ranjgill

Incorporating TNS Retail & Shopper © TNS

2014

Evolution of the Russian shopper and the implications for research

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mailto:[email protected]


2014

Win the brand battle by understanding where and how to influence the shoppers brand decision

2 stories…

2

Win the shoppers’ heart by providing a happy shopping experience

Love and happiness The battle

The love and happiness story…

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You need to continually work to understand the object of your affection

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The Russian shopper is evolving Shopper attitudes and priorities are changing

Channel usage is changing

Retailer usage is changing


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Russian shoppers are becoming more money conscious

5

20

30

40

50

60

70

80

2008/1 2009/1 2010/1 2011/1 2012/1 2013/1 2014/1

% p

opul

atio

n

%

It is silly to spend money on luxury goods even if you have lots of moneyIf I can't buy at once the thing I like, I will save money for its purchaseIt's better to make a purchase on credit without any delay rather than to save money for itI tend to spend money without thinking

Save until can afford the purchase +3%

Silly to spend money on luxury good, even if you have lots of money +7%

Better to purchase on credit rather than save -3%

Tend to spend money without thinking -8%

Source: Marketing Index / TGI, Russia (cities 100+), N=60592

Lifestyle statements


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They are less worried about the brand image and impact on status

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20

30

40

50

60

70

80

2008/1 2009/1 2010/1 2011/1 2012/1 2013/1 2014/1

% p

opul

atio

n

%

I do not refrain from paying more for well-known brands

I buy new products before most of my friends

I like to buy things that make me look respectable

Buy new products before most of my friends +4%

Refrain from paying for well-known brands +4%

Buy things that make me look respectable -8%




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They are more ethically conscious

7

40

45

50

55

60

65

70

75

80

2008/1 2009/1 2010/1 2011/1 2012/1 2013/1 2014/1

% p

opul

atio

n

%

When I hear that a company damages environment, I don't buy its productsI would be prepared to pay more for environmentally friendly productsI buy fair trade products when availableI like to buy products from companies who give something back to society

Prefer to buy from companies that give back to society +7%

Pay more for environmentally friendly products +2%

Don’t buy from companies who I have heard damage the environment +3%

I buy fair trade products when available -3%




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Kiosks and Food markets are steadily declining

8

0

10

20

30

40

50

60

70

80

% p

opul

atio

n vi

sit

cha

nnel

mor

e

than

2-3

tim

es p

er m

onth

%

Hypermarket/SupermarketSelf-service storesKiosksFood Market

2008 crisis

Tobacco ban

Hypermarket/supermarket +5%

Kiosks -18% Food market -13%

Online +1%

Channel purchased more than 2-3 times per month


Self-service stores +4%


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Magnit and Auchan have been the biggest winners in terms of awareness and traffic over the past 5 years. Pyaterochka has defended its position

2009 2014

Pyatiorochka

Magnit

Auchan

Perekrestok

Metro Karusel'

Lenta O'KEY

SPAR Billa

Bakhetle 0

5

10

15

20

25

30

35

40

45

0 10 20 30 40 50 60 70 80

awareness, %

visi

ting,

%

2014/1 HY Russia

Retailer awareness vs visit


Metro

Auchan

Grossmart Karusel'

Lenta

Magnit

Paterson

Perekrestok

Pyatiorochka

Ramstor 0

5

10

15

20

25

30

35

40

45

0 10 20 30 40 50 60 70 80

awareness, %

visi

ting,

%

2009/2 HY Russia

A +24%, V +16%

A +21%, V +9%

A +10%, V +6%

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Karusel, Metro and Pyaterochka are investing most heavily in ATL advertising

10

808 839 811 724 456 474

658 052 661 511 770 152

487 455 643 316 101 244

263 161 518 254 032 499

212 439 300 126 068 995 122 838 679

94 470 022 83 051 750

74 184 060

KARUSEL (CHAIN OF SHOPS)METRO

PYATEROCHKAO'KEY (HYPERMARKET)

PEREKRESTOK (CHAIN OF SHOPS)LENTA

MAGNIT (CHAIN OF SHOPS)NASH GIPERMARKETSEDMOY KONTINENT

BILLA (SHOP)DIXY (FOODSTUFF)

SELGROSAZBUKA VKUSA

SPAR

RUB

TOP 20 retailers by advertising budget

Source: Media Intelligence, Russia Includes: TV, Radio, Press, Outdoor


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But ATL advertising alone is not enough to drive shoppers to the store

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Source: Media Intelligence Source: Marketing Index / TGI, Russia (cities 100+), N=60592

Pyatiorochka

Magnit

Auchan

Perekrestok

Metro Karusel'

0

10

20

30

40

50

60

0 5 10 15 20 25

Ad spend share, %

visi

ting,

%

2014/1 HY Russia


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How can you win the heart of the shopper?... … you need to provide a happy shopping experience

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““No one wakes up in the morning thinking ‘may I suffer the whole day’…”

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The habits of happiness Ted2004

Similarly… No one walks into a store thinking; may I spend longer than I planned in this

store may I find it difficult to find my products may I be disrupted continually may staff treat me badly

