Tomorrow’s Shopping World
(Part III: Food Shopping Today)

By Institute of Grocery Distribution

For many adults, shopping for food can often be regarded as a chore and this is an attitude that appears to have been passed down to the next generation. The challenge for the retail industry therefore is to provide an environment and experience that is enjoyable, easy and inspiring.

Supermarkets

Despite many respondents in focus groups saying they don’t enjoy shopping, 36 percent of adults visit a supermarket more than once a week (five percent everyday). Even teenagers who will generally not have household shopping responsibilities are visiting supermarkets and convenience stores frequently with 18 percent of teenagers using supermarkets more than once a week. However, 30 percent of teenagers visit a supermarket once a month or less compared to only seven percent of adults.

Convenience Stores

There is little difference between the two groups when shopping frequency at convenience stores is considered. 75 percent of adults and 74 percent of teenagers said they will use a convenience store at least once a week. During focus groups teenagers mentioned that their parents will sometimes send them to the local store to purchase items such as milk and bread. This use of convenience stores for top up shopping is therefore being passed on to the next generation. (See Table 1)

On-Line Shopping

As on-line shopping is a growing market, shopping frequency through this channel was also explored. Adults were asked about shopping for food and non-foods on-line while teenagers were asked about non-foods only. There is clearly potential for much more growth through this channel for food retailers as 77 percent of adults claimed not to buy food on-line and 14 percent used it once a month or less. Looking more closely at respondent’s demographics there is a strong social class bias for on-line shopping with four in 10 AB respondents shopping for food on-line compared to only one in ten of those in social economic groups DE.

Respondents shop for non-foods on-line more frequently, although only one-fifth (22 percent) shop more than once a month. Despite teenagers’ openness to technology and higher usage of computers, half of them compared with 40 percent of adults said they do not buy non-foods on-line. As mentioned earlier this may relate more to the payment methods required which teenagers (particularly younger ages) will not have access to.
(See Table 2)

Specialist Stores

As shown in the previous section, most shoppers use both convenience stores and supermarkets, but where do specialist food stores fit into their shopping repertoire?

To establish how important specialist outlets currently are and to understand the role they might play in the future, adults were asked if they had shopped in any specialist outlets in the last year while teenagers were asked if they had ever visited any specialist stores. As a respondent commented in one of the adult focus groups, shopping habits can be passed on from one generation to the next. So if shoppers increasingly use on-line shopping for getting their food and grocery needs, then this is potentially what the next generation will also do.

Despite this view that younger generations are less likely to have experienced specialist outlets, more than half the teenagers interviewed had visited the following outlets at some stage; bakery (87 percent), butchers (68 percent) off license (63 percent) and greengrocers (59 percent).

There is very little variance between the percentages of adults who have shopped at an outlet and the percentage of teenagers who have visited. This suggests that the statement about passing on shopping influences might hold true. However, it appears that today’s teenagers are still being exposed to a wide variety of outlets for food shopping. (See Table 3)

Preferred Shop Size

In terms of the store formats operated by the major retailers, for both groups, six in 10 respondents indicated that they prefer hypermarket stores and one-third preferred regular sized supermarkets. The convenience of being able to get everything under one roof and the extra interest created by non-food categories are key drivers for shopping at hypermarket stores. (See Table 4)

Store Choice

How does shopping behaviour and preferred store format relate to the reasons respondents gave for their store choice? Some of the key reasons given by both samples are driven by the need for convenience. Factors relating to convenience include:

• The shop is easy to get to
• Long opening hours
• Parking is good

Having everything under one roof also provides convenience and is important to 40 percent of adults and 37 percent of teenagers. This is the most important reason for store choice among 12 percent of teenagers and 11 percent of adults.

Some in-store features which also add to the convenience of shopping are:

• Knowing the store layout
• Lots of checkouts

Both these features are more important to adults than to teenagers. This is potentially a reflection of their experience of shopping compared to teenagers who will not have shopped for food to the same extent. Not being able to find what they want and having to queue for a long time at the checkouts have been frequent shopper frustrations identified in other IGD research. These features may therefore become increasingly important with teenagers as their shopping experience grows. (See Table 5)

On-line shopping should be able to provide the optimum in convenience shopping but only if the website is easy to navigate, lead times are reduced and delivery slots fit in with the shopper’s lifestyle.

Choice And Quality are also very important for respondents in deciding what shop they will use. This is indicated by the fact that approximately half of both samples mentioned the following features as being important reasons for store choice:

• They stock the types of foods I like to eat
• They have lots of well known brands
• Products sold are all high quality

A good selection of own label products is more important to adults (35 percent) than to teenagers (23 percent). Again this may be reflected in the types of products that teenagers actually buy and also where they buy. During focus groups some of the brands that were mentioned by teenage respondents which they would not consider substituting included Coca-Cola and Walkers Crisps. As will be shown later on, teenagers are influenced more by brand advertising which suggests they are more brand conscious.

