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In today’s retail and consumer packaged goods marketplace, consumer shopping habits are changing rapidly. Households have more choices in where and how they shop, what they buy, and how they engage with retailers and brands while making their purchase decisions.
Courtney Acuff, Catalina
Consumers are shopping in more retail channels and formats then ever before to fulfill their grocery and household goods needs. They are utilizing a wide range of sources, both online and offline, to access information, discounts and deals.
It’s an “And World” of choice for shoppers, and drug store retailers have a tremendous opportunity to benefit. The average grocery shopper now shops regularly at 2.5 different stores, according to the Food Marketing Institute’s U.S. Grocery Shopper Trends 2015.
Despite a recent study showing that food and product consumable sales within drug stores were flat in 2015, drug stores are well positioned to tap into this cross-shopping behavior — if they can engage today’s shoppers based on preferences and behaviors, at checkout and all along the buyer’s journey.
Leading U.S. drug stores are innovating across mobile, online and in-store media channels to more effectively engage shoppers.
Walgreens’ open API (application programming interface) and developer portal is proliferating new types of mobile engagement and commerce, such as its Quick Print photo printing service and prescription refill capability. Rite Aid recently installed beacons across 4,500 U.S. stores to enable the delivery of ads, coupons and supplementary product information via mobile app providers. And CVS recently announced a partnership for curbside pickup.
At the same time, retailers are not pulling back from more traditional channels of engagement, such as weekly retail circulars, although many are seeking new ways to increase the relevance of weekly deals through personalized delivery at the point of sale. Not backing away from offline channels is, and will be for the foreseeable future, critical to successfully engaging today’s shoppers. In today’s And World, shoppers of all ages are embracing both online and offline.
Consider generational differences in coupon usage among today’s consumers. When Gen X and baby boomers are compared with Millennials, these younger shoppers do, in fact, use digital coupons more frequently than the other two groups, according to a recent study on coupon usage from Valassis. Some 81% of Millennials said they use digital paperless coupons, compared to 74% of Gen Xers and 50% of boomers.
But (and it’s a big but) Millennials are even more likely to use non-digital coupons, including 87% who say they use coupons received in the mail and 87% who use coupons they receive in-store. What’s more, a much higher percentage of Millennials are increasing their usage of coupons, both paper and digital, than other groups.
Relevance and value are the cornerstones of successful shopper engagement today — and tomorrow. It’s critical not only that retailers and brands demonstrate value but that they personalize that experience by bringing the right offers, coupons and deals to the right shoppers, and in whatever channels the consumer chooses to engage.
In its Engaging the Selective Shopper study, Catalina has shown that at a time of unparalleled choice in grocery stores, shoppers today ignore all but a tiny fraction of available UPCs (universal product codes) and buy just a sliver of the available products on store shelves. On average, they buy just 0.7% of the available UPCs in a store during an entire year. In fact, roughly 80% of a brand’s volume is driven by just 2% of shoppers.
Major drug store and grocery retailers are implementing more relevant and effective ways to reach consumers through the products and brands that matter most to them. The example of personalizing the deals in the weekly ad circular is just one powerful example. Weekly deals are a staple for most retailers, but without personalized delivery, many shoppers, if not most, fail to see the relevance.
True omnichannel marketing and engagement needs to meet shoppers wherever they are. Increasingly, that will mean a mix of data-driven advertising and promotions that reach shoppers through both their purchasing behavior and the specific channels and stimuli that most influence and enhance their path to purchase.
From purchase-based online advertising to targeted load-to-card solutions to personalized shopping circulars to point-of-sale coupons and advertising, the right solutions will depend on an intimate, data-driven understanding of each shopper and that household’s path to purchase.
Courtney Acuff is vice president of product at Catalina.
