I was speaking to a client the other day who said, “We’re not too focused on e-commerce right now. It’s only growing by a couple of percentage points a year.†True enough, we were in a market where online is relatively small, and my clients business online was tiny. And despite the myriad articles making often ludicrous claims of how this technology or that technology will transform shopping , the reality in most cases is that shifts in shopping behavior happen relatively slowly at a macro-level. So is it OK to forget about it for another decade or so? Not at all. Even the smallest changes in shopping behavior can have the most dramatic impact on shopper marketing and retail relationships. That is why we penned an e-book, Channel Strategy in the Age of the Digital Shopper, to help marketers and sales people get to grips with the challenges that this new environment represents.
Shopping behavior is changing in many small ways
Shoppers are changing their behavior. Online is growing. Convenience stores and discounters, too. Cool devices such as Amazon Dash threaten to transform the shopping process. Companies likeso product is delivered direct to the home on a regular basis. While some of these changes are already large, many are actually quite small. In many markets and categories the number of shoppers online is still relatively small. The number of shoppers who will want their razors (or whatever) delivered on a subscription basis may be small as a percentage of the total. So why should be worry?
For every time-poor shopper who will want product at the press of a button, there is another who wants to browse, and another who will shop around to seek a deal. For every shopper who opens their smartphone to beacon messages as they head round the store, there will be others who see this as invasive, and block such interactions. And a button shopper in one category might be a browser in the next. The reality is that any single piece of technology will probably, in the foreseeable future, only take a small fraction of the total shoppers in a category.
Small changes in shopping behavior have a big impact on shopper marketing
So why is this significant? Because as marketers, it is the very fact that only some shoppers will change their behavior that is most disruptive, and leads to the biggest opportunities. Think about it. If all of your shoppers switched from one channel to another, the challenge is relatively small. We switch all our shopper marketing activity to a new environment. But if only some shoppers change their behavior? That requires a lot more thought. Which shoppers will change, how important are they to my brand? How do I split my investment differently now that there are more channels? How do I reduce my investment in current channels to allow investment in new channels? Now that’s an interesting set of questions!
Shopping behavior is fragmenting, creating the opportunity for more targeted shopper marketing
More choices. It is the defining characteristic of 21st Century shopping. Shoppers now have more choices of where to shop than ever before – ever! And so different shoppers will behave differently. The challenge lies in identifying which shoppers are most important to you, and working out where and how they are going to shop, and where you can influence them. If 10% of shoppers in your category started buying using Amazon Dash (for example), how important would it be? That depends on whether they are your target shopper. It depends on whether you still have other places to influence their purchase decisions. It depends on whether you want them to continue their current buying patterns or change them. And it depends on how you are currently investing in shopper marketing, and what changes you might need to make.
Changes in shopping behavior might be small, but the impact on marketing could be large
Now is the time to start thinking about this. If 10% of shoppers switch channels, what happens to your focus? If you have 10% market share, then those switching shoppers could be anything between zero and a 100% of your current shoppers. If you are looking to add another point of share, how many of those shoppers have switched? A small switch in shopping behavior could have a massive impact on your shopper marketing focus.
Small changes in shopping behavior impact retail investment
And even a small switch in behavior can have grave impact on trade investment. If 10% of shoppers switch to a new channel, what happens to your investment in offline channels? They have 10% less shoppers (and possibly up to 100% less of your target shoppers, remember?) You’d probably like to cut it, but that might strain relationships with a retail customer who is still relatively important.
Whatever happens, the status quo will change. The shoppers you are targeting may change their behavior dramatically, and that will change everything. So even if the shifts you are seeing in channel dynamics look pretty small, they could have a huge impact on how you manage your shopper marketing and your retail investment and relationships. For more on how changes in shopper behavior change channel and retail strategy, check out our e-book on Channel Strategy in the Age of the Digital Shopper.
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