Retailers and brands alike have lost touch with shoppers’ needs and as a result they are missing one of the most important truths in retail: that happy shoppers spend more.
When companies ask themselves “how can I sell more of my brand” rather than “how can I get shoppers to spend more”, they immediately shift focus away from the shopper and find themselves imposing merchandising, POS and shelf structure that fights against shopper needs. The result is decreasing shopper satisfaction, which has damaging results on spend: 30 per cent of shoppers walk away from a category they have browsed without buying anything at all and 20 per cent of planned purchases never make it into shoppers baskets.
TNS’s global research into shopper behaviour proves that when manufacturers and retailers instead focus on making shoppers happy, they deliver significant increases in both brand and category spend. To achieve this, they need to commit to an individual-level understanding of the missions and consumer usage occasions that drive shopper behaviour, and they need to distinguish between the very different needs of “Decided” and “Open” shoppers. By helping shoppers to navigate stores quickly and without frustration, they free up more time for category engagement and the consideration of additional purchases. And they also achieve additional benefits in terms of retailer loyalty and lifetime customer value. Once happy shoppers start spending more, many of the challenges and objectives for both brands and retailers start to take care of themselves.
Key action points:
- Adopt speed of shopping as the central KPI for retailers and manufacturers – research consistently shows that reducing the time it takes shoppers to spend is the best possible indicator that they will spend more
- Recognise that shopper mission and consumer usage occasion are the key drivers of shopper behaviour, and invest in understanding these at an individual level
- Distinguish between the needs of “Decided” and “Open” shoppers – and remember that the vast majority of shoppers are Decided; structure shelves for ease of navigation, whilst facilitating product comparisons that reflect Open shoppers’ priorities for the category
