A Consumer s Path to Savings: the role of flyers in today s digital world

Transcription

1 A Consumer s Path to Savings: the role of flyers in today s digital world

2 A Consumer s Path to Savings: the role of flyers and coupons in a digital world A Changing Landscape: The retail industry is evolving at a rapid and challenging pace. Loyalty programs and big data are on the rise, offering boundless but complex insights. Consumer needs are changing as shoppers have less time and tighter budgets. Digital disruption continues to redefine what it means to have a winning value proposition. Truly, retailers have never had to pivot their business as quickly as they need to today. But amid these changes, one thing remains true: consumers are still seeking out shopping information and making purchase decisions every day. To uncover how, and why, shoppers choose what to buy, Metroland Media and BrandSpark International collaborated on a country-wide research study. As a distributor of print and digital flyers and coupons, Metroland wanted to understand how the evolving landscape of flyers impacted their business, and the business of their retail partners. And as a regular observer of shopping behaviours in Canada, BrandSpark was well-positioned to conduct and analyze the results, and compare them to previous industry benchmarks. With print and digital flyer and coupon formats growing in number, this paper aims to identify how these formats interact with one another whether they are competitive or complementary and share how retailers and manufacturers can best use them to engage with shoppers. With this information, brands will be equipped to navigate the changing space of consumer media and ensure their flyer and coupon programs are optimized for maximum impact and efficiency. 2 A Consumer s Path to Savings: the role of flyers in today s digital world Metroland Media BrandSpark International

3 Methodology While there are common questions about how to best engage shoppers along the path to purchase across all retail categories, this study analyzes the following four categories to draw conclusions about shopper decision-making along with flyer and coupon usage: BrandSpark International conducted the study online among 1334 Canadian English speaking shoppers and consumers aged 18+. Qualifications to participate in the study included the following: 1. Must have done any of the following: a. Shopped at a grocery store in the past week b. Shopped at a home improvement store in the past month c. Shopped at a department / clothing store in the past month d. Quick service restaurant in the past month AND 2. Read print and/or digital flyers or coupons in the qualified category. Why study this now? Data collection occurred beginning August 11, 2017 through to August 24, To prevent bias, Metroland Media was kept blind to the data collection process. As the retail and foodservice market continues to evolve, so too does the need for clear insights to aid marketers with their investment decisions. This study was driven by a number key market dynamics: Shoppers are becoming more sophisticated in their behaviour Marketers continue to look for new ways to drive traffic and sales The landscape of information sources for shoppers is evolving quickly A need for clear direction based on facts is being demanded by marketers Questions from the industry about how print and digital can work together Myths that Millennials should only be targeted through digital Copyright 2017 Metroland Media Group Ltd. and BrandSpark International Inc. All rights reserved. 3

4 Omni-Channel Flyer and Coupon Usage: An Overview Historically, flyers and coupons have been driven by the Canadian shopper s need to find deals, and retailers are no strangers to this behaviour. For many years, BrandSpark International has measured shoppers desire for great value, and it is consistently one of the leading drivers of purchase behaviour in our country; so much so that Canadian shoppers are proud to tell fellow shoppers when they discover it. So how do shoppers find great value and ways to save money when they shop? Nearly all shoppers (9 in 10) are using some form of flyer or coupon to help them navigate retail environments before they shop. These forms may include printed material, delivered to the home or available at a store entrance, and digital flyers and coupons, which can be found through a retailer s website or a flyeraggregating service (like Save.ca), either in a web browser or in a mobile app. What may be most surprising is not the vast number of ways shoppers get access to deals, but that most shoppers do not choose only one particular format to consume rather, they are using a combination of formats before visiting the store. When looking at the penetration of flyer and coupon usage in three exclusive formats (printed, web-based, and in-app) we find that few shoppers are using one flyer or coupon format exclusively. This suggests that an omni-channel communication strategy is needed in order to increase the number of touch-points a retail brand has with its target market. With 7 in 10 using a combination of print and digital flyer formats, it is important to consider how these channels are being used together: 28% are using all formats ( omni-channel ) 37% are using some combination of print + web-based Flyer apps are nearly always used in combination with another format 4 A Consumer s Path to Savings: the role of flyers in today s digital world Metroland Media BrandSpark International

