He Said, She Said

Surveys reveal that retailers, customers view shopping behaviors differently

November 8, 2010

19 Min Read

MARK HAMSTRA

Consumers and retailers aren't always on the same page when it comes to food shopping, according to recent surveys conducted by SN in partnership with Every Day with Rachael Ray magazine and industry pundit Phil Lempert, the Supermarket Guru.

The surveys tabulated responses from more than 1,200 consumers on a range of topics related to food shopping and meal planning. The survey was also sent to subscribers to SN's email newsletter to determine how well retailers and suppliers know their consumers.

The results illustrated that while the industry has a broad understanding of how customers shop and plan, sometimes there are gaps between the way consumers say they behave and the way retailers and suppliers believe they do.

The differences present themselves in a variety of areas, from how consumers select what brands to buy to how they approach the idea of eating healthy.

The data indicate, for example, that consumers may be starting to adapt to the economic conditions and adjusting their priorities accordingly, perhaps faster than retailers understand. While consumers ranked quality as the most important reason for buying a particular brand, retailers said they believed consumers valued price more than quality when making brand decisions.

Quality was ranked as a main reason for buying a brand by about 80% of consumers, vs. 63.2% of retailers who said they thought consumers ranked quality as important when making brand decisions. Slightly more retailers — 66.2% — said price was more important to consumers than quality.

“I think consumers now expect low prices as the price of entry,” said Lempert.

“Clearly, over the past two-plus years retailers have refocused their efforts on lowering prices and keeping them low,” he told SN. “As prices are expected to rise and retailers, who have absorbed wholesale price increases and not passed them on to shoppers for fear of losing their customers, plan their approaches, this finding reinforces that quality and price must co-exist and reinforces that showcasing the stores' own quality as well as displaying quality brands in prominent key positions throughout the store can help in the ‘price wars.’”

Since the downturn of the economy, he noted, consumers have adopted cost-saving strategies such as bringing a list to the store and clipping more coupons, mimicking the behaviors of the Depression-era generation.

“These behaviors will continue with today's shoppers throughout their lifetimes,” Lempert predicted.

Retailers overestimated the influence of certain drivers of product purchases, according the surveys. For example, more than half of retailers — 53.7% — said they believe loyalty was a main reason consumers selected a brand, while only about 19.8% of consumers themselves said loyalty was a primary reason for selecting a brand.

Retailers also seemed to overestimate consumers' Earth-friendliness, with 34.6% of retailers believing that “green” qualities are an important factor in a brand's selection, while only 20% of consumers report that to be so.

Consumers claim to be less influenced by packaging and advertising than retailers think they are. Only about 10% of consumers said advertising was a main factor in their brand-purchasing decision, vs. 27.9% of retailers who said it was. Similarly, packaging was cited by 16.9% of retailers as a main influence, while only about 7.9% of consumers said it was.

Coupons and Lists

While both retailers and consumers were in agreement that about 81% of consumers seek out products on sale while shopping, retailers seemed to underestimate — or consumers overestimated — some of the actions shoppers take to assist them in their purchasing.

For example, more than three-fourths of shoppers — 76.7% — said they always bring a list when they shop for groceries, but only 50% of retailers said they believed consumers did so.

Similarly, about 60.2% of consumers said they always bring coupons to the store, while only 33.3% of retailers said consumers do so.

Just under 6% of consumers said they shop with a mobile phone or PDA (using it for lists or coupons, for example), while retailers estimated that 23.9% of consumers use a mobile phone to assist in their shopping.

Retailers also seemed to overestimate the influence of certain in-store influencers — especially the importance of convenient product locations. While only about 28.6% of consumers said a convenient product location — at the end of an aisle or next to a related item, for example — was important, 68.1% of retailers thought it was. The influence of floor displays and product sampling/demonstrations was also cited as being more important by retailers than it was by consumers.

Suppliers, who self-identified themselves in SN's email survey, were even more likely to believe that consumers were influenced by in-store media than retailers were, as were sales agencies/brokers. Suppliers, for example, were more likely than retailers to believe that consumers were influenced by on-shelf advertising/coupons (59.4% vs. 55.1%), demonstrations or sampling (51.1% vs. 42.8%) and standing displays (43.6% vs. 37%).

