Discussions in Retail, Part 2: Through the Eyes of the Consumer

We are heading into a crucial time for retail. From the time the school bell rings until the hour we ring in the New Year, it is a season for cash registers to be ringing as well. But in this changing world of ours, how do retailers keep it all going?

From point-of-purchase advertising to reward and loyalty programs, there are many tactics and issues at play. Ipsos' Peter Milic gives his perspective on what consumers are looking for and what they are doing. Peter is part of Ipsos' global team of researchers focused on developing and executing research tools that serve the needs of both the Retail and CPG sectors in their quest for Shopper Insights.

Addressing the growing thirst for shopper understanding, Peter is a regular contributor to the Retail Wire BrainTrust Blog. Here are some recent discussions Peter shared with the blog readers.

A Case for Custom Point-of-Purchase Content?

In a consumer's home, the advertiser competes with everything; there is nothing endemic about a TV program, a magazine, or the Internet. But in retail, it is very different - the competition narrows down to the category. Is there an urgency for more customized in-store marketing for brands?

PM:

The goal of advertising would not be the same in traditional media as it would be within a retail environment. Within a store and more specifically at the point of purchase, the mindset of the consumer is focused on making a choice between alternatives. These are likely to be brands within a category, but it could be a choice between subcategories (i.e. chips, pretzels, popcorn for snacking).

Traditional advertising is not created to evoke an immediate response, rather it attempts to portray a product as a suitable choice when the time comes to make a decision. Given the mindset of the shopper is to make a decision in the next few minutes or even seconds, the in-store message needs to focus on what is most relevant to that particular shopper on that particular day. That is really difficult since the only thing that appears to be relevant to all shoppers all days is price.

Are Customers Claiming Rewards?

If speculating means spending, and spending increases the ability to accumulate rewards, then perhaps giving more points for each dollar spent will actually increase loyalty. What are the pros and cons of increasing the payback on rewards programs?

PM:

The biggest downside for doubling the payback on a rewards program might be the fact that it is functioning as a subsidy, rather than a tool capable of generating incremental sales. I would expect that if consumers are not regularly engaged in a loyalty program (in other words reaping benefits on a regular basis) then it is unlikely many would perceive a future reward to be more compelling than the immediate benefits of lower pricing.

In my own experience, I have always been most influenced by reward programs that provide me with immediate gratification such as late check out at hotels, access to an airlines express line and lounge at the airport.

Do Consumers Value Time Savers?

Consumers want to save money, but saving time is important enough that many shoppers will spend more just to move along more quickly. Do you see convenience stores having a greater opportunity than other competing formats in this regard?

PM:

While the hypothesis appears intuitive, I do not necessarily agree. Those who agree with the attitudinal statement that they would rather save money than save time would also have to agree that a convenience store offers the means to accomplish this objective. Getting in and out of a store quickly is not the only way to save time. How do we know that many of these consumers who would rather save time over money aren't interested in Supercentres that allow them to complete a one-stop shop and thereby save time?

Are Consumers Shopping Local?

Many consumers would really like to support local merchants instead of chains but for a number of reasons, they prefer chains to local "mom & pop" establishments. What are the biggest reasons that you think consumers don't patronize local businesses more?

PM:

As we all understand, the choice of store to shop is influenced by many factors, the most important being price. On the matter of cost of inventory, the disadvantage of being a small retailer continues to increase as the large chains use their enormous buying power and operational efficiency to keep prices competitive. At the same time, it is folly to believe that consumers feel connected or want to feel connected to a local retailer, rather than deal with a faceless corporation. If people can live next to each other for years and never learn the names of their neighbors, why would we believe they want to connect with a local retailer? If a large chain provides many jobs for members of a community, why would they be seen as any less connected to a community?

Are you a retail marketer needing new ideas and relevant discussion on the topics that matter to your business? Check out the RetailWire website or contact your Ipsos representative for information on our research services for retailers.