is about shopper culture. Because marketing is about both symbol and meaning, signifier and signified. Studying shopping with no reference to culture is like, well, studying Tuvan throat singing with no knowledge of Tuva.

CPE is Top of Mind

In a turbulent economy, do people give up having fun? No they do not. Instead, they get their "CPE" in check. CPE is cost-per-entertainment. Consumers across all demographics are participating in entertainment-based activities at home such as video games, surfing the internet, making user-generated content, keeping busy with Twitter®  and Facebook® , and watching their new big TV's. All of these hobbies and toys are considered as a good CPE investment. 

Entertainment is both an emotional and rational investment. For example, a highly desirable Wii® once was a splurge but now may be a reasonable investment due to the hours of entertainment it provides (Nielsen 09). CPE does not always have to be achieved through products. Instead CPE is relevant in various products, services, and occasions from converging electronics (e.g. phones as music players, handhelds that display TV content, and cameras with GPS functionality), professional sporting events, at-home theme parties, and TV-viewing nights.

Entertainment-based purchase decisions also span all demographics and channels. The entertainment-focused shopper will vary from the key beer shopper to the female grocery shopper. For example, video gaming is believed to be dominated by young men, but people of a wider age range now make up the largest percentage of gamers and game shoppers. Gaming is an example of an industry dedicated to continuous updating of its product (technology) to attract a more diverse audience. 

Coupon deals on eBay

Coupons have come a long way. But while electronic coupons, often linked with store loyalty cards, are grabbing all the attention, paper coupons are also coming back into style - in fact, they are now being sold on eBay!

Buying and selling coupons on eBay may not seem a profitable business venture, because it seems to defeat the very purpose of couponing- i.e. saving money. But selling coupons is actually a win-win for both buyer and seller. Shoppers can buy better coupons on eBay, and at the same price as buying the newspaper. Makes absolute sense for the buyer/shopper. Sellers make money not on the coupons themselves, but for the process of clipping them.

To give you an idea, you can buy a bundle of 100 mixed coupons that include categories like 70% food (including restaurants) and 30% non-food, for about $2, including shipping. On an given day there are more than 60,000 coupons available on eBay ranging from food, health and beauty, home and garden and travel.

eBay has made coupons available to people who may not get the Sunday newspaper, or to those whose newspapers don’t carry the coupon inserts. It also gives consumers a choice of selecting the coupon of their choice, on the brands of their choice.

- Contributed by Priyanka Sah

Eliminating risk

In these times of trading down and switching, brands are changing their product mixes to meet the changing needs of their customers. In the UK, the major grocers continue to extend their range of private-label brands (many of which are discount brands), and even the up-market grocers are introducing value ranges.

This creates a new set of issues that well-established brands are able to capitalize on: the elimination of risk. A risk that arises out of doubt; a consumer's questioning whether or not a switch will satisfy their current wants and needs. At the point of purchase, consumers are likely to weigh the obvious saving benefits against the preference of their current brand. Asking themselves things like "Will my family like it as much? Will it last as long? Will it work as well?"

According to Dave Lewis, Chairman of Unilever in the UK, who spoke at last week's Retail Week Conference in London, share of retailer private-label laundry detergent has remained flat over the last year, while there was growth of over 20% in Unilever's value brand, Surf. His conclusion was that shoppers are prepared to trade down but not to risk trying products that might not work.

There are some interesting ways that brands are responding to the competition of private-label brands and this era of risk aversion. I came across this interesting offer by Muller Vitality, who eliminates this risk by offering to reimburse the price of their product. For a relatively new product, offers like these can help ease consumer doubt, potentially increasing trial, and converting new users. It is certainly a way to ensure that a new product secures all important distribution. 

UK supermarket Sainsbury's current TV advertising taps directly into this sentiment, making reference to the fact that dad "might not like it", with plenty of evidence from his kids that he probably will.

 

In our own research with UK shoppers, we found that large numbers were prepared to try retailer private labels, but if they don't live up to the standards of their current brands, this could backfire on retailers.

- Contributed by Ian Thomas

Spring Retail Outlook: Who's up, who's down

A recent article in The Wall Street Journal begins to tell a story about which retailers are winning -- and struggling -- in the current downturn. March year-on-year sales across a range of national retailers indicate an emerging, and unsurprising, pattern.