Both the industry and consumers were in agreement that electronic kiosks are not strong influencers of purchases.

Engaging Online

While in-store kiosks might not be seen as having a big influence, consumers do report that they are engaging with brands electronically via websites and email newsletters — more so than retailers realize.

“It was great to see more than half of the shoppers surveyed used the Internet to talk to the brands: through Facebook, email, newsletters or mobile messaging,” said Teri Tsang Barrett, senior food editor at Every Day with Rachael Ray. “There's no doubt that technology makes life easier before you get to the store — menu planning, grocery lists and more.”

In addition, she noted, such interaction is likely to increase in the near term with more consumers using smart phones to read product reviews or download coupons simply by scanning product codes.

Retailers, according to the survey, seem to misunderstand precisely how consumers are using technology to interact with brands.

Consumers were nearly twice as likely to say they visit the website of a brand that they like as retailers said they were, for example — 66.2% vs. 34.3% — and more than twice as likely to say they signed up for a brand's email/newsletter/mobile messaging, 50.2% to 24.1%. Conversely, retailers overestimated the degree to which consumers said they followed brands on Facebook and Twitter.

Retailers were more closely in sync with consumers when it came to using electronic media for obtaining recipes and health information, although retailers did underestimate consumers' use of online health websites as a primary source for health information. A little more than half of consumers — 54.2% — cited online health websites such as WebMD.com as a primary source for food health information and news, vs. 41% of retailers who thought such sites were a primary source of health information for consumers.

For consumers, the No. 1 source of food-related health information was cited as magazines, at about 60%.

“We love that shoppers are turning to magazines more than any other resource for health-related information, even more than health-related websites,” said Tsang Barrett of Every Day with Rachael Ray. “For us, that means continuing to provide solid information that readers can use.”

When it came to recipes, both retailers and consumers were largely in sync, ranking specific websites such as Allrecipes.com or Kraft.com as the sources for the best recipes, well above cookbooks. Food retailer websites were cited by only 1.1% of consumers — and by no retailers at all.

Lempert noted that this might present opportunities for retailers to partner more with CPG brands to co-brand recipe presentations for retailer websites and mobile apps.

In addition, Lempert pointed out that the advent of these apps — Apple recently reported that it had sold $18 billion worth — signify a shift in the way consumers are connecting with the Internet. Apps, he pointed out, provide very specific solutions for consumers, as opposed to more general-purpose software programs and websites that are loaded with extraneous information and capabilities.

That trend is paralleled in consumers' use of brands' websites, he said, projecting that consumers will increasingly turn to such resources for specific solutions like recipes.

Health Initiatives

The survey also highlighted some differences among the ways consumers said they are trying to live healthier lives, and how retailers and suppliers view those efforts.

Both consumers and retailers cited “eating more fruits/vegetables” as the No. 1 initiative consumers are taking to lead healthier lives (cited as a step consumers are taking by 86.7% of consumers and 84.3% of retailers), while suppliers instead cited “reading nutrition labels” as the top consumer initiative, at 77%. Eating more fruits and vegetables came in second among suppliers at 70.8%.

Although retailers and consumers jibed on the issue of eating more produce, the suppliers might actually be closer to the actual truth, Lempert pointed out.

“What's interesting is that produce consumption has not gone up,” he noted. “People talk about it, and they recognize the health benefits, but people are still buying the same 10 produce items, even though we have 300 or 350 SKUs in that department.”

Sales in the department might be going up because of increased prices for value-added produce items, he pointed out, but the number of servings of fruits and vegetables that consumers are actually eating is still below recommendations.

“My fear is that we get complacent,” Lempert said. “How can we get these shoppers to put their money where their mouth is and buy more produce?”

The surveys also reveal other discrepancies between what consumers say they do and what retailers think they do, perhaps indicating opportunities for retailers to provide more resources for consumers in their areas.

For example, while about 63.6% of consumers said they were using portion control to better lead healthier lifestyles, that initiative was only cited by 34.8% of retailers and 47.8% of suppliers.

