Driving Shopper Behavior in Grocery

Ad Dynamics PerspectiveTM
Driving Shopper Behavior in Grocery
Survey results show high propensity to change stores and brands based on deals
Ad Dynamic’s
Shopper Insight Series
C
ompetition in the grocery space has never been more intense. As trade class lines
blur and a larger focus is placed on grocery items in mass, club and drug stores,
grocery retailers have had to expand their competitive set considerably. Add to that
an uncertain economy, increased fuel costs and extreme weather in many parts
of the country, and you now have shoppers who have become much more price
conscious and promotionally driven. They are more actively looking for where to find the
best price on household items and groceries, and are more prone to switching stores and
brands than ever before, as we discovered in our most recent shopper survey, and which we
will explore at length in this piece.
It has become increasingly difficult to understand how to incent an everyday shopper
on their weekly grocery shopping trip to pick one grocer over another, or one brand
over another. How do those in the grocery space ensure they are capturing the attention
of an increasingly discriminating shopper? Shoppers are being selective—over 40%
are going to more than one store to complete their grocery shopping, of whom about
three-quarters cited “better prices on certain products and categories” as the reason for
shopping at multiple stores, according to our recent Grocery Shopper Insight Survey. The
majority of grocery shoppers (72%) are also seeking promotions for every type of grocery
trip, whether they are buying only a handful of items, or filling their cart. They hold little
allegiance to a select store or brand if presented the right promotional value—53%
of grocery shoppers are either likely or very likely to change where they stock-up on
groceries if they knew prices were lower somewhere else, while only 22% are either
unlikely or very unlikely to switch. Similarly, 85% of grocery shoppers said they at least
sometimes try new brands when they are on sale.
Fundamentally, shopper behavior has changed, and strategies and tactics to drive
behavior continue to evolve. Developing a promotional strategy that differentiates a retailer
enough to cause a grocery shopper to change where they typically shop, or differentiates
a brand enough to cause shopper to change what they typically buy, is a task that requires
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Throughout this Perspective we will
be unpacking the responses from
our most recent Grocery Shopper
Insight Survey. In a study of 1,000
individuals that are either primarily
responsible or share responsibility
for purchasing groceries for
their households, we identify the
differences in buying behaviors
and trip drivers between shopper
demographics. The survey results
allow us to contrast the profiles of
grocery cart-fillers versus basketfillers, frequent versus infrequent
grocery shoppers, young urban
grocery shoppers versus older,
rural grocery shoppers, and how
promotions impact the behaviors
of each.
We then discuss an application
of these findings to promotional
planning in order to understand
how different category allocations,
product allocations, and
promotion types and overlays
better attract one demographic
versus another. Please note
that this Perspective reports Ad
Dynamics’ initial findings from our
Grocery Shopper Insight Survey
conducted in February 2014. We
will provide additional shopper
insights in publications throughout
the course of 2014. Please reach
out to your Ad Dynamics account
team for an advanced look into
the results of our Grocery Shopper
Insight Survey.
Source: Ad Dynamics Grocery Shopper Insight Survey
Figure 1: Grocery shopper media type usage
a detailed understanding of who their target shoppers are, the
buying behaviors and tendencies of their target shoppers, and how
competitive promotional patterns and strategies may be inhibiting
their ability to attract their target shopper. Once that understanding
is achieved, consistent monitoring, measurement, and adaptability
are critical to sustaining their promotional strategy.
