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Issue
February 2011




                   The Social Shopper:
                    A Lens into the Future of
                       Retail Experiences




         Insights for your business
EXECUTIVE SUMMARY

For retailers and product manufacturers, the               When it comes to creating a digital strategy, retailers
importance of knowing who their customers are—and          and manufacturers need to ground their approach in a
how they shop—has never been more essential than it        deep understanding of consumers, including the role
is today. As we all know, the Internet and social media    the product plays in their lives and the experience
have created a landscape where consumers are a             they want to gain from buying it. It requires listening
more significant force than ever before.                   to and learning from the consumer and establishing a
                                                           response that demonstrates a desire to place them at
That is why, at Delvinia, we wanted to better understand   the centre of the experience. As much as any product
the consumer-retailer/manufacturer relationship.           or retail environment needs to communicate a unique
We asked ourselves: In a world with so many                brand experience, to an even greater degree it needs
available options, what should retailers and product       to connect with the individual customer.
manufacturers be doing to court this new consumer?
                                                           In fact, highly social and digitally-inclined shoppers are
Based on our research, we identified seven                 the lens into the future of retail experiences. Retailers
major trends.                                              need to find out what proportion of their customers
                                                           are highly social users of technology, and from
1. Digital dominates pre-purchase research                 there they can determine the urgency of integrating
                                                           digital technologies into their customer experience.
2. Product categories influence
                                                           Understanding the retail experience through the eyes
   pre-purchase behaviour
                                                           of those consumers will provide retailers a glimpse
3. Price is the top consideration                          into the future of all customers.

                                                           By digging deep into consumer insights, retailers
4. Offline channels are still preferred for
                                                           and manufacturers can better identify social and
   confirming availability
                                                           time-starved consumers—those who are leading the
5. Consumer reviews are the preferred choice               way in the digital space. Those who fail to take their
   for vetting products                                    cues from these connected shoppers are missing an
                                                           opportunity. These are the customers of the future
6. Appetite for social content extends to mobile           and they will respond positively to efforts to
                                                           connect digitally.
7. Consumers are increasingly clicking in-store
                                                           By sharing and acting on customer insights, retailers
Delvinia’s proprietary AskingCanadians™ online             and product manufacturers can leverage digital
research community has been collecting information         media to create customer experiences relevant to
about the attitudes and digital behaviours of              the needs of each consumer group. Just keep asking
Canadians for the past four years. Digital behaviours      the question: How does this experience validate and
vary from product to product, but they also vary from      reward my consumer? There are only a few on the
person to person. This is just one tool that confirms      new digital frontier who really understand this.
this. Understanding which behaviours are most
common amongst the consumers of a particular
product or retailer, and then determining how those
consumers interact with that product or in that retail
environment, is key.




       Insights for your business
                                                                                                                 2
contents

Introduction............................................................................................................... 4
Survey findings ..................................................................................................... 5–12
Digital Canadians: which are your customers?.................................................... 13–15
Implications for retailers and product manufacturers .......................................... 16–17
Conclusions ............................................................................................................ 18
introduction

For retailers and product manufacturers, the              That is why, at Delvinia, we wanted to better understand
importance of knowing who their customers are—and         the consumer-retailer/manufacturer relationship.
how they shop—has never been more essential than it       We asked ourselves: In a world with so many
is today. As we all know, the Internet and social media   available options, what should retailers and product
have created a landscape where consumers are a            manufacturers be doing to court this new consumer?
more significant force than ever before.
                                                          To answer this question, we decided to start by
Consumers have the ability to research products on        getting to know them better. Which channel do they
brand and retail websites that provide buying guides,     prefer at each stage of the buying process and
detailed product reviews and the ability to make          why? Does this preference differ from product to
direct comparisons. While price remains the number        product, or retailer to retailer? Where does mobile
one piece of information individuals search for online,   come into play? Exactly how important is social
consumer reviews and recommendations are sought           media? These and many more questions were the
out more often than any other item, including product     focus of a survey we conducted with members
details, promotional offers, product availability and     of our proprietary AskingCanadians™ panel in
expert opinions.                                          November of 2010. Delvinia’s research revealed the
                                                          following seven trends.
Given the ease of access to online information,
combined with the even greater scope of social media
dialogue, retailers and product manufacturers need to
acknowledge that consumers—specifically digitally-
savvy consumers—have greater control in the retail
environment. And although that group may be small in
size, it is growing rapidly.




       Insights for your business
                                                                                                              4
survey findings
                                                                   Figure 1.           Approximately how often do you
                                                                                   research products online prior to making
1.   DIGITAL DOMINATES
     PRE-PURCHASE RESEARCH
                                                                                            purchase decisions?

                                                                                   75% to 100%                      Less than 10%
                                                                                   of the time                      of the time
Online shopping is here to stay and online research                                36%                              6%
is an integral part of the shopping experience. Sixty-                                                                    10% to 24%
                                                                                                                          of the time
one per cent of Canadian shoppers surveyed say they                                                                       14%
research products online prior to making purchase
decisions for at least one out of every two purchases
(Figure 1)i. Furthermore, at least half of all shoppers                                                                  25% to 49%
                                                                                                                         of the time
report that the Internet is their preferred channel,                                                                     20%
over telephone and in-store, for six out of seven pre-
purchase activities (Figure 2).                                                    50% to 74%
                                                                                   of the time
                                                                                   25%

                                                                                   Base: Canadians who research purchases
                                                                                         online, N=360.




                  Figure 2.           Which environment do you typically find most useful for
                                           completing each of the following activities?



                    Direct purchasing a product                                                      83%     13% 4%

                 Determining whether an item is
                             in stock / available                          45%                   32%      12%      10%


                              Comparing prices
                                                                          42%                              51% 1% 7%

                Gathering information about the
                           general product type                     35%                                49%         15%

                  Gathering specific information
                  about a particualar product(s)                    35%                                    55%     9%

                            Seeking coupons or
                              other promotions                   29%                                53%            17%

                     Trying to locate a store that
                             carries the product             26%                                       58% 5%      11%

                     Hearing recommendations
                                   or reviews              22%                                   56% 1%            21%


                           In store      On the internet    Telephone           No preference / I do not do this

                       Base: Have purchased online in the past 6 months, N=500.