• BJ's   +8.5%
• Family Dollar   +6.4%
• Costco   +3.0%
• Ross   +3.0%
• T.J. Max   +2.0%
• WalMart   +1.4%
• Target   -6.3%
• J.C. Penney   -7.2%
• Macy's   -9.2%
• Saks   -23.6%
• Nieman Marcus   -29.9%

What does this tell us? Americans are buying, but they are choosing those retailers that offer the greatest possible value. The six retailers here showing year-on-year increases are each known for offering the lowest possible prices in their own category. Traditional department stores, on the other hand, are feeling the heat. Saks and Nieman Marcus, long associated with designer luxury apparel, suffer double-digit losses. Even the more mainstream Macy's cannot keep the pace.

The only real surprises here are Target and J.C. Penney, two great "discount" department stores. We would expect that Americans would continue to seek reasonable value in addition to store experience and customer service, but these losses suggest that the only real driver of retail growth lies in "lowest possible price."

Are things really this bad? Will early indications of a possible recovery begin to turn the tide in favor of those stores that continue to offer customer service and store experience? Time will tell. In the meantime, we welcome your comments.

Value Retailing: It's chic to be cheap

As reported by WGSN, the consumer is evolving, with clothing purchases revolving around needs rather than wants. Consumers who never previously shopped for value are trading down and shopping at value retailers. These consumers are known as the "frugal fashionistas" who are embracing bargains. Walmart has tried the value-retailer approach by offering a line from Norma Kamali, a women's apparel designer, at affordable prices. JC Penney is also using the value-retailer strategy with its I Heart Ronson line, priced between $50 and $65. The value-retailer leader in the United States continues to be Target with its Go International program, which allows shoppers to have designer styles at an affordable price. Target recently announced its latest designer partnership with Karen Erickson and Vicki Beamon, chic jewelry designers whose line, Erickson Beamon, will be offered through June 26, 2009.

Value retailing is more mature in the United States, with consumers already used to looking for bargains, while European countries are beginning to introduce bargains. The value-fashion area within European markets has an opportunity for growth. One of the key differences between European and American markets is the celebrity and designer endorsement. European retailers use public relations efforts like retailer George at ASDA which has introduced a real-women's ad campaign, using the funds that would have applied to a designer endorsement to increase the quality of items. 

We found it compelling that value retailers' offerings are including the commodity-basics to affordable-designer ranges. The affordable-designer range is needed to capture the frugal fashionista at the value retailer. However, in Europe, a trend-right product does not need a celebrity designer tie-in. We found it interesting how different the power of celebrity is in two fashion forward cultures.

-Contributed by Natalie Bosler

7 Ps In Retail; 7 Reasons To Be Cheerful

Attendance was somewhat lower at the 2009 In-Store Marketing Summit in Chicago. Clearly, this is a direct result of the economic environment as companies are restricting conference attendance and travel. Despite the slightly lower turnout, the content was pretty good. A number of different themes were reinforced by many of the speakers—the majority of those themes concerning the economic difficulties shoppers are facing and how they are adapting or coping with them.

IRI delivered one of the most informative presentations in which they shared a lot of data and suggested a framework of 7 Ps for manufacturers and retailers to consider. These are:

• Planning—Decisions are being made before consumers enter the store. There was plenty of discussion on the amount of coupon-collecting, list-making, and deal-searching going on before entering a store.
• Purpose—Decisions are complementing ritual changes. Lots of different data sources are strongly indicating that changes in behavior will live on into the future, no matter what happens in the economy.
• Price—Shoppers are looking for good prices and quality. Haven't they always?
• Product—Shoppers are buying what they are familiar with. Now might not be the time to introduce the new latest and greatest, but instead spend money on making the familiar better, more relevant, and more engaging.
• Promotion—Shopper-direct marketing has arrived. Good!
• Place—Shoppers are looking for the best deals wherever they can find them. And they are prepared to drive to get them now that the price of gas has come down.
• Performance—Shoppers are scared about the financial future. The level of uncertainty about housing, pensions, 401(k)s and jobs is scaring everyone.

We would agree with all of this and, in our presentation, we also offered up another P to consider: Participation. The need to engage shoppers in ways and through channels in which they are interested or want to participate in.

However, while there was plenty of data to support all of these Ps (and not only from IRI), there was little by way of advice as to what to do. How do you ensure that you are the product/brand on the shopping list? How do you deliver the quality shoppers expect at a price they can afford today? What is the right level of quality (not too much, not too little)? What is the impact on your innovation pipeline? Some suggestions might have been interesting.