What promotions actually drive results? How can retailers and
manufacturers in the grocery space optimize their promotional
efforts to increase sales? In this issue of Ad Dynamics’ Shopper
Insight Series, we will provide a process that will help retailers and
manufacturers understand how successful they are at engaging
their target shoppers using promotions, and how to identify and
execute the right changes and
Among all
adaptations to promotional strategy
in order to attract shoppers.
demographics,
Essential to any effective
print is the
promotional strategy for
most prevalent retailers and manufacturers is a
comprehension of the week to
way shoppers
week buying behaviors of grocery
shoppers—particularly, the
are looking for
segment of shoppers the retailer or
promotions
manufacturer wants to attract. As
we discussed in our Reach & Impact
prior to their
Shopper Insight Survey in 2013, if
grocery trips
retailers or manufacturers fail to
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Ad Dynamics PerspectiveTM
reach their target shoppers with the right promotional message
at the right time, they risk losing that shopper not just for that
purchase, but for future purchases as well. With that in mind, in
our Grocery Shopper Insight Survey, we first set out to understand
the buying behaviors of grocery shoppers to create a foundation
from which a winning promotional strategy can be formed.
Promotions and pricing are central
to grocery shopper behavior
Among the most important initial findings from our survey results
was the resounding response that promotions are essential to
shoppers’ grocery trips. We probed our survey respondents on
everything from whether or not they use promotions, to what types
of promotions they use, to which of their behaviors are governed
by promotions. The results showed that today’s shoppers are
heavily reliant on the promotional engagements of retailers and
manufacturers to pick stores, brands, purchase quantities, basket
and cart additions, unplanned purchases, and more.
Figure 1 shares the likelihood with which shoppers will use
different promotional media to find promotions for their grocery
trips. The top media type by a wide margin was print, with just
under 90% of shoppers claiming they either “Definitely” or
“Probably” will use print ads to find promotions prior to a store trip.
Printed coupons was a close second among grocery shoppers at
about 80%, followed by online promotions and digital coupons,
both of which received roughly 55%. At the low-usage end of
Source: Ad Dynamics Grocery Shopper Insight Survey
Figure 2: Top influences in deciding where to shop
the spectrum were smartphones or tablets, for which over 50% of
With the vast majority of shoppers making trips to
survey respondents said they either “Definitely” or “Probably” will buy groceries each week, it is important for retailers and
not use to find promotions prior to grocery shopping trips.
manufacturers to understand the trip frequency behaviors of
Beyond simply understanding which media types grocery their target shoppers in order to develop a promotional plan
shoppers are using to find promotions, we found that of the that is differentiated for that segment of shoppers. Our survey
deciding factors that determine where a shopper brings their found that grocery trip frequency can vary based on a wide
business, promotions and pricing is the top
range of factors. For example, among rural,
influencer—even more influential than how Not surprisingly,
suburban, and urban shoppers, we found
close shoppers live to their nearest retailer. pricing and
there was quite a bit of overlap in how
Out of seven factors survey respondents were
frequently each group shops for groceries,
asked to rank in terms of what influences their promotions are the
yet there was one key differentiator for
store choice, over 55% ranked promotions most influential factors
urban shoppers that should impact how
and pricing as the top influencer, and just
retailers promote to that segment.
under 90% ranked promotions and pricing in in helping shoppers
More than 30% of rural, suburban,
their top three factors (see figure 2). Grocery decide where they will
and urban shoppers claimed to shop for
shoppers are not only using promotions,
groceries once per week, while over 70% of
but the vast majority are also relying on shop for groceries
each group claimed to shop for groceries
promotions to make decisions like where to
either once per week, or 2-3 times per
shop and what to buy.
week. However, nearly 10% of urban shoppers claimed to shop
daily for groceries, as opposed to less than 5% each for rural
Trip Frequency: More urban “Daily” grocery
and suburban shoppers, which opens up both opportunity
shoppers than rural or suburban
and competition to win shopping trips every day, particularly
Grocery shopping is a common calendar item to find on anybody’s for store locations in urban areas. With one out of every ten
weekly schedule. Whether the grocery shopper is making a trip to urban shoppers making grocery store visits every day, retailers
replenish their entire kitchen, or stopping by the store to pick up
competing for this segment of shoppers require a continuous
an ingredient or two for dinner that evening, we found that 84%
cadence of omni-channel promotional engagement, rather
of shoppers buy groceries in-store at least once per week.
than simply promoting a single weekly flyer. This opens
The Power of Market Intelligence
3
Understanding who
your target shopper
is and the frequency
and size of their
trip is critical in
crafting an effective
promotionial strategy.
