FROMTHE CONSUMER... Fromthe consumer...
Every issue,Danielle Pinnington from Shoppercentric tells us howthe consumer is behaving to help you stay competitive
Hi readers! In recentmonths we’ve seen Easter Eggs on- shelf before Christmas and Spring Sales launched in February. There have never been somany promotions in- store, and the traditional sales calendar has been ripped up as stores use every tactic they can to encourage shoppers to spend.
Y
et the use of promotions doesn’t always create a benefit:
• Unit salesmight increase, but profits drop; •More promotions in-storemeans morematerials to check, and if quality control can’t cope then mistakes emerge; • Promotionalmaterials add to the visual noise in-store,making shoppingmore difficult; • Use promotions too often and shoppers re-adjust their price expectations to the promoted ones rather than recommended sales price. But perhaps the biggest risk
associatedwith seeing promotions or sales as the answer to sluggish spending is the fact that promotions only ever create sales spikes – uplifts for the duration of the promotion, rather than a sustained increase in purchasing
The graph demonstrates the increase in voucher/coupon popularity
in the longer term. So,what do shoppers think of
these efforts, howdo they now relate to promotions? Before the credit crunch it seemed like any promotionwould do as shoppers approached their spendingwith the ‘Iwant it now’mindset. How times have changed. Nowadays shoppers are asking themselves: ‘Is itworth it?’, ‘Do I really need it?’, ‘Do Iwant to spend thatmuch?’ and ‘Do I need thatmuch?’ Of course this change in
mindset doesn’tmean shoppers aren’t buying on promotion. A promotion on the right product, at the right timewill increase sales. What is interesting is howdifferent promotionalmechanics have becomemore appealing over time. Whilst BOGOFs and price
reductions remain popular, vouchers/coupons have now overtakenmulti-buys. Other mechanics increasing in interest among shoppers are loyalty card offers, link saves such asmeal deals, and even added value promotions like free gifts or competitions. From the shopper perspective
the mechanics gaining favour challenge received wisdom that when money is tight shoppers resort to low pricing. Vouchers and loyalty cards are rewards for
shoppers, mechanics that actually work on shoppers mid to long term behaviour, rather than being just about the here and now. Link-saves tap into the opportunity to deliver solutions to shoppers – not just a sandwich, but lunch, not just a pasta ready meal, but a real meal of main, dessert and wine. Promotions clearly have a role
in today’s retail environment. The question is whether the current approaches really tap into or even understand the shopper mindset. If shoppers are increasingly turning to mechanics that are more likely to reward mid to long term behaviour, why are the majority of promotions in-store still so heavily biased towards short term gain? The obvious answer is that sales spikes are more appealing than longer term sales patterns. Is our short-term focused business world missing an opportunity that shoppers are handing them on a plate?
Danielle Pinnington is the founder & owner of Shoppercentric, specialists in shopper insight and trends research. For more information, visit
www.shoppercentric.com.
Promotions buyingmore of nowadays % Total sample
Buy one get one free
Money off single items 3 for 2
Vouchers/coupons Loyalty card offers 2 for £x/xp
Groups of products e.g. meal deal Offers including free gift/competition
21 11 14 24 45
35 36
66 69
50
47 48
53 53
2012 2011
76 79
“Fromthe shopper perspective the mechanics gaining favour challenge receivedwisdom thatwhenmoney is tight shoppers resort to low pricing. Vouchers and loyalty cards are rewards for shoppers, mechanics that actuallywork on shoppersmid to long term behaviour, rather than being just about the here and now. ”
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