Price was mentioned by 64 percent of adults compared with 56 percent of teenagers and was the most important reason for store choice for 20 percent of adults compared with 14 percent of teenagers. The awareness of and importance put on price will also be determined by the experience respondents have. During focus groups some teenagers indicated that they would like to buy the best foods available but later acknowledged that financially they may not be in a position to do so. Adults who are currently responsible for food shopping will have a clearer view on the importance of price in household budgeting.

One of the reasons which a significantly higher percentage of teenagers cited as important compared with adults was ‘My Friends Use The Shop’; 15 percent of teenagers compared with six percent of adults. This again reflects the different shopping experiences had by the two samples. It also emphasises the social aspect of teenagers’ current shopping experiences and the importance they place on their peers’ attitudes.

It was recognised by teenagers in focus groups that while they might like to shop differently in the future and purchase different things, out of necessity, they will probably buy similar products and make similar choices to their parents.

Teenager Influence

Clearly teenagers have experience of going to food retailers but how much influence do they have on what is actually purchased?

Although teenagers during focus groups generally said they found food shopping boring, they indicated that they do like to have some influence over what is purchased. While some believed they could exert this influence without going shopping, others felt they were more likely to get what they wanted if they accompanied their parents on the shopping trip. Being able to get what they wanted made the idea of going shopping with their parents more appealing. Focus groups also revealed that teenagers have learnt how to play the influencing game. By not pushing their parents too far they considered that they would have more success in getting what they wanted. (See Table 6)

From a parent’s perspective, allowing their children to have an influence on what is purchased was a way of ensuring that products bought would be used, thus reducing waste. They were also aware of the fact that when their children showed an interest in going shopping with them that it was likely they were looking for something specific. Although they sometimes found that shopping with their children was more of a hassle and often more expensive, they also recognised that it is a way of getting them to try new things.

The level of influence that teenagers believe they have, and the level of influence parents suggest their children have, are quite similar. For this question the teenage responses are compared with parents of older children (aged 11-16). Over one quarter (27 percent) of teenagers indicated that they usually get what they want when their parents do the shopping. One in five (21 percent) adults with children aged 11-16 said that they usually get whatever their children ask for. The majority of respondents from both samples indicated that teenagers have some influence (55 percent teenagers and 63 percent of adults with children aged 11-16). Only seven percent of adults said that their children get what they want by putting items in the shopping trolley or basket without their knowledge.

Product Choice

To ascertain respondents’ brand/product loyalty from a topline perspective, respondents were asked tothink about the majority of items bought across all categories in the supermarket and select the most appropriate statement from a list of five alternatives:

• For the majority of items there is only one product or brand that I/my family like
• There are a few items where only one product or brand will do but for most items there are a couple of products or brands I/my family like
• For the majority of items there are a couple of products or brands I/my family like, so if our favourite is unavailable we will just buy one of the others
• We have no real preference so just buy the one we fancy at the time
• We have no real preference so just look for the best deal

Boy, 17 years, Leicester 22 percent of teenagers and 24 percent of adults had no real preference to a particular brand or product, choosing to buy instead based on what they fancied at point of purchase or based on what was on promotion. There was little difference for brand loyalty between teenagers and adults. Within both groups only 15 percent said that for many categories only one brand would be acceptable to them. The most likely response from both teenagers (37 percent) and adults (34 percent) was loyalty to one product or brand for only a few categories. For slightly over a quarter of teens (26 percent) and adults (27 percent) there were a couple of different products they would select from.

Response To Out Of Stocks

Although adults and teenagers attitudes to brands are similar, the responses from the two groups are different when they are faced with out of stocks. Half of teenagers (50 percent) when faced with out of stocks will go to another store to get what they want. For a retailer this can be a significant issue as this does not just mean the loss of a sale for one item but potentially a full shopping trip. One in five teenagers (20 percent) will substitute brands compared to one in four adults (26 percent).

During focus groups it was clear that expectations are particularly high for larger retailers to be able to provide everything a shopper needs; out of stocks were therefore considered by some as a major frustration. Although shoppers are frustrated by some essential items such as milk and bread being out of stock, some of the items that they had experienced more likely to be out of stock were less commonplace items but products which might be essential to a recipe or menu they were planning.

Although availability is a key concern in satisfying today’s shoppers, teenagers’ expectations of being able to get the brand they want would appear to make the issue of availability even more important for the future. This is an area where improved technologies in the supply chain might play an important role. Although these technologies may not be visible to the consumer, improving availability responds to shoppers’ needs and is therefore a welcome use of technologies. (See Table 8)

Brand Image

Clearly brands are important to some people, although for many there will be a reduced set of brands which they are willing to choose from. So what is it that makes a brand image successful? What are the features that consumers look for?