There is opportunity
to communicate
more frequently and
through additional
media types to
shoppers making
smaller, more
frequent trips.
Source: Ad Dynamics Grocery Shopper Insight Survey
Figure 3: Size of Grocery Basket by Living Situation
up opportunities to engage more readily through digital
promotions, such as email, online, mobile and social media.
Trip Frequency: Higher income shoppers
make more frequent grocery trips
There were also correlations to be found between annual
household income and how frequently grocery shoppers make
trips to the store. Of the different annual household incomes
we polled, those who make more than $100,000 per year
claimed to shop more frequently than shoppers of lower income
levels. The group of shoppers that make more than $100,000
had the highest percentage of respondents (over 90%) of any
income demographic group claim to shop either once per
week or more. Conversely, the group of shoppers that claimed
an annual household income of less than $25,000 had the
highest percentage of respondents (over 25%) claim to shop for
groceries 2-3 time per month or less.
Depending on which income levels retailers or manufacturers
are trying to attract to their stores, there is opportunity to
modify their promotional frequency to best suit their target
demographic. If a retailer wants to attract shoppers with
an annual income of $25,000 or less, for example, and they
currently are publishing multiple flyers per week, there may be
an opportunity to save on printing costs by pairing back their
promotional calendar without the risk of losing their target
shoppers to competitors. Similarly, if a retailer or manufacturer
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Ad Dynamics PerspectiveTM
wants to target a shopper with an annual income of over
$100,000, additional promotional investment may be required to
keep the more regular shopper engaged.
Purchase Quantity: Who is building carts?
Who sticks to baskets?
Equally important to understanding the frequency with which
a retailer’s target shoppers buy groceries is understanding the
typical size of their target shopper’s basket or cart. Our survey
found that only 65% of shoppers claimed to shop for groceries
at grocery stores most frequently—as opposed to Mass or
Drug stores—yet that number erodes further when looking at
stock-up trips alone. Only 54% of shoppers said they stock-up at
grocery stores, making it especially important for grocery stores
seeking cart-fillers to create a promotional plan that will appeal
to that shopper segment. If a retailer’s target shopper tends to
build a larger basket, that retailer may more successfully attract
their shoppers using basket-building promotional tactics such as
multiple purchase offers or buy/get offers. For a manufacturer
targeting shoppers that average 20 items or less per grocery trip,
working with retailers to make sure their products are promoted
with a % Off or $ Off overlay, and not a multiple purchase offer, is
important to keeping their target shoppers engaged.
Figure 3 shares an interesting perspective on the types of
shoppers that are loading up their carts, versus the segments
of shoppers that are keeping their baskets lean. Shoppers were
Across nearly every demographic we
polled in our Grocery Shopper Insight
Survey, five product subcategories were
identified as the top subcategories that
would cause shoppers to go to the store
to make a purchase.
Figure 4: Grocery Category Trip Drivers by Demographic
asked how many items they typically buy on a single grocery trip,
from 1 to 10, to over 50 items. When comparing the cart-filling
behaviors of shoppers from different living situations, we found
that shoppers that either live alone OR live with friends have a
tendency to build smaller baskets. Nearly 60% of shoppers living
alone, and about 50% of those living with friends claimed to
build baskets of 20 items or less in a single grocery trip. Though
the results for shoppers living alone were fairly expected, it is
an important finding that a minority of those living with friends
purchase groceries for their whole household. Particularly in
areas with many young, single shoppers who have roommates,
retailer and manufacturer promotions may be more effective
constructed to attract the smaller basket builders who buy
groceries for themselves, rather than the stock-up shoppers
buying for an entire household.