Suppliers overestimated how much consumers are cutting down carbohydrates, fats and sugar as part of their efforts to lead healthier lives, the surveys indicate, with 69% of suppliers saying consumers are cutting back, vs. 59% of consumers who said they are doing so. Retailers underestimated this activity, with only 50.4% saying consumers were cutting back on those ingredients.

Retailers significantly overestimated how much consumers are buying organic foods as a health measure — 59.1% vs. 31.5% — and also how many consumers were switching to vegetarian/vegan diets — 45.2% vs. 6.8%.

Both retailers and suppliers also strongly overestimated how many consumers are counting calories and joining weight-loss programs, the survey reveals, while consumers were more likely to say they were skipping dessert than both retailers and suppliers seemed to believe.

Only 9.3% of consumers said they were joining a weight-loss program to live healthier, for example, compared with 21.7% of retailers who thought they were and 23.9% of suppliers.

When it comes to skipping desserts, 27.9% of consumers said, “none for me,” vs. 17.4% of retailers who said consumers were abstaining and 15.9% of suppliers.

To help consumers make better decisions about their health, retailers might consider offering “more in-store help with healthy recipes, tips, consultants or similar point-of-sale opportunities,” said Tsang Barrett of Every Day with Rachael Ray.

“Shoppers have a more personal relationship with health than retailers thought — 96% surveyed believe they are more healthy today than they were a year ago, whereas 86% of retailers surveyed thought shoppers felt that way,” she pointed out. “We believe shoppers are more motivated to lead active, healthy lives, and that drives them to know more about what they're buying and how they're cooking.”

Healthy Motivators

Consumers said their primary motivations for living a healthier lifestyle are preventative care, cited by 65.8% of respondents; losing weight, cited by 62.6%; increasing life expectancy, cited by 57.5%; and physical fitness, cited by about 53%.

While retailers and suppliers also cited those motivations as being important for consumers, they placed more emphasis on specific health issues than consumers did. Retailers ranked the top consumer motivation as losing weight, at 74.6%; preventative care, 65.8%; managing cholesterol levels, 64%; increasing life expectancy, 61.4%; managing blood sugar levels, 57.9%; and managing blood pressure, 57%.

Retailers and suppliers were also somewhat more likely to see the value in providing a nutritionist in the store than consumers were, with 51.8% of consumers saying they would find it valuable, compared with 66.2% of retailers who thought consumers would find value in that service.

Consumers were also twice as likely as retailers thought they were to say they always modify recipes to make them healthier. About 20.2% of shoppers said they modify recipes to make them healthier, vs. 11.8% of retailers who said they did so, and 3.7% of suppliers.

To modify recipes, consumers said they were substituting ingredients (66.2%); adding more vegetables, if applicable (64.9%); reducing fat or sugar (62.2% each); baking vs. frying (56.8%); and reducing sugar (51.6%).

Health/nutritional value was also rated highly by consumers as a factor they look for when searching for recipes to prepare, the survey found. Although searching for recipes using the main ingredient (pork, chicken, etc.) was the No. 1 factor consumers cited, at 59.7%, health/nutritional value was No. 3 at 44.9%, behind length of time to prepare, at 53.2%. “Fits my dietary needs” was also cited by 23.75% of consumers.

Retailers and suppliers were in sync with consumers on many of those factors, although retailers appeared to underestimate the importance to consumers of searching for recipes around a main ingredient (only 35.3% of retailers cited this), and vastly overestimated the number of consumers looking for vegetarian/vegan recipes (35.3% of retailers cited this as a main factor when consumers are searching for recipes, vs. 5.5% of consumers who did so).

Shopping Frequency

The consumer survey results concerning shopping frequency and in-store shopping patterns might reveal additional opportunities for retailers, Lempert said.

The survey noted that about 53% of consumers said they buy groceries for the week and plan their meals ahead of time, and 21.3% said they buy groceries only as needed. Most of the rest of the consumer respondents (24.2%) said they buy groceries in bulk for the month and may shop weekly for fresh ingredients.

