Mike Anthony @ engage consultants

Mike Anthony on Shopper Marketing

The Most Dangerous Number In (Shopper) Marketing

with 16 comments

danger76%.

As in  “76% of purchase decisions are made in-store”. At first glance it might feel almost comforting, its been around for so long. How dangerous could it possibly be? Well that depends on if it is true, and if it is true for you. The answer to the first is, “probably not”, and to the second ‘definitely not’.

Why is it dangerous? Because it is this number that legitimizes (for some) the extravagance of in-store spending. In-store marketing budgets continue to rise both in real terms and as a percentage of total spend – but if that is where most purchase decisions are made, then surely this is OK?

This perhaps is why this number, which seems to contradict virtually every piece of common sense around, is so pervasive and sticky. People want to believe it.

Marketers faced with fragmented media, finding it harder to connect with a mass market, love the idea of being able to grab that mass market at one spot. Businesses faced with increasingly demanding retailers, feel legitimized. “This isn’t capitulation, this is smart marketing! This is investment”.

And so it would be, if the statistic were true.

But what if the number of purchase decisions made in-store, for your business, is much much less?

We’ve studied lots of categories and very few get anywhere close to a 76% in-store decision rate. In one category (kid’s milk), the in-store decision rate was below 5%.

But I’d rather not dispute this number, because actually that misses the main point – the main danger if you will. Even if the number were true, it wouldn’t be true for your brand, your category, all of the time. Making decisions based on an average statistic (whether or not it is true) is dangerous. Most situations are not ‘average’ The challenge of marketing, and of shopper marketing, is to be far more specific.

In-store decision rates vary by category

As I’ve stated above, we’ve seen huge variance from category to category. Some categories are clearly more impulsive in nature, some more planned. If you work in snacks, then you may find many more shoppers making decisions in aisles, than if you market toothpaste, perhaps.

In-store decision rates vary by channel

Whatever the average for your category, the number will vary wildly by channel. We’ve worked in categories where one channel represented a minority of purchases but a majority of in-store decisions: people actually went to this channel when they went sure what to buy. This often occurs where in-store personnel are important to the decision making process (think pharmacy or drugstore). The biggest influence on this though is…

In-store decision rates vary by shopper mission

In a recent study Bell, Corsten and Knox found that major weekly shops had a much higher incidence of unplanned buying than other trips. We all know from our own experiences as shoppers that there are times when we are highly planned, and times when we are very much in browsing mode. Different missions equals different shopping behavior, which means that the number of decisions made in-store varies.

In-store decision rates vary by availability

In some studies we’ve seen, of the biggest causes of switching, is out of stocks. From in-store checks we’ve found that up to 92% of out-of-stocks are on promoted lines: so promotions cause (or at least contribute to) out of stocks. But promotions are done (sometimes) because we believe that people switch brands in store and so we need to influence shoppers. But many of them switch brands because there is an out-of-stock. Anyone getting dizzy yet?

In-store decision rates vary by shopper

Most important is to remember that as marketers we’re not interested in ‘the average shopper’. We’re interested in a specific target shopper, and therefore we must strive to understand how they make decisions, where they make decisions, and how those decisions are influenced. The 76% number is simply an irrelevance. All that matters is how (and where) our target shopper makes choices.

Deal seekers switch

And a last thought – who are these shoppers who switch in-store? In many categories, they are what we call deal seekers: they come to a store with an open mind, and will buy whatever is on deal. They may buy your brand this week, but they’ll switch next time as soon as your competitor is on deal. They may be making decisions in-store, but do we want to spend our marketing money against them?

I’m not trying to pick a fight with POPAI. I’m sure they have solid data to back up their claim. My problem doesn’t lie there. My problem is with the pervasiveness of it: how many ‘experts’ swallow it, and how that leads many marketers astray.

Whether you are a brand manager, shopper marketer, category manager or key account manager – the number is almost certainly wrong for you. Before you spend another dime, go find out where decisions are made by the shoppers you are interested in. 

Image: Flickr

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Written by Mike Anthony

April 10, 2013 at 2:51 pm

16 Responses

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  1. We are currently in the process of doing some work on Decisions Hierarchies and Decision making in store – and these are the sorts of questions we are hoping to answer. Great article!

