Shopping Lists Spell End of Impulse Buying
Impulse shopping? Not so much. That’s the conclusion of
new research by NPD Group, which finds that the overwhelming majority of consumers
are going off to food stores with shopping lists and coupons in hand.
According
to NPD’s Before the Store report, 94 percent of U.S. households
prepare a written shopping list before they head out and 72 percent never or
only occasionally deviate from their planned purchases.
NPD also found that most
households have a primary person, usually but not always a woman, responsible
for handling the grocery shopping. Interestingly, the development of the shopping
list appears to include various family members. Kids, for example, contribute
to 40 percent of the lists made up by family households.
“For food and beverage manufacturers and retailers, it’s all about
getting on the list,” said Ann Hanson, executive director of product development
at NPD Group and author of the report, in a press release.
“With so many purchasing decisions being made at home where meals are
being planned and shopping lists assembled, it’s important to focus on
the consumer at home before they leave for the store,” she added.
Among
those who buy off the household shopping list, there are several explanations.
Mentioned most often is the fact that they saw it on promotion (80 percent).
Reason number two mentioned by 67 percent is that they realized they forgot
to put an item on the list. A smaller number, 37 percent, chose to buy something
that “looked
like a good meal or snack solution.”
Discussion Questions: Do you think there is more or less impulse purchasing
taking place today than in the past? How do retailers get consumers to buy
additional food and beverage products when so few are purchasing items not
on their shopping list?
94% make a shopping list! Who are they kidding. Just go to the grocery store for an hour and count how many people you see with a shopping list. I don’t know how they asked the question, but you can bet that it was designed to elicit the socially appropriate response that, “Yes, I always shop with a list and rarely deviate from it.”
How do we reconcile this with all the data we have that says many decisions are made at the shelf. Ignore what that actual percentage of at-shelf decisions is–it’s got to be more than 6%.
If we’ve learned anything from people like Martin Lindstrom it’s that what people say about why they buy and reality are two different things. I’d still highlight the high-profit items and worry less about making ” the list.” Ramp up the bakery smells and put more flowers by checkout.
The Great Recession turned a lot of consumer practices upside down. One of those was impulse buying. Consumers realized that they were exceeding their budgets when they did not plan before leaving for the store, so they changed behavior and now use lists…and stick to them.
Offering consumers thrifty, time-saving meal solutions is one way to get on the shopping list. A strong promotion is another.
None of this is really new. We’ve been talking about meal solutions for years and promotions for even longer. The delivery technology may change, but unless your brand is valuable to the consumer, it will remain on the shelf and not go into the cart.
Attention all supermarket executives; if you miss the profitability you used to gain from impulse shopping, go look at yourselves in the mirror and say these words, “SKU rationalization.”
SKU rationalization has created an anti-impulse environment that no longer makes the shopping experience conducive for unplanned purchasing.
You have created a store that is just like everyone else’s store with the same SKU assortment, the same choices, and the same products in all the same places at pretty much the same price, except for when you compete by only running discounts and scan downs.
Consumers have always relied on shopping lists. That’s not new or unusual. But consumers used to buy impulse, specialty, niche, and other unplanned purchases, with or without a shopping list. Now, you have taken so many of those opportunities away that she pretty much just sticks to the list.
On the one hand the NPD data suggest that almost all consumers shop with a list. And on the other hand we have more than 80% of brand decisions made at the store. There does not have to be a conflict in these statements but rather the reinforcement of the importance of packaging at the point of sale.
That shopping list (unless it’s being written for the infrequent shopper) is not going to identify the brand. I need butter, salad dressing, chocolate chip cookies, etc. It’s still up to the packaging to break through the competitive clutter and grab the shopper’s attention, reminding her that this is the brand she wants…or a new one worthy of consideration and purchase.
Getting back to impulse purchase frequency, it’s hard to imagine that consumers who are concerned about their spending will go to the grocery store with deep pockets. Lists are an opportunity to be more disciplined and control one of the largest components of monthly expenditures. Categories of necessities will top the list. However, the treat consumers want in these hard times, whether it’s in the form of a snack or deluxe entree can be considered worth the little extra if it’s packaged based on strategic direction and shouts out for attention.
