Grey, G2 Our Eye on Asia – Retail study

Leading global marketing communications agencies Grey and G2 today announced the release of its 2010 Eye on Asia – Retail study with a host of fresh insights on shopping mindsets across the Asia Pacific region and its implications to marketers. A bried about the study is as under :

Eye-sight 1: Two-thirds of final purchase choices are made in-store.

“I look around the store for what intrigues me via samples and if one seems better, then I will buy that.” – Japanese shopper

Our Eye on Asia – Retail study reveals that 39% of Asian shoppers step into a store without any shopping list and do not plan on the categories they wish to purchase. And out of the remaining 61% of shoppers who have pre-decided a category before entering the store, 44% are either undecided on a brand or have a number of brands up for consideration. This reflects a high willingness to switch brands and the fact that even the most loyal shoppers may decide to experiment once they are in-store. Together, the two opportunities represent the scope of in-store communications in influencing the two-thirds of final decisions made in-store.

The need to buy fresh stocks and check the condition of the items leads 66% of Chinese shoppers to make the decisions in-store. In comparison, 84% of Indians have a specific brand choice in mind even before they enter the store as they are accustomed to the in-home delivery system wherein an order is placed via a phone call to the nearest provision shop which will arrange for the package to be delivered to the shopper’s doorstep.

The role of in-store communications differs from country to category. For instance, in markets like Japan and Korea where 67% of a shopper’s category planning for hypermarkets/supermarkets occurs only after entering the store, communications play a key role across the Purchase Decision Journey – from invoking a category to influencing brand selection. However, for markets like India, where 79% of category planning occurs before entering the hypermarket/supermarket, in-store communications have to focus on creating brand preference or encouraging switches in-store.

35% of Asian shoppers across all categories who purchased an over-the-counter (OTC) supplement or treatment brand admit that the item was not part of their planned shopping list, deciding only to buy the item from the category in-store. The study also outlines a trend in the purchase behaviour for snacks. Snacks, which is recognised as an impulse-driven category, is seeing more planned purchases across Asia with almost half (47%) of the Asian shoppers confessing that snacks were included in their shopping list even before they entered the shopping channel.

These findings open a whole new dimension to the term “impulse shopping” and “brand loyalty”. What exactly goes on in the shopper’s mind when choosing categories and brands in-store? How can marketers ensure switches into their categories and brands? Eye on Asia – Retail study provides some surprising answers to these and many more questions on what truly happens at the moment of truth and how marketers can find their way into the shopping basket and past the cashier.

Eye-sight 2: Asian shoppers take time to study products in-store.

“All the products are here, so I can compare and learn more about this type of product. Comparing is really easy here.” – Chinese shopper

Asian shoppers are fascinated by the exposure of products in-store which leaves them spoilt for choice.

The shopping space is emerging into a school-like environment where shoppers expect to experience a walk-through learning journey. Bearing in mind that comparisons are not restricted to prices alone, Asian shoppers are deliberating brand choices. Shoppers are spending a considerable amount of time examining product labels and sourcing for information exhibited by brands for product comparisons before making their final product selection.

Based on our Eye on Asia – Retail study, two-thirds of shoppers in Asia spend an average of 30 minutes comparing products before making their purchase decision. This shopping behaviour stems from a psychological need to feel smart and the assurance that the right and best choice has been made.

According to our retail study, the store acts as a media channel for information. At least 70% of Asian shoppers seek information from brands in-store. Shoppers are looking out for live demonstrations, informational posters that signpost unique product differences and recommendation of new products. This shopping pattern poses an opportunity for marketers to develop stimulus that are arresting and encourage browsing across all shopper touchpoints which will aid in the decision making process.

Contrary to conventional above-the-line marketing where brands vie for the attention of consumers, shoppers are willing to give brands a fair share of their attention in-store.

Eye-sight 3: Advice is appreciated as long as the staff’s approach is non-intrusive.

“I don’t ask for advice, but once in a while when I see people giving demonstrations, I do ask questions to know more.” – Chinese shopper

There is a common perception that Asian shoppers do not like to be disturbed by sales staff who provide unsolicited advice but nothing could be further from the truth.

Over 77% of Asian shoppers are generally seeking information at some level, even if not actively. In fact, when approached at the right moments, the same set of shoppers is rather open to advice and recommendations. What is even more interesting is that the figures in hypermarkets/supermarkets and provision shops/mom & pop stores (79% for both) channels are higher compared to pharmacies/drugstores (77%) where one would expect shoppers to obtain advice. Furthermore, these figures exclude shoppers that actively seek advice.