5 Also of interest is the relationship between the number of flyer formats consumed and the frequency of shopping trips. When respondents were segmented by the flyer and coupon formats they consume, omni-channel shoppers consistently reported visiting stores more frequently in the last week than other shoppers, and those who consumed a combination of print & digital formats were more frequent shoppers than those who consumed only one format. This insight held true across all four shopping categories analyzed. FREQUENCY OF SHOP BY CHANNEL (% Within the Past Week) Print Only Digital Only Print + Digital (No App) Print + App Omni-Channel (Print+Digital+App) 97% 92% 96% 94% 97% 19% 27% 26% 18% 30% 29% 29% 35% 38% 50% 44% 47% 51% 60% 69% Grocery store Home improvement store Department/clothing store Quick service restaurant Please indicate when was the last time you visited each of the following to browse or buy something for yourself or someone in your household: These insights bear another conundrum: if print and digital flyer formats so often contain the same content, what is the value to consumers in accessing this information in different ways, or at different points along the path to purchase? While it is clear that omni-channel shoppers are an attractive and sizable segment of the population, a deeper understanding of what drives the usage of each format is critical to optimizing a retailer s media mix and content strategy to engage shoppers along their path to purchase. We believed that analyzing the shoppers mindset and motivations would unlock key insights to help retailers and CPG brands target their customers and grow sales. Copyright 2017 Metroland Media Group Ltd. and BrandSpark International Inc. All rights reserved. 5

6 Shopper Segments: Mindset Matters To understand how a shopper s mindset might affect their propensity to consume flyers or coupons in a given format, survey respondents were segmented based on their shopping attitudes and behaviours. These segments provide retailers, manufacturers, and quick service restaurants with a critical backdrop as to how and why shoppers behave the way they do, equipping them to optimize their flyer and coupon programs and increase shopper engagement. Segmentation was conducted by measuring the attitudes of shoppers along the path to purchase, such as their enjoyment of the shopping process, their likelihood of making unplanned purchases, and the importance of getting a good deal when shopping, as well as other attitudinal factors. These shoppers were then mapped along two key dimensions of what they look for during their planning phase before shopping: opportunities for deals and savings; and inspiration for new purchase ideas. This gave rise to the profiles of four exclusive segments: Deal-Seeking: Driven-by their need to save money, Deal Seekers target stores and products that will help them stay within a predetermined budget whether the need comes from lower discretionary income, or a desire to be a smart shopper. Flyers and coupons are the means by which they find deals, and create a shopping list to help prevent impulse buying. Inspired: These are trendsetters who shop to enrich their lives, and often look through flyers for new products, ideas and information. As with most Canadians, saving money is important, but they are willing to pay more for products that are of better quality and are better suited to meet their needs. These shopping lovers often read flyers out of sheer enjoyment, looking for that next new product to tell their peers about. Utilitarian: Utilitarians are shoppers with little time and attention, and view shopping largely as a task to complete. While deals and saving money are valued by this group, they are primarily looking to make their shopping trips as fast and simple as possible. They use flyers as a tool to help build their shopping list, as they search for nearby stores that carry the products they need. Engaged: An Engaged shopper is a shopaholic and utilizes all sources of information to help them save money and find the newest products. These are savvy shoppers that are comfortable using both printed flyers as well as the latest technology and apps to get an edge while shopping, and have no problem visiting multiple stores and spending extra time to get the best value wherever they can find it. 6 A Consumer s Path to Savings: the role of flyers in today s digital world Metroland Media BrandSpark International

7 Each of these segments has a unique demographic profile, which retailers may find helpful to compare against their shopper base. While a full profile of each segment can be found on the following pages, some of the most interesting demographic insights are as follows: Millennial shoppers under the age of 35 were most commonly found in the Engaged segment, suggesting a deep involvement in the shopping process as they look for both deals and inspiration. Male shoppers tended to be more price-sensitive than female shoppers, and can most often be found in the Deal-Seeking or Engaged segments. Inspired shoppers, a segment often underserved by flyer content, are most likely to be female, wealthy, and urban. Parallel to the insight that omni-channel shoppers visited stores more frequently than single-format shoppers, Engaged shoppers were more frequent shoppers than any other psychographic segment in the categories studied, except for Home Improvement in which Inspired shoppers came out on top. This suggests that while flyers and coupons are often targeted to meet the needs of the Deal- Seeking shopper, there is a real opportunity to integrate more inspirational content into the flyer to serve and engage the attractive Engaged and Inspired segments. FREQUENCY OF SHOPPING BY CHANNEL (% Within the Past Week) Utilitarian Deal-Seeking Inspired Engaged 95% 96% 96% 97% 25% 21% 30% 26% 34% 35% 38% 43% 52% 52% 54% 59% Grocery store Home improvement store Department/clothing store Quick service restaurant Please indicate when was the last time you visited each of the following to browse or buy something for yourself or someone in your household: Copyright 2017 Metroland Media Group Ltd. and BrandSpark International Inc. All rights reserved. 7

