CPGmatters: Campbell Soup Challenges Belief That 70 percent of Buying Decisions Made at Shelf
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
The long-held belief that shoppers make 70 percent of their buying decisions at the shelf may not be true after all.
New research from the Campbell Soup Company proves instead that shoppers make 80 percent of their decisions to fill a specific food-consumption mission before they enter a supermarket. This is true for mainstream, center store categories with recognizable brands such as soups and shelf-stable juices, according to Phil McGee, director-shopper insights at Campbell.
The Campbell study differs from others by attempting to explain the path to purchase. In other words, rather than simply map the “who, what and where” of the path, Campbell’s research explores the “why, how and what could be,” said Mr. McGee.
“Context is king,” he emphasized. “Goals within context drive shopper decisions. If my goal is to buy for tonight’s meal and I’m in the supermarket, I’ll decide one way. If I’m planning for the weekend, and I’m home flipping through circulars, I’ll decide another way.”
To better understand how context affects decision making, Mr. McGee describes the notion of shoppers’ proximity to consumption. “The further away shoppers are from the time of consumption, the more aspirational they are when considering choices; this means health benefits become more important for foods that shoppers will be eating in the future. By contrast, shoppers in the store buying for meals they’ll eat soon focus primarily on sensory appeal and taste expectations, and secondarily on value,” Mr. McGee explained.
Generally, though, the study found the battle for value often takes place outside the store. Observed Mr. McGee, “Shoppers have already decided by where they go to shop that a particular store will give the best value for that particular trip. The retailer is a proxy for price, and shoppers generally won’t try to nickel and dime once there.”
The comprehensive study examined U.S. adults in eight different phases of research, including eye tracking, in-store observation and interviews, online interviews, in-home ethnography, EEG (electro-encephelograph) monitoring and mobile eye tracking. Within each phase, Campbell attempted to cover as many stages of the path to purchase as was practical — including living, planning, shopping and experiencing — in order to understand decision making activities and influencers within and across stages.
“This work taught us that people aren’t making their lists or shopping decisions only when they think or say they are,” he emphasized. “Ideas may come to mind at seemingly random times, like when going to sleep or driving to work. In fact, rather than two or three moments of truth, we find there are infinite moments of truth across the path to purchase. The good news is that some of those infinite moments are more influence-able than others. These are what we call ‘pivotal moments of influence.’ An obvious high proportion of these pivotal moments occur outside the store. Knowing where, when and how decisions are made helps shopper marketers make more efficient and effective investment choices.”
Discussion Questions
Discussion Questions: Do you agree that the retail industry has been wildly overestimating the extent to which purchasing decisions are made in-store? If so to any degree, how should that affect shopper marketing in-store and out-of-store?
There’s a difference between deciding to have soup for dinner and choosing which soup to have. The former may be what this study is focused on while the latter is what the previous studies have focused on. Nobody has ever suggested that everything happens in the store. However, we know that many decisions can be influenced in the store. It’s not an either/or thing, it’s a both and more thing.
Campbell Soup research may be right, but I doubt the extent of it.
Unless there is no jingle in their jompers, shoppers will most likely buy unplanned products once they get inside a food store. That’s part of the adventure … and I believe many shoppers enjoy that adventure.
This research confirms what most supermarkets have observed at their front end. Today’s daily percent of a week’s sales has significantly changed. Years ago, Monday was the lowest and Saturday was the highest. This was before Sunday openings. Today the Monday through Friday percentages are not nearly as far apart. This is further supported by the checkout peak of 4 to 6 pm. All driven by what to have for dinner tonight.
There have been several new studies challenging the 70% number. However the conclusion appears to be very closely related to the question asked. Do you know what you plan to fix for dinner when entering the grocery store? Do you make a list before a regular trip to the store? Do you make a list when going to the store to pick up a few needed items? Do you write a product such as soup or chicken soup or Campbell’s Chicken Noodle soup on your list? Each question will result in a very different number of what decisions will be made at the store. Apparently consumers do a different amount of planning depending upon the occasion or reason for the trip.
I believe that purchase decisions vary by category. With expertise focused in the health, beauty and wellness arena, our company research has revealed similar findings to Campbell’s–if someone has a headache, as an example, they will shop within a very finite area of the store to seek pain relief. And then select among the brands, forms, and options at shelf.
