76%.
As in ‘76% of purchase decisions are made in-store’. At first glance it might feel almost comforting, its been around for so long. How dangerous could it possibly be? Well that depends on if it is true, and if it is true for you. The answer to the first is, ‘probably not’, and to the second ‘definitely not’.
Why is it dangerous? Because it is this number that legitimizes (for some) the extravagance of in-store spending. In-store marketing budgets continue to rise both in real terms and as a percentage of total spend, but if that is where most purchase decisions are made, then surely this is OK?
This perhaps is why this number, which seems to contradict virtually every piece of common sense around, is so pervasive and sticky. People want to believe it.
Marketers faced with fragmented media, finding it harder to connect with a mass market, love the idea of being able to grab that mass market at one spot. Businesses faced with increasingly demanding retailers, feel legitimized. This isn’t capitulation, this is smart marketing! This is investment!
And so it would be, if the statistic were true.
But what if the number of purchase decisions made in-store, for your business, is much much less?
We’ve studied lots of categories and very few get anywhere close to a 76% in-store decision rate. In one category (kid’s milk), the in-store decision rate was below 5%.
But I’d rather not dispute this number, because actually that misses the main point – the main danger if you will. Even if the number were true, it wouldn’t be true for your brand, your category, all of the time. Making decisions based on an average statistic (whether or not it is true) is dangerous. Most situations are not ‘average’. The challenge of marketing, and of shopper marketing, is to be far more specific.
In-store decision rates vary by category
As I’ve stated above, we’ve seen huge variance from category to category. Some categories are clearly more impulsive in nature, some more planned. If you work in snacks, then you may find many more shoppers making decisions in aisles, than if you market toothpaste, perhaps.
In-store decision rates vary by channel
Whatever the average for your category, the number will vary wildly by channel. We’ve worked in categories where one channel represented a minority of purchases but a majority of in-store decisions: people actually went to this channel when they weren’t sure what to buy. This often occurs where in-store personnel are important to the decision making process (think pharmacy or drugstore).
In-store decision rates vary by shopper mission
In a recent study Bell, Corsten and Knox found that major weekly shops had a much higher incidence of unplanned buying than other trips. We all know from our own experiences as shoppers that there are times when we are highly planned, and times when we are very much in browsing mode. Different missions equals different shopping behavior, which means that the number of decisions made in-store varies.
In-store decision rates vary by availability
In some studies we’ve seen, of the biggest causes of switching is out of stocks. From in-store checks we’ve found that up to 92% of out-of-stocks are on promoted lines: so promotions cause (or at least contribute to) out of stocks. But promotions are done (sometimes) because we believe that people switch brands in store and so we need to influence shoppers. But many of them switch brands because there is an out-of-stock. Anyone getting dizzy yet?
In-store decision rates vary by shopper
Most important is to remember that as marketers we’re not interested in ‘the average shopper’. We’re interested in a specific target shopper, and therefore we must strive to understand how they make decisions, where they make decisions, and how those decisions are influenced. The 76% number is simply an irrelevance. All that matters is how (and where) our target shopper makes choices.
Deal seekers switch
And a last thought – who are these shoppers who switch in-store? In many categories, they are what we call deal seekers: they come to a store with an open mind, and will buy whatever is on deal. They may buy your brand this week, but they’ll switch next time as soon as your competitor is on deal. They may be making decisions in-store, but do we want to spend our marketing money against them?
I’m not trying to pick a fight with POPAI. I’m sure they have solid data to back up their claim. My problem doesn’t lie there. My problem is with the pervasiveness of it: how many ‘experts’ swallow it, and how that leads many marketers astray.
Whether you are a brand manager, shopper marketer, category manager or key account manager – the number is almost certainly wrong for you. Before you spend another dime, go find out where decisions are made by the shoppers you are interested in.
Image: Flickr