       Insights for your business
                                                                                                                                        5
2.   PRODUCT CATEGORIES INFLUENCE PRE-PURCHASE BEHAVIOUR

When it comes to researching products prior to                       Beyond pre-purchase information gathering, consumers
making a purchase, Delvinia finds that consumers                     of packaged goods in general, including pet products
are five times more likely to opt for the Internet over              and health supplements, favour in-store interactions
the in-store environment when shopping for home                      to satisfy most information needs, including product
electronics, media, and appliances – digital and                     recommendations and price comparisons.
technological products in themselves. By contrast,
shoppers prefer to conduct in-store research for more
personal, consumable items like apparel, beauty and
cosmetics, and groceries. In fact, consumers are 68
per cent more likely to gather pre-purchase information
about apparel in-store than online (Figure 3).




          Figure 3.         Most useful channel for pre-purchase information gathering on a
                                             specific product by category



                                                                                                                     83%
                            Home electronics or computers
                                                                         15%

                                                                                                               73%
                               Media (books, music, videos)
                                                                              19%


                              Children's toys baby products                                                  69%
                                                                                    25%


                          Household appliances or furniture                                              63%
                                                                                    31%


                               Home decor and accessories                                              58%
                                                                                    32%

                                                                                                   55%
             Health / nutritional products (e.g. supplements)
                                                                                       36%

                                                                                             44%
                                               Pet products
                                                                                           41%

                                                                                           40%
                                      Beauty and cosmetics
                                                                                                 50%

                                                                                     34%
                                                  Groceries
                                                                                                 49%

                                                                                    32%
                                                    Clothing
                                                                                                   54%



                                                                   Internet     In store

                                                                Base: Have purchased online in past 6 months, N=500.




       Insights for your business
                                                                                                                           6
3. PRICE IS THE TOP CONSIDERATION
Finding the best price is critical for everyone and it represents the number one information item that consumers
search for on manufacturer and retail websites. In total, 93.1 per cent of respondents search for information
related to price, retail stores with the best price, or promotional offers online (Figure 4)ii.




        Figure 4.       What information are you looking for when you research products online?




                                                     Price                                                84.9%



                    Consumer review / recommedations                                              65.0%


                         Product specifications / details
                         (colour, size, capabilities, etc.)                                      62.4%



                         Retails Store(s) with best price                                       60.1%



                                      Promotional offers                                     57.3%



                                     Product availability                                49.9%


                        Expert opinions recommending
                                      the best product                                  48.4%



                                      Consumer reports                                  45.3%



                                          Retail locations                           45.0%



                                         Ideas / solutions                      35.0%



                                  New product launches                       29.3%


                                           Other, specifiy       2.0%


                                                              Base: Research purchases online, N=346




       Insights for your business
                                                                                                                  7
4.    OFFLINE CHANNELS ARE STILL PREFERRED FOR CONFIRMING AVAILABILITY

Only when it comes to checking the availability of stock does online trail the in-store experience. (We also glimpse
a continued role for the telephone.) Overall, only 32 per cent find the Internet useful in determining whether an
item is available or in stock at a particular store (see Figure 2 above). For some retail categories, this is more
consequential than others. This is particularly true for furniture and large appliances, where timeliness and
shipping are significant factors in making a decision to buy. Here, 46 per cent prefer to check in-store for product
availability, while 34 per cent of shoppers prefer to log on, and 17 per cent simply pick up the phone (Figure 5).

In contrast, consumers of electronics and media share a strong preference for checking stock online, and are
among the least likely to wait until they are in a store to confirm product availability. For these buyers, if retailers
fail to offer reliable stock information online, they also risk losing sales from those shoppers who prefer to
purchase in-store.




                     Figure 5.           Preferred channel for determining if an item is in stock


                                                                                                    56%
                                   Home electronics
                                                                         23%
                                      or computers
                                                                   15%
                                                                                                    56%
                                      Media (books,
                                                                                  31%
                                      music, videos)
                                                              7%
                                                                                          43%
                                     Children's toys,
                                      baby products                                 35%
                                                                       17%
                                                                                        37%
                                    Home decor and
                                                                                          42%
                                       accessories
                                                                 10%
                                         Household                                  34%
                                         appliances                                           46%
                                         or furniture                  17%
                                              Health /                           30%
                                 nutritional products                                         47%
                                  (e.g. supplements)             11%
                                                                       18%
                                        Pet products                                                54%
                                                                   13%
                                                                       18%
                                             Clothing                                               56%
                                                                 11%
                                                                       17%
                                         Beauty and
                                                                                                      59%
                                          cosmetics
                                                                   14%
                                                                   14%
                                           Groceries                                                      63%
                                                              7%


                                                            Internet         In store     Telephone

                                                         Base: Have purchased online in past 6 months, N-500.




        Insights for your business
                                                                                                                    8
5.   CONSUMER REVIEWS ARE THE PREFERRED
     CHOICE FOR VETTING PRODUCTS

Word-of-mouth has always been a key factor in the
purchase process, but the Internet has increased
its power ten-fold. In fact, for online shoppers, peer
reviews are second only to price. Delvinia’s research
                                                         “   Everyone likes to feel that they’ve made
                                                             the best decision when shopping, and
                                                             peer reviews are often a way for buyers
finds that 65 per cent of Canadian shoppers look
for consumer reviews and recommendations while               to confirm their choice—whether they
researching online (see Figure 4 above).                     are mobile users or not. Retailers who

From the brand perspective, peer ratings and reviews         use shelf space or in-store display
can be uncomfortable because they require brands to
                                                             to highlight constructive discussion
surrender control of their message. However, onsite
discussion allows shoppers to gather rich insight            about products and their benefits can
into products with minimal effort, while delivering
                                                             enhance the shopping experience and
equally rich consumer feedback to brand and product
managers, and retailers alike. In fact, peer feedback        gain consumer trust, as they validate


                                                                                            ”
is so highly valued that consumers would prefer retail
                                                             their desire to be informed.
websites provide peer reviews over fancy tools to
help them select products (Figure 6).
                                                             Amy Sullivan
                                                             V.P. Customer Insight




       Insights for your business
                                                                                                     9
Figure 6.          When you are shopping on a retail website, how important is each of
                                         the following features to you?



           Product information in comprehensive                                            66%                 28%


          Shipping policy is easy to find and read                                   58%                 29%


                      Can locate stores near to you                                 56%                   33%


        Can compare prices of different products                                    56%                    35%


            Return policy is easy to find and read                                 27%                    42%


                 Provides store contact information                                52%                   35%

      Can compare features of different products
                                     on one site                              46%                         42%


             Can read consumer product reviews                               45%                         40%


          Can zoom in or rotate image of product                          40%                      40%

                  Has selection tools to identify the
                             recommended for you                  27%                        42%



                                                            Very important          Somewhat important

                                                        Base: Prefer Internet over other channels for any part
                                                              of the purchase cycle, N=462.