On the other hand, someone shopping for beauty or wellness may actually enjoy the “adventure” (as previously cited in this discussion) and add items to their market basket based on impulse (product appeal, packaging, prior advertising, etc.).
Retailing is not exact science … there will forever be an art side of the equation.
The research and Mr. McGee’s observations make sense.
My constant question in this age-old discussion is “which decision?” Is it to shop? Category? Brand? Size? Flavor? Almost certainly some of these decisions are very often made at the shelf, which is what makes in-store conditions so important to actual sales performance for both retailer and manufacturer. But we are never sure which ones, on which occasions and for which purposes.
Moral of the story — you have to play a full-court game all the time. Half-court offenses that begin at the store door and end at the shelf will not win the game.
The research is interesting, and much of it rings true. I’d love to see more on specifically what can/should be done with this info to produce more sales, more profitably. Don’t know if those specifics are indeed available but proprietary, or if this research is “nice to know,” but not “need to know.” To my mind, merchandising will always be part science, part art, and part SWAG (scientific-wild-ass-guess).
While I agree that purchase planning can, and does, take place at home and other non-store locations, I believe that consumers still make many of their purchase decisions in store. An easy example would be that a customer is walking down an aisle and notes that a product they buy, but were not planning to on this purchase trip, is on sale at an attractive price.
I do agree that the distance from the meal occasion has an impact on the purchase decision. All of us plan to eat healthier, etc., when we have the time to plan, but when we are hungry and are confronted with making a purchase, the items we purchase are definitely different. As a student in a food retailing curriculum, one of the statements I remember regarding market baskets was that a hungry man without a list always had the largest market basket. I believe had we looked, we would have also discovered that the basket was filled with more “good tasting” than “healthy” food.
Shoppers have a tight range of purchase options on core items. If I like chicken noodle soup, for example, and buy it every week, in one sense that would seem to support the Campbell research. On the other hand, as Gene Hoffman points out, I’m looking to fill out that weekly shop with items that appeal to me at the moment the old way of looking at the issue seems right.
So…bottom line… Campbell is probably right for a majority of constantly purchased items and retailers should keep merchandising for those affordable indulgence purchases.
Once again, retailing eludes a black or white definition — what a surprise.
I found the findings of this study very interesting. Although I agree that a large portion of the purchase decision process is done before entering the store, today there is a tremendous opportunity to influence shoppers at the point of purchase. If this study was done prior to the recession (say 2006 or 2007) I think the results would have been different. I can only assume that more shoppers today are planning ahead since money is tight and people are watching every penny.
So, what is a retailer and CPG manufacturer to do? Work closer together to create solutions for shoppers that meet their current needs. For example, displays that offer a shopper a meal solution (Campbell’s chunky soup with minute rice). Even better, replace one of the items with a store brand to help the shopper save money. Results: The consumer saves, the national brand gets a premium display location and the retailer draws in consumers and builds store brand acceptance. Win, win, win!
The prestore list, whether written or mental, determines which aisles you shop. The final decisions are made at shelf. However, in-store alone is not sufficient to create or drive a brand.
The path to purchase is changing as technology plays a larger role in the shopper’s life. If Mom has a few minutes in between meetings at work, and looks for a dinner recipe on her smartphone, and that recipe calls for soup, her soup decision is made long before reaching the retail shelf. Same is true when they see a recipe idea shared on their friend’s Facebook site.
The fact is, information is being shared in so many ways, at so many times of the day, that it makes sense that Campbell is finding that fewer decisions are being made while at shelf. We shouldn’t be surprised if this number continues to decrease over time.
I’m fascinated by this, “The further away shoppers are from the time of consumption, the more aspirational they are when considering choices.” Could that be true in selection of furniture, cars, jewelry, etc? Some RW researcher should puck it up for if true, it could really help luxury/premium brands.
Most people have a list, but if they see one-liter extra virgin olive oil on an end-cap at $4.99 with a nice sign, they’ll buy it, which leads me to the old adage of “great displays, at great prices sell goods the customer never had intended to buy, when they came in.”
Tomato soup at 3/$2.00 will sell 10x faster with a display and sign, than off the shelf, so keep the ends full of good values, and the list will go out the window.
