By Emodo Institute
As we near the end of 2021, consumers have a lot to contend with. Inflation is the highest it’s been in three decades. Prices are up across the board, including hikes on meat, gas and other everyday essentials. At the same time, we’re seeing bottlenecks in supply chains and elevated demand for a variety of goods and services. On the positive side, more people are back to work and consumers are shopping and spending more.
Shopping behavior and preferences appear to be reflective of economic optimism or skepticism.
Paint all that with a COVID background and you end up with a very dynamic, confusing market… for marketers. One of the greatest marketing challenges may be a shift that’s occurring beneath the surface. It turns out, most consumers have divergent, deep-rooted perspectives on the economy, and their shopping behavior and preferences appear to be reflective of that division – aligned with economic optimism or skepticism.
For marketers, addressing those different perspectives may be the key to success.
A Comprehensive Look at Consumer and Category Differences
A recent Emodo Institute study confirms that across the board, even as consumer spend increases, shoppers are focusing their spend in fewer stores than they used to and opting for shorter visits to many of the stores they select. The Emodo Institute analyzed consumer perspectives and preferences pertaining to 23 different retail categories, such as grocery, electronics, furniture, convenience and discount stores. The study found that shoppers are much more likely to visit certain types of stores than others and travel farther for favorite store brands, bypassing the brand’s competitors. Additionally, the study identified determining factors for those decisions. The reasons and distances vary depending on the type of store and key consumer concerns.
It’s a critical time for retail brands to steal share, or protect share, depending on their market position.
The Emodo Institute research identified these patterns and factors for each of the 23 retail categories. The depth of findings provides marketers the unique opportunity to better understand their target customer in this dynamic time and tailor their messaging to match the needs and expectations of each audience.
The Psychology of Store Selection
The new Emodo Institute study, called “The Psychology of Store Selection,” reveals that the consumers who currently shop and spend the most are much more open to trying new stores and they’re more likely to travel farther to visit stores they prefer – instead of just visiting the nearby competitor. That means it’s a critical time for brands to jump on the opportunity to steal share, or protect share, depending on a brand’s market position.
Additionally, the findings highlight key attributes of retail stores that make them worthy of the longer journey for this group. Those attributes include superior loyalty programs, promotions and brand reputations. These “spenders” also prefer stores that adhere to safety and sanitation protocols. Conversely, consumers who are more selective and reserved about spending tend to shop closer to home. These are the consumers that are more focused on convenience and selection.
Request a free custom overview of the results for your retail category.
So, while a year ago, messaging may have been more about BOPIS and home delivery, today marketing messaging needs to evolve and be multidimensional. Given the differences in consumer beliefs and behavior, a single message is not enough.
Several aspects of the study point to specific ways the changing times are altering consumer behavior and shaping the beliefs behind those alterations. The study revealed that consumers who are otherwise similar across traditional segmentation criteria (such as gender, age, and ethnicity) have divergent perspectives on the economy. Anchored by whether the current state of the economy makes them feel comfortable spending more or less when shopping, more than 2/3 of consumers expressed beliefs that can be categorized as “Optimistic” or “Skeptical.” Of those consumers, roughly half are optimistic. The other half, exactly the opposite.
Given the differences in consumer beliefs and behavior, a single message is not enough.
Why Economic Outlook Matters
The optimism and skepticism of participants aligned closely with specific reported behaviors and shopping preferences, including differentiated shopping, spending and mobility patterns. For example, those who are optimistic about the economy are more than twice as likely to be working outside the home. Their optimism is predictive of the higher rate at which they’re trying new stores, their tendency to spend more overall and a greater propensity to shop in physical retail environments (and reduce their online spending in so doing).
Those who believe the current economy makes them feel less comfortable shopping are only about one third as likely to spend more during this holiday season vs. last year. They’re much more likely to be visiting the same stores they visited before the pandemic and these days they are much more likely to continue shopping online at the same, or greater, degree as last year.
Time to Rethink Your Targeting and Messaging Strategies?
The study reveals a number of insightful, actionable findings for retail marketers and informs a few key takeaways that apply to all retail categories:
- Consumer shifts: On the whole, consumer attitudes and behaviors are different than they’ve ever been. Consumers think differently about entire categories of stores. They’ve reduced the roster of stores they visit and intentionally spend less time in some select stores and store types than they used to. These shifts are directly tied to the relevance of ad messaging.
- Consumer proximity: Physical retailers in most categories are competing for fewer and shorter consumer shopping moments. Winning a greater share of those shoppers and moments likely requires a fresh advertising strategy and message. For example, targeting shoppers based on category-specific distances from your stores and your competitors’ stores, and mobility patterns that begin at home vs. workplace. Adjusting your message for consumer proximity can make a significant difference in campaign performance.
- Consumer division and scale: Today’s consumers are divided by differences in their perspectives on the economy. Those perspectives are predictive of shopping behaviors and preferences, for example, whether the consumer is likely to respond to a convenience message, a loyalty message or a safety message and whether they’re likely to even step inside certain types of stores. In order to connect with specific audience segments at scale, retail marketers would be wise to adopt two parallel strategies to appeal to both sides of the divided audience. In essence, execute two plan A’s to enable the best chances of hitting the mark with the largest possible portion of the audience. Mobility, proximity and shopping pattern data can be leveraged in creative ways that help bridge both sides.
For several years, the Emodo Institute has researched and analyzed consumer trends and perspectives in order to help marketers navigate shifts in consumer sentiment, preferences and behavior. The findings this year are different than any other and begin to give us a glimpse into how the consumer world may be permanently changed from COVID.
If you’d like more information about the study, the findings or specific solutions that address these consumer shifts, here are a few suggested resources:
Get a free copy of the research report.
Watch a video presentation of the core findings from the research.
Request a deeper dive, custom presentation of the findings for your team and retail category.