Winning The Retail Purchase Decision – (Part 3) Who Is Influencing Your Shoppers To Buy Or Not Buy From You?

Each day retailers have the challenge of converting shoppers into buyers and brand marketers have the challenge of converting shoppers into buyers of their brand’s products.

In the first part of this blog, we discussed how purchase decisions are influenced in the marketplace and the pre-store research stages of the consumer decision process. In part 2, we discussed how shoppers choose a shopping destination to make a purchase.  In part 3, we focus on what has been called the “First Moment of Truth,” when a shopper makes the purchase decision in the store.

When examining the many influencing factors in making these purchases, we will examine the points of influence that can be controlled by the retailer, those that can be controlled by the brand marketer and other factors controlled only by the shopper.

The Shopper

A shopper entering the store brings with her a mix of variables that may or may not have been influenced by marketing prior to this shopping trip.  These include the shopper’s plan for the shopping trip, her mood, attitudes toward brands and products, value perceptions, shopping budget, time pressure to buy now, convenience orientation to buy now, brand loyalty, habitual grab & go purchase behavior, expected ease in finding her solution on this shopping trip and her level of involvement in this purchase (time spent researching, importance of specific product features, emotional/social involvement with product). 

These internal factors will have strong bearing on her final in-store decisions whether or not they can be influenced in store.  In order to win any shopper who is not an existing loyal user of a brand, they need to be disrupted, engaged and persuaded that a particular brand / product is worth buying on that trip.

The Shopping Experience

The retailer controls most of the shopping experience.  This is the experience between entering the store and the last 3 feet of the shelf where most decisions are made.  The retailer has selected to deliver either a shopping environment that is focused on making easy, quick purchase transactions or one focused on delivering multi-sensory and personal interactions in store and enhanced solutions that they take home from the store.  This shopping experience strategy can impact store loyalty, length of time spent in store, and often the number of items in the basket.

Transactional retailers include convenience stores, many grocery stores, club stores and many mass merchants.  Products are on shelves or racks and most shoppers find and buy products on their own.  If the only sales associate contact is at the checkout, a retailer likely falls in this category.

Retail experience stores create an environment that engage the senses and/or help shoppers find the unique solutions that are perfect for their needs.  Disney and Apple stores, Bass Pro Shops, and Fresh Market are good examples of this category.

Both retail formats can be effective, but they make different use of in-store experience influencers.  Tools to direct a shopper’s path, length of shopping trip and buying attitude include:

Atmosphere – Store design, store layout, visual merchandising, use of space, lighting, music, type of fixtures, width of aisles, breadth of assortment and amount of product on displays. For some, this translates to ease of shopping, for others it translates to pleasure of shopping.  Atmosphere is one key reason that shopper will spend over 3 hours shopping in a Bass Pro store vs. only a few minutes in a mass merchant’s fishing department.

Wayfinding – Overhead and in-aisle signing guides shoppers to easily find the products they are looking for.  Visual design of signs helps communicate information and give visual cues on the department and category of products.  Good wayfinding helps consumers find the products they came to buy.

Store Associates – A shopper’s interaction with store associates can be highly influential.  Educating sales associates on your brand and products can impact your sales.  Shoppers are drawn to associates who are friendly, knowledgeable and helpful.  Having trained sales associates available to help can boost product sales for recommended products and brands.

The Last 3 Feet

While the shopping experience will influence how long a shopper stays in a store and how they shop the store, the last 3 feet is where each purchase decision is made.  The impact of purchase influencers in this space may vary across product categories.  Tools that can be used to influence and win the purchase decision include:

Merchandising – Whether products are featured on end caps, a secondary display or use in-aisle POP signs to highlight a product’s features and benefits, gaining a differentiating visual element to engage a shopper in-store helps sell product.  Merchandising disrupts habitual shopping behavior and engages shoppers in evaluating the highlighted product.  The result can be brand switching or an impulse purchase.

