Capturing The Lifetime Value Of The ‘Mom Shopper’
A retail survey undertaken by PG and Mead Johnson examines retailer attitudes toward making the baby aisle a store destination, in the first of a series of articles.
We all recognize the value of moms as shoppers of our stores. In this changing world of two working parents and even stay-at-home dads, the fact remains that the majority of our shoppers are female — and many of those shoppers are shopping for more than just themselves. They're typically moms shopping for their families, buying a greater variety of items and in greater quantities. They're our best shoppers, providing the highest value to our stores.
The question is: How do we attract new moms, and keep these moms in our stores over their lifetimes? We know that it all begins with attracting and retaining the new mom. The new mom will likely begin a new pattern of shopping: what they buy and where they buy it. That is, coming home from the hospital with a new baby prompts new behaviors. For the first time, the new mom must determine how best to care for the baby and providing all of the baby's needs. The new mom is looking for a store that provides her needs, from formula to food; offers the right price and value relationship; and is an inviting place to purchase these important products. Progressive Grocer and Mead Johnson sought to find how retailers were addressing this valuable “mom shopper.” To that end, a joint study was in-fielded with hundreds of retailers across the United States to better understand what we're doing today and what we're planning for the future of the baby aisle in our stores.
The “Baby Aisle Study” included a diverse group of retail thought leaders across various channels, in-eluding supermarket chains and independents, as well as several drug and mass merchandisers. Respondents cut across multiple functional areas, from category management and procurement to marketing and market research, and, of course, included merchandising as well as operations. Importantly, multiple levels of experience were captured, with participants ranging from the manager or senior manager level all the way up to president and CEO. This article captures the highlights of what you told us.
There are three key findings in our survey:
1 The mom shopper is important today, and will be even more important in the future.
Not only do retailers recognize the importance of the baby aisle shopper today, but they see her as growing more and more important in the future. Two-thirds of retailers in the survey said that the mom shopper is very or somewhat important to their organization today, and more than half believe that her importance will grow over the next one to three years. In fact, when asked to rate key departments by their importance to this valuable mom shopper, respondents ranked the baby department at No. 2, a mere single point behind the produce department, and ahead of departments such as fresh meat and pharmacy. Retailers clearly see the importance of the baby aisle in capturing the long-term loyalty of moms as shoppers of their total store.
However, very few retailers rate their organization as successful in attracting and retaining moms' loyalty. While more than two-thirds attest to the importance of the baby aisle in capturing new moms, only 12 percent claim that their organization is “highly successful” at capturing their long-term loyalty.
In short, the baby aisle is seen by most as a key strategic priority, and many believe that the future is bright. In fact, more than four in 10 respondents expect the baby aisle to become even more important in the future, and the majority of respondents are planning to make investments in new baby aisle merchandising to enhance the shopping experience over the next year or two.
2 The shopping experience is the single most important factor in attracting and retaining the mom shopper.
The strategic importance of the baby aisle is clear, as well as the intent to further invest in the aisle. But how do we measure success? What are the metrics?
When asked to rank eight key elements in successfully managing the baby aisle, retailers ranked “creating an easy-to-shop environment” first, with “driving overall satisfaction of the shopping experience” following. These were seen as more important than “providing...variety,” or a host of other tactics. Further, seven out of 10 retailers recognize that these characteristics (“...easy to shop.. “overall satisfaction with the shopping experience...”) are even more important for the baby aisle than they are for other departments in the store.
But even more interesting are the findings associated with how success in the aisle is measured. The survey asked about nine key success metrics — that is, we asked which success metrics were most important for the baby aisle. “Shopper satisfaction,” followed closely by “out-of-stocks,” was far and away the greatest response, while “profit percent per foot” was dead last.
Yet while shopper satisfaction is deemed the most important metric, very few retailers are tracking it on a regular basis, with fewer than half tracking satisfaction monthly or more frequently.
By comparison to the low incidence of measuring shopper satisfaction, 81 percent track out-of-stocks monthly or more often, with 36 percent conducting weekly tracking, and 34 percent tracking out-of-stocks daily.
So, while “shopper satisfaction” receives top scores when it comes to successfully managing the baby aisle, and is considered the single most important metric, tracking success is severely lacking. There appears to be a tremendous opportunity to create the right metrics and then establish tracking mechanisms to secure regular feedback from shoppers on how we're doing in this most critical department of the store.
3 The baby aisle opportunity is to transform it into a destination for the mom shopper.
While of great strategic importance, retailers have an opportunity to create a better shopping experience in the baby aisle, with the result of turning the section into a destination for our shoppers.
Today, only 14 percent of retailers believe their shoppers view the baby aisle as destination within their stores — that is, the shopper goes to the store for the express purpose of purchasing baby aisle products. This is in striking contrast to the fact that retailers believe that the baby aisle drives store choice among mom shoppers (again, second only to produce). This disconnect represents a distinct opportunity for improvement.
Retailers believe that their shoppers view the baby aisle as either a:
• Routine Purchase (44 percent): If moms are already doing their weekly shopping in the store, they buy their baby items there as well, or a
• Convenience Purchase (42 percent): Moms typically shop for baby products elsewhere, but if they happen to be shopping the store, they'll pick up some baby items while they're there.
Moms have already indentified the importance of the baby aisle in store choice, so we have the opportunity to help moms choose to shop our stores because of the baby aisle, thereby turning it into a true destination for moms. The key to transforming the baby aisle into a true destination with our shoppers is to create the right shopping experience to satisfy and delight the mom shopper.
Among those retailers that already have developed, or are developing, formal shopper segmentation, almost 80 percent say that new moms are one of their shopper types. However, the level of activation behind the new-mom shopper group is quite low. Only 20 percent of all retailers surveyed have a baby club today, with that number forecasted to grow minimally to 25 percent over the next one to three years. Baby registries are even smaller, with only 7 percent offering one to their new moms today, and growing slightly up to just 9 percent in the future.
Turning the baby aisle into a destination for new moms is a significant opportunity for both retailers and baby product manufacturers alike. Moms are and will remain a key shopper segment, but we've only scratched the surface of how best to attract and retain them.
By better connecting with new moms' needs early in their shopping life cycle, we can create loyal shoppers throughout their lifetimes. It's now time to create new partnerships between retailers and manufacturers to improve the shopping experience, thereby redirecting this valuable shopper to think of our baby aisle as a key destination in our stores. There are myriad ways to build mom satisfaction and loyalty. The formula for success will vary from retailer to retailer, but these investments will pay both short-term and long-term dividends by attracting and retaining the valuable mom shopper throughout her lifetime of purchases.
This is the first in a series of articles on “Capturing the Lifetime Value of the Mom Shopper.” In upcoming months, we will examine new learning emanating from an extensive, proprietary mom shopper study conducted by Mead Johnson. And finally, we'll hear from Mead Johnson management regarding how it plans to put this retail and shopper learning into action.