Recent sales performance shows that all buying, not just impulse, is down. However, I’m with Bob on this. Anecdotally, I do all the food shopping for my house and I see very few lists being checked off. My sense is that the survey results are highly suspect.
The key is still to give the customer a good reason to shop the store. Once they are inside, the same laws of promotion and surprise still apply.
When I was a food-retailing student at the University of Mass., I remember that the supermarkets thought the ideal customer was a hungry husband shopping without a shopping list. The concept was he would buy what he liked–snacks, etc., and a lot of it, and then his wife would have to return to the store and then buy what they needed. In essence that appears to still remain true but based on the NPD research is happening less often.
Given all that has happened to the economy over the past few years, I expect that more and more people are doing a better job of planning their grocery purchases for a couple reasons. First, there is less money in many households to spend. People need to ensure that they get what they need for money they have to spend. Second, shopping takes time and more of the usual grocery shoppers (women) work. Not sure that too many people see grocery shopping as fun. It is likely viewed as a task and something that has to be done rather than something to be enjoyed.
Consumers are in a depression mentality since “The Great Recession.” They are paying down debt and increasing savings. Our largest population segment, Baby Boomers, has always been the spenders and now facing retirement on fixed income has pulled back. It has been well publicized that shopping with a list saves money, when it fact it reduces impulse purchases. The question is, will the ‘good old days’ ever come back? At this time it looks unlikely.
Retailers that create a treasure hunt and an exciting shopping experience have a chance for impulse purchases, but retailers offering the same old boring shopping experience will have limited success.
We make a shopping list of things we can’t resist,
Then we go to stores and buy what our sights insist.
The idea that impulse buying has gone awry,
Is well researched but it’s not time to say goodbye.
I’m with Bob. Let me summarize this way.
1) Shopping lists are not new. People make them so they won’t forget to buy things they need–NOT to prevent them from buying other things they want.
2) IHL did some interesting research and discovered that the use of self-checkout caused a 40+% reduction in the purchase of impulse items at checkout. Not surprising, really. It’s part of the nature of what you do on a self-checkout line (watch for the next available slot) vs. what you do on a ‘regular’ checkout line (peruse magazines, candy and POS end caps–where the impulse buys happen).
I don’t agree with the study or its conclusions. I’m surprised at NPD. The company’s work is usually quite a bit more robust.
Something no one has mentioned here is the role technology is playing and will play in shaping shopper purchase decisions. In the Boston area, I often see shoppers using Modiv Media’s handheld scanners as they shop at Stop & Shop. Interestingly, the device both encourages and discourages impulse buying. On the one hand, the targeted ads the device presents can certainly sway shoppers to make an unplanned purchase. On the other, I’ve seen shoppers scan an item, check the running basket total, frown, scan it again to cancel the purchase, and return the item to the shelf.
As additional mobile technology makes its way into the bricks-and-mortar retail experience, I only see this tension increasing. The very apps that would be most helpful for consumers in planning their shopping trips (location-aware shopping list managers with tie-ins to past purchase history) are also the ideal venue for reaching shoppers with targeted offers.
So, to answer the question, there is more *and* less impulse buying going on today…it’s just the nature of impulse buying that’s changing.
If you don’t truly recognize what the problem is you can’t solve it. The decline in impulse purchase has nothing to do with shopping lists. It has everything to do with the economy. The impulse purchase is the one where the shoppers ask themselves if they can afford it. For 20 years that question was rarely asked. Now it is asked with every unnecessary purchase. Yes, impulse buying is an unnecessary purchase.
Mr. Retailer, you are not going to change this pattern until there is a dramatic change in the economy. Don’t focus on trying to make shoppers buy what they are not going to, focus on giving them a reason to come to your store and focus on your operational profitability. Make those necessary purchases yours rather than your competitors and make them profitable for you.
Based on my conversations with retailers, they are still obsessed with getting items crossed off shoppers’ lists rather than trying to figure out how to get shoppers to stray. This is what led to all of the conversation around shopper “missions” and ensuring that those missions are accomplished.
Once retailers quantify the impact of, say, seven out of ten items getting crossed off of a list (hundreds of millions of $$ in some cases), it’s hard to think about anything else. That’s why list-making tools from both brands and retailers have become all the rage (and they are certainly more popular than wish lists)!
