So, what’s new for 2017?

Further to the sales results and retail news that invariably fills the media after Christmas, it’s also important that the industry takes note of the shopper perspective – and really takes into account the opinions of the very people whose behaviour leads to the headlines.

With so much happening around us, you might have thought that a stock take of shoppers’ claimed behaviour and attitudes would reveal considerable change, yet our latest report shows year on year changes to be minimal. It seems that UK shoppers don’t react in knee-jerk style even to such seismic news as Brexit, but whilst shifts in our data may be undramatic in nature, there are a number of key differences that show there are nevertheless changes a-foot.

Perhaps the biggest surprise to us came when shoppers were asked to indicate which factors were of critical importance to them in terms of their expectations – with product quality and service now considered more important than competitive or cheapest prices. This reflects a growing sense among shoppers that the continual focus of retailers on pricing, particularly in the grocery sector, must not be to the detriment of retail fundamentals. It seems UK shoppers are looking for more than just low prices if retailers are to attract their custom.  In the fiercely competitive grocery market low prices have almost become a given, with more added value elements now performing a more critical role in differentiating between competitors.

The retail experience, of which service is a core part, is becoming more of a focus for shoppers. They want to feel they are important to the retailer, rather than just being a walking wallet. And they want their needs to be recognised and reflected, through retail experiences that save time and ultimately make life easier.

Whilst competitive pricing seems less critical this year it would be a mistake to think that today’s savvy shoppers are less concerned about value for money. Instead we need to recognise that price is but one part of the value equation, along with time efficiency and satisfaction. Increasingly shoppers are prepared to put the effort in to find the right retail experiences for them. In our 2016 stock take it was clear that shopping around was now embedded behaviour in the UK, with shoppers visiting an average of 4 different stores / websites in the last fortnight. That figure hasn’t changed, but what we have seen is an increase in the proportion of shoppers who do lots of small shops and rarely / never a main shop – 16% up from 11% in 2016.

What’s more, shoppers are seeing less benefit to putting all their eggs in one basket, so to speak.

  • 60% of shoppers agree ‘I save time if I stick to stores I know well’ – a drop from 67% in 2016
  • 51% of shoppers agree ‘fewer, bigger shops is more efficient than lots of little ones’ – a drop from 58% in 2016

These changes in behaviours and attitudes are hugely important for the big four Grocers who are still coming to terms with the fact that big box grocery retail is not the future. And it is important news for the brands that supply these retailers, because small store distribution and ranging takes far more thinking than the one-size-fits-all template of the 90’s and 00’s.

 

More specifically, the move to ‘little & often’ shopping has been gained directly at the expense of the traditional main shop – with only 1 in 4 shoppers now claiming to do a main shop and trying to avoid top up shopping in between.

Apart from a skew towards single households, this emerging cohort of shoppers who do ‘little & often’ shops is primarily distinguished by their attitudes and behaviours rather than their demographics. On average these shoppers visit 6 different stores a fortnight – so that’s typically shopping every other day which means they can cover a lot of ground, experience a lot of retail environments, and can therefore be very clear on who delivers well, and on what.

Not surprisingly these shoppers doing ‘little & often’ shops are more likely to be found in c-stores and local specialists, and it’s worth reflecting on the fact that these are two of the channels showing growth (see box on Channel Changes), reflecting a mutually beneficial relationship. These shoppers are genuine fans of these channels, being more likely than the average UK shoppers to describe c-stores as ‘quicker to shop’, ‘easier to get to’, ‘open longer’ and even ‘cheaper’. And they talk about the positives of using Local Specialists as ‘supporting the local economy’ and ‘cheaper’. They also feel they gain from the shopping around that they do: 56% agree that ‘I go wherever the best deals are, even if it means splitting shopping across different stores; and 38% agree that ‘I switch stores based on what I need because I know the best places to get what I want’.

Attitudinally these shoppers are less likely to plan their shopping, and enjoy the benefits to be gained by actively shopping stores for the best prices or deals. They are less likely to see any efficiencies to be gained from always shopping familiar or large stores, and there appear to be fundamental reasons why they choose to avoid the traditional main shop type of trip:

  • 40% agree that the thought of a big shop is daunting and stressful vs 26% of UK shoppers
  • 34% agree grocery shopping is a chore they don’t enjoy vs 29% of UK shoppers

This cohort is the one to watch. Whilst ‘little & often’ shopping trips won’t suit everyone, they appear to be in the ascendency. Of course the sheer choice and accessibility of stores plays to this trend, but choice is there to be flexed, and this cohort is learning to make an art of that. The fact they are not solely playing the price or promotion game is a reminder that today’s shoppers are getting more choosey, and will take more effort to court.