What Does Being Voted the UK’s Worst Supermarket Mean?

As we are currently conducting a large study into the UK’s supermarkets, I couldn’t help raising an eyebrow (or two) at the results of a survey carried out by ‘Which?’ (October 2012).

 

Firstly the headline is misleading from so many points of view, and to me highlights the complexity when asking shoppers (or consumers in this case) questions of this type.  It is also important to understand the differences between their shoppers and none shoppers, and how they perform to their target markets. 

 

Although Tesco has always been successful in attracting shoppers from across the demographic groups, the rise of stores that capture quality at one end, or budget at the other have  placed the big 4 in a middle ground that relies more on location that differentiation.

 

 

Our current study looks deeper into the understanding of location as a driver to stores choice, and examines in detail where shoppers go, who they drive past to go to a preferred retailer, and how this differs depending upon the shopper mission.  The data (from 5000 primary food & grocery shoppers) is being analysed to see what they are doing well (or not so well), and how well they match the desires of the shopper across those shopper missions.

 

So will we be announcing who is the best or worst? Definitely not! The complexity of need occasions and shopper missions and the impact on retailer choice is of far greater interest than a headline grabbing comment.

 

Our Retailer Series is due for release at the beginning of April. Read more here.

 

The Horsemeat Scandal - What Shoppers Really Think

Who's to Blame for the Horsemeat Scandal?

The horsemeat scandal has definitely kept the newspaper (and blog!) editors busy over the past week or so, so I felt this an opportune moment to reflect on who is to blame for all this.  Here are those currently under suspicion;

Food Manufacturers, Meat Suppliers, Criminal Gangs, Retailers and the Shoppers themselves….

Well at first glance it is easy to put the blame on the food manufacturers, they are the people who make the product and are therefore responsible for what they put in it, they are goliaths whose main purpose is to make money, obviously if they can replace an ingredient without affecting the taste then it’s all good.  But did they actually buy the ‘meat’ knowing that it was horsemeat, or did they just find a cheaper supplier of the product they normally use?  Of course all this is from the point of view that they were actually saving money, therefore were they just being conned by the second suspect the meat suppliers?  And indeed, were these just part of a conspiracy which involved the third suspect, the criminal gangs?  I’m sure we could continue this by getting further and further away from the main point, which I believe is PRICE.

Actually I didn’t mention Price before, but ultimately this seemingly innocent word is to blame, but surely price isn’t a cause, but an effect in this instance, we really need to find the cause!

So let’s look at who controls the Price.  When we study shoppers and ask them who they think fund the prices and offers in store, they more often than not cite the Retailer.  As we know, most promotional activity is actually funded by the food manufacturers in order to retain or gain market share (Yes, I know I’m simplifying this!). 

Therefore the conclusion is clear; it’s the fault of the food manufacturers with the help of the retailers, they are driving down price!  Well let’s hang on a minute, have the Shoppers themselves got off the hook? Surely they are the ones that are demanding lower prices, causing the retailers to offer the discounts that they in turn have negotiated from the manufacturers?

Well as a specialist researcher into shopper behaviour in this sector, I am loathed to attach any blame to them, yes they want value, but this doesn’t necessarily equate to price alone and although the market may consider they have free choice between retailers, retailer location is a far bigger driver to store choice.

So in the end, I believe that the retailers’ price based propositions are at the heart of the problems we are seeing.  By concentrating their attention on getting the prices down from manufacturers, they are driving down the quality, and in the end that has been compromised.  Retailers in my opinion need to do more to differentiate themselves beyond price comparisons.  Shoppers crave good quality products at a fair price (as a definition of value).  One only has to look at the growth of Waitrose to realise that price is not necessarily the key to growth.

Will ‘Showrooming’ be a big trend for 2013?

Smartphones are changing the way we shop. With an increase in internet-enabled phones and savvy shoppers always on the look-out for a bargain, a new retail revolution is taking place. 

‘Showrooming’ is the term used to describe the new trend of shoppers browsing products in store and then searching for them online in order to find a cheaper price. So worrying it is becoming for brick-and-mortar stores, that many are having to rethink their sales strategies to discourage people from using them just as a catalogue for Amazon (or other online retailer).  

 

Mobile internet data is currently tripling each year in the UK, with a forecast of a 26-fold increase by 2015, and m-commerce  growing around 30-40% a year. Electronic items are most likely to be searched in-store and then bought online. Shoppers can still ask questions in-store and get advice from sales assistants but then go and find it cheaper elsewhere. 

In order to counteract this, retailers are having to come with ways of encouraging shoppers to buy in-store. Some are selling items that aren’t available online, reducing their prices, and using click & collect to encourage in-store footfall. 

Source: McKinsey Global Institute

QR reader apps such as RedLaser allow shoppers to scan the barcode of a product and find out who is selling it at what price – removing any need for the shoppers to search around for the best possible price. In order for retailers to stay ahead here, they should have a good mobile-optimised site, and most importantly, have well-informed and helpful staff who are as knowledgeable about products as the information that can be found on the website.