I never see anyone holding a grocery list, except perhaps the clueless husband who doesn’t know where the breadcrumbs might be. But purchasing is changing. The average customer has come to the realization that there are plenty of things out there that they do not NEED…and perhaps don’t even WANT. We may be looking at a fundamental shift in the way Americans consume, which could last for a long while.
The research methodology was missing something, but it’s clear that impulse purchases are down, especially high-ticket, treasure hunt items in club stores. Clubs and other retailers seem intent on higher in-stock rates, giving more facings to key items and leaving less room for discretionary items. SKU rat, as David Biernbaum points out so well, has also cut into impulse purchases by taking away much of the fun and excitement of shopping.
Well, these days impulse purchases will not be on the increase but I’m not in total agreement with the negativeness of my colleagues. Temptation may not be one of the seven deadly sins but it is inherent to our DNA. And retailers do have a good handle on how to promote it, David. End aisle displays, candy racks and cold single serve beverages at the checkouts are not an accident.
If we had actual observational data I’m pretty sure that we would see shoppers buy on impulse just as much as in the past. Especially now; given the economy, it’s a little bit of guilty pleasure we can still afford.
Here’s an interesting but unscientific tidbit–my favourite supermarket chain has several sizes of shopping cart. Only the small ones include a clipboard to which a list can be attached.
Impulse buying now exists in a different form. Amazon makes suggestions when I select books. Several times I purchased these items. The new impulse is adding value at the decision point. How many items that are purchased have associated products? It is just easier for online stores to make these associations known.
“Survey says” shopping lists are trending up. OK, makes sense in this difficult time. However, here is an analogy: shopping lists are like New Year’s resolutions. A majority of American adults make one or more New Year’s resolutions a year. Statistics show that 30% are broken in less than a month and much fewer make it past three months.
Here is an outside the box strategy for getting your brand into the cart if it is not on the list to start. Break with convention and aim to keep your products away from the front of the store and the first aisle in the shoppers’ normal traffic pattern. After that, items that make the cart are bound to come less from the head and more from the heart.
When it comes to pre-planning the grocery trip (making lists and clipping coupons), what shoppers say they do may be quite different from what they actually do.
A little more than a year ago, the folks at Henkel Consumer Goods took a deep dive into three years of shopping behavior data and concluded that detailed trip planning was practiced by about one fourth of households. This behavior pattern was shown to be quite enduring and unrelated to household income level. Since I helped write up the study report, “The Shoppers Perspective,” I have high confidence in its findings.
This leaves me with a quandary, since I have generally high respect for NPD Group and its work. The results cited from its “Before the Store” study would seem to contradict the other research I know to be sound. I can only conclude that the apparent inconsistency results from response bias and very different methodologies.
A final thought: What shoppers say they do is indeed important, as it reflects their collective attitude and frame of mind. These insights are useful to shopper marketers, especially when they document trends over time. I’d like to see more detail from the NPD study that might help improve our understanding of the one remarkable statistic from its press release.
I have to agree with earlier comments that the numbers are so high as to be unreasonable. There’s hardly anything that 94% of the population does.
However, in our business we are experiencing continued growth in customer usage of shopping lists which would at least support the notion that it is increasing. Our system is built around the weekly ad, so what we’re seeing is customers creating lists (with specific brands) as a way to save on the items they want or need.
I think the real trend is that customers are placing more importance on saving money. It’s not that they won’t buy on impulse; it’s that the item that’s on sale seems much more attractive than the one that’s at full price.
People on a budget are more specific about what they buy, makes sense (although 94% seems pretty high), but I’d say it varies by retailer. I’ll bet Whole Foods impulse numbers are a lot higher than any traditional grocer–simply because they’re better at merchandising at the point of sale.
So, for most grocers, it’s a self-fulfilling prophecy…and a double whammy to boot. Limited budgets and lousy merchandising equals less impulse buying. But I would think you could get over the “limited budget” hump by fixing the merchandising. Check WFs latest numbers for proof.
There is no doubt that economic conditions have pushed shoppers to save more and plan more than in the past. Less disposable income and uncertainty about the future have definitely discouraged discretionary purchases, prompted increased saving and forced shoppers to think carefully about where they spend and what they spend it on.