Retailers, Lempert said, still seem to be more focused on the weekly stock-up. He suggested there might be more opportunities for retailers to create “in-store events and occasions” to get these shoppers into their stores more often. He also cited the example of Food Lion's Bloom banner, which created a convenience area near the front door for fast-moving items.

“I think that was a very clever idea, and I'm shocked that more retailers haven't done that,” he said. “If a supermarket can make it more convenient for customers to capture that extra shop, rather than a convenience store or someplace else, then they could pick up that extra traffic and extra money.”

Tsang Barrett of Every Day with Rachael Ray said she sees opportunities for retailers to do more to facilitate the meal-planning experience for shoppers.

“We've seen weekly menu planning to be one of our more popular features, no matter where shoppers find it: the magazine's column, our online newsletter, Rachael's mobile apps or other [places],” she said. “So we're not surprised that the majority of shoppers plan grocery shopping as a weekly event (53%) and retailers agree (60%). What we'd love to see next would be for retailers to help make meal planning even easier, using whatever in-store current or new technologies to offer answers to the universal ‘what's for dinner’ question.”

As far as what areas of the store consumers shop most often, consumers and retailers agreed that produce was the most highly trafficked department.

79.2% of consumers said they “always” shop produce, and 18.3% said they shop it “most of the time.”
Dairy was close behind at No. 2 with 66.1% of consumers saying they always shop in the dairy department and another 25.5% saying they do so most of the time.
The meat department was cited as an “always-shop” by about 45% of consumers, with another 32.7% saying they shop the meat section most of the time.
About 31.6% of consumers said they always shop for canned/packaged goods, and another 37.6% said they did so most of the time.
Slightly fewer consumers shop in the frozen-food section, with 30.3% saying they shop for frozen foods every time and 38.3% saying they do so most of the time.
The deli/bakery area is a destination every shopping trip for only 19.6% of consumers, and is shopped most of the time by 28.7%.

Retailers rated the top five most frequently visited departments as produce (63%), dairy (42%), beverages (26%), canned/packaged goods (24%) and frozen (22%).

Lempert said the low frequency of trips through the frozen department, in particular, illustrate an opportunity for retailers to improve their merchandising.

“I think frozen is one of those hidden gems,” he said. “Even over the last couple of years, during the recession, I was surprised more people did not turn to the frozen-food section … where they can save 30% to 40%.”

He cited the savings associated with frozen juice concentrate or frozen seafood as examples.

“Part of it is that nobody is excited about the frozen-food aisle, with all those glass doors,” he said.

On one recent visit to a new Schnucks supermarket in the Midwest, he said, he noticed motion-sensor-activated lights in the frozen cases, which added some excitement. In addition, he said some of the freezer cases were angled out into the aisles to break up the flat appearance of the aisle.

He suggested retailers also consider other ways to enliven the section, such as splitting aisles so that frozens are across from dry groceries, for example, “just to break it up a little.”

SURVEY INFORMATION

THE DATA AND TABLES on these pages were obtained through two consumer surveys and one industry survey, all of which were conducted via email.

The consumer surveys were sent to the Every Day with Rachael Ray Consumer Panel and The Supermarket Guru Consumer Panel from Sept. 17 through Sept. 29. They yielded a total of 1,238 responses.

The industry survey was sent to subscribers of the SN daily email newsletter from Oct. 7 through Oct. 18 by Penton Research. (Penton is the parent company of SN.) It included responses from 139 retailers and 135 suppliers/manufacturers, plus a small number of wholesalers, sales agencies and others. The survey results on these pages focus primarily on the retailer responses, except where indicated.

The wording of the surveys sent to the industry was changed slightly to ask respondents to predict how consumers would respond.

For example, consumers were asked, “When you go grocery shopping, which of the following actions do you take?”

The industry version of the question was, “When consumers go food shopping, which of the following actions to they take?”

The consumer panels were 90.5% female, and 94.5% of consumer respondents were the primary shopper in their household.

Phil Lempert, the Supermarket Guru, based in Santa Monica, Calif., is an industry consultant and contributing editor at SN.

Every Day with Rachael Ray magazine, published by the Reader's Digest Association, is based in New York. It focuses on menu planning, meal solutions and shopping tips.