AddThis

Consumers vs. shoppers, it all makes sense now

Ever wonder what the difference was between a consumer and a shopper, but were afraid to ask at the risk of a marketer spewing more jargon. Good news. Turns out consumers and shoppers are pretty much the same and have been all along.

Offering a breath of fresh air on the topic this week was Fern Grant, SVP strategic planning for MARS Advertising. She was among the marketing and shoppers insights executives who participated in the second annual SHOP conference presented by the Center for Retailing Excellence at the University of Arkansas Sam M. Walton College of Business. Grant, a psychologist who became a market researcher turned advertising executive, made the case for a holistic view that puts the “person” at the center of the discussion rather than shoving them into the “consumer” or “shopper” box depending upon where they may be along a path to purchase that is no longer linear. People who buy stuff don’t view themselves as consumers or shoppers, and if brands, retailers and agencies did the same they would be better able to leverage the wealth of insights that are now available to more effectively influence behavior.

“Shopper marketing is about change and getting the shopper to do something she isn’t currently doing,” Grant said. Insights gleaned from data fuel the process. “Data tells me what people are doing today whereas insights tell you what they are going to do tomorrow how they might do things differently if you engage with them differently.”

While Grant used the terms shopper and consumer throughout her conversation with the several hundred people who gathered in Fayetteville for the conference, she also made the case that the distinction no longer makes sense and perhaps never did. In some respects the consumer vs. shopper view of the world arose because brand marketers viewed consumers as the universe of people they wanted to influence to buy their products. Meanwhile a new discipline emerged focused on influencing behavior inside of stores called shopper marketing. But then the distinction between where “the store” begins and ends got very blurry as it became possible to engage in shopper marketing when consumers were not physically inside a store. Today, the store is in your pocket, on a desktop or on a tablet device that didn’t exist when marketers first began differentiating between consumers and shoppers.

Doing so now gets in the way of effective strategies to influence behavior, according to Grant. Brands are focused on the universe of consumers while retailers want to understand their customers and that detracts from understanding people as human beings. For example, within the agency world there are people focused on consumers who talk about things like brand equity and consumer segmentation while those on the shopper team talk about basket, trips, trip type and list-making, according to Grant.

“It is really getting in our way of understanding who people are as human beings,” Grant said of the notion of an individual morphing back and forth between a consumer and a shopper. “Our experiences as a consumer can prompt a different shopper experience and our experience as a shopper can influence us as consumers.”

Why this matters now is because the stakes have never been higher when it comes to gleaning insights from data that can be transformed to actionable strategies to grow sales in a U.S. market challenged by demographic realities that are disturbing to CPG companies.

“This is probably the most exciting time to be in insights because the need is greater than ever before and past practices are not working,” said Phillip Chambers, head of global insights at PepsiCo.

He suggested that if shopper insights capabilities had not existed during the past 20 years the growth that brands and retailers experienced might have happened anyway because the overall market was growing. That’s not expected to be the case in the next 20 years, not in the United States anyway, so it is a good thing that, “the depth of understanding about what motivates consumers is at a point of exponential potential.”
Chambers said volume growth will be more challenging to achieve in the future due to shrinking families and commodity prices are increasing as a byproduct of globalization. Meanwhile, brands are clogging the market with an expanding array of products, but retailers are shrinking their store sizes.

Chambers contends the CPG industry is a defining moment that requires a shift from the supply chain, efficiency oriented model to one driven more by fragmented pockets of demand that requires a higher degree of speed to bring products to market and then a more dynamic feeback loop which allows for faster reaction once products are in the market.

“Major CPG companies are still anchored in an efficiency, scale and supply chain model,” Chambers said. “Some people are going to get this right, and I don’t want to have to compete against them.”