Brochures – Product information / brochures that a consumer can pick up and read will allow a shopper to learn more about a product and why to buy it.  Mobile phone internet service has expanded access to information in store.  Displays and packaging with QR codes provide access to product information without the cost of printing in-store literature.

Product interaction – For many products, consumers want to touch, feel, and try a product before purchasing.  Tools such as in-store product demos and sampling allow the consumer to try the product.  Packaging with windows to see, touch, or operate the product, let the shopper know exactly what they are buying.  Creating these interactive experiences will help you sell your product.

Packaging – Product packaging is often the last source of product information to influence a decision.  If no prior information source has been engaged (on-line research, family recommendation, retail associate, POP sign, etc.), packaging plays a key role in many decisions.  For a lower-involvement product category, packaging may be the only source of information a shopper has when making a purchase decision.  Great packaging that engages consumers sells product.

Promotional offer – Consumers are drawn to value and special offers.  Offering a promotion gets your product noticed for two key reasons.  First, you change the value equation in a way that makes your product more attractive.  Second, POP communication of a promotion helps your product stand out on shelf.

Price communication – The price at shelf is the trigger to evaluate all the product information received up to this point.  The value will be assessed based on the features and benefits of a product vs. competitive products, the need to buy the product now, the desire to buy the product now and the convenience to buy the product now.  How a price is communicated at the shelf can influence purchase.  Pricing multiples (3/$10) has been proven to boost sales over individual price points ($3.33).  Coke and Pepsi are masters of this tactic.

Wild Cards – Outside Influence

No matter how prepared your store or brand is to sell shoppers on your products, there are outside influences that can trump your best efforts.  One of the most familiar is a shopper with kids.  A child who wants a particular product will often be successful in convincing a parent to buy that product.  Kids have unique talents in influencing purchases in store!

Another in-store influence beyond control is other shoppers in the aisle.  Another shopper is viewed as a credible source of product information.  I watched 3 shoppers being influenced by another shopper on which leaf blower to buy—I ended up buying the recommended blower too!  Other shoppers’ presence and social influence can impact what does or does not go into a basket.  What products a shopper wants to be seen buying will impact a trip…and in some product categories, drive sales online.

Smartphones and mobile internet access are rapidly influencing shopping in new ways.  Shopping apps and mobile searches for product reviews can change an in-store decision or even prompt a shopper to change stores to buy a product.  These tools can also be leveraged to encourage shoppers to check-in on their smartphone to receive in-store promotions or coupons.

Where To Prioritize Your Efforts

With all these variables, where should a brand marketer focus time and spending?  According to a 2011 study commissioned by Google with Shopper Sciences and IPG Mediabrands, the top sources used by shoppers when making purchase decisions are: 

Product packaging                                                    50%

Brochure/pamphlet read in store                                  49%

Talked with a salesperson or associate                         38%

Product signage/display                                             36%

Phone call with a customer service representative          31%

Sampled/experienced the product in a store                  22%

As the impact of these tactics will vary by product category, we recommend you test and establish best practices for your brand.  For most categories, product packaging, product signage/display and retail associates will play significant roles in the final purchase decision.

Winning at retail is an art and a science.  We always recommend starting your shopper marketing efforts with fresh insights to optimize your opportunity to have the biggest impact and best chance of winning vs. your competitors.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans.

How Shoppers Choose A Store — (Part 2) Who Is Influencing Your Shoppers To Buy Or Not Buy From You?

In the first part of this blog, we discussed how purchase decisions are influenced in the marketplace and the pre-store research stages of the consumer decision process.  Part 2 will focus on choosing a shopping destination to make a purchase.

Shopping Destination Decision Factors
Once a consumer has researched a purchase, she will then consciously or unconsciously decide where she plans to make the purchase.  There are several factors that influence the decision of where to shop.  A simple representation of these factors is:

Store choice = Distance + Experience + Value + In-Stock Trust + New!

