AS THE NUMBER of food-retailing channels has proliferated in recent years, consumers are finding it easier and easier to become channel surfers.
Recent data from SymphonyIRI, Chicago, show that 55% of consumers shopped for grocery products at 10 or more places in the last year.
“One of the things that has always intrigued me is that the people who spend the most tend to shop the most places, and I don't think that's always appreciated,” said Bill Bishop, chairman of Willard Bishop, Barrington, Ill. “I think the most important shoppers have a much greater tendency to shop multiple places.”
While some channel-surfers might also be cherry pickers seeking out the best deals, many are also looking for specific niche products that might only be carried by certain retailers.
“These are people who search out special reasons to use what otherwise would be a niche retailer,” Bishop explained. “People who find the special reasons for using Amazon, those are also people who might find a reason to use a limited assortment store.
“They spend the effort because it is worth their while,” he said. “For the bigger spenders, it is worth more of their while to do that.”
The best way to capture more business from these shoppers is through having a diverse offering and leveraging the Internet to allow more personalization of the shopping experience and a more robust product offering, Bishop explained.
“A number of retailers have websites that allow customers to get regular announcements when the items they are purchasing are on sale,” he said.
In addition, offering an expanded product selection online might help prevent channel erosion and retain more shopping trips, he explained.
One such operator that does this is Wakefern's ShopRite, which offers a selection of sharply priced home appliances and other general merchandise through its website, ShopRite.com, that allows customers to either have them delivered to their homes or to their local store for pickup. Merchandise offered includes sewing machines, patio umbrellas, video-game hardware and other items normally not sold inside ShopRite stores. The website is provided by MyWebGrocer, a turnkey provider of supermarket Web services.
Bishop related a story about how he became more of a channel surfer when a type of cookie he wanted was no longer carried in his local supermarket, but he was able to find it through Amazon.com.
“If the retailer had said, ‘If you can't find what you want, check our website,’ and then had a robust answer to that, we would have never gone to Amazon,” he explained.
A report by WSL Strategic Retail showed that women have been shopping fewer channels during the recession, and making fewer shopping trips per week.
Women made about 3.9 total shopping trips per week in a recent three-month period and shopped at an average of 3.7 different outlets, according to the “Shopping Trends 2010” survey. In that three-month span, women shopped 8.2 different channels, vs. 8.6 different retail channels in 2008.
“Women are trying to live within their budget — which means resisting the temptation to stock up if they can't pay for it. Stocking up less means more trips to replenish, and going to more stores to find the best sales and the lowest prices,” WSL said in its report. “Therefore, the new, smart and thrifty shopper is making more trips in a week to more stores.”
Recent survey data from Retail Forward, part of London-based Kantar Retail, show that supermarkets were able to increase the number of visits from customers in the last year.
“Increasingly, shoppers are being drawn back to the supermarket in large part because of the strong price/value/quality proposition and aggressive pricing by leading chains as well as a growing roster of supermarket formats,” Retail Forward wrote in a recent report, noting that shoppers reported an increase of 2.4 percentage points in weekly visits to supermarkets and an increase of 3.2 percentage points in monthly visits.
That compares with slightly smaller increases at club stores, discount stores, dollar stores and supercenters. C-stores and drug stores, while increasingly expanding the quality and variety of their food offerings, are not gaining traffic as quickly as supermarkets.
Retail Forward's survey data showed that 43.5% of shoppers said they were making weekly trips to supermarkets in 2009, compared with 41.1% who said they were doing so in 2008. That makes supermarkets the most frequently visited format, followed closely by c-stores (for gasoline purchases) with 41.1%, down 2.2 percentage points from 2008. About 28.7% of shoppers said they visited Wal-Mart Supercenters on a weekly basis in 2009, up less than 1% over 2008 levels.
John Rand, director of retail insights at Cambridge, Mass.-based Management Ventures Inc., which is part of Kantar Retail, said traditional supermarket loyalty programs don't really delve deep enough to thoroughly understand customer decision-making.
“The ShopperScape data we use shows there are very few customers who are loyal to a single outlet,” he said. “What I think retailers need to do is understand why. Consumers don't go to other formats and other channels for all the same reasons.
“There's a tendency, especially in a recession, to assume it's for the best price, but I don't think that's the whole answer, and I don't think it ever was.”
Factors such as the overall store experience and the types of offers also have an influence, but these need to be studied more analytically, Rand asserted.
“Many retailers have tended to be observational on this and make judgment calls, but my impression is that there's a lot more data available today that can be easily developed that gets much closer to the real questions,” he said.
“One interesting question that needs to be answered is not only who shops at other outlets and also shops at mine, but who shops at other outlets that doesn't shop at mine,” he said. “There's not a lot of work done on that.”