Campbell Soup’s survey and data might be closer to accurate than what we have been led to believe by the grocery industry. Impulse buying may make up a larger percentage of in-store decisions; but the buying list is made at home prior to going to the store. That list is the essentials and maybe a few impulse items; but it is made based on need and cost factors.
If we waited until we were in the store to decide what we want and need; our carts would be filled with more of what we want and less of what we need. Plus our wallets would be lighter at a time we need our waist lines to be smaller.
Absolutely. Consumer choice is far murkier and harder to understand than anyone wants to admit. But just as much as I disagree with the “all in store” idea, the “almost all out of store” for a low price consumable like soup seems like attempting to simplify what can’t be simplified.
On the other hand, our research has found that once in the store, consumers are generally on a mission and have little time to investigate product.
Assuming it’s a repeat purchase and assuming there are no sales and promotions in a given category when the shopper arrives, then yes, maybe Campbell’s research is right. But these are two big IFs. If there is a compelling sale, a new brand/product or an interesting promotion, the buyer will almost always exercise their options. Is this a case of focus group says X but field research says Y?
Most of this type of research is looked at as either/or. There is no doubt a place to review both studies as complementary as Dr. Needel mentions below and as I treat in my blog.
There are plenty of decisions made at the shelf, some of which can be influenced.
Funny thing about moments of truth: They ring true only when your product is the one purchased.
It is axiomatic that 100% of purchase decisions are completed in the store. It is also axiomatic that 100% of purchases are influenced in some way by messages, experiences, behaviors, word of mouth, or planning that take place prior to the actual shopping trip.
On the other side of the equation, as a 2009 Henkel-Dial report “The Shopper’s Perspective” found, shoppers exhibit underlying and relatively enduring preferences, planning habits and traits that affect if and how they may respond to various stimuli outside and inside the store, including prices.
Some moments of influence may be more pivotal than others, and as others here observe, individual traits, purchase context, store choice and shopping occasion are among them. One of the keener insights of shopper marketing is an awareness that purchase response is an outcome of a massively multi-variable equation.
That means each path to purchase is a unique meander through the web of influences. 100% of the time.
Is that why end-cap displays don’t work–or do they?
More and more, shoppers are using shopping lists and collecting coupons. All this indicates that decisions are made off site.
The retail industry is spot on in estimating their importance on influencing and impacting purchasing decisions. Manufacturers/CPG concerns know that the consumer is at a “Moment of Decision” when she/he is in the store.
That is certainly the collective wisdom of the crowd. The BIGresearch June, 2011 Simultaneous Media Usage (SIMM) Survey asked 25,150 Adults, 18+, “Please tell us which of the following media influence your GROCERY purchases?” The respondents were given 25 different media forms — traditional, new, and in-store.
The top 6 media influencers mentioned were:
— 70.4% Coupons
— 54.6% In Store Promotion
— 38.2% Word of Mouth
— 37.7% Advertising Inserts
— 31.4% Newspapers
— 31,4% Direct Mail
That not to say that the other 19 media forms don’t have an impact on influencing the consumer. They do to varying degrees and among different segments of the population. Campbell Soup and other leading CPG firms do well to align with their respective grocers, and recognize the STRONG VALUE of in-store.
No, no, no. The incredible rise and sustained presence of house brands over the years points to the importance of in-store decisions. Add to this the growth of impulse purchases, and the strength of impulse stores like all of the dollar stores and we have a large retail segment that defies this single study.
People make lists; people make choices in store too.
Sometimes the “needs” on my list are at a brand level, sometimes at a volume/pack size level, many times neither. How I make a list and a choice for a product is different depending on my mission, my time, my wife’s request/demand, a recipe, what I bought before, an offer, an “ad,” how I’m feeling….
Getting it right even for one person is pretty tough, especially with the “push” mentality that still prevails. Applying survey-based insights from a few thousand people just doesn’t get to the “what is right for me” solution.
I hope the benefits of research like this and phrases like “Infinite moments of truth” are to challenge the current status quo and accelerate the industry towards “relevance” and personalization. The winning companies of tomorrow will be the ones that successfully crack this.
I think they’re both right. You make the decision to buy “peanut butter” at home when you write out your list, but you make the decision to buy Jiff or NOT buy Jiff (because you’re lured by something better) at the shelf. You may be buying peanut butter made by Jiff by rote too, but you can still be swayed by the right message at shelf.
