Shopper behavior has changed radically in 2020. This much is true and has been widely reported (including a number of articles by me!) Many research agencies have been quick to point out that shoppers have swarmed to e-commerce or have returned to doing larger less-frequent shops in supermarkets and hypermarkets. So far, so correct. But none of this highlights the most important trend in shopping behavior that will impact retailers and manufacturers in the years to come. Shopper behavior in 2020 has changed, but not in the way you think!
Shopper behavior 2020
Of course predicting what comes next is a tricky business. Everyone has their view, but the consensus seems to be that many of the pandemic shopping trends will stick, but perhaps not as much as during the peak. Many people will have fallen in love with e-commerce in 2020, but some will not have been enamored. Still more will have been prepared to pay for a delivery when they had no choice, but might be more likely to head to the store and save the delivery charge in the future, especially as concerns about the economy grow. That weekly shop at the supermarket might have been a welcome trip out of the house and may continue to be so for those that work from home. But many will return to the workplace, and fitting in a big weekly shop around work, kids and everything else might rapidly become the inconvenience it was in 2019. As shopper behavior evolves in 2020 and beyond, not everything we have seen will stick.
So what can we say for sure about shopper behavior in 2020 and beyond? More shoppers are going to go online. But not all. Some shoppers will return to big weekly shops. But not all. And not all the time. Because some of them will also be using local stores as they try to support their community. Some of them will be buying some of their stuff from . But of course, not all. So how can marketers cut through this?
A new way to understand shopper behavior – Shopper Economics
What does this mean? To really understand what is happening with shoppers, we need to look at the data differently. A few years ago I created the concept of Shopper Economics as a way of understanding shopper motivations, understanding their decision making, and therefore influencing their behavior. Shopper Economics, together with research from several markets around the world, enabled us to predict, and then prove the biggest trend in shopping behavior before Covid19. And it has helped identify the biggest change in shopping behavior after Coronavirus too.
The biggest change in shopper behavior in a generation
Prior to Covid19, the biggest, most important shift in shopping behavior was fragmentation. Shopper fragmentation is where shopping baskets, or shopping trips, are split across a number of channels or trips. In the world of grocery, this manifests itself with the break-up of the that big weekly shop. Some items were bought in discounters, some online, some via subscription, and yes, some, still in a supermarket – just not so much and maybe not so frequently.
How shopper behavior will change in 2020
So what is happening post-Covid? Fragmentation is still continuing. Evidence seems to show that while there are fewer trips on average, there is still plenty of fragmented shopping. e-commerce storefront company Shopify has just announced that the number of vendors they were supporting increased by 62% over six weeks during Covid – that’s a lot of small stores sneaking a slice of the shopper pie.
The thing is as shoppers have access to more options, they realize that each option has its pros and cons. Online can be great, unless you need the product immediately. A supermarket is pretty good for most categories but doesn’t deliver what every shopper needs in every category. only cover a few items at most. When it comes to shopping, there is no one store or channel that suits all occasions.
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Shopper behavior 2020 is even more diverse: meet the heterogeneous shopper
Fragmentation is likely to continue as a macro change, but here is the thing. Fragmentation isn’t a universal trend. Even before Covid19, not everyone had changed their shopping behavior. In a huge recent study that I worked on in conjunction with the Global Market Development Center (GMDC), almost half of American shoppers still bought the majority of their groceries in a big shop, once a week or even less frequently. Not everyone had fragmented their shopping.
Post-Covid shopping trips have become even more varied. There are more options, and many of us have tried more of those options. Some will stick, for some shoppers, some of the time. The variance in our shopping patterns will have increased!
More shoppers will be shopping in more varied ways that before. There has never been such a thing as ‘the shopper’ (despite the ubiquity of the phrase!) “The Shopper†doesn’t do one thing. There are lots of different shoppers all shopping in different ways. Each using different channels for different categories and different missions. More shoppers will be fragmented. But many won’t. And even more will be some where in the middle.
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The heterogeneous shopper – a headache or an opportunity?
This shift towards more heterogeneous shopping behavior will be a major headache for retailers, but is a brilliant opportunity for brands. Retailers, in particular big box grocery retailers, will have the biggest problems. The big store model is built on a ‘everything for everyone model’. It is also built for big shopping trips. Large hypermarkets are increasingly used for smaller shopping missions, but they really don’t deliver as well for the shopper on this type of trip. A trip to an out -of-town hypermarket, an hour or more in the store and the trip home is worthwhile when I’m buying a full grocery shop. When I’m topping up that might feel arduous to many. Big stores work well for a big shop: but making them work for smaller shops is a big challenge. Worse – how to make them work for smaller shopping trips and larger shopping trips at the same time? That is the challenge of the heterogeneous shopper!
How to win with the new shopper in 2020 and beyond
And how about brands? How can brands operate in this heterogeneous environment? How should brands change their approach to shopper behavior in 2020 and beyond? The answer lies in targeting and differentiation.
It isn’t enough to spot the macro trend. Everyone has done that. Everyone knows that e-commerce has grown. But who has gone to e-commerce? Which shoppers? When? Why? Without getting into the detail, our strategies in each channel will be generic at best. We need to focus.
No brand needs to win with every shopper (unless you are targeting 100% market share!) No brand needs to win on every mission. Brands will be successful if they ruthlessly focus on their target shopper: focusing their time and investment and tailoring their activities to work for that subset of shoppers. Invest in the channels where those target shoppers can be influenced: investing in activities which will influence those shoppers.
And differentiation. By that I mean to recognize that different shoppers use different channels for different missions. So yes, work out which shoppers use which channels. But also work out what are the prevalent missions in those channels, and tailor activity to fit with that. Too often we use the same activity across all channels, especially when one retailer operates across multiple channels. If different shoppers use different channels for different missions for different categories, having the same activity in a Tesco hypermarket as in a Tesco Express is crazy – yet I see it all the time!
How to get better results at retail: better shopper marketing in 2020 and beyond
Shopping continues to evolve. Shoppers and their missions continue to become less homogeneous. If you do nothing, you will waste money, time and simply won’t get the results you want. If you embrace this reality, and really focus on your target shoppers and tune your investment and efforts towards influencing them, you can actually get better results from your in-store activity and better returns on your trade investment.
Get help now to win with the new shopper in 2020
No it isn’t easy. Retailers will pull you to spend more in their stores regardless of who shops there. You’ll be tempted to run promotions. Tempted to put activity into every store as surely ‘more is better’. But in this world, with the fragmented, heterogeneous shopper, more is not better. Focused is better. If you want to know more, please get in touch now.