8 Shopper profiles dealseeking percent index to total female 58% 0.91 male 42% 1.17 < 35 21% % % 0.77 psychographics & shopping strategy defining psychographics I go to multiple stores to get the best deals I leverage the latest technology and apps to save more on my shopping I regularly review the promotions at retailers that I shop flyer & coupon usage top 5 frequency of flyer/coupon usage Read printed retail flyers Used coupons from a printed source (i.e. mail, Read retail flyers on a computer Used coupons from a website 91% 70% 68% 49% % 0.90 top shopping strategy by category Read retail flyers in an app 40% < $40 k 29% 1.11 $40 k $79 K 35% 0.95 $80 k $120 K 28% $120 K 8% 0.73 I have a routine for shopping these stores I usually plan exactly what I am going to buy TOP USE FOR EACH FLYER MEDIUM To determine what I am going to buy on a planned shopping trip to a particular store rural 18% 1.06 town 26% 1.00 I often select stores based on deals offered at the time When I know what products I need to buy, but want to compare prices between stores small city 21% 0.91 Big city 32% 1.00 I often select the restaurant based on the menu items offered When I know what products I need to buy, but want to compare prices between stores UTILITARIAN percent index to total female 65% 1.02 male 35% 0.97 < 35 12% % % 1.04 psychographics & shopping strategy defining psychographics I often buy premium quality products even though they cost more I will pay a little more for a new product if I think it may be better than what is currently available Flyers are a good source of information flyer & coupon usage top 5 frequency of flyer/coupon usage Read printed retail flyers Used coupons from a printed source (i.e. mail, Read retail flyers on a computer Used coupons from a website 91% 63% 61% 40% % 1.15 top shopping strategy by category Read retail flyers in an app 32% < $40 k 25% 0.96 $40 k $79 K 33% 0.89 $80 k $120 K 26% $120 K 16% 1.46 I often select based on the store s location I usually plan exactly what I am going to buy TOP USE FOR EACH FLYER MEDIUM To determine what I am going to buy on a planned shopping trip to a particular store rural 21% 1.24 town 21% 0.81 I often select stores based on the store s location When I know what products I need to buy, but want to compare prices between stores small city 25% 1.09 Big city 32% 0.97 I often select the restaurant based on the menu items offered To determine what I am going to buy on a planned shopping trip to a particular store 8 A Consumer s Path to Savings: the role of flyers in today s digital world Metroland Media BrandSpark International

