Shopping is changing radically because of digital/mobile technologies. Shoppers are wielding tablets and smartphones to research products and purchase them at the best value. As a result, technology is shifting power to the shopper. Both manufacturers and retailers need to get ready.
“We need to start thinking about technology as a positive. This is the world we now live in. We need to embrace it,” said Alison Chaltas, Executive Vice President, GfK Shopper & Retail Strategy.
“Value-seeking cuts across a big swath of the population,” said Rob Barrish, Senior Vice President, GfK Shopper & Retail Strategy. “It’s not just about getting the best price, but also finding the best product and information – in store, online, and along the way.”
The executives outlined the impact of technology-enabled shoppers and how marketers and retailers can come to grips with such a major change in the marketplace. They spoke in a presentation recently in Chicago at the Shopper Marketing Expo hosted by the Path to Purchase Institute.
Research by GfK revealed the following:
Smartphones have penetrated more than 50% of the population, and tablet growth has doubled
41% of smartphone owners use their mobile phones to help them shop
48% of tablet owners use their phones and 58% use their tablets to help them shop
23% of all consumers use a mobile phone to help them shop.
Shoppers who own digital devices are using them to make purchase decisions, the executives said. Many of these shoppers are using mobile devices to compare prices, locate a store, look for information or reviews, search for coupons, or for “showrooming” — that is, see and touch a product in the store before buying it elsewhere or online.
Twenty-two percent of those who use a mobile phone or tablet while shopping admit to showrooming, said Barrish. “Keep an eye on this and develop a strategy,” he urged. For example, to “beat showrooming, promote private label or offer discounts on shoppers’ mobile devices while they are in the store.
A byproduct of new technologies is a new shopper profile: the “Xtreme Shopper” who is wired (with a mobile device), competitive and optimistic, Chaltas noted. “Don't talk to them in store about how tough times are — focus more on offering solutions, be a glass-half-full type. Tell them, ‘Here is how we can help you.’”
Xtreme Shoppers are competitive. “They want to deliver better value to their family. This is not being done out of desperation. It brings them a sense of accomplishment. They take pride in looking at the money they saved. It has to do with control. It becomes something like a sport,” she said.
GfK research found that half (52%) of Xtreme Shoppers say they are less loyal to any one retailer because they need to shop around for value. “Xtreme Shoppers want to be rewarded,” Barrish pointed out.
One way to address the loyalty issue is via co-creation, Barrish noted. Consumers will be more loyal to a retailer who lets them help shape the offering they buy. The percentage of consumers who agreed with this more than tripled in 2012 vs. 2011, GfK research found.
Another way is via customization of offers, either while the shopper is online or in the store. Younger consumers (in the age range 18 to 34) in particular appreciate a tailored offer — they see it as a value exchange. To win their loyalty, Barrish suggested providing them with more input, using social networks to communicate with them, and building a relationship.
“Value seeking cuts across a big swath of the population,” he noted. “It's not just about getting the best price, but also finding the best product.”
When it comes to making the purchase or completing the transaction, the executive said, the use of smartphones and tablets starts to trail off. Those receptive to the mobile wallet concept tend to be under age 35. Mobile commerce may be a good fit for them. For those age 50 and older, there may be more resistance. They may try, fail and then back away from it, citing concerns about security and complexity.
However, mobile is happening, Chaltas stressed. She shared the Shopper Marketing Manifesto: “Know me. Engage me. Make it easy for me. Tell it to me straight. Make me feel smart. Less is more. Keep it fresh.”
She suggested visiting stores, websites and apps to get ideas, and listed several:
“Everything is consistentlythemed at Williams & Sonoma. They have an [ongoing] conversation about food, most of which they do not sell. But they sell the expertise and equipment to make the food wonderful.”
Petco is creating a position in the pet business, recognizing that, for some people, a dog represents the child in the family.
“McCormick just opened a retail store. M&Ms, Hershey, Coke and Nike have also done this. McCormick says they want to provide a learning experience to help people understand the world of flavor.”
TESCO UK is an example of where the world of fill-in trips is going. The consumer can just click and collect. Planning dinner for Tuesday night? Click on the items you want, then get in your car to pick up your bagged purchases using the drive-through lane. The cost is automatically charged to your credit card. This is convenient in a new and different way and Peapod is now expanding the concept here in the US.”
Chaltas said some larger retailers are inviting shoppers to order online, then pick up their items at the store. But when this or any other technology fails, be sure to communicate about the problem and apologize. “Mobile can simplify the world or make shopping harder. The mobile world is the great equalizer,” she summed up. The hard part for more senior executives is most of us haven’t gotten with the mobile shopping program. “We encourage all to buy a state of the art tablet and use at least one shopping app for 5 minutes every day. After 60 days, you’ll get it.This isn’t a world leaders can read about, we have to jump in personally, fingers first”