Shoppers living with a family proved to be the largest cartfillers of the four groups, by contrast. Just under 50% of shopper
respondents living with family claimed to purchase over 31 items
per grocery trip; 17% claimed to buy over 50 items per trip, by far
the largest percentage of respondents among the different living
situation segments. Needless to say, shoppers filling a cart with
50+ items per grocery will be attracted by a different promotional
value proposition than shoppers who live alone or live with
friends. The separation between the behaviors of these two groups
illustrates the importance of understanding how different shoppers
behave, and the implications of varying shopper behaviors to a
retailer or manufacturer’s promotional plan.
Category Mix: Secondary Trip Driving
Categories are Critical for Differentiation
There are a variety of factors that influence a grocery shopper’s
decision to shop at a given store that fall outside of a retailer’s
control—for instance, the proximity of the store to the shopper’s
home. Other than opening a new store location closer to that
shopper’s home, there is nothing a retailer can do to change an
influencer like proximity. Within the spectrum of factors retailers
have more control over are the promotions and discounts for
their products, store cleanliness and layout, level of customer
service, loyalty programs and perks, among others.
One critical factor that can be easily overlooked, but which
retailers can control, is the product subcategory assortment
within a retailer’s omni-channel promotions, irrespective of
pricing. Grocers will typically promote an array of different
products from each department within their four walls
each week, but choosing which products to promote at
the subcategory level should be supported by methodical
decision-making.
We heard from grocery shoppers of a variety of different
backgrounds about which product subcategories, if on
promotion, would cause them to go to the store to purchase
the product. Beyond the top five subcategories shoppers from
nearly every demographic identified as trip drivers, there was
significant disagreement between shopper demographics
around the next 10 to 15 trip driving subcategories—an
area that will prove critical for retailers and manufacturers to
understand as they decide on a promotional strategy that will
impact their target shoppers.
Across nearly every demographic we polled in our Grocery
Shopper Insight Survey, five product subcategories were
identified as the top subcategories that would cause shoppers
to go to the store to purchase. These five subcategories include
beef, chicken, sodas, milk, and coffee—as shown in figure 4.
About 52% of shopper respondents ages 21-29 identified beef
as a grocery trip driving subcategory for them, and about 59%
of respondents with an annual income of over $100,000 also
identified beef as their top trip driver, yet only 8% of 21-29 year
olds surveyed claimed an annual household income of over
$100,000. There was little demographic overlap between those
two groups, yet both groups identified beef as a leading grocery
The Power of Market Intelligence
5
Each of the three meat
products on the Metro
flyer front cover were
identified as top 10 trip
driving subcategories by
shopper respondents,
or subcategories that
shoppers would go to the
store to buy if they were
on promotion. The flyer
page also featured some
key categories in cheese,
carbonated soft drinks,
and packaged bread, all of
which were identified as
trip drivers by more than
30% of shoppers.
Figure 5: Front Page Trip Driver Heat Map, Metro, Toronto Flyer, 1/17/2014
Retailers need to
look past the top
five to ten product
subcategories
that shoppers
identified to
leverage the
variations in
trip drivers
among different
demographics.
trip driver. The implication for
grocers is that it is a safe bet to
promote a category like beef
prominently across all media
types, as it is a subcategory
that attracts nearly all
demographics.
That said, beef is a heavily
promoted subcategory
among most grocery
retailers. Retailers are still
left to question how they can
differentiate their subcategory
allocation to edge out their
competition. To get a better
idea on how to approach this
question, retailers need to
look past the top five to ten product subcategories that shoppers
identified to identify the variations in trip drivers among different
demographics.
