Understanding Shopper Behaviour in Online Grocery
Understanding Shopper Behaviour in Online Grocery
The online food and grocery market continues to grow rapidly presenting new opportunities for consumer goods companies to engage shoppers, increase sales and develop their category strategies. But to date only a minority of players have fully embraced the online channel.
For many, the online space is perceived as somewhat of an enigma which remains on the periphery of traditional shopper marketing activity, more an afterthought than an integrated component of a holistic channel strategy. At Evolution however we believe firmly that online activity should sit at the heart of the shopper strategy, following the same fundamental principles we have learned in-store while acknowledging the marked differences between the physical and online worlds.
In-store and online shopper marketing strategies should follow the same fundamental principles
We know from the store-based world of grocery retailing that any successful shopper strategy is driven from the shopper's perspective. Only by understanding the shopper's journey along the path to purchase and how they are influenced during that journey can we hope to understand with any clarity how as marketers we are able to target products and marketing messages most effectively.
We believe that the underlying approach to developing an online strategy should be no different. Like in the physical world, we need to understand the shopper's profile, the array of influences that affect the shopper's mind-set and, of course, the marketing initiatives which are available to help interrupt shoppers on their journey.
but shopper marketers would do well to understand the marked differences between the in-store and online world.
What is greatly important and often underestimated, is just how different the online and physical can be when it comes to influences on shopper behaviour, both in terms of the influences on the shopper's mindset and the shopper marketer's ability to engage people at the point of purchase.
First let's look at shopper profiling
Shopper profiling takes on new dimensions in the virtual world and this can help explain clear differences in behaviour when people shop online.
Though often a blunt instrument, profiling is a useful means to start segmenting any market. Clearly the socio-demographic, lifestage and lifestyle characteristics are as relevant online as they are offline, but the virtual world arguably requires further depth in analysis of these attributes as well as additional dimensions for consideration. Access to high speed internet, modes of transport and the shoppers' degree of technological know-how are good examples. These additional factors at the most basic level dictate whether or not a shopper is able to use the online channel at all. At a more subtle level they help us understand some of the differences in shopping behaviour we see between online and in-store channels such as changes in bulk buying and impulsive behaviour.
Let us consider an example comparing an older and a younger more technologically aware shopper, and how their behaviour may differ when shopping online. Take an older shopper first. This shopper's behaviour has been heavily conditioned by their vast experience of shopping in-store. They are also less au fait with technology. This shopper's approach to online shopping mirrors closely the way they would shop a physical store picturing the store's aisles in their head, shopping category by category. The younger so called generation Y or iPod generation shopper has grown up with online technology has few, if any, physical or emotional attachments with the in-store shopping experience. This shopper is more inclined to use digital cues such as recipes, ideas, social media and promotions to help them navigate the store.
In this example we note that while these two shoppers may well behave in similar ways in-store, when shopping online their mind-sets and consequential behaviours contrast greatly.
Now let's look at how the different circumstances between an online and traditional shop can greatly influence changes in behaviour.
We know from our existing research that shopper behaviour is greatly influenced by the circumstances of the shopping trip. In the physical world the circumstances of the shopping trip may involve leaving the house on a specific mission or popping into a store on the way home from work. The circumstances of the trip affect, for example, the shopper's mind-set, the route they take round the store and how much time they have on their hands to consider their purchases. However, when shopping online the circumstances of the shopping trip are transformed almost entirely. This is because an online shop can take place almost anywhere: at work, on a laptop while watching television, or even in the kitchen while looking through the fridge and cupboards.
We suggest these fundamental differences between the circumstances of shopping in-store or online have a profound influence on shopper behaviour. Indeed we would go as far as to say that the extent of difference between the circumstances could actually result in the same shopper having a different modality depending on whether they are shopping on or off-line. This influences how they shop, what exposure they have to shopper marketing and how many unplanned purchases they make crucially it influences what they buy.
