Independent shopper insights consultancy Shoppercentric has published its Shopper Stock Take Index for a third year, which reveals that 41% of consumers use store loyalty cards ‘a lot’ and 47% use them ‘occasionally’. Only 1% of survey respondents said they had never heard of loyalty cards.

However, Danielle Pinnington, Managing Director at Shoppercentric, warns: “Retailers and brands must keep a finger on the shopper pulse and appreciate that each customer is now using a range of strategies to cope with increasing pressures on household budgets. Which categories or sectors will suffer most this year is likely to depend on how they react to changing shopper needs.”

Pinnington adds: “With shoppers picking and choosing between stores for particular items based on their own experience of how well different retailers deliver, there is even greater pressure to differentiate and create memorable in-store experiences. Equally, avoiding or challenging misconceptions based on bad experiences has become more important. If, as our report shows, shoppers are actively widening their repertoires, loyalty as we used to know it is an outdated term.”

Shoppercentric collected more than a thousand online survey responses from shoppers, covering how they felt about the stability of their household budgets, how their shopping habits are changing, and what brands and retailers need to do as a result.

The 2018 Shopper Stock Take index reveals that while shoppers aren’t yet feeling the same pinch as in the worst of the recession, they are certainly starting to feel more pressure. Only one in four claims to be unaffected by the current economic situation, with a considerable proportion of UK shoppers having to make minor changes to spending.

The speed of change is rapid – just 12 months ago, the proportion of those making minor changes was just 16%, but today it stands at 44%. 26% of shoppers have noticed prices increasing a lot, and 56% have noticed small increases.

Shoppers primarily put these increases down to the state of the economy (54%) and Brexit (50%), although the exchange rate, cost of ingredients and greedy companies are also ‘blamed’ by a fair proportion of shoppers.

80% of shoppers are now “being careful to avoid waste”, while 75% are “avoiding being tempted to buy things I don’t need”. 50% are “going out of their way to find the best prices” and will “split shopping across different stores to get the best deals.” 60% are now buying “own label where I can to keep costs down” and 33% are now using “online shopping to check spending as I go.”

2017 saw a continued increase in the proportion of shoppers who had abandoned weekly main shops in favour of shopping little & often – rising from 11% to 16%. This year, however, there has been no change in that figure, suggesting this trend may have reached its ceiling.

Instead, shoppers are becoming more active as they make the most of the choice available. Shoppers’ average repertoire has changed to five stores or websites in the last fortnight, up from four in 2017. 26% of UK shoppers say that they fit their grocery shopping in where and when they can. 33% of shoppers switch stores based on what they need – to get the best places for what they want (versus 28% in 2017).

The biggest change in the five channels covered by the report was in the use of discounter stores – up 13% on 2017 figures to 57% of UK shoppers. Use of the Big Four supermarkets rose by four percentage points on 2017 figures to 83%. There was no significant change in convenience store or online grocery usage penetration – 49% and 30% of shoppers using those channels respectively.

With the exception of Smart TVs, all digital devices covered by this report saw increased usage by UK shoppers. Computers/laptops were cited as the most used touchpoint – up six percentage points on 2017 figures to 63%. In second place were smartphones with a huge 18 percentage point increase on last year to 45%.

Interestingly, despite a number of retailers and brands moving away from catalogues, usage by shoppers rose to 22%– up four percentage points on 2017.

There has been a seven percentage point increase to 58% in the number of shoppers that have been triggered to shop by content on their smartphone. Using a smartphone to carry out ‘research’ has remained on a par with last year at 61%. However, using the device to ‘find’ an item has risen from 56% to 60%, while the number of shoppers using smartphones to buy a product has gone up from 37% to 42% of shoppers.

However, despite the considerable shift in shoppers using their smartphones as they shop, particularly in relation to actual purchasing, there has been no increase in the uptake of mobile-based promotions, which remains at 20%.

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Shoppers are highly likely to boycott brands which run “promotions that aren’t as good as they sound” according to new research into how much UK consumers trust retailers and brands.

Nearly six in 10 shoppers (59%) cited disappointing promotions as a key irritant in future purchasing decisions, putting it top of the factors which put shoppers off retailers and brands.

The latest industry report from Shoppercentric, a leading independent shopper research agency, “WindowON…Trust Issues”, reveals high levels of cynicism and falling levels of trust amongst the UK population.

This could have dire consequences for brands and retailers, because shoppers are increasingly voting with their wallets:

• 36% of UK shoppers have ‘stopped buying a brand or using a company’ because they were uncomfortable with something they did or stood for.
• Having taken a stand in relation to one brand or company, 58% of these ‘boycotters’ said they were more likely to do the same again in the future.
• 41% of boycotters were 55+ compared to 34% of non-boycotters.
• 55% of shoppers always or frequently look for products that are transparent about their contents e.g. see thru packs/clear labelling information.
• 32% always or frequently look for products that demonstrate their ethical policies.