Matthieu Ricard


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If service is bad, or shoppers have to spend time searching for products, they are less likely to purchase and may not return again

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40

45

50

55

60

65

70

75

80

85

2008/1 2009/01 2010/1 2011/1 2012/1 2013/1 2014/1

% p

opul

atio

n

%

I can refuse to buy something due to a bad service and will avoid this store in futureI don't like when sales people in shops approach me right away with questionsI don't like to spend much time at shops searching for a certain product

Refuse to buy something due to a bad service and will avoid this store in future +2%

Don't like when sales people in shops approach me right away with questions -1%

Don't like to spend much time at shops searching for a certain product 0%


Manufacturers can improve the situation



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Searching is a negative experience…

By combining eye tracking with neuroscience (EEG), we know that… Positive emotions are experienced only when the shopper finds products that match their needs Shoppers may scan as many as 116 products but actually reject 113 of them.

No No No No No No No No No No No No No


No No No No Yes No No No No No No No No

No No No No No No No No Yes No No No No


No No Yes No No No No No No No No No No


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Making it faster and easier for shoppers to find the products they want is proven to increase shopper spending

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4,48

2,78 2,91 3,06 2,57

2,29

0 - 10 11 - 20 21 - 30 31 - 60 60 - 120 120 +Time Taken to select first product (seconds)

% Conversion to purchase

Buy

tim

e

Fast

Slo

w

Low High

Faster buy time = higher conversion Faster buy time = more products bought


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How can you make shopping faster and easier?... …you need to truly understand the shoppers’ needs, and then satisfy them

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Let’s look at a case study within the cheese category, which is quite saturated and with no growth Great to consume

…but difficult to shop

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Выступающий

Заметки для презентации

But also a quite mature category Alot of emotions to it, liked and great to consume CLICK and yet so difficult to shop how do we connect and overcome barriers to avoid massive drop out during the shopper journey


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Insight: category laid out by product, does not match shopper search or consumer needs

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Plenty of categories will probably find themselves locked up in look-a-likes like of the former cheese product led category segmentation - which from an internal point of view is very comfortable because everyone in the company and industry understands it… CLICK But the shopper dosnt !!!´She is drivern by her primary consumer needs – AND thats not a processed cheese


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Facilitate: category laid out by occasion/shopper search

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Occasion based visuals

Extra tasteful

The family Cooking

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Colour coding and description

… outside store … inside store … in leaflets kvickly has made it easier for you to find the cheese you are searching - see the colors on the shelf

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kvickly has made it easier for you to find the cheese you are searching - see the colors on the shelf


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Results

‒ 85% prefer new layout

‒ Greater cross-segment purchase

‒ ‘I’m trying more cheeses, confident that I’ll like them’

‒ Rated number 1 Category Supplier (vs 14 previous) (Retailer: Kvickly Denmark)

‒ Category uplift ‒ Store profits uplift ‒ ROI in 10 months

SHOPPER RESULTS RETAILER RESULTS FINANCIAL RESULTS

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The battle…

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How can you win the brand battle?... …you need to understand where and how to influence the shoppers brand decision

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There are two types of shopper at shelf

Decided …know what product they will buy

Open …make some kind of decision at the shelf

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Where do shoppers make decisions? Remember back to our model we know that shoppers are either decided or open when they approach the shelf. Studies show that they are mainly decided depending on category – usually between 60% and 80%, so whilst influencing shoppers at shelf is important, it’s not as important as popular myth would have us believe In fact – most shoppers are not only decided before they approach the shelf, they don’t look at any other products except for the one they know they want to buy!


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83 81 81

78 76 76

73 69

67 66 66 66 65

60

Oral careMayonnaise

SaucePersonal wash

SpreadsBeer

DeodorantsCheese

Hair careSalty snacks

YoghurtConfectionery

Skin careIce cream

To save time, shoppers stick to what they know and tend to make the brand decision pre-store

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TNS R&S decision tree data

Source: TNS decision tree studies


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Which contradicts previous beliefs

75% of all decisions are made

at the shelf

60-80% of shoppers are decided

before the shelf

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So to influence shoppers effectively you need to understand their entire ‘shopper journey’

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Triggers or occasion

Brand commitment

Pre store In store Purchase



The point of purchase decision isn’t necessarily a discrete moment. We can think of the point of purchase being the moment at which the purchase decision is confirmed but the reality is that this decision is often made a long time before the shopper reaches the supermarket shelf. The shopper arrives at the shelf with a lot of ‘baggage’. Before they make a purchase and confirm their decision by putting an item in their basket we should work backwards: What happened at the shelf? What were they planning to do before they got to the shelf? What influences were they exposed to recently? How have all of their previous experiences to date shaped their attitudes towards the category and different brands? We should also remember that they are shopping on a mission for a particular consumption occasion If shopper marketing is about influencing shoppers at the point of purchase decision, we need to understand where and how and when that decision is taken. We can’t hope to influence shopper behaviour and decisions without first having a detailed (and correct!) understanding of existing behaviours. Unfortunately appreciation of the shopper decision-making process is often sketchy, and interruptions are planned with little or no thought given to shopper behaviour – meaning that they are often unsuccessful, or worse have the opposite effect to that intended. The simple questions that most clients are grappling with at the moment are: 1. Where and how should I be investing to influence shoppers (pre, in, post store) 2. How should I develop these activations to be most efficient in influencing shoppers in the direction of our brands.