Let’s examine each of these factors:

Distance – the distance from where I am (now).  A familiar factor in deciding where to shop is a convenient location—with “convenient” defined as being close to where the shopper lives or will be located today.  The store chosen may not always be the closest to one’s home, but it may be conveniently located near the shopper’s workplace or kid's school--wherever you have to drive today.  A shopper will also bundle several shopping destinations into one trip making a drive to a distant shopping destination more convenient by visiting several stores in that area on the same trip. 

Getting a shopper to buy online removes the distance factor—increasingly brick and mortar retailers are trying to get consumers to buy online while researching products to avoid losing a sale to another retailer’s brick and mortar store.  Brands are launching ecommerce sites to lock in a sale during the research process and remove the store choice issue altogether.

Experience – The shopper’s prior experience with a store.  The shopper’s experience with a store and resulting loyalty can be a key factor in shifting the shopping destination from a conscious choice to an automatic choice.  Overtime, the shopper forms a habit of shopping in a preferred store for different items.  The experience components that influence this loyalty include:  a clean neat store, a store that is easy to shop, sales people that are available, friendly, helpful and knowledgeable and short lines at checkout.  (…plus:  good value and in-stock trust which we will cover separately).  A store that has a preferred experience for one product category may not be preferred for other product category, but shoppers may one-stop-shop for convenience rather than driving to shop in two stores for two different categories.

Value – Value for the money is a factor that can change week to week, so while it is part of a store’s experience, we consider it a separate factor in the store destination decision.  A store may have an everyday low price approach or a high-low promotional approach to pricing.  Consumers can be persuaded to switch stores based on an advertised price promotion.  At a reduced price point, a consumer may decide to switch from their preferred store to capture a lower price at an alternate store.  At some point in their evaluation, a shift in price shifts the value equation enough to favor the new destination. 

In-Stock Trust – Shoppers expect that most stores will have their preferred brands and products in stock—but they also learn which stores are more likely to carry a broad assortment of brands and products vs. those which just carry a few staples in a category.  Aldi and Kroger both sell groceries, but their assortments are significantly different.  Consumers will shop at stores that they trust to have the product they want in stock.  For a more involved purchase where a consumer has spent hours online researching a specific product model, they are also likely to research where they can find the product in stock. 

New! – New! is a factor that can trump all habitual shopper behavior.  It can be a new store that a consumer tries or news that prompts a special trip to a destination.  This can be a special event, an unusual sale, or an invitation from a friend to go shopping to a destination.  New! is a factor that can be harder to influence competitively, but can offer potential opportunity if leveraged well.

What can you influence?
So given these five factors that drive the shopping destination choice, what can a brand marketer do to help influence a decision to drive consumers to the stores of their retail partners?  

The best way to remove the distance factor is to gain distribution in all major retailers for your product category.  This is a worthwhile goal.  We previously noted that offering an ecommerce site of your own and/or gaining distribution on multiple retailer ecommerce sites can pre-empt the distance factor by completing the sale online. 

Influencing the store experience for the stores that distribute your product can be difficult.  Retailers want to control the in-store experience.  One key option here is to help educate that store’s sales representatives on your products.  Work with your retailers to identify their preferred method to have you participate in educating their staff.  Demos and in-store events are other opportunities to enhance the everyday shopping experience for your products.

Influencing the value equation can be done through a variety of price and non-price promotions.  Work with your retailers to create promotional advertising to engage and direct your brand’s shoppers to their stores.  Learn how to leverage social media and mobile apps to increase visibility of your brand value. 

Influencing the in-stock trust factor can be best achieved by gaining distribution of your most popular products with the key retailers in your category.  For many categories, also offering your products online allows you to sell your entire product line—and offer all the SKU’s that a brick and mortar store may not carry.  Store finders and Google search are increasingly being used by shoppers on mobile devices to find where to buy the products shoppers want.

