Category “shop around” levels should dictate customer acquisition strategies
While Smokey Robinson’s momma may have told him to shop around for love, the latest Major Market Retail Report (MMRR) from Toronto consultancy KubasPrimedia suggests that Canadians also like to shop around for everything from women’s wear and men’s casual wear to housewares and personal care products.
The MMRR found that consumers shop at an average of 2.6 stores in each of 30 categories tracked by the report – which include apparel, consumer electronics, furniture and video games and equipment.
Women’s dress wear is the most “shopped around” category, with consumers shopping at an average of four stores, followed by women’s casual wear (3.9 stores), personal care products (3.7) and children’s wear (3.5).
The report suggests that apparel is the most shopped around category because consumers tend to put more effort into buying clothing, and the selection tends to vary significantly from store to store and season to season. “Consumers have to shop around to see it all,” says the report.
While individual preferences also play a role in the personal care products category – which encompasses items like soap, shampoo and toothpaste – it is also shaped by what the MMRR describes as the “wide availability” of these products at drug stores, department stores and other mass merchants. Since a bottle of shampoo is the same regardless of where it’s purchased, the MMRR suggests that shopping habits in this category are motivated largely by price and convenience.
Drug stores are the least shopped around category, with consumers shopping at an average of 1.4 stores. The report suggests this is because pharmacies keep detailed customer records – it makes sense to stick with the same prescription outlet. Many customers also have drug insurance plans, says the report, making shopping around for a better price redundant.
The MMRR suggests that in categories with a higher degree of shopping around, the strategy should focus on converting existing traffic rather than attempting to attract new traffic. “This is the same as reducing your walk-out rate,” says the report, which urges retailers in this category to determine who their new converts are and target their advertising accordingly.
In categories with less shopping around, the MMRR suggests that the focus be on up-selling existing shoppers. “Bringing in new customers could be very lucrative, but you’ll need to come up with something particularly innovative and compelling to pry them from the competition,” it states.
The MMRR is based on surveys of 1,520 consumers in the country’s six largest markets, and is considered statistically accurate within plus or minus 2.5%.