That’s why the combat at shelf level is stronger than it’s ever been — (that and private label of course) and why every CPG company needs to be smarter about the shopper, not just the consumer.
I have trouble with the basic premise of this topic. In the first ‘graph, Campbell referenced “The long-held belief that shoppers make 70 percent of their buying decisions at the shelf.” They then supposedly counter that notion with the argument that “shoppers make 80 percent of their decisions to fill a specific food-consumption mission before they enter a supermarket.” Apples and oranges.
Making “food-consumption mission” decisions has nothing to do with choosing brands, flavors, line extensions, new products, or sizes in the center-store. What about in-store promotions, shelf signs and coupons, new package designs, improved formulae, and out-of-stocks? Suddenly and yet consistently, that 80% figure becomes moot and the at-shelf decision-making tendencies more closely representative of reality. Is it 70%? Who knows? But, that percentage feels good. That percentage is comfortable. What I do know is that all center-store brands, including Campbell Soup Company, spend a bunch of bucks trying to affect the at-shelf influences mentioned above.
Wooo! “Infinite moments of truth!” Didn’t we kick around that exact concept of the infinity of moments of truth recently in one of our discussions? If it’s accurate that moments of truth are infinite, how can Campbell in one breath assert an 80% out-of-store decision-making process, and then acknowledge that along a given shopping timeline anything and everything might change? Campbell is a great company and I hope they never stop making tomato soup to go with my grilled cheese sanwishes (they’re like sandwiches, only chronically mispronounced – eek!, there’s a “d” in my sandwich!). But, this looks like “research” for the purpose of gaining headlines and keeping the research and PR departments employed.
The old 70% solution has always had its doubters. This research goes beyond the doubt to provide evidence to the contrary. Of course, I may plan to buy soup at the grocery store and Campbell may be the brand I almost always buy. But my purchase of soup could be influenced by a sale on a competing brand of soup. The purchase decision in that case takes place in the store.
Most of the (above) comments about this article are right on track in that they all suggest…”well, it depends.” I am part of the problem when it comes to the story of most decisions made at the point of sale because of my work in package design research.
Campbell’s research is exhaustive for sure. Is it comprehensive? I am not certain. There is nothing in the article that describes the basis for each exploration…at home, in the store, on line etc. I too have followed these various paths in search of the Holy Grail on purchase decision behavior. The deliberate study of in store choices (think of cold/cough remedies when you have one) vs. the impulsive/knee jerk selection of a salty snack for a DVD night at home are two very different scenarios at the point of sale. What goes into those selections before people reach the store is certainly an important factor. Trying to place a weight on what happens before or during the in-store situation requires taking into account all (or nearly all) of the possible scenarios that influence category and brand decisions.
Focusing on the in-store factors of merchandising, packaging and pricing recognizes the interaction of previous experience with the immediate effect of what goes into the shopping cart. It’s an approach that doesn’t weigh all the factors but magnifies the need for effective in-store presence. Marketers can focus on each step of the various paths or concentrate their budgets on the few that matter most for their brand. Whatever their choice, they should understand what they are including, excluding and giving the most weight (budget) to. Having said all that please remember “Unseen is unsold.”
I think we had a discussion on this some time ago, when Ogilvy Action reported that only 40% of purchase decisions are made in the store. At the time, I suggested that perhaps as few as 10% of purchase “decisions” are made in the store, given the VERY large number of purchases that are repeat buys that are made so often that they are habitual.
Having this discussion again reminds me of how fact-insensitive this industry is. It isn’t just that people might disagree about this or that, but that even when something is definitively, scientifically proved, it doesn’t mean that it will have much impact. Several years ago at the largest shopper insight conference, one of the largest brands reported on a joint study of an aisle reinvention, with a large retailer, where they showed achievement of substantial sales lifts.
An audience member asked how the roll-out was going, and even though the study was two years old, NO ROLL-OUT had occurred! Why? I was reminded of this recently when a senior shopper researcher for another global brand asked me if he could show the retailer that they would both benefit from a certain merchandising practice, wouldn’t it be eagerly embraced? The short answer is, not necessarily.