Shoppers are “sticking to the list” much more so than ever before. But to say that impulse purchases are a thing of the past, is a vast overstatement. The shopping list and a fistful of coupons may more clearly define the categories purchased, but the store and the shelf still have tremendous influence in what they end up buying. They may be buying cereal, but the specific product choices can still be swayed by perceived value, convenience or added benefits once they are in the store. They still make decisions at shelf. Why does candy, a high impulse category, remain so highly recession proof? It’s not that impulse goes away; shoppers just become more choosy on what categories they buy, and where small “splurges” are still acceptable.
In fact, the importance of shopper marketing and understanding store-level impulse behavior continues to increase as manufacturers continue to learn the critical nature of at-shelf decisions. Our own Futurescope research among 300+ industry professionals shows manufacturers and retailers alike are recognizing the value of shopper marketing, and believe it to be vital to their success. Many are continuing to increase investment in resources, research and programs to strengthen their shopper understanding and, in turn, strengthen their relationships with retailer partners.
Impulse may have changed in the new economy, but impulse still impacts over half of shelf purchases in many categories and continues to be a major source of tremendous opportunity.
Good discussion on this topic, and I agree that shoppers are much more conscious about how money is spent. Lists are one way to ensure the necessary items aren’t forgotten, and coupons are a great incentive–but there is a larger story here. As many panelist have said survey numbers and behavior don’t align.
Comparison shopping doesn’t stop–it continues in the aisle, at the shelf. Many shoppers have purchase intent around specific products and brands, but will consider other names, sizes and alternates based on what they find at the store. Loyalty programs have worked well for many retailers, but their value proposition is challenged every day by what is on offer.
This is a flawed survey. They clearly did not go into a convenience store or a Starbucks where impulse purchases are a standard revenue generator for the stores. The same holds true for “store in store” placements like Wal-Marts with McDonald’s inside (these are impulse purchases), or food areas inside of malls or even Target stores. All of these are clearly impulse purchases, since they are not destination locations for these impulse items. The same can be said for large bins of tools, soda and other items at Home Depot, Lowe’s and key retailers in the hardware industry. Add to this the traditional checkstand items at every food and drug retailer that holds magazines, batteries, candy and other impulse items and we have serious questions about the conclusions that NPD comes to from their survey.
I’m with Paula on this; in fact it appears that about 100% of us are at least somewhat dubious about this “research.” But rather than asking people to give their opinions on something that is empirical by nature, why not just measure it directly: are sales of chewing gum, disposable razors and Altoids way, way down? If not, then the claim is one more for the “everything’s changed” mythology.
Now I’m wondering if others do what I do. As the primary grocery shopper for my family, I always make a list before going to the store. I only look at the list once when I think I’ve finished my shopping to make sure I grabbed everything on the list. Maybe that is true of others and is one explanation for why we don’t see more list carrying consumers in stores.
This seems like a most egregious example of what I call “pretend market research.” Even if heavy bias was not introduced by the form of the questions, it continues the widespread mistaken belief that shopping, particularly in supermarkets, is a rational, cognitive process. It simply is NOT.
However, if you are a marketer, you are likely to think about it cognitively, not emotionally. So you and your researcher can think of rational questions to ask of shoppers who virtually never even think about the issues you are asking about. However, when you ask them a logical, rational, cognitive question–bringing it to their minds–they will immediately echo your question by creating a logical, rational cognitive answer. Hence, you pretend to do research by pre-creating a template to outline reality (the questionnaire,) and the shopper goes along with your pretense, playing the part of the rational (not foolish looking) respondent, and validates your unrealistic imaginings.
Without delving further into the experimental design, I will say that almost certainly they did NOT interview shoppers. A shopper is someone within the four walls of the store, not someone who has ever been inside the four walls of the store. This distinction is crucial.
Probably 90% of what is believed about “shoppers” is baloney. This is a consequence of the fact that everyone shops, usually with a fair degree of regularity. This results in everyone feeling that they have a pretty good understanding of the matter, anyway.
But it is simply untrue that people have a good understanding of their own behavior. Their logical but profound ignorance is compounded by asking others about THEIR shopper practices, such as by an internet survey, far removed from the actual behavior.