    Caroline Davies

    April 10, 2013 at 2:54 pm

    • HI Caroline,

      Good luck with the project – do let me know how you get on, and let me know if you need any help – we have plenty of relevant category experience!

      All the best,

      Mike

      Mike Anthony

      April 10, 2013 at 5:13 pm

  2. Spot on Mike, as much as we prefer to the simplest way of doing in-store promo. The fact is in many occasions it is just a waste of budget. But still this strategy is use over and over again despite the result may be none whatsoever, which just show how lazy we as marketer are. (I also contribute in the approval of this kind of promotion over time :))

    Mario

    April 11, 2013 at 1:03 pm

    • Hi Mario,
      Thanks for your honesty! We’ve all been there, and we all do things, sometimes for the wrong reason. There will always be a need for short-termism – and promotions are a great way of hitting a target. But let’s not justify it by pretending that it’s strategic, and let’s just think a little more about how we do it.

      We’ll continue to put money into stores; the challenge is to put some thought into how and where we do this, and not be, as you put it, lazy!

      Thanks for reading and contributing.

      All the best,

      Mike

      Mike Anthony

      April 11, 2013 at 1:13 pm

  3. Hi,
    Agree with the central theme of the article: you can’t make specific decisions based on industry averages.
    However, we need to be clear about what we mean by planning. Planning can be present or absent on a number of different levels; category, sub-category, brand, SKU are the obvious distinctions. I have assumed that POPAI’s figures quoted ad nauseam are based on SKU decisions. How many decisions are pre-planned to this extent? Very little. Maybe 76% is too low.
    The other distinction which is important is how to segment ‘planning’ at a total level. Planned vs. Impulse doesn’t cut it. There is at least one other behaviour: Reminder purchase. Not on the shopping list, not bought on a whim. The store reminds you of the prior need to buy. Batteries is the obvious example. Big implications for in store shopper marketing.
    To get back to the challenge presented by Mike: you have to get to this level of detail to make an informed shopper marketing decision.
    James

    James Llewellyn

    April 11, 2013 at 7:50 pm

    • Hi James,

      Thanks for the additional thoughts. You are completely right and this is why any number is useless, and dangerous. Every single shop has myriad decisions built into it, which is why what is important is to understand how different shoppers shop your category, and decide which of those you are going to target.

      Thanks for contributing,

      Mike

      Mike Anthony

      April 12, 2013 at 8:01 am

  4. Great article, Mike. So true! This generic statistic also doesn’t specify if the “purchase decision” is the category decision, the brand decision, variety or SKU decision. Yes, there are always some decisions made in store. But the most important to most marketers is the brand decision.

    Julie Landy

    April 11, 2013 at 11:41 pm

    • Hi Julie,
      Thanks – in their reports POPAI do go some way to explaining what they mean – their data suggests that only 24% of shoppers planned a specific category and brand and then bought it.
      The methodology is solid, and the data is therefore probably robust – it is in the interpretation that everything gets a little hazy.

      THe methodology asks people pre-shop what they plan, and then checks afterwards. The trouble is that (for example) if I am off to buy washing up liquid I might not remember the specific brand name in an interview. That doesn’t mean it isn’t planned. It also doesn’t mean that I am going to make a brand choice at the fixture either.

      The data isn’t wrong, but data can be made to tell any story. If I was cynical I might suggest that POPAI have a vested interest in creating the impression that things happen in-store…..

      As for your assertion on ‘brand choice’ is the most important, I’m not sure I agree. There are lots of other decisions which are also important – depending on what your marketing goals are….. Brand choice is certainly critical, but I’d hate marketers to lose sight of other important decisions. Consumption and purchase are a chain of loads of decisions…. marketing is about influencing all of them – good marketing is about choosing which decisions to focus on…

      Thanks

      Mike

      Mike Anthony

      April 12, 2013 at 8:26 am

  5. I always use 100% with my clients. That’s the percent of customers who make their purchase decision in store. Some are habitual, others partially planned, others influenced by a stimulus, some fully planned. Either way they are ALL executed at the shelf and thus I’ve always reckoned that 100% of purchases can thus be influenced at shelf and in store. To what extent varies by all the factors you discuss in the post. So I think it should read “100% of shoppers make their final SKU purchase decision at the shelf”. Course POPAI love that!!