Influencing the New! factor takes creativity on your part.  Work with your retailers to create news and excitement to drive traffic to these stores.  Department stores used to be the leaders in having weekly in-store events to attract shoppers.  What will you create?

Why is this store choice decision important? 
For a brand marketer, a shopper’s choice to shop in a store that does not stock your product is in effect a choice not to buy your product.  You can alter this outcome by gaining broad distribution in all stores that a shopper is likely to consider or you can work with your brand’s retailers to help attract shoppers to their stores.

In the third and last part of this blog, we will look at in-store influences that you can use to win the purchase decision at retail.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth.   We help you identify new business growth insights & opportunities and execute winning strategies & plans.   www.GrowthSpringGroup.com

Who Is Influencing Your Shoppers To Buy Or Not Buy From You? (Part 1)

Do you know how your marketing programs are or are not working for you?  You work to measure results, but do you understand why you are getting those results?

You use your marketing efforts to persuade your customers / consumers to buy your product and services.  At the same time, your competitors and the marketplace provide distractions and disruptions that can either weaken the effectiveness of your efforts or disrupt it completely.

Do you know what percentage of shopping trips your consumer goes into a store planning to buy your product only to walk out with your competitor’s product?  Do you know why you lose these sales?

An earlier blog post talks to the reasons consumers buy products and services.  This post will talk to the people and marketing that influence purchases and the potential points of influence where you can win and lose a purchase.  While this subject is complex enough to merit a book chapter or an entire book (perhaps a future endeavor?), this three-part blog will provide a high level summary that I hope is helpful for you.

We will look at 4 key points of influence during the shopping process:  Marketplace, Pre-Store Research, Shopping Destination Selection and the In-Store Shopping Process.  These points can be linear steps in the shopping process or overlap depending on the shopper and product category.

Marketplace
The marketplace is where most traditional marketing lives—especially outbound broadcast and print media.  You send your advertising out into the market hoping it will disrupt, engage and persuade your target consumer to buy your product.  But if your target consumer is not in the market or is not disrupted by your communication, all of your efforts can be just background noise.  For these non-shopping target consumers, all forms and locations of your marketing are just background information.   You brand communication will likely have a cumulative impact on your brand image and awareness for a future time when a consumer does enter the market to buy your product or service.  But, until those consumers do enter the market, your marketing has its greatest influence on those planning near term purchases.

For consumers in shopping mode for a particular product or service category, messages received from category suppliers will resonate, be evaluated and incorporated into the purchase decision process.  Advertising works, but it is much more effective with consumers who are also actively shoppers.  If your product has infrequent purchases and is a lower priced item, you should consider focusing your marketing dollars at other points of influence.

Pre-Store Research
The next point of influence in the shopping journey is the pre-store research effort where shoppers gather information on what products and services they are considering/planning to buy.  This information gathering increasingly uses search engines, forums, blogs, company websites, retailer websites and consumer reviews as some of the key information sources.  Consumers are seeking this information on their computers and via smartphones.  In Google’s white-paper ZMOT, Winning the Zero Moment of Truth, author Jim Lecinski shared that half of all shoppers are using search engines to conduct product research, 38% comparison shop products online and 36% sought information from a manufacturer’s website.  To access this kind of data, 79% of consumers now say they use a smartphone to help with shopping. 

The implication of this behavior is that you should make it easy for consumers to find your brand and product information online.  To help your brand win your category, be the best at having your product information available where consumers are looking.  Do you have a clear strategy for Google, SEO, YouTube, Facebook, your website and other online destinations?  Consider an integrated approach to these digital marketing tools to achieve consistent branding and information across all consumer touch points.

Increasingly, consumers are placing more weight on the product feedback of other consumers, so having a solid source of product reviews for your brand on your site and your retailers’ sites can help you win the purchase decision.

