The Catalyst

Today, where consumers choose to shop is very dependent on whom they believe offers the greatest value. The key, however, is to recognize that how shoppers define Value has changed – as have their definitions of Quality, Service, Selection, Store Conditions, Convenience and even Low Prices.

HOW HAS CONSUMERS’ VALUE EQUATION CHANGED?

Price
Yesterday: 60% of shoppers” ID’ed “correct” prices on 50% of the top 100 food store items
Today: 14% of shoppers” ID’ed “correct” prices on 50% of the top 100 food store items
Tomorrow: From EDLP to Targeted Loyalty Incentive Rewards – Providing the Lowest Prices on Items or Reasonable Alternatives that the shopper Wants and Needs – while saving on shopping related expenses, including Time and Resources

Service
Yesterday: “Hi, Bye, Thanks, Did You Find Everything
Today & Tomorrow: Agenting is Key – Acting as the Trusted Buying agent of the shopper

Convenience
Yesterday: Location
Today: One Stop Shopping for Products
Tomorrow: One Stop Shopping for Services and Solutions

Store Conditions
Yesterday: Neat, Clean and Orderly
Today & Tomorrow: Interactive Experiences & Technology

Quality
Yesterday: Branded Merchandise and Made in USA/How Long it Lasts vs. Throw Away Society
Today: A Branded Store (not necessarily selling Branded Products)
Tomorrow: Service + Trust

Variety
Yesterday: Selections of Brands, Products and Departments
Today: Always Have What I Want
Tomorrow: Selection of Solutions and Services

Emotion
All great art – prose, poetry, music, painting, sculpture, architecture – has one element in common: its communication strikes an emotional response. The most successful retailers will COMBINE ALL of these elements to move people in a three dimensional world.

SO…WHAT IS THE KEY?
Consumers “where to shop” decision drivers can be divided into two major categories. First, are the Rational drivers (Price, Quality, Convenience, etc.). The second category is Emotional, which includes, but is not limited to, the following:

- Trust
- Concern For My Family
- Fun and Exciting
- Stress Reduction and Safety

Today, research shows that many shoppers are driven by the Emotional factors, with the Rational factors being of secondary importance.

Understanding the Consumer Value Equation, to the target shopper of today, is vital. A business must turn information and knowledge into action that will generate an enhanced customer relationship. It all begins with a clear recognition and definition of VALUE in the mind of today’s consumer – who is seeking a retailer they can trust in an increasingly untrustworthy world.

William “Mac” McDonald is a Senior Retail Marketing Specialist with ESA & Company.  For over 40 years, Mac has focused on consumer actions that affect retail tactics and strategies. An advisor to the National Retail Federation (NRF), Mac can be reached at Mac@ESACompany.com.