    Ken Hughes

    April 12, 2013 at 4:56 am

    • Hi Ken,

      Thanks for the thoughts…. Whilst I philosophically agree with you – there is an action at the shelf, which therefore means that a decision is taken, even if it is merely affirming what was decided a long time ago.

      I guess my concern is that if that number was publicized, wouldn’t it be as dangerous as the POPAI number. I’m pretty sure the POPAI data is robust – but it is so abused that it becomes dangerous. 100% is also ‘correct’ – but surely open to just as much misinterpretation and abuse?

      What do you think?

      Mike

      Mike Anthony

      April 12, 2013 at 8:32 am

      • I suppose I use the 100% number with clients to get consumer marketing teams to think ‘store’. Sometimes they are so focused on brand equity and general themes that they need to learn that even if their recall levels are high, that their propensity to purchase figures are high, or their ‘plan to purchase on entering this store’ figures are high – all this data is pointless. Yes – habitual behaviour is high and you could construe from that, that the decision is already made, but I still think that ‘the final 3 feet’ needs to be the focus. They need to learn that this is the most important part of the puzzle and not the last piece. This is the ‘corner piece’ from which we should be working. Therefore everything happens and the shelf – this is the moment all your above-the-line and anything else you’ve done is either going to turn into a sale or not. This is the moment. Anything you’ve measured on the way is nice to know (recall, propensity etc.) but this is it. Like a poll before an election isn’t the result. That’s why I like to use the 100% figure – to drive focus to make them think about the reality

        Ken Hughes

        April 14, 2013 at 6:08 pm

      • Hi Ken,

        Thanks for coming back – and I understand where you come from (having had, I think, similar experiences to those described above)… The message that “it isn’t over until the purchase is made” is valid and valuable: perhaps spinning it to:

        “all shoppers make A decision in-store”

        might be worth consideration? Otherwise there is a danger that we make it all about the store which is simply not true… Knowing that the store is always important and that the store is all that matters are two very different things….

        What do you think?

        mike

        Mike Anthony

        April 15, 2013 at 12:00 pm

      • As always it depends on why you are using a statistic. Every statistic used is used by someone with an agenda! I agree that the 100% in-store decision figure is scaremongering, but is used to force consumer marketeers to recognise the in-store part. On the other side I accept your point, and I think it is a good one on not letting people think SM is all about in-store. As a behavioural science it is about a philosophy, a model and one that is wider than just in-store. I sometimes struggle with that bit, as if all that we achieved in the next few years is a shift in mindset into the store away form pure consumer marketing, I think that’d be a good step on the journey for all. Sometimes I think the ‘average’ marketing director is too ‘dazzled’ by a whole philosophical change and can swallow a change of focus easier? As I said – depends on the agenda

        Ken Hughes

        April 15, 2013 at 3:03 pm

  6. Really good. That emperor has been running around naked for far too long.

    Unfortunately, it’s been a great number for too many promotion agencies to tout to too many people that don’t know any better.

    If brands are unique, then every one of these numbers will be unique too. Each brand has to figure theirs out.

    The 100% number is a false premise and undermines one’s need to think.

    BTW, I am cynical and believe that believing POPAI in this regard is like believing in the tooth fairy or that a marketing services holding company actually believes that its staff are its greatest asset.

    There’s too much defaulting to false convenient premises and too little effort made to do the actual brain and legwork that’ll help brands (and far too little money to make mistakes – each one is magnified when the budget is so tight).

    Cheers!

    Chip Hoyt

    April 13, 2013 at 11:44 pm

    • Hi CHip,

      Thanks for the contribution and support.

      I agree that the 100% number doesn’t really help move things forward for me – it hides the subtlety that marketing needs to understand.

      Cheers

      PS – You cynical? Really?? 🙂

      Mike Anthony

      April 14, 2013 at 8:12 am

  7. Reblogged this on Blacksheep AMBD and commented:
    Intriguing article from Mike Anthony, and one that we completely indentify with. In fact, Blacksheep has conducted similar analysis of UK & irish shopping habits recently, and concluded that the most dangerous number in Shopper Marketing right now is ‘2’. As in, when people aren’t shopping alone they are less lilkely to be subjected to marketing or impulses…Dedicated ‘singles’ nights at the supermarket anyone?!

    Blacksheep AMBD

    April 18, 2013 at 6:01 pm


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