9 INSPIRED percent index to total female 72% 1.13 male 28%.78 psychographics & shopping strategy defining psychographics I often buy premium quality products even though they cost more flyer & coupon usage top 5 frequency of flyer/coupon usage Read printed retail flyers 95% < 35 9% % % 1.08 Flyers are relaxing to read I will pay a little more for a new product if I think it may be better than what is currently available Used coupons from a printed source (i.e. mail, Read retail flyers on a computer Used coupons from a website 71% 71% 45% % 1.31 top shopping strategy by category Read retail flyers in an app 34% < $40 k 22% 0.85 $40 k $79 K 11% 0.65 $80 k $120 K 28% $120 K 51% 1.31 I have a routine for shopping these stores I usually plan exactly what I am going to buy TOP USE FOR EACH FLYER MEDIUM To determine what I am going to buy on a planned shopping trip to a particular store rural 16% 0.94 town 23% 0.88 I often select stores based on the deals offered at the time To determine what I am going to buy on a planned shopping trip to a particular store small city 25% 1.09 Big city 34% 1.06 I often select the restaurant based on the menu items offered When I know what products I need to buy, but want to compare prices between stores ENGAGED percent index to total female 61% 0.95 male 39% 1.08 < 35 23% % % 1.00 psychographics & shopping strategy defining psychographics I leverage the latest technology and apps to save more on my shopping Among my friends and family, I want to be the first person to try new products I go to multiple stores to get the best deals flyer & coupon usage top 5 frequency of flyer/coupon usage Read printed retail flyers Used coupons from a printed source (i.e. mail, Read retail flyers on a computer Used coupons from a website 95% 77% 77% 58% % 0.85 top shopping strategy by category Read retail flyers in an app 51% < $40 k 21% 0.81 $40 k $79 K 41% 1.11 I often select stores based on the deals offered at the time TOP USE FOR EACH FLYER MEDIUM $80 k $120 K 29% $120 K 9% 0.82 I usually plan exactly what I am going to buy I read them for enjoyment rural 14% 0.82 town 29% 1.12 I often select stores based on deals offered at the time Looking to see what new products are available in-store small city 22% 0.96 Big city 33% 1.03 I often select the restaurant based on the menu items offered It inspires me to make a purchase I may not have considered Copyright 2017 Metroland Media Group Ltd. and BrandSpark International Inc. All rights reserved. 9

10 Where do Millennials stand? Many marketers have carved out a strategy to attract the Millennial segment, defined here as shoppers between the ages of 18 to 34. While Millennials are often presumed to be selfindulgent, it may be surprising to some that 68% fall into the segments characterized by deal-seeking behaviour. Additionally, 46% of Millennials are Engaged shoppers, indicating that this group is more involved in the shopping process than any other age segment. 22% Deal-Seeking 46% of millennials are Engaged grocery shoppers more than any other age segment. 18% Utilitarian 13% Inspired 4% Equal Preference 20% Web 51% Print 25% App 10 A Consumer s Path to Savings: the role of flyers in today s digital world Metroland Media BrandSpark International

11 This engagement in the path to purchase is reflected in their media consumption habits as well; a whopping 55% of Millennials reported themselves as omni-channel shoppers, consuming flyers and coupons on all of print, web-based, and in-app formats, compared to 19% of Baby Boomer respondents. And while 8 in 10 Millennials reported using a combination of print and digital media before hitting stores, only 10% of these consumers are exclusively using digital flyers or coupons suggesting they are not abandoning print media along their path to savings. In fact, 51% of Millennials actually reported preferring printed flyers, compared to 25% who preferred to view flyers in an app. Despite the deal-seeking tendencies of Millennials, retailers should consider leveraging these shoppers enjoyment of shopping, desire for brand recognition and more spontaneous shopping habits to drive impulse purchases. In this way, more inspirational content in the flyer can help give retailers a competitive edge when targeting this highly desirable segment. MILLENNIAL SHOPPING ATTITUDES Completely Agree / Agree (5pt Scale) Millennials (35 and Under) Gen X (37 to 54) Baby Boomer (55+) I often select stores based on the brands and products offered 72% 60% 64% I have a routine for shopping these stores 65% 58% 52% I often buy items I didn t plan on buying 51% 49% 43% Copyright 2017 Metroland Media Group Ltd. and BrandSpark International Inc. All rights reserved. 11

