Beta testing AaramShop's new Analytics Engine. This is the 1st look into product category intelligence based on the content of the shopping bags. Objective is to understand purchase patterns on which products categories are most likely to get into shopping bags together.
More updates soon.
Since the video is low res, have added a couple of screen shots as references.
Fig 1 : Soaps and Sanitizers.
Fig 2 : Cereals and Breakfast
Fig 1 is the % of other categories which get into the shoppers bag, when products in the "soaps and sanitizers" category are bought. 25% of the shopping bags also contain "hair care and styling aids" products.
Fig 2 on the other hand is about buying behavior around Cereals and Breakfast and I am curious about the 37% buyers also buying into the Skin Care category. :-)
As many as 70% of brand decisions are made in the “last mile”. 70% and growing.
This research finding was 1st published by POPAI, and has been substantiated over years by a number of other studies including our own research using some of our last mile tools into various product categories. What is interesting is that in a lot of cases the percentage is higher.
What this indicates however is alarming. This percentage effectively indicates spillage (even gross wastage) of media buying costs which are not being successful or effective in generating real sales.
I am sure we have all experienced the magic of the last mile, whenever we have stepped out to pick up something like a washing machine, or a TV or a refrigerator – we leave our homes with a fair understanding of the product category, the top five brands in the category and our intended brand purchase, however, magically most of us come back with a different product – 70% of us do it time and time again.
Reasons why shoppers switch brands are multiple however almost all of them are centered on effective usage of last-mile consumer touch-points by some brand when compared to others.
Last-mile touch points are multiple & diverse ranging from product pricing, POSM quality, share of display, quality of experience, quality of salesmanship to basic issues like brand presence. All these combined create a last-mile experience which ensures brand switches.
On a number of brands our studies show us a significant “intent of purchase” of the brand amongst consumers when they walk in to the store – thereby indicating obvious good work done on the awareness & interest creation front by the advertising, however, significant negative shift in the actual purchase.
The fact that an in-effective last mile can be a bleed on the success is well understood, however, not all brand managers seem to understand how to address the issue in effective and measureable ways.
It is well understood that the consumer is spending a lot of time online, in a lot of cases much more time than what he spends in front of the TV set or reading print. And this share of time is increasing at a feverish pace.
When online the consumer does his research on the brand, this research can be a combination of self driven or could be triggered by peers on his social networks.
The more expensive the purchase, the more involved and extensive the research.
This is far more relevant because this is where the consumer spends time engaged in the category, seeking and deciding what alternatives he has options of. This is when is willing to form opinions and is willing to read and listen to referrals.
Most importantly, this is one dialogue process where the consumer is completely in control – he not only chooses the time and level of dialogue, if he does not like what he sees he can merely click it away and move else where.
The consumer is not closed to any brand in this stage – he is in fact in a “SELL TO ME” mindset, which has been well captured by Yahoo and exploited to the fullest by Google by their huge success of Adwords platform. This process is radically different from the one way communication which he gets subjected to in a TVC, print ad or a hoarding.
Putting up the brands’ TVC on Youtube.com is not the answer, ensuring that the brand participates in the “search” journey – by providing access to relevant data & information on brand comparison of features, USPs, costs, etc, and enabling communication with the user community and engaging with the user community - is the answer.
While brand owners have started spending an increased percentage of their budgets online (and is growing) – for a number of brands that spend still is backed by the “awareness creation” thought process, rather than focusing on the consumers search for information journey.
This integration of shopping with technology is real. 87% of US consumers research products online before buying them in person or in a store.
However across categories…the major buying still happens off line.
ROBO = Research Online Buy Offline.
This is not limited to B2B products or big ticket purchases like computers, phones or cars, but extends across all categories.
The consumer spends his research time comparing features, absorbing user experience reviews, understanding costs.
All this before he heads out in the last mile, to check out the physical experience and then buy.
To get into the consumers mindset, presence in the last mile needs to be preceded with relevant presence in the online search process.
For a number of years we have profiled the shoppers, into various categories, e.g. value shoppers, lifestyle shopper, convenience shoppers, family shopper, etc. After this classification, we have decided on how to approach a shopper based on this profile and what is the nature of message which the shopper responds to.
This “shopper type” has meant that we could decide which type would want discounts vs. which type would buy lifestyle vs. which type would want convenience.
This “typification” meant that we could target relevant brand messages to these specific segments of customers and the expectation has been that once a value shopper always a value shopper.
However, new research indicates that the same shopper shops in discount stores, while he also shops in departmental stores and specialty stores… but he/she shops differently.
Consumers are less loyal to any single channel / type of retailer than they were in the past. Different needs = Different stores.
What this really means is that a brand needs to increasingly target the shopper close to the moment of purchase and hence at the store level and dependent on the store format.
Consider a shopper at a “cash and carry” store – he or she is there to buy in bulk and is seeking out value for money. So if a cola brand has to be relevant to the shopper, it has to offer a bulk deal or maybe a value pack based offer of 2 free bottles with 10 bottles or it might want to push its mega sized bottles at a discount.
Now consider the same shopper hops into the gas station convenience store for a drink while he tops up his fuel tank. For the same brand of cola to be in the consideration set in this format – it has to be in a very handy size, in an easy to grab location, ready for immediate consumption and maybe bundled with a short-eat.