Consumers also continue to be highly influenced by friends and family members.  Many brands are handed down from parent to child as the right brand to use.  Friends and family are often viewed as the key trusted experts over other information sources.  Google says 49% of consumers talk with friends or family while researching products.  Word-of-mouth marketing has high impact in categories that rely on personal recommendations.

In certain categories, celebrity or pro recommendations have high credibility and trust as a source of influence.  This is not true for all products, so research the impact of these endorsers in your category before investing money here.

While pre-store research does not play a role in all categories, it is increasing in importance and impact for many consumer products.  Make sure your brand offers your shoppers the information they want in the places where they will look for it.  Finding information on your products needs to be easy.  If shoppers have to work hard to research your brand, they are more likely to buy from your competitor.

The above covers the Marketplace and Pre-Store Research points of influence for shopping.  We discuss the key decision and influence factors when selecting a shopping destination in Part 2 of this blog.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

Are You Betting Your Success On Out-Of-Date Insights?

How current are your consumer insights? Do you know? For some companies, investing in market research to gain consumer insights is an annual strategic investment. For other companies, there is no market research budget and research is run on an as needed basis. In other companies, market research is one of the first budgets cut in a downturn and important questions are never answered. 

When was the last time you updated the insights on which you base your key strategy decisions? If it has been more than a year since your last strategic market research study, consider making this a near-term priority. Do not assume your consumers have not changed in significant ways.

Why you ask do I need to spend money on fresh insights? Don’t consumers pretty much behave the same way year after year? Why invest in repeating a research study I have done in the past when I know I can spend that same money on programs such as a sales promotion and see results right away? This is a good question and an important question.

Most companies will invest in gaining consumer insights to learn what consumers think about their company’s product and brands and why they behave the way they do—either shopping for or using their products. These insights are used to guide strategy development, marketing planning and new product development efforts. If these insights were important at one point of time to guide strategy development, it is likely they are still important to benchmark current consumer behavior and attitudes to guide strategy today. A modest investment in research today can unlock new consumer and shopper insights that provide new and unique competitive advantage in the marketplace.

When asking why to invest new money this year, consider the dramatic changes with consumers that have occurred in the last couple years. The economy and 9% unemployment have transformed how and where families spend their discretionary income. Food and fuel spending take up a larger percent of a family’s total income—what is “normal” for consumers has been evolving in the last couple years. Spending for daily needs, food choices, lifestyle products and services have all evolved. 

Who is shopping has changed. Consider the insights from a study by GfK, MRI and ESPN: 31% of men nationwide were the primary household grocery shoppers in 2011, up from 14% in 1985. A 1,000 person nationwide 2011 study from Yahoo and DB5 showed a higher number—51% of men reported being the primary grocery shoppers in their household. With a larger percentage of the male population being affected by unemployment, more men are staying home and are taking on new shopping roles in their family. How does this affect your category?

Now add the rapidly evolving integration of technology into consumers’ lives via smartphones and tablets like the iPad. Consumers are researching, shopping, comparing prices and buying products and services in new ways. A comScore study at the end of 2011 showed that 38% of smartphone users used their phone to make a purchase at least once on their phone during the course of their device ownership. This included 47% who purchased digital downloads of songs, movies, ringtones, ebooks, etc, 37% who bought clothing and 32% who bought electronics on their phone.

Phones are enabling shopping in new places—37% of consumers made purchases while in transit and 42% made purchases while at a location away from home, including work. When you consider that 20 million new smartphones are expected to be sold in 2012, this behavior will only expand. How does this affect your shoppers and your selling effectiveness? Do you know?

If you are developing new strategies to grow your sales in the next 1-3 years, you can be much more effective if you have fresh insights on your consumers’ behaviors, attitudes, priorities and purchase criteria. Without these insights, you may miss a key emerging opportunity or simply fail to communicate and promote your products in a way that engages today’s shoppers. If your key competitor unlocks those key insights before you, they can gain a new advantage with your customers.