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Russian shoppers are influenced by many out of store touchpoints

30

35

34

43

52

36

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Usually I only buy products whoseadvertising I have seen/heard

Celebrities influence my purchasedecisions

People ask for my advice before buyingnew things

Before buying something expensive Ialways ask friends' opinion

I tend to be influenced by onlinereviews about products/brands

I often post comments/reviews aboutproducts/brands online

% population 2014 Out-of-store influences


TV Radio Print

Social

Digital


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Some big questions if you are to influence shoppers along their journeys

1. What are the main shopper journeys for your category/brand?

2. Where along the journey does the shopper make a brand choice?

3. What are the most impactful touchpoints?

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A product must be both ‘mentally available’ and ‘physically available’ for a shopper to purchase

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Purchase Mental

availability Physical

availability

“Get into repertoire”

Consumer occasions

“Get chosen within repertoire”

Available in-store


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You should find out which part of the path to purchase represents most opportunity to influence shoppers, and then invest there

Mental Availability Physical Availability


Brand commitment


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First you need to understand the key occasions, channels, and missions for category purchase



Brand commitment


Relaxing at home

With food at home

Leisure out of home

50%

25%

20%

Occasions Missions

53

20

12

7

Weekly shop

Fill in

Meal

Specific trip

Channels

40

35

20

5

Hyper

Super

Discounter

Online

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Then you need to understand how brand equity translate into purchase for our brands

100

Category buyers

Repertoire Preference Overall Conversion (Purchase)

80

75 65 ?

35



Brand commitment



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You need to know where decisions are made, so we can see where the brand wins, and where it loses

60 40

Brand decided pre store

Brand decided in store

50% Won

10% Lost

Won 15%

Lost 25% 36

Repertoire

80

Overall Conversion (Purchase)

65



Brand commitment



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You need to compare performance against your competitors

Repertoire Preference Pre store

conversion In store

conversion Overall

conversion

Brand X 80 75 60 40 65

Competitor 43 38 44 35 39




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Brand commitment



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And identify which touchpoints have the biggest influence

Pre-store Ads in retail folders Outdoor posters

In store

Price labels Promotions

Pre-store Radio ad Blogs/forums Retailer websites

In store Leaflet with product info

Pre-store TV ad Friends & family

In store

Packaging

Reach

Imp

act

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Brand commitment



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These insights help us to be precise about the actions needed to grow the brand and the category

Overcome barriers 4. How can I gain shoppers?

Improve reach, relevance, purchase conversion 2. Why do I lose shoppers?

Pre-store or in-store 3. Where do I lose shoppers?

Which touchpoints to invest in 5. Where do I need to invest?

Which occasions, mission and channel 1. What do I target?

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How can we accurately capture the entire shopper journey?... ...we need to ask the right questions, ‘In the moment’

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Asking shoppers ‘why’ is often ineffective

They post-rationalise, or can’t remember

They don’t know or can’t articulate

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The typical at-home/online survey scenario Understanding brand choice by lager drinkers

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Many claim they choose a brand out of their consideration set

69% bought a brand in their consideration set

31% did not

Why?

Of all consumers who made a choice

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Traditional recall survey generates a high number of responses…

Recall survey

3.8 influences mentioned per respondent 44


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…but shows the usual set of deciding factors

0 5 10 15 20 25 30 35 40 45 50

Recall survey

The price

Special offer

Well-known brand

Drinks menu

Brand not available

Friends

Try something new

Complement food

Match the occasion

Drinks display

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Asking questions ‘In the moment’ generates more accurate and insightful data

Recall survey IN-MOMENT (e.g. Mobile in the place of purchase)

3.8

1.4 influences mentioned per respondent

influences mentioned per respondent 46


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…and reveals ‘real’ deciding factors

0 5 10 15 20 25 30 35 40 45 50

Recall Mobile

The price

Special offer

Well-known brand

Drinks menu

Brand not available

Friends

Try something new

Complement food

Match the occasion

Drinks display

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We are piloting research approaches on mobile

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We are committed to where this type of research is done ‘in-the-moment’ on a mobile device. We believe it will deliver many benefits: - Allow us to track shoppers before they buy a product and capture

their category interactions close to the moment they happen to improve recall of the interactions

- Allow us to get closer to the purchase decision and capture more intuitively, the barriers and triggers to purchases

We are actively looking to pilot these studies with clients.


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Implications for manufacturers Win the brand battle by identifying where and how to influence the shoppers’ brand decision Implications for Researchers Ask the right questions, in the moment

Closing summary

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Implications for manufacturers Win the shoppers’ heart by providing a happy shopping experience. Focus on making shopping faster and easier

Love and happiness The quest


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Thank You

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ranjgill

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