Let's also not forget that, while some of the headline numbers about unemployment, reduction in shopper spending, etc. are not good, it is still a fact that over 91% of the U.S. population has jobs and there is still a lot of money to compete for. So there are reasons for brands to be optimistic out there.

Participation and Engagement

At the In-store Summit last week we talked about the need for shopper and consumer engagement. Razorfish have released some interesting research we have come across on the affect that widgets have on purchase behavior. They say:

"The other major findings include how dramatically “engagement” effects page views and revenue. The following charts demonstrate that consumers who spend 5+ minutes with a widget spend significantly more time and view more page views on a given publisher’s web site. We found a similar impact on revenue, where engagement with a widget for 5+ minutes had large revenue upsides."

Engagement = success.

Thanks to Brian Wakabayashi in our Dallas office for sharing this.

Some Thoughts on the Future

We are not normally in the business of predicting the future, but because there are many dramatic changes taking place in the world at the moment and because we have been asked a number of times by a number of clients recently, we thought we would outline some internal thoughts we have on what might happen in the world of retail during the coming years. Some of this might seem obvious, and there are bound to be things we have missed, but the intention is to revisit these in two years to see how we did.

Macro Retail Changes
Economic factors will continue to have a significant impact on the retail industry in the U.S. during the next 24 months. 

We expect to see:

• Further consolidation as retailers with strength buy their weaker counterparts to drive growth through acquisition. Manufacturers will need to provide leadership and intellectual property to the retailer to gain influence. Bigger business-building ideas for retailers will be required on a more regular basis.

• Further store closures through both the bankruptcy of retailers and reduction in footprint as retailers close underperforming stores. New development and building will be limited. We are unlikely to witness much expansion. Plenty of retail property will lie dormant for some time. Strong stores and locations will get stronger.

• Changes in the nature of formats. Any potential development will likely be concentrated on larger retailers developing smaller, more personalized, and locally relevant formats.  

Dinner Distress

Let’s face it. Dinner isn’t as easy as it used to be. Running to your neighborhood restaurant or ordering take-out on a daily basis is a thing of the past. The recession has caused consumers to change their eating behavior and make numerous compromises to stay within their shrinking budgets.

One trade-off is that consumers are cooking at home more often to save money. Therefore, consumers are giving up many things associated with this new behavior − the restaurant dining experience, trying new and unique foods, and and sampling meals from talented chefs who get the food right every time. Just because consumers are cooking at home more often doesn’t mean that they know what they’re doing in the kitchen.

What does this all mean? Less money, less time, and less confidence to create meal solutions every single day.

Luckily, many retailers and manufacturers are responding to the concerns of their distressed shoppers. They have rolled out programs that offer shoppers easy-to-make meal solutions on a tight budget or chef-quality meal solutions for less than the restaurant price. Both types of programs have been well received with different types of shoppers. Here are a few examples:

•     Kraft® iFood Assistant. This app gives consumers simple, delicious food ideas, anytime and anywhere they go. It provides how-to videos, smart 1-2-3 recipes, shortcut tips, and a built-in shopping list − all of which are designed to save time. It is now one of the 100 most popular iPhone® paid applications. 

•    ConAgra Foods® Simple & Delicious e-Newsletter. This weekly e-mail newsletter provides shoppers with a database to find recipes, meal ideas, meal-planning tips, and special offers that are all related to ConAgra products. In a recent newsletter, Simple & Delicious featured “Meal Ideas for Under $10” − an enticing offer in today’s environment. The Simple & Delicious website also offers Simple  & Quick Meals, Budget-Friendly Meals, and Cooking 101 videos − solutions for every type of cook.

Promo Magazine Article on Digitail™

In a guest column, Integer's POV on the convergence of retail and digital was published on promomagazine.com today. Read here.  The article explains some of the key principles behind Integer's newly developed Digitail™ discipline. 

"Examples of the retail-digital convergence are not difficult to find. In fact, many retailers and manufacturers use them. But the key is to stay ahead of the curve and realize the opportunities to provide new, innovative, and personalized offerings to your audiences."

Click on over to promomagazine.com and check it out. 

Presenting Digitail™

Today at 12:30, Mountain time, Craig Elston, Senior Vice President, Insight & Strategy, and Morgan McAlenney, Senior Vice President/Digital Czar, will be presenting at this year's InStore Marketing Summit on behalf of The Integer Group. They will be discussing Digitail™ - The Convergence of the Digital and Retail Space: The Effect Promotions Have on Shopper Behavior. To download the presentation, click here.