Insights for your business
                                                                                                                     10
6.   APPETITE FOR SOCIAL CONTENT EXTENDS TO MOBILE

Not only are shoppers increasingly using peer ratings and reviews to guide their purchase decisions--their use
is going mobile. Delvinia’s research finds that nearly one in five Canadian smartphone owners use their phones
to search for product recommendations while shopping (Figure 7). In fact, the number of smartphone users who
search for this information rises dramatically to 40 per cent when iPhone owners are isolated.




          Figure 7.            Which of the following activites have you completed online,
                                 using your smartphone, in the process of shopping?



                         Take a picture of a product in-store                                      32.5%


                      Locate a store that carries the product                                 26.6%

                        Gather information about the general
                                                                                           24.9%
                                               product type

                                            Compare prices                              23.2%

                         Gather specific information about a
                                                                                        22.4%
                                       particular product(s)

                  Find product recommendations or reviews                             19.0%


                                  Contact customer service                         16.9%


                      Download a coupon or other promotion                      13.5%


                       Determine whether an item is in stock                  11.0%


                      Post to social network about a product             8.0%


                                Directly purchase a product             7.6%

                  Use a QR code to get product information             6.3%
                                          or a better price
                             Post to a social network about a          5.5%
                                        purchase experience

                      Write a product review / rate a product         4.2%


                                          None of the above                                                43.9%


                                                                Base: Smartphone owners, N=237.




       Insights for your business
                                                                                                                   11
7.   CONSUMERS ARE INCREASINGLY
     CLICKING IN-STORE

Another growing element of the mobile shopping
experience is the use of camera phones. Delvinia’s
research finds that one-third of Canadian smartphone
owners have used their phone to take a picture of a
                                                          “   Some consumers are using the
                                                              in-store visit as an extension of
                                                              browsing online. Using their mobile
product while shopping (Figure 7). A further 9.7 per
cent cent have used their phone to post to a social           phone to snap pictures of items as a
network about their experiences.                              reference for themselves or to send to a

However, many retail locations prohibit the use of            friend or spouse is a common behaviour.
cameras in-store, with the intention of ensuring the
                                                              A quick snapshot of a product sent
security of merchandise and curtailing efforts to copy
it illegally. For mobile-savvy shoppers, however, this        home with the quick text message ‘is
can cause frustration and diminished loyalty, and
                                                              this the right product?’ can save a lot of
importantly, it can cost sales. Notes one individual in
a discussion of the issue at Yahoo! Answers, “I take
photos in stores all the time. I use these photos to
show my wife what is on sale, or an item that I’d like
for her to return to the store later to check out.” He
                                                              frustration later.


                                                              Randy Matheson
                                                                                   ”
                                                              Director, Emerging Media
concludes, “Businesses cannot afford to alienate
customers.”

Retailers who want to connect with today’s shoppers
need to revisit these policies and weigh the risks
against the consequences. While the pros and cons
may vary from retailer to retailer, or even product
to product, those in the business of serving young,
digitally-savvy consumers in particular, need to find
ways to bridge this gap.




       Insights for your business
                                                                                                     12
digital Canadians:
which are your customers?

The analysis above illustrates typical uses of digital     Understanding which segments are most common
media in the purchase process. Digital behaviours          amongst the consumers of a particular product
vary from product to product, but they also vary           or retailer, and then determining how those
from person to person. Delvinia’s proprietary              consumers interact with that product or in that retail
AskingCanadians™ online research community has             environment, is key.
been collecting the attitudes and digital behaviours of
Canadians for the past four years. This is just one tool   At Delvinia, we help our clients understand this by
that confirms this.                                        looking at a customer experience through the lens of
                                                           a particular digital segment. For example, if a large
Every year we collect data from more than 25,000 of        proportion of an organization’s customer base are
our panellists regarding their attitudes towards, and      high social users of technology, we would look at
usage of, digital technology. Working with Generation5     creating an experience that reflects their perspective
Mathematical Technologies, these responses have            and brings them in touch with other consumers in that
been projected across every postal code in Canada,         product category.
providing the foundation for a segmentation model
using Generation5’s mosaic clustering system based         To illustrate this way of thinking we have created two
upon Canadians’ ownership versus social usage              scenarios based upon the diversity of consumer/
of technology. Overall, this segmentation clusters         retailer relationships and the way customers use
together into three large groups distinct from the         digital media. Scenario 1 is typical of the savvy,
average—social, time-starved and lagging.                  socially engaged consumer, while Scenario 2 reflects
                                                           the life of a more time-starved consumer.
Socially-engaged Canadians include those for whom
technology is not just a means of keeping organized,       Figure 8.                                Digital behaviour major segments
but it is also a lifeline to family and friends and
to the digital universe at large. The time-starved
segment includes groups of Canadians for whom
technology is a means to an end. It is a tool to help                                                           Social
                                                                       Social usage of technology




them manage their hectic lives. They tend to own
a number of devices, including smartphones, and
are comfortable in the digital space, but their use of
technology for social purposes is limited. Distinct                                                             Average

from each of these groups are the laggards. These
individuals tend to be late-adopters or do not own                                                                                     ed
                                                                                                                                    arv
technology at all, they may be overwhelmed or                                                                                    st
                                                                                                      Lagging                 e-
                                                                                                                             m
alienated by digital media and they rarely leverage it                                                                    Ti
for social or other purposes (Figure 8).

                                                                                                        Ownership of technology




       Insights for your business
                                                                                                                                            13
SCENARIO 1: TOM SHOPS FOR A DIGITAL CAMERA