We reviewed the 11th through 15th most selected trip
driving subcategories—identified as the “Varying Trip
Drivers by Demographic” in figure 4—among the same
respondent demographics. Comparing the top five trip driving
subcategories to those ranked 11 through 15, there are clear
disparities in category preference between the different
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Ad Dynamics PerspectiveTM
demographics. One example is pasta, which 26% of 21-29
year old respondents identified as a trip driver when the
subcategory in on promotion—the only demographic in this
example to identify pasta in the top 11-15. Likewise, butter
was uniquely identified by 28 % of shopper respondents with
an annual income of greater than $100,000, potato chips was
uniquely identified by 28% of respondents living with friends,
and fruit was uniquely identified by 29% of those living in a
household with five to six people.
It is in this set of subcategories where grocers can measure
how well they are promoting to their target shoppers. If, for
instance, Metro in Toronto instituted a new strategy to attract a
larger segment of shoppers ages 21-29 to their stores in 2014,
based on the preferences of our survey respondents, they may
have more success reaching that demographic with a pasta
promotion instead of a vegetables or butter promotion. To form
a more complete promotional strategy, Metro could then review
the competitive activity of Sobeys—an in-market competitor—
to identify when they promoted vegetables or butter in 2013,
and add Pasta to their promotional calendar on those weeks,
knowing 21-29 year olds may not find the subcategory mix at
Sobeys attractive.
The subcategory allocation within any promotional
media type has a direct impact on a retailer’s ability to drive
grocery shopping trips week to week. Using a combination of
competitive promotional data, along with an understanding
Figure 6: Front Page Trip Driver Heat Map,
Food Basics, Toronto Flyer, 1/16/2014
of the tendencies of their target grocery shoppers, will add a
method by which a promotional plan can be constructed to
drive specific shopper behavior, in accordance with a retailer’s
overall strategy.
Translating Behaviors to Promotional Strategy
Understanding shopper behaviors and grocery trip drivers is only
useful if the data and information can translate into effective
strategy changes, a process in which Ad Dynamics specializes in
our day to day engagement with both retailer and manufacturer
clients. To this point we have shared some of the initial grocery
shopper behavioral and trip driving findings across a variety
of demographics. In this next section, we will provide some
examples of how to take action on these findings using real flyers.
Figure 5 depicts the front page of the Metro, Toronto flyer
from January 17th , and Figure 6 shows the Food Basics, Toronto
flyer from January 16th, 2014. Both Metro and Food Basics
successfully represented a wide spectrum of products from
different departments on this front page, though according to the
trip drivers identified by shoppers in our Grocery Shopper Insight
Survey, the subcategory mix could have been further optimized.
The legend in figures 5 and 6 show to what extent each product
featured on the front page was indicated as a trip driver. Each of the
three meat products on the Metro flyer front cover were identified
as top 10 trip driving subcategories by shopper respondents, or
subcategories that shoppers would go to the store to buy if they
Though Food Basics
promoted pork, a
top ten trip driving
subcategory among
grocery shoppers, on the
front page of their 1/16
flyer, they also promoted
three products that were
identified by less than
20% of shoppers as trip
drivers. There may be
opportunity to further
optimize their front page
product assortment in
future flyers.
were on promotion. Similarly, the pork featured on the Food Basics
flyer front page fell into the top ten as well. More than 30% of
shopper respondents claimed they would go to the store to buy
products like the rib roast (beef), bacon (pork), and salmon (seafood)
at Metro, and the pork loin (pork) at Food Basics.
The Metro flyer page also featured some key trip driving
subcategories in the cheese bars, carbonated soft drinks, and
packaged bread, all of which were identified as trip drivers by
more than 30% of shoppers. Conversely, many of the items on
the Food Basics flyer front page were identified by only 10-19%
of grocery shoppers as drivers, such as the pasta, pasta sauce,
cookies, paper towels, and facial tissue.
Despite allocating roughly half of their front page to some
of the top trip driving subcategories, Metro did promote one
product that was identified by less than 10% of shoppers as a trip
driver. Only 7% of shoppers claimed salad/cooking oil as a trip
driving subcategory. This suggests that the space allocated to
the D’Angelo vegetable oil could have been better allocated to
subcategories that would cause a higher percentage of shoppers
to make a trip to the store to purchase.
