Shoppers are changing their behavior: are you prepared for a fragmented retail future?

Shoppers are changing their behavior: are you prepared for a fragmented retail future?

In case you hadn???t noticed, things are changing in the world of retail. And not just by a little. They are changing a lot! And at its heart is a revolution in the way shoppers are shopping. If ever there was a rationale for the existence of shopper marketing, this is it, or rather, now is it! To win in the world of consumer goods, brands and retailers have to win with shoppers. And that means all marketers, whether marketing to consumers or shoppers, need to invest in understanding shoppers, segmenting shoppers, targeting shoppers and marketing to shoppers better than anyone else.

Shoppers??? behavior is shifting radically
Changes in shopper behavior are sending shockwaves through the industry, but many misinterpret and over-simplify the situation. What we are seeing in shopping behavior shifts is more than a simple move to online, and it is more than shoppers being more price sensitive. To understand shoppers properly shopper marketers must dig a little deeper to understand what has driven shoppers in the past, to better understand the likely patterns of the future.

Want to know more about understanding shoppers, creating shopper insights, marketing to shoppers and investing in retail? Join me, together with my business partner Toby Desforges, in London this July for fantastic one-day workshop ??“ The Shopper Marketing Revolution LIVE

The internet has clearly liberated shoppers from the tyranny of having to shop in the stores in a specific locality, and has helped price-conscious shoppers dig out the best deals through price comparison sites. But while that might have been the catalyst of these shifts it is an oversimplification to look at shopper behavior as a movement online. What is actually happening is a reversal of a sixty-year long trend in shopping and retail. What I???m talking about is the end of the one-stop-shop.

For decades shopping trips have coalesced into fewer and smaller shops: driving the collapse of specialist retailers and the growth of superstores and hypermarkets. At its heart was a shoppers??? desire for convenience, quality, selection and price. These superstores offered a reasonable compromise at a time when the independents they competed with didn???t. Those who look back with nostalgia on the high street of yore forget that for every quality butcher or baker, there were many who sold mediocre produce, relying on the fact that shoppers in the town had little choice about where to buy.

Shoppers are making different decisions
And that is where this shopper revolution begins. Shoppers now have choice, and they seem to be rather enjoying it. Not just a choice of buying online, but a choice of where to buy, and what to buy, and who to buy it from. A choice of which categories and brands to invest time in, and which not to. Shoppers have suddenly found themselves with more options than a shopper has ever had. And they are loving it.

Retailing is disrupted as shopping trips are fragmenting
Shoppers are smashing the one-stop-shop into pieces ??“ their shopping is fragmenting over multiple shopping trips and multiple shops. Don???t believe me? Convenience stores are booming across the world. In the UK, entertainment specialist HMV, driven into administration just a couple of years ago by the big superstore retailers and online retailers such as Amazon, now sells more music than Tesco, and is the UK???s number 2 entertainment retailer. Specialists are growing in all sorts of categories, driven by the desires and needs of some shoppers to experience something that the likes of Amazon and Tesco can???t create.

Discounters are growing too, as there are categories which, for some shoppers, are all about price. Categories where a wide range of products simply isn???t important. Yet thediscounters??? offer clearly isn???t all about price. In the UK, Aldi and Lidl have just won a whole bunch of awards for the quality of their own label product. Hardly what one would expect of an apparent ???hard discounter???.

Shoppers shift, retail responds ??“ brands caught in the crossfire?
Now is the time for brands to really start thinking carefully about shoppers, and how they are going to engage with them today and in the future. This shopping fragmentation creates challenges, for sure, but also creates a number of opportunities for manufacturers to reconfigure the way they market to shoppers and invest in the retail trade. Brand manufacturers have some really tough decisions to make. They are being pulled in multiple directions. There is a need to invest in new channels and retailers as they are potentially ???the future???. Yet customers such as Walmart-owned Asda, who this week announced a massive sales slump, will still demand investment (indeed might be demanding more!)

How to survive? The answer is quite simple in principal (though let???s not pretend that its simple in practice!):

Different shoppers will go to different channels and stores for different things
Genericism is never good in marketing. In the past, however, it hasn???t been fatal in the world of shopper marketing and retail investment. Evidence the walls of price discounts in most stores. In the future, this type of ???marketing??? will simply not be good enough. Shopper marketers must focus and adapt. It is impossible to win with everyone, everywhere. But byunderstanding, segmenting and targeting shoppers effectively, brands can both drive growth and improve returns on shopper marketing and retail trade investment.

Start by identify your target shoppers
It???s not possible to win with every shopper, everywhere. Omnichannel in its purest form isn???t possible. But we can win with the right shoppers in the right environments. The starting point of real shopper marketing is therefore to understand who your target shoppers are. Trying to understand too broad a set of shoppers will lead to generic data which doesn???t lead to insight. True marketing is about focus and targeting, and shopper marketing is exactly the same.

Prioritize the channels and environments where you can influence your target shoppers
There are so many environments, both online and offline, where shoppers can be found, the choices facing shopper marketers are dizzying. But investing in all places is inefficient, if not impossible. Shopper marketers therefore must invest in channels where theretarget shoppers can be found, and influenced. Just because a shopper is present in a channel, doesn???t mean it is worth investing in. We???re all on Facebook, but that doesn???t mean you can influence my choice of detergent there. And again, the key comes in focusing on those target shoppers you want to influence, and prioritizing channels based on where they can be found, and where they can be influenced.

Invest in the right shopper marketing mix
With clarity on which channels and environments are influential for your target shoppers, the next step is to identify the right shopper marketing mix to create the desired behavioral change in those target shoppers.

Reconfigure trade investment to support your shopper behavioral goals
The last step is to then begin the process of reconfiguring retail trade investment to support the right activities in the right environments. This might mean reducing investment in some retailers as the stores which they own simply aren???t that influential. It will certainly mean investing in different ways. Easy? Not at all. Necessary? Absolutely! Brands simply can???t afford to keep investing in activity which isn???t effective.

These are turbulent times for the consumer goods industry, and those who think that business as usual will somehow be good enough are in for a rude awakening. The world is shifting radically, and new approaches are needed. Tough decisions need to be made, but those decisions must be informed. And that means all marketers, whether marketing to consumers or shoppers, need to invest in understanding shoppers, segmenting shoppers, targeting shoppers and marketing to shoppers better than anyone else. Want to know more? Come and join me, with by partner and co-author Toby Desforges, in our one-day workshop in London this July. We???ll cover all of this, and more, in way more detail than I can hope to do in a simple article. Hope to see you there!



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