Tom is a gadget junkie who is entirely at home online.   Next Tom plugs his preferred make and model into a
He enjoys using his new toys as much as he enjoys        couple of shopping sites to establish an acceptable
shopping for them. Today he is in the market for a       price range. He realizes that this will be a sizable
digital camera.                                          investment, so he ultimately prefers to make the
                                                         purchase offline, at a reputable shop within a
He begins by looking online to learn about new           reasonable proximity. That way, he can handle the
developments in the technology. He wants to              camera a bit before buying, and chat in-person with
understand whether he should buy a digital SLR           someone knowledgeable, who can help him out if he
or a point and shoot. He does some reading on            has any troubles later.
websites for photography enthusiasts, including sites
published by some of the established photography         With all of this freshly gathered information in mind,
magazines. Then he lobs a few questions out in           he pulls up a map of camera retailers nearby and
some forums, hoping to reel in advice from a pro.        links through to their sites to see who has the product
The users at one site point him to a Twitter feed from   in-stock at his preferred price. Tom identifies Pics
a photojournalist who also writes tech reviews. He       Plus as having the best price and he has confirmed
takes in all the chatter with ease and enthusiasm.       that they have the camera onsite. But the users at
From his perspective, the more information the better.   Shutterbug.com rave about the sales staff there, and
                                                         they too have the camera available at a fair price. He
Finally, he decides to buy a digital SLR. Now he         can buy it today! He drops by Shutterbug after work
needs to create a shortlist of brands and models         and tries it out. Because he no longer needs to know
and get a sense of the investment he needs to put        the basics about the camera, he has time to consider
down. He searches for digital cameras on Google          some great auxiliary products recommended to
and locates some sites with product reviews from         him by the store staff. Tom completes his purchase
consumers and experts. He zeroes in on a Leica, and      and heads home for a weekend of shooting. Now
visits the manufacturer site to learn more. The site     he always consults the staff at Shutterbug when he
gives him product specs, but it also recommends          wants added insight.
different models for different types of photographers
and provides tips on how to get the best shots
under different circumstances. He’s learning about
landscape photography, and becoming more intrigued.




“    Making the transition seamless from the online experience to the offline experience is
     the challenge. If there’s a gap in service levels or a process misalignment, retailers lose
     credibility and consumers lose momentum.


     Sara Durning
                                                         ”
     Director, Strategy & Experience Design




       Insights for your business
                                                                                                             14
SCENARIO 2: MOLLY BUYS GROCERIES

Molly is a busy career mom with a three-year-old
daughter. She rarely has time for herself, much
less to surf or chat online like some of her friends.
She’s unlikely to shop online; there’s just too much
information to wade through and not enough time. But
she’s not averse to technology. She has a smartphone
and a penchant for any app that helps her day go
more smoothly.

On the weekends she shops for groceries and
usually brings her daughter along. While at the store
this weekend, Molly refers to her grocery list on
                                                          “   Many years ago, not being able to get
                                                              enough information about products
                                                              and services was a pain point for
her smartphone and notices an alert that there is a
children’s mobile game from Fruity-O’s available for          consumers. Today, consumers have
free. The game was created by Fruity-O’s and made
available to shoppers by the retailer while in-store.         the opposite problem. They are
                                                              overloaded with disjointed pieces
Molly downloads it and offers it to her daughter.
The game is subtly branded and it promotes healthy            of information. Consumers want a
eating, so she feels good about letting her child play.
                                                              succinct and consistent presentation
While her daughter is preoccupied with the game,
Molly is able to navigate the store with ease.                of product and service information. As

At the end of the game, Fruity-O’s offers a coupon
                                                              a customer experience advocate and
along with a message from the retailer, indicating            a consumer, I look forward to seeing
which aisle has the product. Molly makes her way to
the correct aisle and picks up a box of Fruity-O’s on         better curation of product and service
her way out. At checkout, she shows the clerk the             information and experience through
coupon on her smartphone and receives a discount
on the cereal.                                                stronger collaboration between
                                                              retailers and product brands. After all,
Not only did Molly enjoy some savings on this trip,
but with her child occupied and her own hands free,           who has the time to sift through all that


                                                                                          ”
Molly enjoyed a coffee from the in-store café, took
                                                              disjointed information?
in the atmosphere, and treated herself to some new
products that caught her eye along the way. She also
told three friends about the experience before the            Rosalina Lin-Allen
weekend was over.                                             Director, Client Strategy




       Insights for your business
                                                                                                    15
implications for retailers and
product manufacturers

When it comes to creating a digital strategy, retailers   Highly social and digitally-inclined shoppers are the
and manufacturers need to ground their approach in a      lens into the future of retail experiences. Retailers
deep understanding of consumers, including the role       need to find out what proportion of their customers
the product plays in their lives and the experience       are in fact highly social users of technology, and from
they want to gain from buying it. It requires listening   there they can determine the urgency of integrating
to and learning from the consumer and establishing a      digital technologies into their customer experience.
response that demonstrates a desire to place them at      Understanding the retail experience through the eyes
the centre of the experience. As much as any product      of those consumers will provide retailers a glimpse
or retail environment needs to communicate a unique       into the future of all customers. If retailers don’t make
brand experience, to an even greater degree it needs      an effort to understand these new consumers, they are
to connect with the individual customer.                  missing the opportunity to connect with the customer
                                                          of the future.
Retailers and manufacturers can’t assume that all
consumers are alike. Remember, they vary in their         For product manufacturers, we recommend
comfort levels with digital technology. Some shoppers     connecting with consumers to understand drivers,
feel empowered by all that the Internet has to offer,     such as: What’s unique about his lifestyle that
while others are overwhelmed.                             compels him to buy the product? Which of the brand
                                                          values resonate with her and why? What else is
Consumers also vary in the experience they seek           happening in their lives at the time that this product
when buying different products. The information           becomes relevant? What added value can the brand
junkie may want to cut to the chase when buying the       provide to address complementary needs in the daily
critical item he needs today, but he may bask in the      lives of my consumers? Are my consumers digitally
dialogue for that more discretionary treat. Which         engaged, and if so, how?
consumer are you courting? Take a close look at
the intersection of your product with their life in the
digital space.




“    Consumers’ expectations of brands have shifted in powerful ways. Brands can’t lead just
     by making more noise than the other guy. The other guy has changed. Interaction points
     have changed. Consumers are more empowered. It’s not about what you say; it’s about
     what you do and what other people say about it. Hoping they have nice things to say isn’t
     much of a strategy.

     Andrew Kinnear
     V.P. Customer Experience
                               ”
       Insights for your business
                                                                                                               16
We invite product manufacturers to share these           With a rich knowledge of your consumer, you can
insights with their retail partners, and in turn         then evaluate the experience through their eyes. In
encourage retailers to build on the insights by          the two scenarios illustrated above, brand managers
asking questions like: How do the needs addressed        and retailers tapped into this knowledge to deliver
by this product at home also find expression from        an experience that reflects an appreciation of their
the consumer when she’s in my store? What other          consumers’ needs beyond the basics. Shutterbug
needs remain unmet that we can address? How do           may have leveraged segmentation insights to
consumer attitudes toward this product extend to their   help staff recognize Tom as an informed buyer
attitudes about their preferred retail environment?      and prosumer, and thus engage him in a richer
What does this suggest about how the product can         conversation. The makers of Fruity-O’s, together with
best be merchandized, priced and promoted through        the retailer, understood all too well how stressful
my store? How do my customers use digital channels       grocery shopping can be with a busy toddler. Each of
to shop for the products I stock? How else are they      them listened to their consumers and learned from
engaged online? How do they use mobile?                  them, considered their product category, and met
                                                         them where they are at.
We encourage clients to expand their dialogue with
business partners to establish a more comprehensive
understanding. Retailer/manufacturer collaboration
only increases the likelihood of success. By sharing                          Consumer
                                                                               digital
and acting on consumer insights, retailers and                                behaviour
product manufacturers can leverage digital media to
enhance the customer experience in ways that are
uniquely relevant to their specific consumers and
product category.                                                             Customer
                                                                                                 Product
                                                             Brand           Experience
                                                                                                 category
                                                                              Strategy
In short, at Delvinia the first step is always to
listen and learn—dig deep into consumer needs,
attitudes and behaviours. We look for ways that the
product brand and the retailer are linked through
the customer online. These connections facilitate
                                                                               Channel
the creation of seamless, synergistic shopping
experiences that help the customer solve a problem,
spark an idea, or start a conversation.