Our Eye on Asia – Retail study indicates that only 11 to 16% (percentage varies according to channel type) of Asian shoppers do not want to be approached at all. As the complexity of promotions and variety of products increases, non-advice seekers are more likely to switch sides and seek the guidance of sales staff, as revealed through our in-depth conversations with shoppers.

The need for advice varies by country and channel choice. At 93%, Indonesia shoppers are most open to being approached and seek advice in hypermarkets/supermarkets, while Australia has the largest number of non-advice seekers (25%) in this channel. Similarly, there is a large percentage of non-advice seekers (22%) amongst Indian shoppers as they tend to shop “by the list”. This is a stark contrast to Japanese shoppers who are very open to being approached (88%), particularly if it is for a new product.

The differences between markets are even more pronounced in pharmacies/drugstores. Emerging markets like Vietnam (40%) and India (24%) have a high distribution of active advice-seeking shoppers. They feel more compelled to seek information from the white uniform “experts”, while markets like Japan and Korea are more private about their medical conditions with 22% and 16% respectively belonging to the non-advice seeking category for pharmacies/drugstores.

The study clearly shows that the route moving forward involves revolutionising the methodology of training and placing salespeople in the various channels. Based on our research, product demonstrations are under-used as a “pull” mechanism in hypermarkets/supermarkets, where 56% of Asian shoppers actively look for demonstrations in-store before making a purchase. In addition, categories with a huge variety of brands require more sales staff support to help shoppers make their final product cho
ice. Our Eye on Asia – Retail study aims to address some of these key issues that plague marketers in driving consumer purchases in-store.

Eye-sight 4: Almost half the promotions done in-store are wasted.

“I avoid brands that give me free gifts of their cheaper stuff. No sincerity.” – Malaysian shopper

Most marketers would vouch that Asians love promotions and our Eye on Asia – Retail study has proven the statement to be true. Our research findings indicate that 69% of Asian shoppers love promotions. They love it because promotions spice up their shopping experience and offer an opportunity for new product trial. In addition, Asian supermarket/hypermarket shoppers (76%) are able to attain better value and lower prices for necessities like toothbrushes. Such is the addiction to promotions that shoppers in China and Malaysia are conditioned to expect promotions in these categories. In fact, they tend to postpone purchases and time them according to the promotions.

However, to say that promotions are effective all the time would be inaccurate. Amongst the Asian shoppers who claim to make purchases during promotions, 40% indicated that they would have bought the item in any case. This goes to say that for every 10 promotions, four of them would neither expand user base nor encourage switching. On the contrary, regular buyers take advantage of promotions to stock-up.

There are a number of reasons contributing to the wastage of promotions in certain countries and channels. As outlined in the report, at least 57% of Asian shoppers from the emerging markets do not look out for promotions as they are fixate on buying the same brand on every occasion. Moreover, at least 45% of Asian shoppers say that “If a well-known brand is often on promotion, I tend to doubt its quality.”

Our Eye on Asia – Retail study indicates that how promotions are deployed should undergo a complete shift. Promotions are no longer about delivering monetary value but targeting the psychographic need of shoppers, empowering them to feel that they are making a smart choice. It needs to go beyond the notion of rewarding shoppers and identify the triggers that will encourage switching. A different success formula would apply for different markets and channels.

Understanding the tipping point for each category can be a start. In some markets, a 20% cash discount has the biggest appeal whereas in other markets, “buy one and get a different product free” excites shoppers the most. Our retail study takes the initial steps in identifying some of the success factors that can accelerate shopper purchases in-store.

Eye-sight 5: Asian shoppers visit stores not just for products but also for the experience.

“I enjoy shopping as it’s about spending money and you can see different new things in the market” – Malaysian shopper

The moods of shoppers have a direct link to their in-store expectations. Across Asia, most shoppers associate a repertoire of positive emotions with shopping. They find it fun, relaxing and happy. While the moods are generally positive, there are distinct differences across countries and channels which have a direct impact on the role of communications and the shopper interaction/engagement that is required.

The presence of variety and novelty makes shopping fun for 56% Koreans in the hypermarkets/supermarkets, while a strong relationship with the local shop-owner drives excitement in provision stores for 68% of Indians. These moods reflect what the shopper would look for as they walk into the store. Beginning with the store environment, layout, right down to the brand display, every element should allow shoppers to “explore and experience” so as to encash on the positive moods of the shopper. These experiences can be delivered through demonstrations that enable shoppers to interact with the products, in-store activities that engage shoppers or through competitive trials and offers that drive shoppers’ need for exploration and adventure.

