STUDY DIVIDES CONSUMERS ACCORDING TO 'NEED STATES'

MARK HAMSTRA

CHICAGO -- Shoppers don't see any one particular food store as their primary shopping destination any longer but instead shop according to their specific needs at any given time, according to research presented at the Food Marketing Institute Show here last week.

The study, conducted by the Coca-Cola Retailing Research Council of North America, has been further refined from an earlier version that was presented at the FMI Midwinter Executive Conference in January, as reported by SN at that time.

Called "The World According to Shoppers," the study grouped consumers into nine "need states," which account for the forces that drive consumers to select one food-shopping destination over another based on their immediate situation. The nine need states are: caring for family; efficient stock-up; smart budget shopping; discovery; specific item hunting; reluctance; bargain-hunting among stores; small basket grab-and-go; and immediate consumption.

"People don't consider themselves primary shoppers of your format anymore," said Kevin Davis, chairman, president and chief executive, Bristol Farms, Carson, Calif. "They shop according to their need states."

The key for retailers is to figure out which consumer needs they are best suited to fulfill and to pursue those to the exclusion of the others, said Bill McEwan, chief executive officer, Sobeys, Stellarton, Nova Scotia.

"Focus is the key in this study," he said. "No longer can any of us afford to be all things to all people."

He said supermarkets have become bland in the face of alternative shopping channels that cater to specific consumer needs. McEwan and Davis are members of the CCRRC.

Michael Sansolo, senior vice president, FMI, said the research indicated that consumers have a far greater level of commitment toward stores that specifically cater to certain needs. For example, he said natural and organic stores have the highest degree of commitment from consumers among food retailers.

"We live in a time when the middle of the road is where the road kill is," he said. "The more focused the format, the greater the level of passion that consumers have for that format."

To achieve that focus, retailers "have to be willing to walk away from certain parts of their business," said Davis of Bristol Farms. "If you think you must be all things to all people, you will fail."

He said retailers should think of their brands as being more like consumer packaged goods, which consumers evaluate according to their needs at any given time.

"Nobody would spend $12 for a 12-pack of soda, but all of us in a heartbeat would put $1 in the vending machine for a can of Coke if we're thirsty," he said.

The study evaluated how much shoppers in each of the nine groups spend on a weekly basis in supermarkets, what percentage of the total number of trips they make and what percentage of the total spending they account for. Consumers who fall into the "caring for family" category, for example, spend $110, on average -- the most of any group -- and make 20% of supermarket shopping trips and account for 28% of the spending in supermarkets.

While they stressed that the importance of focusing on certain need states is a key lesson from the study, the presenters also said retailers have to be prepared to capture consumers that fall into multiple need states, and understand that consumers can be attempting to satisfy multiple needs on any given shopping trip.

The study will be implemented in the form of an online tool through which retailers will be able to analyze data about their own stores and those of their competitors. It will be available at www.CCRRC.org.