                                                         The grocery and cereal partners in particular
                                                         showed tremendous innovation and a willingness to
                                                         experiment, or play, with digital technology to connect
                                                         with shoppers. They delivered a solution that employed
     Retailer        Customer       Product brand
                                                         the lens we at Delvinia recommend. That is the lens
                                                         that is found at the intersection of four critical inputs
                                                         in to the retail experience: consumer digital behaviour,
                                                         channel, product category and brand. That is to say,
                                                         know who your customers are, how digitally engaged
                                                         they are, how they leverage different channels when
                                                         shopping for in your product category, and how they
                                                         relate to your brand specifically.




       Insights for your business
                                                                                                              17
conclusions

By digging deep into consumer insights, retailers and       Retailers must also listen to their customers to
manufacturers can better identify social and time-          determine how to develop digital strategies that
starved consumers—those who are leading the way in          enable them to connect. Simply ignoring or refusing
the digital space. Those who fail to take their cues from   to inhabit the digital world can result in mutual
these connected shoppers are missing an opportunity.        consumer/retailer alienation, leaving both retailers
These are the customers of the future and they will         and manufacturers to grapple with shrinking
respond positively to efforts to connect digitally.         consumer loyalty and sales. Get closer to these
                                                            consumers by providing solutions and experiences
Retailers must also understand how each of these            that reflect a knowledge of their lives overall, not
groups uses technology to interact with their               merely as buyers of specific products or patrons of
products and must be receptive to the changing              specific retail outlets. These consumers will reward
needs and wants of their customers. They need to            you for the risks you take. The social shoppers in
revisit the fundamentals of their business—product,         particular will reward you with valuable feedback that
place, price and promotion—and be prepared to               you can use to learn and further refine your offer.
adjust and respond effectively. But the power to
modify the old four P’s is no longer exclusively the        By sharing and acting on customer insights, retailers
purview of the retailer or product manufacturer,            and product manufacturers can leverage digital
and the context in which these decisions are made           media to create customer experiences relevant to
extends well beyond the in-store environment.               the needs of each consumer group. Just keep asking
                                                            the question: How does this experience validate and
                                                            reward my consumer? There are only a few on the new
                                                            digital frontier who really understand this.




END NOTES

i    This data is derived from a separate proprietary
     survey conducted by Delvinia from September 28 to
     October 18, 2010 with a representative sample of 360
     Canadians online.

ii   ibid




            Insights for your business
                                                                                                               18
ABOUT DELVINIA                                              ABOUT THIS RESEARCH

Founded in 1998, Delvinia is a digital strategy and         This proprietary survey was conducted from
customer experience design firm. With customer              November 19 to 22, 2010 with a sample of 500
insight capabilities powered by AskingCanadians™,           Canadians who shop online. Respondents were
our online community of 160,000 Canadians, we               sourced from Delvinia’s own AskingCanadians™
are able to gain customer intelligence to fuel our          panel. Established in 2005, AskingCanadians™ is
award winning strategy and design team. Delvinia is         Canada’s most influential online survey community
dedicated to helping its clients in the financial, media,   with a panel of more than 160,000 members across
education, retail and technology sectors craft effective    Canada. Joining the AskingCanadians™ panel is
digital solutions anchored in customer behaviour.           free to Canadians who are in the age of majority in
                                                            the provinces they reside, or have the permission of
Our mission is simple: create experiences that              their parents or legal guardian. Qu’en pensez-vous™
enrich people’s lives. We work in partnership with          (www.quenpensez-vous.com) is the sister community
our clients to inspire new thinking and approaches          in Quebec. www.askingcanadians.com is owned
that deliver results. We believe digital platforms can      and operated by Delvinia Data Collection for more
create deeper connections between companies and             information go to www.delvinia.com/askingcanadians.
consumers; by focusing on relevancy, utility and            Delvinia also wishes to acknowledge Shoptoit
ongoing engagement. We also believe that great              (www.shoptoit.ca), which surveyed a sample of 360
experiences are built in collaboration with the people      customers about their online shopping behaviour, for
that use them and continually evolve to meet their          their contribution to this report.
changing needs.



STAY TUNED

Watch for your invitation to the next Delvinia Webinar
featuring more insights from our latest retail research,
including case studies that bring the Delvinia
perspective to life.

Contact Delvinia today to discuss the significance of
these insights for your business.

Delvinia
370 King St West
Toronto, ON
M5V 1J9
www.delvinia.com




       Insights for your business
                                                                                                            19

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The Social Shopper: A Lens into the future of Retail Experiences

