Turning Shoppers Into Buyers

OgilvyAction is highly involved in giving brands and retailers a leg up during these hard times through their experience and extensive shopper research. They have created a white paper that touches on a lot of interesting and timely issues that retailers are facing: pricing & discounts, shopper behavior and new advancements concerning digital/mobile initiatives. Here is an excerpt on actionable items retailers can take:

Most consumers’ shopping habits change to some degree in a recession: putting off replacing the car, not buying that extra handbag or pair of shoes, cutting back on nonessentials, and paying by cash or debit cards to manage the household budget better. So, too, are lifestyles changing in this recession.

For many consumers, dining out will happen less often and family holidays will often become “stay-cations” in which the family vacations at or close to home. The change in shopping habits and lifestyle during a recession drives different behavior in-store. Here are just a few examples that marketers need to watch for:

--Shoppers will more often buy according to a family meal plan, preparing more meals at home and dining out less often
--The choice of private label or house-brand products will be more relevant in certain categories, particularly food or beverage categories
--Shoppers will be more disciplined about where they shop. For some, this will mean turning to lower-cost/ high-discount retailers like Wal-Mart and Aldi, and for others this means buying in bulk from warehouse club retailers like Costco
--Many shoppers will plan their shopping trip to be more disciplined by buying more from fewer channels
--Many shoppers will reduce the number of quick trips to stores, often combining errands to limit fuel spend The retailers’ weekly catalogs and circulars detailing the promotions on offer will determine where shoppers will buy to stock the pantry, often sending shoppers to different retailers from week to week
--Promotional prices are a drawing card for shoppers in any economic climate, and in recessions you can expect lower-income households to be even more attracted to deeply discounted prices.

The key principle when understanding a shopper’s behavior is that attitudes toward product categories are always complex and that they change during a recession. This is supported in a recent study revealing how shoppers will prioritize spending by product category.

The first five items they stop buying are air fresheners, cookies, beer, wine and soda. Recession-proof items we never stop buying include pet food, toilet paper, deodorant, pain relievers, hair care products, fresh meat and canned vegetables.

The changing shopper behavior simply means that marketers need to use all the tools and resources they have in order to identify the in-store behavior as it happens in their category. Marketers can then make insight-based decisions on how to leverage shopper behavior to grow their brand.

Shopping on the Internet and Your Mobile Phone

The impact of the recession is also being felt online, with consumers “clicking” for very different reasons in recent months.

Growth in online shopping is still in double digits, but the pace of growth is slowing. The latest global Capgemini e-Retail Sales Index reports that year-on-year growth in online shopping in September 2008 was down from the 72 percent of a year earlier.

In certain countries, however, consumers are going online not to shop, but to seek out coupons and discounts to take with them to the store. For example, 22 percent more U.S. consumers are shopping at retail with coupons they accessed online.

Similarly, the use of mobile “smart” phones as coupon or discount vehicles is growing rapidly in this recession. The world’s 10th-biggest retailer (Kroger Supermarkets) is committed to the delivery of coupons directly to the shopper’s mobile phone. The system was tested with Kroger’s most loyal shoppers, and coupons sent to mobile phones were linked to recent purchases in the store. By 2011, it’s estimated that retailers will send 3 billion coupons or incentives to mobile phones globally -- a digital innovation that will influence the shoppers’ path to purchase well beyond the current recession.

For more information, visit www.ogilvyonrecession.com.
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