Trip management is the ‘new black’ in shopper and retail marketing. But what is a trip, and how do you leverage it? Smart retail marketers are taking a much closer look at what type of category and shopping trip types they are in and how to successfully activate against them in store.
Shopping trips have changed in the Australian market over the past 20 years.
The traditional grocery ‘Stock Up’ shop that Mum used to do weekly or fortnightly has shrunk to 1/3 of grocery shopping trips and is now equalled by Quick Trips (also known as Top Up shops), driven by the growing consumer need for convenience. A subset of Quick Trip is Dinner Tonight trips, which now represent just over 10% of all shopping trips. Emergency trips for shoppers who have run out of something are around 14% of all trips. And then we have the growth of the browsing shopping trip, representing about 70% of mall shopping visits, where spends are bigger but a purchase is not guaranteed because the shopper is really on a form of social entertainment or leisure outing.
But now the balance of trip types is changing again with slowing economies and rising prices – most noticeably in the USA, but the balance shifts will also be seen here in a slightly more dilute form over the next couple of years.
What’s happening is that as food and fuel prices rise, shoppers are combining their shopping trips and errands, and eating more meals at home.
A decline in Quick Trips, that are typically the most profitable trips for retailers since Quick Trip shoppers prefer to save time over money, can have a huge effect on a retailer. Currently around 70% of baskets both here and in the US are what is considered to be Quick Trips or Small Baskets – averaging $30 with about 6-8 items.
If this trend accelerates with rising prices, retailers may have to compete more directly with lower-cost channels for share of wallet. This is already starting to become apparent. Low and middle income trips to food stores for almost every mission slid so far this year. Instead, shoppers are frequenting ‘dollar stores’ (in the Australian market, stores like the Reject Shop and Go Lo) more often for basics.
This means that as shoppers reduce their number of trip types, retailers and manufacturers are moving from competing for Shoppers to competing for Shopping trips. Increasingly cross format shopping behaviour and the eventual retail destination is determined by a complex interplay of personal requirements such as time, family, financial, urgency and personal situation amongst others.
This interplay is forcing retail marketers to ask “What trip type is my category targeting?” and “How do I maximise my relevance to that audience to increase purchase conversion?”
If you’re a retailer in this environment, what you’re trying to do is increase basket spend on the existing trip. This can be achieved by “disincentivising” small basket shoppers. Aldi do this very successfully for example by not having express lanes, longer check out belts for larger basket sizes and not opening late nights.
If you’re a supplier or manufacturer in this environment, what you’re trying to do is ensure your product is in the shopping basket in all relevant trip types for your category. This means understanding in which trip types, and parts of the day (‘dayparts’) your category figures most heavily, and how shoppers shop during different trips.
In grocery, shoppers on a Stock Up shop will traditionally walk most or every aisle, so what’s most important here is aisle activation – being seen on the shelf via signage or ticketing (and pricing) once shoppers are in your category aisle.
Shoppers on a Dinner Tonight trip usually run the ‘race track’ – the perimeter of the store where all the chilled meals and soups, fresh fruit and veg, and bakery are. So if you’re a category generally consumed as part of dinner you need to be located in or near, and ideally bundled with, the destination Dinner Tonight categories.
And shoppers on a Quick Trip will generally head straight for their desired categories. This game, then, is about co-location – being right next to the biggest Quick Trip category types. This requires an understanding, usually via basket analysis, of what the biggest Quick Trip categories are.
A number of US retailers have been working with larger suppliers to pioneer work in this area, referred to as Trip Clustering. The intent is to map shopper traffic flows by trip type and then cluster the maps into similar behaviours that can then be executed against.
Trip type is determined by a combination of shopper research and basket data analysis (looking at the most common, and most expensive or dominant, items in the basket) to determine primary trip motivation. Example trip clusters might include things like Dairy demand, Immediate need, Explore store, Mostly meat, Constant cravings, Fresh fixation, and Health and Beauty calling. Traffic flows will differ for each. For instance, you might not be in a Health and Beauty related category, but your products might often fall into Health and Beauty trip baskets. You therefore need to understand the traffic map for a Health and Beauty Calling trip and ensure your products are located along the ‘path’ during that trip type.
Even if you’re lucky enough to be in a destination trip category (ie one the shopper has specifically headed to the store for), the shopper’s more recent combining of trip types means you are now competing with other destination categories for share of wallet and being visible during all relevant trip types is paramount.
The successful retail marketers in the next few years – the ones whose products will best ride a retail slowdown – will be the ones who shore up their purchase conversions via a thorough understanding of what type of category they are in, what shopping trip types they need to focus on and how to successfully execute against them.
For more information about shopper trip management contact Norrelle Goldring direct on 0411 735 190 or visit www.shop-ability.com
