Promiscuous Shopper 2.0
Happy 10th Anniversary
August saw the 10th anniversary of the Credit Crunch: Mervyn King (then Governor of The Bank of England) had to cut short his holiday, Northern Rock bore the brunt of the first run on a UK bank in 150 years, and soon thereafter the epidemic of Affluenza claimed its final victims as unambiguous ostentation gave way to full-frontal frugality.
Saving became the new spending
Money changed hands less freely as consumer caution hit retailers, which in turn hit manufacturers and distributors, and the economy seized up. The recession took hold, and Austerity (now a noun, rather than an adjective) measures were implemented in an effort to balance the national P&L.
Rise of The Discounters
The Retailers’ response to this reverse-consumerism was to engage in promotion-warfare, a battle in which there were ultimately no winners. On the high street sales started earlier, lasted longer, and found more spaces in the calendar – all before Black Friday became a thing in the UK.
In the grocery aisles, the Big Four commenced a race to the bottom, squeezing their margins (and their suppliers) in order to offer shoppers the ‘lowest prices’ – not to be confused with the ‘best value’.
When they got to the bottom they met The Discounters – a new breed of supermarket stocking unfamiliar brands at low prices – at this point viewed more as a curiosity than a viable threat. An aggressive store opening schedule, set against a backdrop of continued wage stagnation has since seen Aldi and Lidl being taken increasingly seriously by their peers.
2007 vs. 2017 (losing shoppers vs. losing frequency)
When the dust settled on the Credit Crunch, and consumers were taking their first tentative steps into the valley of recession, the notion of a Promiscuous Shopper became a newsworthy topic. The difference between then and now is that – thanks to the mass uptake of smartphones, and their use of location data – we’re better equipped to quantify the nature and nuance of this promiscuity.
In 2007, while a personal ‘promiscuous shopping’ experience meant the occasional trade-up or trade-down, the blunt-edged measurement tools available at the time suggested an abrupt switch of store, rather than the nuanced reality of considered trading up or down. This resulted in an exaggerated Nth degree of promiscuity where the outcome was binary: you either stayed with your regular shop or ditched it entirely. The reality – as is often the case, and that we can now explore in more detail – is less sensational, but more complex.
The Promiscuous Shopper
The notion of Loyalty in grocery shopping is a misleading one: what is really a habit, motivated by necessity, and executed based primarily on convenience has been conflated as Loyalty.
In opening new stores, Aldi and Lidl addressed the number one reason why people use the shops they do: convenience.
They already had the low prices, so now they had to address perception issues, aka brand image. They did this by knowing their key points of differentiation (non-UK brands), and explicitly marketing them: ‘our odd-looking, unfamiliar brand is just as good as your household-name one, but cheaper’. And they’ve won awards, and come out top in blind taste tests.
In two years both Aldi and Lidl have moved up a place each in Kantar’s grocery market share rankings – growing their share by a combined 2.5%, while the Big Four have shed 2.7% between them.
The proliferation of smartphone ownership since 2007 has meant that a majority of people now carry a tracking device with them at all times. We can see whether a device seen at one retailer is seen at a different retailer the following week.
Location is an important complementary data source, adding to the existing depth of first-party and breadth of third-party data. As we accrue these device-linked data points it enables us to better understand shopper behaviour – after all, just because we’ve seen a person at your store, does not make them your shopper.
For that reason, it’s imperative that we work to blend data sources – first party (e.g. store-card data), third-party (lifestyle and attitudinal surveys), and location – to overcome the limitations of each source to get us closer to a more complete version of the truth.