Then why don’t more people, you know, actually study shoppers in stores? Why would you, given the difficulties, and the fact “everybody agrees on the way we are doing it.” As that acerbic American philosopher Josh Billings noted, “The trouble with most people isn’t that they don’t know, but that what they know, ain’t so!”
Perhaps a new consumer is also on the horizon; one who is using a smart phone or other mobile device to assist in their shopping vs. the traditional paper shopping list. A growing number of money-saving and convenience features, including electronic coupons and recipes, are now being provided to consumers on their mobile devices as they shop vs. at-home and pre-planned. This is much more in sync with today’s time-starved shoppers, which continue to be more women than men and go directly from work to the store to grab what they need as quickly as possible.
There are also valid points, above, in that SKU rationalization and “clean store” policies with reduced POS and floor displays reduce the amount of impulse buying. All the more reason for brand marketers to find a creative way to make it onto the grocery list, whether created at-home, or on the fly as they shop with mobile, digital devices.
Is that what the ‘new normal’ is supposed to be? Maybe.
The truth is that not too many people carry a shopping list on paper or in their smartphone. They have that list in their heads. Most purchases weekly are repeat purchases. You don’t have to write them down. The remainder is impulse.
The conversation about this research from NPD reinforces the importance of the ARF shopper insights effort, especially regarding how to research the path to purchase. Our intention is to document appropriate research methods for shopper questions and it appears that this is a great example of why that is needed.
I don’t know how they compiled their data, but 94% seems ridiculously high. Having been involved with supermarkets for the last 17 years, it is the merchandising that sells the product. The display, the smells, the quality, and yes–the price.
Even with digital solutions that make it easier to plan in advance of a shopping trip, today’s shoppers still don’t have the time to do the planning they would ideally like to be able to do. Those making the lists–for the most part–are those who have been making lists for the last 40 years.
EVER BEEN TO COSTCO? Costco is the KING at getting people to buy more than they intended. It’s that “treasure hunt” mentality that more grocery retailers need to incorporate into their merchandising plans.
If lists prevented impulses, our inboxes would be empty and our to-do lists complete. We are creatures of impulse, and smart retailers and marketers are still able to tap into that streak, recession or not.
Clearly without knowing more about the research design it is difficult to comment–though I have to agree with many here–it is probably flawed.
BUT–it does say a number of things that align with our research in many categories:
– Lists exist – and whether you are on them is important.
– Lists are often categories and not brands.
– Just because the brand isn’t listed, does not mean the decision hasn’t already been made.
– 80% of brand decisions made in-store is the most damaging statistic in the history of shopper marketing. Seriously – it just isn’t true. It’s true in some categories, for some shoppers, but is generally nonsense.
– Shopping begins outside the store. Period. To think of shopping as an activity which only takes place in a store is a fallacy and merely plays into the hands of greedy retailers.
– As with all of these things the key questions are – what about my category, my brand, my target shoppers? And what do I do about it?
Today’s shopping list is NOT a bunch of items to buy scribbled on a scrap of paper. It’s the cell phone, it’s the weekly sales circular, it’s the coupon folder jam packed and filed by expiration date and product category.
I see this and other methods used every time I shop. People keep memory lists. I even hear customers recite these out load to themselves.
There is far less impulse buying today than there was five years ago. And customers seek the best buy they can find.
During the first 6 months of this year, my team and I have personally interacted with over 1000 customers shopping our stores, and interacted via online survey technology with another 6,000 customers. Admittedly, shopping for office supplies is not the same as shopping for groceries–they are driven by very different needs–but none the less, there are elements of both tasks and environments that are very similar.
We see about 40% of our customer using some form of shopping list and about 75% who shop our promo/impulse fixtures. In our case, the majority of customers who shop the promo/impulse fixtures do so after they have purchased the items on their shopping list–that is, customers come into the store to get their ‘needed’ items shopped first, then the take a few minutes to see if there is anything good on offer in the promo/impulse fixtures.
Impulse buying isn’t dead, it just a bit delayed until after the regular shopping is completed. It probably that the extent to which customers shop promo/impulse may be influenced by how much they have spent on those ‘needed’ items.