Danielle Pinnington, Managing Director at Shoppercentric (pictured), says: “Over the last few years, with the rise of social media and 24/7 news, it has become clear that consumers are increasingly aware of shortfalls in the behaviour of the companies they buy from… If consumers are as cynical as our research indicates, it highlights the need for brands and retailers to be more aware of how trust issues can develop and what they need to do to avoid this. There’s the potential for serious impact on businesses when trust issues lead to a negative change in behaviour, something retailers can ill-afford to happen.”

Nearly half of all UK shoppers – 46% – now fall into the cynical bracket, failing to agree at all with the statement that they are ‘trustful of others’. These shoppers are also less likely to agree that ‘most people are trustful of others’, ‘most people are trustworthy’ and ‘most people are basically honest’.

Trust is a major issue, as nearly three quarters (74%) of UK shoppers agreed that they ‘want to feel good about the retailers they use’ while almost the same percentage (73%) ‘want the money they spend to go to companies they trust’.

Shoppers rate corporate retailers and brands poorly in relation to putting consumer interests first, in comparison to other institutions and businesses.

Shoppercentric also asked people what factors irritated them most, drawing up a list of key irritants (those that scored 8+ out of 10, where 10 is annoying enough to not buy that product or use that retailer).

As mentioned above, ‘Promotions that aren’t as good as they sound, was ranked number one irritant by the most respondents, followed by so-called ‘shrinkflation’, where reduce their size or quality but keep the same price with 58%. In third place are retailers and brands who make changes which negatively impact shoppers but lets them profit on 55%.

Pinnington concludes: “The individual irritations may seem relatively harmless in isolation, but these can create real frustration and annoyance among shoppers. To see a considerable proportion of shoppers giving such high annoyance points for so many factors should be a red flag to retailers and brands. When all else feels equal, such as price, range and accessibility, it can be the sense of connection, or not, that can lead a shopper to remain loyal to their usual brand/retailer, or choose to go elsewhere.

She adds: “Our research implies that 1 in 3 UK shoppers have taken action – to shop elsewhere or stop buying a particular product so this willingness to act is not limited to a small minority. This is the context in which trust issues need to be viewed and unless retailers and brands understand the potential impact that trust issues – big or small – can have on shoppers, they run the risk of falling foul of shoppers who are increasingly aware, thoughtful and willing to act.”

The Shoppercentric report can be found here.

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Economic and political uncertainty is affecting consumer attitudes and choices, says Danielle Pinnington of Shoppercentric

2017 is certainly proving to be a roller coaster. Brexit talks are finally starting; the exchange rate remaining weak; prices on the increase; salaries failing to match inflation; and politics proving to be anything other than strong and stable.

This is the context in which UK shoppers are making the purchase decisions that are so crucial to a buoyant economy, and there are various signs that confidence is starting to weaken.

During the recession, we tracked the impact the economy was having on households, and at its worst in 2013 we found that the majority were having to make changes to spending. Compare this to 2017, and we see quite a different picture – but there are definitely signs of problems to come (see fig 1) with one in five already making changes ‘just in case’.

Whilst fewer shoppers are having to make major changes and one in four shoppers claim to be unaffected now vs. only one in 10 in 2013, the fact is that the majority of shoppers are starting to tighten their belts as times look increasingly tough.

What does this mean for in-store activation and communication? Well, the lessons learnt from the recession are a good starting point.

Back in 2009/10 the biggest shift in shopper psyche was from ‘I want it now’ to ‘Do I actually need it?’.

This was demonstrated by the emergence of prudent (rather than austere) shopper behaviour: being more careful to avoid waste; planning what to buy and avoiding being tempted to spend more; cooking from scratch; and making things go further.

Shoppers quite literally narrowed their view by focusing on what they actually needed. And when shoppers become more blinkered, in-store activation and communication needs to become more proactive in selling products.

To hit the mark, shopper marketing campaigns need to be more focused on delivering a benefit to shoppers, not just to brands or retailers.

Think about the successes during the recession: own-labels running campaigns to persuade shoppers to try their versions of well-known brands; solution-based campaigns such as ‘Dine in for £10’ and ‘Feed your family for a Fiver’ helping shoppers feel retailers were on their side; and enabling shoppers to make the most of the money available through money off coupons, link-saves or ‘extra product free’ promotions.

By taking those experiences on board, and applying the same principles to today’s situation then the new challenges can perhaps be seen as opportunities. If we all make the most of the tricks we learnt to survive the recession, we might find 2017 easier to cope with than some would have us believe. And perhaps we can all feel a little more confident in these times of change.

