The Fundamentals of Shopper Behaviour

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Abstract

In this report we discuss three fundamental patterns of shopper behaviour that every marketing manager should know about. Analyses of 654,000 shopping trips in US, UK, Australian and Chinese stores over the last decade show that these patterns are ‘law-like’ – the same in supermarkets, large hypermarkets, small convenience and speciality stores.

Key findings

Many shoppers buy just a few products – one is the most commonly purchased number of products on a shopping trip.
Most shopping trips are short – two thirds of all shopping trips, and a third of all supermarket trips are completed in less than 10 minutes.
Most shoppers cover less than a quarter of the store on a trip.
These empirical patterns were remarkably similar across the range of countries, retail formats, store sizes and time periods studied.

Given the complexity of the retail landscape, generalisable knowledge provides much needed benchmarks for retailer and manufacturer decision making. Just as architects must work with the laws of physics, marketers and retailers should design their stores and tailor their interventions to work with these real-world shopping patterns, rather than against them.

STUDYING SHOPPER BEHAVIOUR

Data about the behaviours of shoppers can be collected using a range of methods; from simple observations by researchers to automated tracking of shoppers in-store through mobile phones or radio-frequency tags *1.

*1. Contact the Institute to discuss the latest approaches. retail@marketingscience.info

We draw together data from 654,000 shopping trips collected using a range of methods including electronic tracking of shopping carts and mobile devices in-store, retailers’ transaction records, and in-person observations to describe three robust and generalizable patterns of shopper behaviour. These patterns were consistent across:

Large and small supermarkets in the UK, USA, and Australia. The supermarkets studied stocked between 30,000 and 50,000 grocery products.
Massive hypermarkets in the USA and China stocking 150,000+ product lines across a wide range of grocery and non-grocery categories, e.g. Walmart, Fred Meyer, Carrefour etc.
Smaller convenience-size stores in Australia retailing a limited range of health, beauty, pharmacy and convenience products.
Speciality stores ranging in size and retailing a limited range of product categories – in this case alcoholic and non-alcoholic beverages.

Fact 1: Many shoppers buy only a few products on a trip: one is the most commonly purchased number of items on a trip.

In any store, the most common number of products purchased on a shopping trip (mode) is one. This surprising result was consistent across markets, different store formats, and stores vastly different in size. For example, 50 percent of shopping trips in supermarket B, a moderately sized US supermarket (3,000m2), were for five products or fewer. Fifty percent of shopping trips at hypermarket B, a massive 15,000m2 store, were for five or fewer products (see median results in Table 1).

The 42-outlet average includes convenience and specialty stores.

These results confirm that shoppers use stores as a “communal pantry” (Sorensen 2009b) and make quick trips to buy small baskets of items as they need them – a just-in-time approach to shopping (Scamell-Katz 2012).

The majority of baskets are ‘small’ – typically less than 9 items.

Across the 42 retail outlets analysed, the average number of products purchased on a shopping trip was nine. However, because of the skewed distribution of the data (see Figure 1), the average masks the key insight of the mode, the most frequent value.

The retailer transaction data typically has a large ‘head’ of shoppers who purchase a small number of products (i.e. six or fewer) and a long ‘tail’ of shoppers who purchase a cart or basket-full of products. The data in Figure 1 is truncated to 60 products, but in reality extends beyond 120 purchases for a few shoppers/trips.

In convenience drug and speciality liquor stores, the number of items per trip was smaller – on average just one or two items. One was the most commonly purchased number of items in the smaller format stores and the same ‘big head, long tail’ pattern was evident.

The “big head” and “long tail” of shopping trips – most shopping trips are for a few items and just a few are for many items.

Figure 1: Distribution of basket sizes – US, UK *3, Chinese and Australian super and hypermarkets (n=18)

*3. In one store, only shoppers with trolleys were tracked, resulting in a small number of shoppers purchasing only a few items. That the data continues to fit the pattern so well is a testament to the robustness of these findings.

Figure 2: Distribution of trip length – US, UK, Aus supermarkets (n = 17)

Fact 2: Many shopping trips are quick: Two-thirds of all shopping trips are completed in less than 10 minutes.

Marketers and retailers managers often overestimate the amount of time shoppers spend in-store.

Across the four retail formats and 86,700 shopping trips studied, 59 percent of all trips were completed in 10 minutes or less. Table 2 summarises the differences across store types. Trips of less than 20 minutes were the norm for supermarkets while trips of less than five minutes were the norm for smaller convenience drug and speciality liquor stores.

Trips in larger store formats were typically longer – the median hypermarket shopper spent 38 minutes in-store. However, a substantial proportion of hypermarket trips (29 percent) were still shorter than 20 minutes. Moreover, differences in trip length were not directly proportional to store size. The hypermarkets studied were four times larger on average than the supermarkets, but trips were not even twice as long. Combined with the first generalization that many shoppers purchase just a few items, this suggests that many shoppers shop large format stores as though they were smaller convenience or grocery stores even though the larger floor space forces them to spend longer.