  • 1. Issue February 2011 The Social Shopper: A Lens into the Future of Retail Experiences Insights for your business
  • 2. EXECUTIVE SUMMARY For retailers and product manufacturers, the When it comes to creating a digital strategy, retailers importance of knowing who their customers are—and and manufacturers need to ground their approach in a how they shop—has never been more essential than it deep understanding of consumers, including the role is today. As we all know, the Internet and social media the product plays in their lives and the experience have created a landscape where consumers are a they want to gain from buying it. It requires listening more significant force than ever before. to and learning from the consumer and establishing a response that demonstrates a desire to place them at That is why, at Delvinia, we wanted to better understand the centre of the experience. As much as any product the consumer-retailer/manufacturer relationship. or retail environment needs to communicate a unique We asked ourselves: In a world with so many brand experience, to an even greater degree it needs available options, what should retailers and product to connect with the individual customer. manufacturers be doing to court this new consumer? In fact, highly social and digitally-inclined shoppers are Based on our research, we identified seven the lens into the future of retail experiences. Retailers major trends. need to find out what proportion of their customers are highly social users of technology, and from 1. Digital dominates pre-purchase research there they can determine the urgency of integrating digital technologies into their customer experience. 2. Product categories influence Understanding the retail experience through the eyes pre-purchase behaviour of those consumers will provide retailers a glimpse 3. Price is the top consideration into the future of all customers. By digging deep into consumer insights, retailers 4. Offline channels are still preferred for and manufacturers can better identify social and confirming availability time-starved consumers—those who are leading the 5. Consumer reviews are the preferred choice way in the digital space. Those who fail to take their for vetting products cues from these connected shoppers are missing an opportunity. These are the customers of the future 6. Appetite for social content extends to mobile and they will respond positively to efforts to connect digitally. 7. Consumers are increasingly clicking in-store By sharing and acting on customer insights, retailers Delvinia’s proprietary AskingCanadians™ online and product manufacturers can leverage digital research community has been collecting information media to create customer experiences relevant to about the attitudes and digital behaviours of the needs of each consumer group. Just keep asking Canadians for the past four years. Digital behaviours the question: How does this experience validate and vary from product to product, but they also vary from reward my consumer? There are only a few on the person to person. This is just one tool that confirms new digital frontier who really understand this. this. Understanding which behaviours are most common amongst the consumers of a particular product or retailer, and then determining how those consumers interact with that product or in that retail environment, is key. Insights for your business 2
  • 3. contents Introduction............................................................................................................... 4 Survey findings ..................................................................................................... 5–12 Digital Canadians: which are your customers?.................................................... 13–15 Implications for retailers and product manufacturers .......................................... 16–17 Conclusions ............................................................................................................ 18
  • 4. introduction For retailers and product manufacturers, the That is why, at Delvinia, we wanted to better understand importance of knowing who their customers are—and the consumer-retailer/manufacturer relationship. how they shop—has never been more essential than it We asked ourselves: In a world with so many is today. As we all know, the Internet and social media available options, what should retailers and product have created a landscape where consumers are a manufacturers be doing to court this new consumer? more significant force than ever before. To answer this question, we decided to start by Consumers have the ability to research products on getting to know them better. Which channel do they brand and retail websites that provide buying guides, prefer at each stage of the buying process and detailed product reviews and the ability to make why? Does this preference differ from product to direct comparisons. While price remains the number product, or retailer to retailer? Where does mobile one piece of information individuals search for online, come into play? Exactly how important is social consumer reviews and recommendations are sought media? These and many more questions were the out more often than any other item, including product focus of a survey we conducted with members details, promotional offers, product availability and of our proprietary AskingCanadians™ panel in expert opinions. November of 2010. Delvinia’s research revealed the following seven trends. Given the ease of access to online information, combined with the even greater scope of social media dialogue, retailers and product manufacturers need to acknowledge that consumers—specifically digitally- savvy consumers—have greater control in the retail environment. And although that group may be small in size, it is growing rapidly. Insights for your business 4
  • 5. survey findings Figure 1. Approximately how often do you research products online prior to making 1. DIGITAL DOMINATES PRE-PURCHASE RESEARCH purchase decisions? 75% to 100% Less than 10% of the time of the time Online shopping is here to stay and online research 36% 6% is an integral part of the shopping experience. Sixty- 10% to 24% of the time one per cent of Canadian shoppers surveyed say they 14% research products online prior to making purchase decisions for at least one out of every two purchases (Figure 1)i. Furthermore, at least half of all shoppers 25% to 49% of the time report that the Internet is their preferred channel, 20% over telephone and in-store, for six out of seven pre- purchase activities (Figure 2). 50% to 74% of the time 25% Base: Canadians who research purchases online, N=360. Figure 2. Which environment do you typically find most useful for completing each of the following activities? Direct purchasing a product 83% 13% 4% Determining whether an item is in stock / available 45% 32% 12% 10% Comparing prices 42% 51% 1% 7% Gathering information about the general product type 35% 49% 15% Gathering specific information about a particualar product(s) 35% 55% 9% Seeking coupons or other promotions 29% 53% 17% Trying to locate a store that carries the product 26% 58% 5% 11% Hearing recommendations or reviews 22% 56% 1% 21% In store On the internet Telephone No preference / I do not do this Base: Have purchased online in the past 6 months, N=500. Insights for your business 5
  • 6. 2. PRODUCT CATEGORIES INFLUENCE PRE-PURCHASE BEHAVIOUR When it comes to researching products prior to Beyond pre-purchase information gathering, consumers making a purchase, Delvinia finds that consumers of packaged goods in general, including pet products are five times more likely to opt for the Internet over and health supplements, favour in-store interactions the in-store environment when shopping for home to satisfy most information needs, including product electronics, media, and appliances – digital and recommendations and price comparisons. technological products in themselves. By contrast, shoppers prefer to conduct in-store research for more personal, consumable items like apparel, beauty and cosmetics, and groceries. In fact, consumers are 68 per cent more likely to gather pre-purchase information about apparel in-store than online (Figure 3). Figure 3. Most useful channel for pre-purchase information gathering on a specific product by category 83% Home electronics or computers 15% 73% Media (books, music, videos) 19% Children's toys baby products 69% 25% Household appliances or furniture 63% 31% Home decor and accessories 58% 32% 55% Health / nutritional products (e.g. supplements) 36% 44% Pet products 41% 40% Beauty and cosmetics 50% 34% Groceries 49% 32% Clothing 54% Internet In store Base: Have purchased online in past 6 months, N=500. Insights for your business 6