Make an investment in market research a new priority this year. You would not take a long road trip without a current map or a GPS to guide your way. Be sure to start your 3-year planning with current insights to guide you on your journey.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

Sell more by understanding why shoppers buy from you

If you are like most companies, you have a core group of shoppers that are your loyal customers and then you have others that buy your product or service on occasion and some who try your brand and never buy again. 

Do you know each of these groups behave the way they do?  Do you know why your customers buy your product?  Do you know why others never buy your product?

Let’s start with the reasons people buy—what drives them to consider and buy a product or service.  Your brand may fall into multiple purchase decision categories for different customer segments.  Which of these are the most likely reasons your customers buy from you?  There may be other reasons / purchase behaviors for your category, but likely most of your customers can be found on this list.

·         Replacement – replacing something that is used up or broken.   A less frequent purchase, but usually one where someone knows what kind of product they want to buy.

·         Routine – buy regularly from an acceptable set of products or services.  You may be the only product they buy in this category or part of a rotational set of product (or services).  Canned soup, breakfast cereal and fast food restaurants are representative of this behavior for many.

·         Brand loyal—this too can be a routine, habitual purchase.  But these shoppers are brand loyal.  Discounts, special offers will not cause these loyal shoppers to switch.  Brands like Budweiser, Heinz Ketchup and McDonalds may or may not offer the very best product, but they have a loyal following.   Do you provide your customers a reason to be loyal to your brand?

·         Variety seeking—someone who is loyal to a category, but wants to try something new.  A good example is seeking variety when chosing a restaurant.  Condiments, fashion, beauty salons and car shopping can fall into this behavior.

·         Seasonal—the time of certain events or seasonal weather, these category purchase decisions increase at certain times of year.  Examples include:  gardening, hunting, swim suits and Christmas decorations.  Due to the seasonal nature of these selling seasons, sales happen in a shorter time window.  Understanding why shoppers will want your product and how to market it can make or break your year.

·         New & improved—people are often looking for the next new thing.  They are willing to try something new to see if it offers a real improvement, a better value or a solution that simplifies their life.

·         Brand switching to upgrade—like new & improved shoppers, many customers will search for a better product or service if they are not completely satisfied with their current product.  Do you provide a better solution?  Do you communicate these benefits so others know to try your brand?  If your customers are not truly satisfied, you need to re-engage them before they seek better value elsewhere.

·         Brand Mom/Dad/person of influence always uses—sometimes it is easier to trust someone who has more experience.  Many brands are bought because it is the brand that Mom always used.  Friends, neighbors, celebrities, professionals and doctors are other influencers depending on the category.

·         Brand switching to seek value / cut costs—in today’s economy people are looking for value.  Some are willing to reduce value for a lower price.  But if you let your shoppers make decisions only on price, you are missing an opportunity to communicate and sell your unique value.  Most shoppers will pay more if they believe the value for the money is worth it.

·         Indulgence—small indulgences are a hot trend this year.  Can your product and service offer this benefit?  Chocolate, Starbuck’s, fashion shoes and microbrew beer are categories that benefit from this trend.

·         Gift purchase—not everyone is shopping for themselves.  Purchase motivations and personal constraints change when they are buying a gift.

·         Impulse—these people saw your product or place of business and on impulse decided to try it.  For some categories this can be over 20% of purchases.  Understand what drives this behavior for your shoppers.

Each of these purchase behaviors have different buying motivations and purchase criteria.  If you assume all off your customers have the same reason for buying your product or service, you are missing the opportunity to segment your customers and grow your business with customers who buy for different reasons.

If you have not recently conducted research to understand who your shoppers and customers are, and why they buy, you have a great opportunity to boost your business in this year.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

Part 2 – How and why consumers are giving retailers a Merry Christmas

This two-part blog looks at how much consumers are spending this holiday season and why are shoppers buying more this year than expected.