Interestingly, shopping trips in the Chinese hypermarket tended to be longer than in the US hypermarkets – 47 minutes on average compared to 37. More work is needed to understand cross-country differences in shopper behaviours.

The same “big-head, long tail” pattern was evident in trip-length data (Figure 2). On any given day, many shoppers spend a limited amount of time in store and a few spend a long time. The data in Figure 2 was trimmed at 100 minutes, although some trips extended beyond even this!

Across store formats, the majority of trips are quick.

A substantial proportion of hypermarket customers shop as though they were in a smaller retail outlet, spending a limited amount of time in store.

Fact 3: Shoppers visit only a small proportion of the store on any single trip.

Some retailers and marketers assume that shoppers methodically work their way up and down each aisle, only heading for the checkout once they have acquired all the items they desire. Even shoppers tend to assume they behave this way. In exit interviews, 25 percent of shoppers claimed to shop the whole store (i.e. go up and down every aisle) (Scamell-Katz 2012).

Across the 42 grocery stores, hypermarkets, drug stores and speciality liquor stores studied, shoppers typically visited 25 percent or less of the store on a trip (see Table 3 for summary metrics). Whilst this result may be alarming to retailers and marketers, it is not surprising. The majority of shoppers are very familiar with the store layout, and most only want to purchase a few products, so it makes sense that the majority of shoppers visit just a proportion of the store.

Although the supermarkets ranged in size from 2000m2 to 7000m2, the number of square meters shoppers typically covered showed little deviation, regardless of store size, shown in Figure 5.

On average, half of all shoppers reached only 600m2 (approximately 6500ft2) of the store; and less than a quarter covered more than 1000m2. Only a few ‘outliers’ visited more than 1000m2 of the store. In larger supermarkets and hypermarkets the “whiskers” or error bars of Figure 3 extended further while the middle “box” showing 50 percent of shoppers was similar.

Figure 3: Area of store covered on a single shopping trip (US supermarkets, n=11)

That shoppers typically visit a small proportion of the store on a shopping trip builds on earlier observations by Sorensen (2003) that shoppers visit about a quarter of a supermarket on an average trip. We extend this finding to new retail contexts and demonstrate how it relates to the square meters visited on a shopping trip, a more robust measure. For an average supermarket of 4,000m2 (43,000ft2), half of all shoppers visit just 600m2 and few visit more than 1000m2, suggesting an upper limit on how far shoppers are willing to walk on a shopping trip.

The number of square meters shopped typically did not increase relative to store size. The middle 50 percent of shoppers consistently covered between 300 to 900m2 of the store.

SUMMARY & IMPLICATIONS

For Retailers

Retailers compete for shopping trips. The more shoppers who believe the store is a convenient, attractive way of getting what they want, the more shopping trips the store wins. Most shopping trips are for only a few items, so stores need to cater for shoppers making these quick trips. Initiatives that support quick/small trips such as shopping baskets, express lanes and fast payment solutions should be prominent. Such changes will improve store attractiveness and give shoppers more time (to buy more). Similarly, items that tend to be bought together should be located close to one another.

Given the heterogeneity of consumers and their shopping trips, we see that customers are given the unenviable task of locating the very few items they want among the thousands on display. Stores, therefore, should be easy to navigate, and easy to shop quickly. Making product categories easier to find and shop through the use of ‘signpost brands’ may help shoppers make the most of their limited time in-store. Secondary displays of top selling items may also play a strategic role in helping shoppers to get the bulk of their shopping done as quickly as possible.

The reliance of shoppers on mental maps (as opposed to physical signage) of the stores they regularly shop means that changes to store layouts should not be undertaken lightly.

Above all, retailers need to work with, rather than against these patterns of shopper behaviour. Given the intensity of competition among retailers, those who understand these patterns and adapt their practices will have a competitive edge in attracting customers.

For Brand Managers

There is a clear need to make it easier for shoppers looking for your product category and brand to find them fast. To this end, it may be worthwhile conducting market research to find out where customers expect to find the product, and what cues they use to navigate towards it.

The prevalence of short shopping trips suggests that the emphasis should be on helping shoppers recognise and find brands quickly on shelf by providing visual cues, such as images or colours (see Scamell-Katz 2012). Just as retailers should keep stock location static, so too should brand managers undertake minimal changes to packaging, unless it is to improve visibility and recognition of the brand, to keep it easy for existing customers to find the brand/SKU.

Store coverage patterns can also be used to identify locations for secondary displays in-store to ensure that every shopper has the opportunity to see and shop the category even if they visit just a small proportion of the store.

These findings also have implications for the design of shopper research. Research methods and sample frames such as loyalty card data that may exclude quick trip/small basket shoppers cannot provide a complete view of shopper behaviour. Equally, methods that rely on shopper recall are likely to be biased.

Research into the fundamentals of shopper behaviour is continuing at the Ehrenberg-Bass Institute. To suggest new research sites, contribute data or discuss the findings, contact retail@marketingscience.info

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The Fundamentals of Shopper Behaviour

Abstract

Key findings