Danielle Pinnington is founder and owner of Shoppercentric, an independent agency specialising in shopper behaviour research, providing brand owners and retailers with the perspective that drives shopper marketing and retail strategies. It was established in 2004 and works with clients ranging from Cadbury to Debenhams.

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Generation Z shoppers (those aged from 15 to 24) are shop-happy and digitally-savvy consumers who are open to being influenced by retailers – but they also have high expectations of them.

They are more likely than the general shopping population to think that retailers consider their age group important, while half of them believe that retailers and brands understand their age group, compared with a third of the rest of shoppers.

Danielle Pinnington, Managing Director at research company Shoppercentric, which has published the new report, says: “Generation Z are a fascinating section of the shopper population. They’ve grown up in a truly connected world and are starting to access the kind of money that means they can flex their spending power. A lot has already been written about who they are as consumers, but there’s been no particular focus for those interested in shoppers. We wanted to take a closer look at what their expectations and needs are since they may not be today’s big spenders, but they could give a real pointer to where the future of retail lies… if we take the time to listen to them.”

Other findings of the report include:

• Generation Z are more likely to say that happiness runs deeper than material possessions alone: 34% strongly agree that they want to feel they are getting good experiences and that life isn’t all about what they own, versus 28% of older shoppers.
• Generation Z shop (instore/online) at least seven times a month (rising to eight times a month amongst the men in this age group). For them, going to physical shops and malls is as much a social pursuit as it is about buying things: 52% of Generation Z said that going out shopping was a fun way to spend time with friends/family, versus 44% of adult shoppers at large.
• Ecommerce provides a welcome distraction for Generation Z, with 62% of them agreeing that online shopping is a great way to stop getting bored, compared with 53% of older shoppers. Indeed, 70% of Generation Z shoppers agree that they “often browse online with no intention of buying (versus 63% of older shoppers).
• Just over one in four Generation Z consumers (28%) say that they spend lots of time on YouTube getting ideas and recommendations, compared to 13% of older shoppers. They are also twice as likely as other shoppers to cite product displays as important when shopping instore, and 49% agree that they use the displays instore/online to give them ideas (versus 41% of the broader shopping population).
• They also use their smartphones in-store more often, with 53% agreeing that this way they can get better information to help them decide what to buy when instore, compared to 38% of older shoppers.
• Generation Z consumers love a bargain: 48% agree that they tended to buy the cheapest they could so that they could buy more things they really like. 62% are also tempted to buy if an item is on promotion versus 55% of older shoppers.
• Generation Z are also the first truly digital generation, having grown up with the Internet and the World Wide Web. Almost all of them (97%) have either a laptop or a PC, 96% have a smartphone and 63% have a tablet.
• The biggest problem for retailers is that Generation Z are Generation Returner – they have no problem buying more items than they want, and returning what they don’t want. In fact, 28% of Generation Z agree that they buy lots of things online knowing they’re going to send most back, compared with 10% of older shoppers.
• They are more impulsive and more willing to take risks with an order than older shoppers; 44% of Generation Z say that they often buy things on the internet that they hadn’t planned to purchase, versus 32% of older shoppers.
• Speedy delivery is more important to Generation Z than to older shoppers, with one in five putting same day/next day delivery in their top three most important factors for shopping online, compared with one in ten older shoppers.

Social Media plays a huge role for Generation Z, and they are more likely than older shoppers to be connecting beyond their social groups of family and friends or even like-minded groups, to retailers or brands. Specifically:

• 79% of Generation Z use Facebook vs 66% of older shoppers; 24% regularly use it to contact retailers or brands.
• 50% of Generation Z use Instagram vs 17% of older shoppers; 41% regularly use it to contact retailers or brands.
• 49% of Generation Z use YouTube vs 27% of older shoppers; 32% regularly use it to contact retailers or brands.
• 41% of Generation Z use Twitter vs 26% of older shoppers; 48% regularly use it to contact retailers or brands.

Pinnington observes: “We’re all aware that Generation Z are easily bored and have a very short attention span, but on the flipside, they have great confidence and a terrific support system provided by social media which helps them to manage risk when they’re choosing what to do and what to buy. Plus they’re aware that retailers are interested in them and that they’re worth getting to know – this is in stark contrast to how many older shoppers feel.”

She concludes: “Generation Z know that they’re being courted, so it stands to reason that they expect to be impressed before they part with their cash. This apparent self-assurance is important because it will set a high bar against which retailers and brands will be judged moving forwards. Each touchpoint with these shoppers needs to be a positive experience and reflective of the brands’ tone of voice and values whilst remembering that this is a generation that enjoys shopping, so retailers will need to deliver to that brief and make it fun both instore and online.”

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