However, emotions are not all positive. Amongst all the Asian markets, Australian shoppers are the most negative when shopping. More specifically, they feel rushed but neither happy nor relaxed. This has a direct impact on the time they spend in-store which is far shorter as compared to the other markets. They are also less likely to seek advice or look for in-store communications unless it is about information on product packaging. For Australians, shopping is about completing a chore whereas for Chinese and Korean shoppers, shopping is about discovery and exploration. This mindset is fuelled by the promotions, range and environment in-store that make the overall experience even more “adventurous”.

For some Malaysians, shopping is “monotonous”. This could be the result of the explosion of malls sprouting up at every corner with similar offerings, activities and layouts. The mood directly impacts the way Malaysians are consuming information in-store. Continuous promotions are also a contributing factor that adds to this mood in Malaysia since shoppers are becoming conditioned to expect promotions instead of treating such offers as a special delight or reward. Once again, this underscores the growing need for marketers to introduce variety and flexibility.

Our Eye on Asia – Retail study explores the linkages between shopper moods and the experience expected in-store. It helps marketers identify the opportunities to invest in experiential marketing and make the shopping experience memorable not just in big store formats but also in the smaller provision shops.

Eye-sight 6: There is an Asian shopper. There is no Asian shopper.

Are all Asian shoppers similar in terms of their in-store needs or do brands need to innovate and create distinct in-store communications for say, a Chinese shopper versus a Vietnamese or a Japanese shopper?

According to our Eye on Asia – Retail report, marketers have an opportunity to expand beyond geographical segmentation and target shoppers according to mindsets. In a region that is as diversified as Asia, marketers will find it more effective to connect with shoppers by developing focused in-store messaging based on mindsets or shopper tribes.

Shoppers walk through a defined Purchase Decision Journey in their numerous visits to various retail outlets each month. The differences that exist in the “Journeys” and shopping behaviours form the basis of the four shopper tribes.

The four shopper tribes identified are: Engaged Info Seekers ,Loyal Listers ,Whim Indulgers and Passive Value Fans.

Drawing reference from the tribes, marketers will have a clearer vision on how to gauge the effectiveness of in-store communications which will enable micro-targeting of in-store messaging based on the tribe they intend to reach. Our research sheds new light on how messaging can be developed based on the tribes’ propensity for list making, information gathering, in-store promotional sensitivity and purchase frequency.

Engaged Info Seekers

“I look at the packaging, the information, the ingredients, and then compare with the price of the product to see that I am getting the correct product that suits my needs.”

For Engaged Info Seekers, the shopping experience is likened to a discovery trip. Hungry for knowledge, this set of shoppers is constantly in a quest to learn more about the latest products and products that they can derive the most value out of. In-store information that builds a stronger sense of value and highlights key product benefits is most likely to influence their decisions in-store.

Loyal Listers

“I’ve used so many brands but nothing can give me the same feeling as this, so even if it is slightly p
ricey, I will still buy it.”

Loyal Listers rely on their shopping list religiously because of their familiarity and confidence in the brands they purchase. As planning is done prior to their visit to the store, they require communications during pre-planning to aid in their decision-making. As such, in-store messaging should be directive and help navigate shoppers to brands quickly.
Whim Indulgers

“The plan is not to have a plan!”

Shopping is all about experience and stimulation for Whim Indulgers, whether it is for indulgence or relaxation purposes. Gaining a new discovery is the key motivation even though this may not always result in an actual purchase. This group of shoppers are most excited by variety and the actual feel of the product, whilst trials and demonstrations tend to hook their attention.

Passive Value Fans

“Promotions, sales, VIP discounts are the biggest temptations for weekly shopping.”

Passive Value Fans tend to have low participation in-store but actively seek detailed information on the products they buy prior to their shopping trip. They research the brand and price through word-of-mouth communications and newspapers before selecting the channel. The value equation leans towards lower prices for this group of shoppers. They are well-versed with daily promotions offered by their preferred stores and ensure that they always get the best deals.

Our Eye on Asia – Retail study serves to help marketers make the shift from the “obvious” way of shopper targeting to a world that recognises behavioural patterns and addresses the diversity of Asian shoppers in an effective and efficient manner.

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