Total holiday spending is now expected to end around +3.8% according to the National Retail Federation.  Others are forecasting closer to 5% growth.  Why are consumers spending more than last year in a still tough economy? 

Based on news reports and recently reported consumer surveys, GrowthSpring sees six key catalysts for why consumers are spending more this holiday season.

1.    Families are working to create the “ideal” Christmas.  Each year adults hope for and work to achieve a family Christmas experience that is ideal—an experience just like the holidays pictured in so many TV Christmas movies. The family is together, happy, cheerful and filled with Christmas spirit.  In a year when so much has been beyond the control of the average family (the economy, job security, higher food and gas prices, global instability, dysfunctional U.S. government, etc.), families can still influence/create their family Christmas experience.  Families are working hard to ensure their family has a special time together and are spending to give their kids a nice Christmas at the end of a tough year.

2.   Consumer confidence is up.  With recent favorable economic reports on declining unemployment, a dip in gas prices, and efforts to stabilize global financial markets, consumer confidence among Americans with full-time jobs reached its highest level in almost five months (according to the Bloomberg Consumer Comfort Index).  

3.   This season has featured deep retail discounts from start to finish.  From starting Black Friday the night of Thanksgiving to the record-setting shopping events of Shop Local Saturday, Cyber Monday, Green Monday and Free Shipping Friday, as well as retailer specific sales, shoppers have had great values offered to them on this season’s hottest gifts.  Shoppers have responded to take advantage of discounts.

4.   Shoppers are shopping for themselves as well as for gifts.  NRF surveys show that while early holiday spending was up, as of mid-December, shoppers lag last year in how much of their shopping is completed.  It appears that some of the Black Friday weekend shopping was to satisfy pent up consumer demand for items wanted and needed by shoppers for the home and for themselves.  They took advantage of Black Friday pricing to shop and buy non-gift items at great prices while also shopping for the holidays.  Many shoppers are also buying more practical gifts and smaller indulgences for their family and friends allowing them to buy more gifts but stay on budget.

5.   The Internet continues to change how consumers shop—and pre-shop.  A Shopper Sciences study showed that 42% of shoppers planning to spend more time doing online research prior to buying this year.  According to a Shop.org survey, 122.9M consumers said they would shop on Cyber Monday this year.  Retailers participated too—over 92% of online retailers offered a special promotion over the Thanksgiving weekend.

    Online shopping with free shipping is now playing an increasingly important role in the last two weeks before Christmas—especially among the 41% of consumers who expect to shop for last minute gifts (Source:  Price Grabber).  Over $1 billion was spent on Free Shipping Day (Friday, December 16).  Last week saw YTD online holiday shopping approach $31B and 4 individual days top $1B.  Overall, online holiday shopping is up 15% YTD.

6.   Mobile has further enabled holiday shoppers to find deals and the products they want.  Mobile phones, social media and shopping aps are making it easier to shop and are helping consumers find what they need while staying on budget.  Consumers are increasingly locating products, comparing prices and shopping on their smart phones.  According to the NRF study, 31.2% of smartphone users will use their phone to compare prices and research holiday items with their smartphone.  The Shop.org study revealed 17.8 million consumers planned to use their smartphone to make a holiday purchase—up from just 3.6 million in 2009.  Mobile-commerce sales are expected to reach $6.7 billion in 2011 according to online-marketing firm eMarket.  And, with Walmart launching its first social-shopping ap, Shopycat, other retailers will rush to do the same in 2012.

These six catalysts provide valuable insights into shopping purchases this year.  In the coming weeks, we will continue to learn more about how shoppers behaved this holiday season and why.  In the mean time, consumers are giving the gift of a good Christmas season to retailers.  It is a welcome gift this year.

How and why consumers are giving retailers a Merry Christmas – Part 1

This two-part blog looks at how much consumers are spending this holiday season and why are shoppers buying more than expected.