Years ago I recognized that shoppers’ behaviors diverged widely from their own belief about that behavior. Shoppers do not know how they shop, because so much of the behavior is instinctual and habitual. See Neale Martin, “Habit, the 95% of behavior marketers ignore.” Spending the past ten years studying, mostly, shoppers’ behaviors, has helped me to understand the overall process much better. But now I have learned that retailers are no more “rational” than are the shoppers in their stores.
This doesn’t mean that neither shoppers’ behaviors nor retailer’s behaviors are not understandable. But simply that they must be understood in terms of what actually happens – which may diverge very far from what every shopper “knows” and every retailer “knows.”
My favorite American philosopher, Josh Billings, summarized the situation well when he said, “The trouble with most people isn’t that they don’t know … But that what they know, ain’t so!”
By the way, discovering that a much smaller share of purchase decisions are made in the store, than previously thought, can easily lead to the misleading conclusion that they are doing a lot more “deciding” at home or elsewhere. The correct conclusion is that people are not thinking about purchases nearly as much as we thought.
Great topic with fabulous opinions, comments, and perspectives shared. I am very focused on the notion of applying the appropriate messaging to be (fill in with your favorite); disruptive, informative, directive, etc., and knowing when to use each (or others not listed).
We are getting closer–but the journey continues. I think the Campbell Soup Company research forces us to confront our assumptions, biases, prove our points–and those are all good things.
Go back to the source of the 70% number. It is the sum of consumers who specify a category (buy soup) but not a brand, consumers to planned to buy one brand and switched (planned to buy Progresso and bought other brand), and consumers who bought something unplanned (i.e., not on their list). Suspect the percentage will vary across categories — some are more impulse, others are more brand-driven.
Nope. I can’t agree that it’s less. It may be ‘in general’ less, but not less. If it were less, why would every CPG be fighting for shelf space? Sounds too simplistic doesn’t it? I think not.
I may have soup on the list, but I will choose what kind at the shelf. I will choose what brand at the shelf or I may buy it fresh from the deli.
Someone said many of the answers are “well, it all depends.” It sure does! It depends on many factors. Am I hungry? Am I not hungry? Am I on a meal trip? Am I on a weekly/biweekly shopping trip? The list goes on. I could even be on a vacation shopping trip where nearly 100% of the decisions are made at the shelf and totally influenced by the merchandising of the store. Influences vary. It will also vary by retailer.
There’s more to the science than generalizations. There’s also more to it than what a single study with a motivational point of view can provide.
The great thing about food shopping is that it is more frequent than most other shopping. It has so many varieties of types of visits and so many opportunities to influence. Some choose to do so. Some don’t at all or their attempts are poor. Food shopping can be an adventure or a daily chore depending on the type of trip. I would put forward the idea that regardless of the trip, the opportunity is equal either way.
Customers probably do decide to buy soup (and other products) before they set foot in the retail store — but when they do go down the soup isle, they have Campbell’s, Progresso, no-name, exotic name/price and store-brand to choose from. If Campbell’s point of sale (shelf) promotion is the “loudest” (or in some way the most attractive) shoppers are probably persuaded to buy Campbell’s. One thing is certain, at retail is one of the few places shoppers actually seek promotional materials and advertising (often opting to fast-forward through it as they watch TV.)
Most shopping lists probably have clam chowder or chicken noodle written on them (even if there is a proclivity for or history of buying Campbell’s.) Then, when faced with the point of sale promo materials, the BRAND is chosen.
I should add that my experience is with beverages, (and almost entirely with alcohol beverages) which have very low loyalty to BRAND (and are highly influence by POP promotions). Perhaps soups are different — but if the only choice was Campbell and Campbell as Dan suggests, I would think Campbell would be somewhat less concerned about the 70% figure.
The data point we have is something like this 70% of all [retail or B2C] purchase decisions are made at the point of sale, except for alcohol and function beverages where the figure is closer to 75%.
I have been reading, recently, several books on the subject, including “Shopper Intimacy,” and “Shopper Marketing and The Power of Marketing at Retail,” and it certainly appears that there is data — and lots of it — that supports the importance of “POP” (and that it is growing in importance) and the decline of other persuasive forms of promotion especially traditional media spots.
As you may recall, Pepsi even suggested in their Snoop Dog TV commercial (a commercial about POP displays that was probably fast forwarded through the second time a viewer was exposed to it) that “the product/brand with the best POP displays wins.”
“Is that all you got?”
“I’m up to my knees in zero cal-o-ries….”