The fact that the same shopper will respond to very different stimulus at the two locations is because his purpose of shopping is different – value vs convenience.
While the brand would have the uniform overall image, however, its last mile messaging, is what gets the brand into the shopper’s basket.
The brands consumer touch-points need to be relevant to where is it placed and which need state does that format address.
One singular overall “awareness” focussed message / campaign does not work on ensuring conversion in the last mile.
We are increasingly moving towards or already living in a “disposable product” society.The quest for quality and durability has been replaced by the desire to stay “current”.
The mindset of the consumer is to buy cheaper – replace quicker – stay current on technology. While this is especially true for things which were in the past considered to be indulgent purchases, and which have now become more “every day” and common – say for example a blender or a iron, however, even bigger ticket items are getting disposable.
This is not to say that the consumers are moving away from “luxury” – quite on the contrary, however, that is a different category and has different drivers.
The consumer is keen on staying current rather than investing heavily into something which will last longer – this is also prompted by frequent technology upgrades and fear of investing heavily into something which could become obsolete in a hurry.
While this trend has various levels of adaptation in different geographies, a recent study by NDP Research across North America assigns this as one of the leading reasons why there is growth in private labels beyond the consumer products category.
Take a product category like a blender; the shopper is willing to buy a private label or a basic blender and replace it every couple of years with newer and better blenders rather than buy a machine which will guarantee a 7 year usage life – in which time it is bound to be obsolete.
Now consider this shopping behavior to that of a generation ago when what was purchased was expected to last.
The numerous product enhancements are designed to make consumers’ lives easier, better, more convenient and more enjoyable – leading to purchase of products which I didn't even know I wanted. When a consumer walks through an isle or glances at a shop’s well stocked shelf, he notices products which address a need state which did not seem to exist a while back. This need state and hence the desire to use is enhanced in any of the many “experiential hooks”. A consumer is far more likely to pick up a pack of skin lotion, if he/she is demonstrated how it works on his/her skin type, rather than purely based on a recall of a print ad with a supermodel. Products which address specific need states of a specific niche of shoppers tend to create tribes of users and are able to benefit in a big way by creating positive referrals amongst the TG. However, the interesting aspect is that the shoppers evolves and switches between tribes on a fairly regular basis. These new and enhanced needs and wants lead to a lot more experimentations and hence an increased amount of impulse buying.
It is well understood that the consumer is spending a lot of time online, in a lot of cases much more time than what he spends in front of the TV set or reading print. And this share of time is increasing at a feverish pace.
When online the consumer does his research on the brand, this research can be a combination of self driven or could be triggered by peers on his social networks.
The more expensive the purchase, the more involved and extensive the research.
This is far more relevant because this is where the consumer spends time engaged in the category, seeking and deciding what alternatives he has options of. This is when is willing to form opinions and is willing to read and listen to referrals.
Most importantly, this is one dialogue process where the consumer is completely in control – he not only chooses the time and level of dialogue, if he does not like what he sees he can merely click it away and move else where.
The consumer is not closed to any brand in this stage – he is in fact in a “SELL TO ME” mindset, which has been well captured by Yahoo and exploited to the fullest by Google by their huge success of Adwords platform. This process is radically different from the one way communication which he gets subjected to in a TVC, print ad or a hoarding.
Putting up the brands’ TVC on Youtube.com is not the answer, ensuring that the brand participates in the “search” journey – by providing access to relevant data & information on brand comparison of features, USPs, costs, etc, and enabling communication with the user community and engaging with the user community - is the answer.
While brand owners have started spending an increased percentage of their budgets online (and is growing) – for a number of brands that spend still is backed by the “awareness creation” thought process, rather than focusing on the consumers search for information journey.
This integration of shopping with technology is real. 87% of US consumers research products online before buying them in person or in a store.
However across categories…the major buying still happens off line.
ROBO = Research Online Buy Offline.
This is not limited to B2B products or big ticket purchases like computers, phones or cars, but extends across all categories.
The consumer spends his research time comparing features, absorbing user experience reviews, understanding costs.
All this before he heads out in the last mile, to check out the physical experience and then buy.
To get into the consumers mindset, presence in the last mile needs to be preceded with relevant presence in the online search process.
I started documenting the changes in the way shoppers behave when taking a decision on the brand purchases sometime back and have collated the top 10 trends, as I see them, in this white paper.
The trends strongly reiterate the urgency and the need for brands to focus on the “shop floor” in the same manner as they have traditionally focused on the prime time on TV to advertise and promote themselves and their products.
This whitepaper on the changing shopper behavior and its reasons is now available for a free download from here. You will however, need to register on the site and then log into it to download the whitepaper.
There is a lot more information on each of the trends; do email me if you wish to know more – I will be happy to share the same with you. You will also find some of the additional information on each of the trends on this blog over the next few weeks – so do subscribe to either the RSS fee or by way of email for regular updates.
Just got this whitepaper from WPP's retail knowledge initiative - The Store titled "Retailing in the Recession". This is the 1st in a series of "playbooks" to help retailers and brand owners succeed in today’s unpredictable climate. I believe you will find this insightful although it does tend to address the US market trends - however, a number of them are applicable for Asia as well.
I have linked it here for a free download, although you will need to register on the site to access the document. When on the site, also check out the demos of the last mile effectiveness measurement tools.