In October, the National Retail Federation forecasted a 2.8% increase for 2011 holiday shopping and stood by their forecast even after a strong Black Friday weekend suggesting that shoppers were just spending their money early this year. 

It turns out consumers were not listening to the NRF.  This week, following continued strong shopping trends, the NRF raised their forecast to 3.8% increase for the season and reported that November spending was up 4.5% YOY.  The 3.8% forecast is lower than last year’s 5.2% holiday spending increase, but more robust than expected.  Consumers continue to spend as Christmas approaches. 

NRF’s most recent spending survey released this week revealed shoppers have completed less holiday shopping to date than in previous years.  That suggests that much of consumers’ November shopping was for themselves, and there is still a good bit of holiday shopping to come.  Big news and good news for retailers.

Another source of good news is this year’s holiday spending growth online.  Those selling online are having a great holiday season.  Online sales as reported by ComScore have reached $268B for the holiday season to date ending December 12.  This is an increase of over 15% vs. last year.  http://lnkd.in/3xcBTE   

This trend reveals that companies that did not participate in holiday ecommerce have missed key sales opportunities this year.  If you have not started building ecommerce capabilities on your website or at least your retail partner’s websites, you are missing sales and likely losing market share.

Why are consumers spending more and changing their shopping behavior? 

We will discuss that in Part 2.

Your Brand – A Promise Kept?

What a difference it makes when we keep a promise vs. break one.  Kids and loved ones expect us to keep our promises.  Keeping a promise feels good.  All are happy.  The result can be as simple as a met expectation or a big emotional payoff of delivering on a big promise.  Repeated kept promises strengthen a relationship and trust.

Breaking a promise disappoints all parties.  You let someone down—even if there was a reason to do so.  The person on the other side of the broken promise is disappointed, hurt, perhaps event angry.  You fell short of what you promised.  You risk losing their trust in the future.  Repeated broken promises destroy trust.

Keep this in mind when you think of your brand.  Your brand is your promise.  People buy your brand because of what it represents—and the emotional bond they have built with your brand because of the consistent experience you deliver.  It is a promise of expected consistency, quality, timeliness, value and experience.  It is the promise of their ongoing relationship with you and your products or services.  If you change your product or service delivery in a way that is perceived to be less than expected, you have broken your brand promise.  Your customer will decide whether or not to give your relationship another chance and buy from you again.  Can they trust you in the future?

You will look at your brand differently if you view your customers as those you to whom you have made promises.  Keep your promise, build your relationship and trust and you will often be rewarded.

4 Ways to Win Shopper Hide and Seek

Most of us played Hide and Seek as a child.  You hide and try not to be found by the person playing with you.  It can be a fun game if you are a child.  It is not a good game if you are a consumer product sitting on a shelf hoping someone will buy you.

Is your product hiding? Sometimes products hide in plain sight.  Other times, no one is searching for them.  To win the retail game of hide and seek, consider the following:

1.       First, be in the game.  Make sure you are making a product that people value and will seek out in store.  Make what the market wants rather than making what you can market.

2.       Be easy to find.  The easiest place to be found is to be right in front of the seeker.  When possible, work with your retailer to get secondary placement for your product.  Pursue endcaps, special displays, in-store features, shippers or retail merchandising / POP signage that get you noticed. 

3.       Make your package stand out from your competition on shelf so you can be easily found.  If the consumer has to seek your product out on the regular shelf, do not hide by looking the same as the others in the category.  Clearly make sure you are visually differentiated on the shelf.  Is your package a different color, shape, size, material than your key competition next to you?  Can you make your package look high value and make theirs look blah by comparison?  Don’t hide; shout so you can be found.

4.       Let shoppers know which game your product is playing.  Does your packaging clearly communicate what your product is; what is uniquely better about it than any other product and who is this product for?  Once they find your package, let them know why to buy you.

Remember, your competitor is playing the same game.  If you play the game better, you will be the one to make it to “home” first—in the shopping bag.