For both adults and teenagers, brand heritage and company reputation are important to the success of a brand. Looking across both samples at the most important attributes/activities that make a brand successful, mention of reputation and heritage accounted for 71 percent of teenage responses and 69 percent of adult responses. These were the following attributes:

• Company has a reputation for producing good quality products
• Friends/Family use the brand
• The brand has been around a long time

During focus groups it was mentioned that well-known brands are more reliable, although some respondents acknowledged that established brands being better quality could be more psychological than a reality. For certain categories, consumers have grown up with a number of brands which they know and trust and are therefore reluctant to try something different.

The ethics surrounding the brand are also very important, with 15 percent of adults stating this was the most important attribute to the success of a brand image compared to 12 percent of teenagers. Research by the Co-operative group in 20052 shows that ethical consumerism is increasing its share of the grocery shopping basket, and is growing at 7.5 percent year on year, a faster rate than conventional grocery, which is growing at 4.2 percent year on year. IGD research3 on ethical consumerism found that a brand being ethical is not enough to succeed. Shoppers will not purchase items that are ethical but perform poorly, for example not lasting their shelf life period. A product must fulfil customer expectations as well as being ethical in order to maintain a permanent position in the shopping basket. (See Table 9 and Table 10)

This focus on ethics is not only important for brand manufacturers but also something which retailers are increasingly concentrating on. Recent initiatives by the retailers include Sainsbury’s compostable packaging and Tesco’s drive to decrease the use of carrier bags. Many retailers also stock products with ethical credentials such as organic or Fairtrade. Advertising which highlights ethical trading and production values can also help the overall image consumers have of a brand or retailer. During focus groups some respondents commented that Waitrose advertisements with real farmers appealed to them in preference to seeing a celebrity endorsing a product or retailer.

Marketing

The preferred way to find out about new products was through television advertising which was mentioned by 85 percent of teenagers and 83 percent of adults. Despite this high percentage, it was acknowledged during focus groups that people will often change channels when advertisements come on. With more people having access to digital television in the future and subsequently more channels, channel switching is likely to become an increasing problem for advertisers. Although multiple-channel television allows better targeting of consumer groups, technology also allows us to ‘mute’ the message we don’t want to see, for example SkyPlus. While targeted marketing should be more effective one criticism mentioned by teenagers was that although some companies clearly target them, they don’t appear to appreciate the budgets of their consumers.

With the highest percentage of respondents saying that friends and family using a brand is important to the success of a brand’s image, it is unsurprising that learning about new products through word of mouth is mentioned by 50 percent of adults and 38 percent of teenagers. What is surprising is that this is more important to adults than it is to teenagers. Considering that many teenagers communicate through instant messaging and chat rooms, it might be expected that this is where they will find out about products. However, only five percent of teenagers mentioned internet reviews or chat rooms.

Twice as many teenagers as adults suggested that email and popup messages on internet sites are good ways of finding out about new products. For both these media, approximately one in ten teenagers cited these as good ways to find out about new products compared to one in twenty adults.

33 percent of teenagers and 36 percent of adults said that they liked advertising in magazines and newspapers. With magazines, in particular, there is generally a clear target reader, meaning advertising can be more relevant.

Previous IGD research has shown that many shoppers currently decide what they are going to buy when they are in a store. Only one in five adults (21 percent) said they would like to find out about new products through information on shelves in store while one in ten said they would like to get information from televisions in store. The use of televisions in supermarkets means that the ‘recency effect’ of advertising is stronger. Shoppers are at the point of sale when potential solutions to needs are broadcast. However, as many shoppers will be aiming to do their shopping as quickly as possible, in-store media advertisements need to be shorter than usual. Interactivity options on in-store televisions could allow customers to find out more information about the product or access special promotions.

Despite high consumer expectations for products to meet their specific needs and increased technology awareness, few respondents would like to have promotions sent to their mobile phones or PDAs. During focus groups participants mentioned that they are already getting too much sent to their phones by their service provider and that they don’t want any more interference from other companies. The opportunity for new technologies is to empower consumers to opt into promotional brands, categories or topics that are of personal interest to them; in much the same way that direct mailings have traditionally operated. (See Table 11)

About The Author

Institute of Grocery Distribution (IGD; www.igd.com) is a key research organisation for the sector and provides a forum for discussion, learning and specifically opportunities for improvement and the development and sharing of best practice. Its team of analysts provide leading edge research and information on both the domestic and international markets for food and grocery and the challenges ahead. The work focuses on the whole food and grocery chain from the consumer, retailing and foodservice, to manufacturing, wholesaling, distribution and farming. In 2005 it strengthened its international insight and is pro-actively working with the foodservice sector.