  • 7. 3. PRICE IS THE TOP CONSIDERATION Finding the best price is critical for everyone and it represents the number one information item that consumers search for on manufacturer and retail websites. In total, 93.1 per cent of respondents search for information related to price, retail stores with the best price, or promotional offers online (Figure 4)ii. Figure 4. What information are you looking for when you research products online? Price 84.9% Consumer review / recommedations 65.0% Product specifications / details (colour, size, capabilities, etc.) 62.4% Retails Store(s) with best price 60.1% Promotional offers 57.3% Product availability 49.9% Expert opinions recommending the best product 48.4% Consumer reports 45.3% Retail locations 45.0% Ideas / solutions 35.0% New product launches 29.3% Other, specifiy 2.0% Base: Research purchases online, N=346 Insights for your business 7
  • 8. 4. OFFLINE CHANNELS ARE STILL PREFERRED FOR CONFIRMING AVAILABILITY Only when it comes to checking the availability of stock does online trail the in-store experience. (We also glimpse a continued role for the telephone.) Overall, only 32 per cent find the Internet useful in determining whether an item is available or in stock at a particular store (see Figure 2 above). For some retail categories, this is more consequential than others. This is particularly true for furniture and large appliances, where timeliness and shipping are significant factors in making a decision to buy. Here, 46 per cent prefer to check in-store for product availability, while 34 per cent of shoppers prefer to log on, and 17 per cent simply pick up the phone (Figure 5). In contrast, consumers of electronics and media share a strong preference for checking stock online, and are among the least likely to wait until they are in a store to confirm product availability. For these buyers, if retailers fail to offer reliable stock information online, they also risk losing sales from those shoppers who prefer to purchase in-store. Figure 5. Preferred channel for determining if an item is in stock 56% Home electronics 23% or computers 15% 56% Media (books, 31% music, videos) 7% 43% Children's toys, baby products 35% 17% 37% Home decor and 42% accessories 10% Household 34% appliances 46% or furniture 17% Health / 30% nutritional products 47% (e.g. supplements) 11% 18% Pet products 54% 13% 18% Clothing 56% 11% 17% Beauty and 59% cosmetics 14% 14% Groceries 63% 7% Internet In store Telephone Base: Have purchased online in past 6 months, N-500. Insights for your business 8
  • 9. 5. CONSUMER REVIEWS ARE THE PREFERRED CHOICE FOR VETTING PRODUCTS Word-of-mouth has always been a key factor in the purchase process, but the Internet has increased its power ten-fold. In fact, for online shoppers, peer reviews are second only to price. Delvinia’s research “ Everyone likes to feel that they’ve made the best decision when shopping, and peer reviews are often a way for buyers finds that 65 per cent of Canadian shoppers look for consumer reviews and recommendations while to confirm their choice—whether they researching online (see Figure 4 above). are mobile users or not. Retailers who From the brand perspective, peer ratings and reviews use shelf space or in-store display can be uncomfortable because they require brands to to highlight constructive discussion surrender control of their message. However, onsite discussion allows shoppers to gather rich insight about products and their benefits can into products with minimal effort, while delivering enhance the shopping experience and equally rich consumer feedback to brand and product managers, and retailers alike. In fact, peer feedback gain consumer trust, as they validate ” is so highly valued that consumers would prefer retail their desire to be informed. websites provide peer reviews over fancy tools to help them select products (Figure 6). Amy Sullivan V.P. Customer Insight Insights for your business 9
  • 10. Figure 6. When you are shopping on a retail website, how important is each of the following features to you? Product information in comprehensive 66% 28% Shipping policy is easy to find and read 58% 29% Can locate stores near to you 56% 33% Can compare prices of different products 56% 35% Return policy is easy to find and read 27% 42% Provides store contact information 52% 35% Can compare features of different products on one site 46% 42% Can read consumer product reviews 45% 40% Can zoom in or rotate image of product 40% 40% Has selection tools to identify the recommended for you 27% 42% Very important Somewhat important Base: Prefer Internet over other channels for any part of the purchase cycle, N=462. Insights for your business 10
  • 11. 6. APPETITE FOR SOCIAL CONTENT EXTENDS TO MOBILE Not only are shoppers increasingly using peer ratings and reviews to guide their purchase decisions--their use is going mobile. Delvinia’s research finds that nearly one in five Canadian smartphone owners use their phones to search for product recommendations while shopping (Figure 7). In fact, the number of smartphone users who search for this information rises dramatically to 40 per cent when iPhone owners are isolated. Figure 7. Which of the following activites have you completed online, using your smartphone, in the process of shopping? Take a picture of a product in-store 32.5% Locate a store that carries the product 26.6% Gather information about the general 24.9% product type Compare prices 23.2% Gather specific information about a 22.4% particular product(s) Find product recommendations or reviews 19.0% Contact customer service 16.9% Download a coupon or other promotion 13.5% Determine whether an item is in stock 11.0% Post to social network about a product 8.0% Directly purchase a product 7.6% Use a QR code to get product information 6.3% or a better price Post to a social network about a 5.5% purchase experience Write a product review / rate a product 4.2% None of the above 43.9% Base: Smartphone owners, N=237. Insights for your business 11
  • 12. 7. CONSUMERS ARE INCREASINGLY CLICKING IN-STORE Another growing element of the mobile shopping experience is the use of camera phones. Delvinia’s research finds that one-third of Canadian smartphone owners have used their phone to take a picture of a “ Some consumers are using the in-store visit as an extension of browsing online. Using their mobile product while shopping (Figure 7). A further 9.7 per cent cent have used their phone to post to a social phone to snap pictures of items as a network about their experiences. reference for themselves or to send to a However, many retail locations prohibit the use of friend or spouse is a common behaviour. cameras in-store, with the intention of ensuring the A quick snapshot of a product sent security of merchandise and curtailing efforts to copy it illegally. For mobile-savvy shoppers, however, this home with the quick text message ‘is can cause frustration and diminished loyalty, and this the right product?’ can save a lot of importantly, it can cost sales. Notes one individual in a discussion of the issue at Yahoo! Answers, “I take photos in stores all the time. I use these photos to show my wife what is on sale, or an item that I’d like for her to return to the store later to check out.” He frustration later. Randy Matheson ” Director, Emerging Media concludes, “Businesses cannot afford to alienate customers.” Retailers who want to connect with today’s shoppers need to revisit these policies and weigh the risks against the consequences. While the pros and cons may vary from retailer to retailer, or even product to product, those in the business of serving young, digitally-savvy consumers in particular, need to find ways to bridge this gap. Insights for your business 12
  • 13. digital Canadians: which are your customers? The analysis above illustrates typical uses of digital Understanding which segments are most common media in the purchase process. Digital behaviours amongst the consumers of a particular product vary from product to product, but they also vary or retailer, and then determining how those from person to person. Delvinia’s proprietary consumers interact with that product or in that retail AskingCanadians™ online research community has environment, is key. been collecting the attitudes and digital behaviours of Canadians for the past four years. This is just one tool At Delvinia, we help our clients understand this by that confirms this. looking at a customer experience through the lens of a particular digital segment. For example, if a large Every year we collect data from more than 25,000 of proportion of an organization’s customer base are our panellists regarding their attitudes towards, and high social users of technology, we would look at usage of, digital technology. Working with Generation5 creating an experience that reflects their perspective Mathematical Technologies, these responses have and brings them in touch with other consumers in that been projected across every postal code in Canada, product category. providing the foundation for a segmentation model using Generation5’s mosaic clustering system based To illustrate this way of thinking we