The Sobeys flyer cover in figure 7 provides a second example
of how retailers can dissect their subcategory allocation to
understand how successfully they appealed to shoppers. In this
case study, however, shoppers were asked about trip driving
subcategories specifically for the Super Bowl event. We found
that trip drivers changed radically from a standard grocery trip
The Power of Market Intelligence
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About Ad Dynamics
Ad Dynamics is a market intelligence firm
dedicated to increasing our customers’
returns on their promotional investments
and providing real-time visibility into
e-commerce pricing. We support our 850+
clients through monitoring and analyzing
over 200 U.S. and Canadian markets for
every channel of trade and 1 billion buy
pages from 3,000 global merchants,
enabling dynamic decision making by
turning data into actionable insights.
Figure 7: Front Page Trip Driver Heat Map, Sobeys, Toronto Flyer, 1/30/2014
to a grocery trip for an event or holiday, and figure 7 illustrates how Sobeys successfully
created a front page subcategory allocation to match the preferences of Super Bowl
grocery shoppers.
Eight out of the 11 ad blocks Sobeys promoted on their 1/30/14 flyer front page fell
within the top 15 subcategories shoppers selected as items they would add to their cart
if they were discounted prior to the Super Bowl event. Sodas, potato chips, and cheeses,
in particular, made up three of the top five likely cart-additions prior to Super Bowl, with
22% or more of respondents selecting each. Sobeys constructed a flyer front page that
was specifically suited to build the baskets of Super Bowl grocery shoppers.
In summary
Perhaps the most critical lesson shoppers taught us in our Grocery Shopper Insight Survey
was the importance of making data-supported decisions during promotional planning.
The disparity in the behaviors and preferences of different grocery shopper segments
requires that retailers and manufacturers learn about their target shopper, and what their
competitors are doing to attract their target shoppers. Additionally, with the availability
of a variety of promotional and product information sources for grocery shoppers’, there
is an unprecedented willingness to change their preferences or behaviors to find the best
value. If retailers and manufacturers fail to engage their target shoppers with regular
promotional messaging, they risk losing their shoppers to competing stores or brands for
both current and future purchases.
In this first iteration of our Grocery Shopper Insight Series, we introduced the
framework for a process for combining competitive promotional data with shopper
insights to achieve a data-supported, targeted promotional plan. Over the course of the
next several months, we will narrow our focus on the different stages of the ad planning
process, and recommend some best practices for incorporating both competitive
promotional data and shopper insights into each stage. Our goal is to share the process
through which many of our clients have improved their ability to target their strategic
shopper segments with relevant, timely promotions.
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Key Takeaways
• Out of seven factors grocery shoppers
were asked to rank in terms of what
influences their store choice, over 55%
ranked promotions and pricing as the
top influencer, and just under 90%
ranked promotions and pricing in their
top three factors.
• Just under 90% of grocery shoppers
claiming they either “Definitely” or
“Probably” will use print ads to find
promotions prior to a store trip. Printed
coupons was a close second among
grocery shoppers at about 80%.
• Nearly 60% of shoppers living alone,
and about 50% of those living with
friends claimed to build baskets of 20
items or less in a single grocery trip.
By comparison, only about 25% of
respondents living with family (children
living in home) claimed to build baskets
of 20 items or less on their grocery trips.
• Beyond the top five subcategories
shoppers from nearly every
demographic identified as trip drivers
(Beef, Chicken, Carbonated Soft Drinks,
Milk, Coffee), there was significant
disagreement between grocery shopper
segments around the next 10 to 15 trip
driving subcategories. These secondary
trip driver categories will prove critical
for retailers and manufacturers to
understand as they decide on a
promotional strategy that will impact
their target shoppers.
Learn More
For more insight into the entire
promotional landscape or
an analysis of your digital
and print strategies, call
Ad Dynamics at 1.800.235.3781
or e-mail
[email protected].
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