Let's look at how these different circumstances can affect behaviour using an example of a methodical and organised shopper. In the physical world this shopper typically makes a list before visiting the supermarket. On arrival they walk up and down most of the aisles picking up items from the list. But at the same time they use the shelves and promotional displays perhaps subconsciously to help choose new products or perhaps make the odd impulse purchase. The point to note here is that because they are methodical and walk the whole store, they have high exposure to shopper marketing initiatives throughout their journey. Now let's imagine how that same shopper may behave when shopping online. Here the shopper takes their laptop into the kitchen and looks through the cupboards, adding items directly into their online store rather in the same way as they would write their list. They buy everything that they need quickly and effectively, but in this case their exposure to shopper marketing initiatives is very limited. Impulse purchases are lost and as a result average basket size is probably smaller.
It's not just shopper profiles and circumstances that influence behaviour: the online store itself can also drive behaviour
While the shopper's profile and circumstances can clearly influence online shopping behaviour, so can the online store itself sometimes with unpredictable or even negative results.
Unlike a physical store where the shopper's journey is dictated by the store's static layout, POS materials, off-shelf displays and signage, the online shopper can take many different journeys and is therefore somewhat less predictable.
When a shopper embarks on their online shopper journey they are typically faced with a number of choices. These may include building a shopping list based on previous purchases, using recipes for ideas, shopping by theme such as promotions or navigating through categories or departments. The choice made at this initial stage is likely to influence profoundly purchase decisions from the offset and help drive the remainder of the journey.
For example, if a shopper starts by visiting the promotions page, we would expect them to make a high proportion of impulse purchases and be more inclined to buy outside of their typical brand repertoire. Furthermore their subsequent buying behaviour would clearly be influenced by what they have already bought on promotion. In contrast, if a shopper starts with a list based on previous purchases, this could have the effect of reducing their brand repertoire since they will not be exposed to new or alternative products. Subsequent behaviour is likely to involve filling gaps in the shopping list.
The challenge to interrupt
Given these initial decisions that shoppers make, we believe this makes it all the more important to be able to interrupt shopper effectively and efficiently once they are further into their journey. Essentially there is a need to maximise a shopper's field of vision no matter whether they buy from a list or using cues provided by the retailer's website.
We believe that retailers', and consequently manufacturers', ability to interrupt is currently poor and there is a requirement to develop more effective tools to interrupt the shopper's journey as they browse through products. It is during the journey itself during the decision making process where opportunities for shopper marketing are best targeted.
At present attempts to interrupt the shopper's journey are restricted in the main to promotional listings at the head of product pages and in a few cases the use of banners. Asda does in some cases recommend products that you may like a tool we are surprised that is not more widely used. Overall we perceive the level of sophistication as sitting someway behind in-store marketing in effectiveness but see great potential.
Online grocers need to leverage their ability to know what the shopper has already bought, both on the current and previous trips, recommending accompaniments and promotions. This could be taken further to offer shopper's recipes or other ideas based on what is placed in their basket. Interruptions, such as promotions, need to be more overtly displayed as the shopper adds items to their basket, perhaps even using carefully targeted pop-ups. We absolutely acknowledge that there is a fine line to be drawn between subtle yet relevant recommendations and intrusive marketing which could alienate shoppers, however we believe there is still a fair distance to go before that line is reached.
In summary
That the online channel has great potential is not in doubt for the majority, yet few understand how to exploit it fully. We suggest an online shopper strategy cannot merely be an add-on to existing shopper knowledge and initiatives but requires more careful consideration.
We highlight that traditional shopper profiling only goes some way to understand shopping behaviour online. We posit that behaviour online is affected greatly by the circumstances of the shop and that the way that online stores are designed fundamentally affects the way that shoppers move through their digital path to purchase. For retailers and manufacturers there is a major challenge to understand better how online shoppers behave, the influences on that drive that behaviour and how to overcome the technological hurdles.
As new technologies evolve, new opportunities will emerge. It will be those manufacturers with a clear strategy, a deep understanding of their online shoppers, and how their proposition can serve those shoppers' needs, that will be best place to capitalise.
Related research
Online Shopper Marketing
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