12 Flyer Usage by Category While it is common for shoppers to carry their habits with them across retail categories, this study found that flyer and coupon usage does vary depending on the category being shopped. Four categories were observed in this study to demonstrate different styles of shopping: routine-based shopping occasions in grocery, less frequent and project-based occasions in home improvement, and inspirational purchases in department or clothing stores. Additionally, the quick service restaurant (QSR) sector was included to help understand how an industry often driven by consumer needs for convenience and savings was affected by a rise in digital couponing. PRINT APP DIGITAL To note, the selection of retail categories is not meant to provide an exhaustive generalization of shopping behaviour, but a means to understand and demonstrate how shopping and flyer usage habits vary between contrasting categories. An analysis of the path to savings - the steps a shopper takes to find the products they want to buy while maximizing value for money suggests that how each step is supported by flyers and coupons varies by category and shopper segment. Further, the value of each flyer format is dependent on the mindset or behaviour of the shopper in question. Quick-Service Restaurants While consumers of the QSR category have a very different path-to-purchase than shoppers of other traditional retail categories, coupons and flyers have remained a cornerstone of these brands marketing communications due to the importance of location targeting. Hungry consumers typically have multiple options available to them at any one time, making competition for traffic a challenge for operators. Location and proximity aside, informing potential consumers about new menu items as well as deals and other promotional offers is critical to growing business. As most consumers (64%) are deciding what to buy before entering the restaurant, reaching consumers during the pre-visit stage is crucial to drive traffic. Printed coupons (82%) are the primary promotional medium being leveraged by consumers in this category. Restaurant websites and coupon apps are used as well, but to a lesser degree (36%), followed by coupon aggregating sites viewed on a computer (21%) and viewed on a mobile device (16%). Restaurants should experiment with communication that offers a mix of new and on-deal menu items to drive interest. With only 27% of shoppers completely agreeing that their selection of which restaurant to visit is based on deals offered at the time, quick service restaurants have the flexibility and opportunity to integrate more inspirational and creative content into their coupon programs. 12 A Consumer s Path to Savings: the role of flyers in today s digital world Metroland Media BrandSpark International

13 Preferred Flyer Formats at Each Purchase Stage (Note: QSR not included due to its unique customer path-to-purchase.) LOOKING FOR INSPIRATION DECIDING WHAT ITEMS TO BUY COMPARING PRODUCT PRICES STORE SELECTION Utilitarian Inspired Deal-Seeking Engaged Utilitarian Inspired Deal-Seeking Engaged Utilitarian Inspired Deal-Seeking Engaged Grocery Retail As expected, a category as frequently shopped by grocery is defined by established habits and routines. While planning and list building is a cornerstone of the category, it is also the category that showcases the highest degree of impulse purchases among the categories studied over 50% of shoppers buy items they did not plan to during a typical grocery trip. A look at the shopper segments indicates that each group is navigating the path to savings in different ways. Utilitarian shoppers are leveraging print flyers to inspire them, determine what to buy, and which store to visit. They tend to access their mobile device to get more specific price comparisons before heading to the store. Deal-seeking and Engaged shoppers are more thorough users of print and digital formats along the path to purchase, while Inspired shoppers use print flyers more than any other format. Home Improvement Retail Shopping trips within the home improvement category are often made to support a project in the home, and are therefore less frequent and routine. With a high reliance on pre-shop planning (80% of shoppers) and a general need to find the best deals (84% of shoppers), home improvement shoppers are highly engaged in planning their purchases before making these bigger-ticket purchases. Home improvement shoppers tend to use a wider array of flyer formats to help them navigate the path to savings. While Inspired shoppers are mostly print-focused when shopping for groceries, this segment extends into various digital formats as they shop for the home. Similar extensions into web- and app-based and flyers are seen with Engaged shoppers, while Deal-Seeking shoppers prefer to use apps and other mobile formats when shopping this category. Department / Clothing Store Department and clothing store traffic is highly driven by the deals offered by retailers. Most shoppers have not developed a routine for shopping this category and therefore there is a natural spontaneity that retailers can tap into by encouraging impulse purchases. In fact, only ~50% of shoppers know exactly what they are going to buy prior to entering a store, compared to 80% for shoppers of home improvement. In order to find which brands are being offered and for how much, print flyers and mobileaccess flyers are the formats leveraged most frequently. As shoppers progress through the path to savings towards price comparisons and store selection, mobile devices become more prominent fixtures of the category, with few shoppers relying on flyers accessed via desktops/laptops. Copyright 2017 Metroland Media Group Ltd. and BrandSpark International Inc. All rights reserved. 13

14 Key Takeaways for Canadian Retailers While this report brings to light some of the complexities of an effective flyer and coupon strategy for retailers, there are a few key learnings that smart marketers can use to engage their target shoppers wherever they are along the path-to-savings. Here are 3 things to consider as you evaluate your approach to marketing to shoppers before they visit the store. 1 Plan to spread content across multiple formats: the most lucrative shoppers are omni-channel users. Marketing spend optimization is not a new concept, and today s retailers are working harder than ever to determine how to improve the ROI of their media investments. Some have experimented with shifting investments to digital channels while other have tested spreading investment across multiple channels. This study demonstrates that shoppers navigating their path to purchase are leveraging a combination of print and digital formats to find inspiration, find the right product, compare product prices, and identify the store they should visit. Given that shoppers are using an omni-channel strategy before making a purchase, retailers should use one as well. Even as digital flyer and coupon formats grow in popularity, retailers must consider that these communications are complementary rather than competitive and will need to plan to use multiple flyer and coupon channels in order to attract visitors to their store locations. The results of this study suggest that retailers and quick service restaurants can optimize their content development and distribution by aligning their creative material with the unique value their shoppers and consumers are looking for at each stage of the path to savings. 14 A Consumer s Path to Savings: the role of flyers in today s digital world Metroland Media BrandSpark International

15 Design content and channel mix to align with your customer s mindset. 2 3 Millennials are looking for savings beyond digital sources. Adjusting your content strategy by format is only half the battle retailers should also consider how the mindset and shopping behaviours of their customers are impacting the value they seek along the path to purchase. Some shoppers, such as the Utilitarians, view shopping as a mere task, while others, such as the Inspired and Engaged shopper derive enjoyment from planning their shopping trips, absorbing category-related shopping content and visiting stores. Due to the variation in information that each segment requires, retailers have an opportunity to optimize content targeting to improve this alignment. Before setting your flyer and coupon strategy, consider how your customer base maps onto a grid of deal- vs. inspiration-seeking. Are the majority of your customers Engaged shoppers, who are hungry for rich information across a variety of formats? Or might you be targeting a Utilitarian shopper, whose life you could make easier with list-building suggestions in your digital flyer? Finally, consider that these needs and the value you can provide still hinge on the format in which it is offered. When looking for inspiration, printed flyers are typically at the top of the media hit-list. But when shoppers are looking to compare prices, flyer apps and aggregated sites viewed on mobile devices are often the format of choice. Leveraging these insights will help you to optimize how and when content is shared with shoppers and consumers. With an increasing share of resources being dedicated to attract and retain Millennials, it is important to gain a deeper understanding of their true behaviours and attitudes towards shopping. And while Millennials may make some purchase decisions based on inspiration from their Instagram feeds they are truly engaged shoppers who are looking for deals and savings to fit their budget as well as their lifestyle. Millennials are content consumers in every sense, and are very comfortable navigating multiple sources of information congruently to make daily decisions. With this in mind, it is unsurprising that Millennials are avid users of flyers and coupons even more so than their Gen-X or Baby Boomer parents. What is unique about this group is their tendency to use both print and digital flyers hand-in-hand. While it is clear that Millennials are often digital-native consumers, they find real value from their print flyers, and most often prefer this format due to the physicality and tangibility offered. The print flyer can be a source of inspiration for these consumers, and is an opportunity to engage them personally in their home before they reference the digital flyer for deals in-store. Executing an effective omni-channel flyer program is critical to attaining and retaining these highly sought-after customers. Copyright 2017 Metroland Media Group Ltd. and BrandSpark International Inc. All rights reserved. 15

16 for more information, please contact: Tim Whelan, Marketing Manager, Metroland Media, Mark Baltazar, EVP and Partner, BrandSpark International, Metroland Media Group Ltd. is a dynamic media company with a long and proud history of creating community connections across Ontario. From its award-winning print publications, some of which date back more than a century, to a steady flow of new digital products, Metroland is intensely focused on leadership in local media. Through a combination of marketing solutions, including print, direct marketing, digital and consumer shows, Metroland Media connects tens of thousands of businesses with consumers in their communities. As a trusted Canadian media company, Metroland is uniquely positioned to help advertisers of all sizes reach local audiences in innovative and engaging ways. BrandSpark International uniquely combines action-driven consumer insights with marketing credentials and new product launch services. We are strategic thinkers that fuse our passion for insights with our clients need to drive results. Our multi-disciplinary team takes a customized approach to solving your marketing challenges with a dedicated client service focus. BrandSpark Research focuses on insights that decode the shopper mindset, specializing in understanding their retail and e-commerce paths to purchase. BrandSpark Marketing Services runs leading CPG voted by consumer awards programs; Best New Product Awards and BrandSpark Most Trusted Awards. Shopper Army is our consumer-facing platform that engages shoppers through new product curation, product testing, social amplification, and e-commerce integration.