have created two upon Canadians’ ownership versus social usage scenarios based upon the diversity of consumer/ of technology. Overall, this segmentation clusters retailer relationships and the way customers use together into three large groups distinct from the digital media. Scenario 1 is typical of the savvy, average—social, time-starved and lagging. socially engaged consumer, while Scenario 2 reflects the life of a more time-starved consumer. Socially-engaged Canadians include those for whom technology is not just a means of keeping organized, Figure 8. Digital behaviour major segments but it is also a lifeline to family and friends and to the digital universe at large. The time-starved segment includes groups of Canadians for whom technology is a means to an end. It is a tool to help Social Social usage of technology them manage their hectic lives. They tend to own a number of devices, including smartphones, and are comfortable in the digital space, but their use of technology for social purposes is limited. Distinct Average from each of these groups are the laggards. These individuals tend to be late-adopters or do not own ed arv technology at all, they may be overwhelmed or st Lagging e- m alienated by digital media and they rarely leverage it Ti for social or other purposes (Figure 8). Ownership of technology Insights for your business 13
  • 14. SCENARIO 1: TOM SHOPS FOR A DIGITAL CAMERA Tom is a gadget junkie who is entirely at home online. Next Tom plugs his preferred make and model into a He enjoys using his new toys as much as he enjoys couple of shopping sites to establish an acceptable shopping for them. Today he is in the market for a price range. He realizes that this will be a sizable digital camera. investment, so he ultimately prefers to make the purchase offline, at a reputable shop within a He begins by looking online to learn about new reasonable proximity. That way, he can handle the developments in the technology. He wants to camera a bit before buying, and chat in-person with understand whether he should buy a digital SLR someone knowledgeable, who can help him out if he or a point and shoot. He does some reading on has any troubles later. websites for photography enthusiasts, including sites published by some of the established photography With all of this freshly gathered information in mind, magazines. Then he lobs a few questions out in he pulls up a map of camera retailers nearby and some forums, hoping to reel in advice from a pro. links through to their sites to see who has the product The users at one site point him to a Twitter feed from in-stock at his preferred price. Tom identifies Pics a photojournalist who also writes tech reviews. He Plus as having the best price and he has confirmed takes in all the chatter with ease and enthusiasm. that they have the camera onsite. But the users at From his perspective, the more information the better. Shutterbug.com rave about the sales staff there, and they too have the camera available at a fair price. He Finally, he decides to buy a digital SLR. Now he can buy it today! He drops by Shutterbug after work needs to create a shortlist of brands and models and tries it out. Because he no longer needs to know and get a sense of the investment he needs to put the basics about the camera, he has time to consider down. He searches for digital cameras on Google some great auxiliary products recommended to and locates some sites with product reviews from him by the store staff. Tom completes his purchase consumers and experts. He zeroes in on a Leica, and and heads home for a weekend of shooting. Now visits the manufacturer site to learn more. The site he always consults the staff at Shutterbug when he gives him product specs, but it also recommends wants added insight. different models for different types of photographers and provides tips on how to get the best shots under different circumstances. He’s learning about landscape photography, and becoming more intrigued. “ Making the transition seamless from the online experience to the offline experience is the challenge. If there’s a gap in service levels or a process misalignment, retailers lose credibility and consumers lose momentum. Sara Durning ” Director, Strategy & Experience Design Insights for your business 14
  • 15. SCENARIO 2: MOLLY BUYS GROCERIES Molly is a busy career mom with a three-year-old daughter. She rarely has time for herself, much less to surf or chat online like some of her friends. She’s unlikely to shop online; there’s just too much information to wade through and not enough time. But she’s not averse to technology. She has a smartphone and a penchant for any app that helps her day go more smoothly. On the weekends she shops for groceries and usually brings her daughter along. While at the store this weekend, Molly refers to her grocery list on “ Many years ago, not being able to get enough information about products and services was a pain point for her smartphone and notices an alert that there is a children’s mobile game from Fruity-O’s available for consumers. Today, consumers have free. The game was created by Fruity-O’s and made available to shoppers by the retailer while in-store. the opposite problem. They are overloaded with disjointed pieces Molly downloads it and offers it to her daughter. The game is subtly branded and it promotes healthy of information. Consumers want a eating, so she feels good about letting her child play. succinct and consistent presentation While her daughter is preoccupied with the game, Molly is able to navigate the store with ease. of product and service information. As At the end of the game, Fruity-O’s offers a coupon a customer experience advocate and along with a message from the retailer, indicating a consumer, I look forward to seeing which aisle has the product. Molly makes her way to the correct aisle and picks up a box of Fruity-O’s on better curation of product and service her way out. At checkout, she shows the clerk the information and experience through coupon on her smartphone and receives a discount on the cereal. stronger collaboration between retailers and product brands. After all, Not only did Molly enjoy some savings on this trip, but with her child occupied and her own hands free, who has the time to sift through all that ” Molly enjoyed a coffee from the in-store café, took disjointed information? in the atmosphere, and treated herself to some new products that caught her eye along the way. She also told three friends about the experience before the Rosalina Lin-Allen weekend was over. Director, Client Strategy Insights for your business 15
  • 16. implications for retailers and product manufacturers When it comes to creating a digital strategy, retailers Highly social and digitally-inclined shoppers are the and manufacturers need to ground their approach in a lens into the future of retail experiences. Retailers deep understanding of consumers, including the role need to find out what proportion of their customers the product plays in their lives and the experience are in fact highly social users of technology, and from they want to gain from buying it. It requires listening there they can determine the urgency of integrating to and learning from the consumer and establishing a digital technologies into their customer experience. response that demonstrates a desire to place them at Understanding the retail experience through the eyes the centre of the experience. As much as any product of those consumers will provide retailers a glimpse or retail environment needs to communicate a unique into the future of all customers. If retailers don’t make brand experience, to an even greater degree it needs an effort to understand these new consumers, they are to connect with the individual customer. missing the opportunity to connect with the customer of the future. Retailers and manufacturers can’t assume that all consumers are alike. Remember, they vary in their For product manufacturers, we recommend comfort levels with digital technology. Some shoppers connecting with consumers to understand drivers, feel empowered by all that the Internet has to offer, such as: What’s unique about his lifestyle that while others are overwhelmed. compels him to buy the product? Which of the brand values resonate with her and why? What else is Consumers also vary in the experience they seek happening in their lives at the time that this product when buying different products. The information becomes relevant? What added value can the brand junkie may want to cut to the chase when buying the provide to address complementary needs in the daily critical item he needs today, but he may bask in the lives of my consumers? Are my consumers digitally dialogue for that more discretionary treat. Which engaged, and if so, how? consumer are you courting? Take a close look at the intersection of your product with their life in the digital space. “ Consumers’ expectations of brands have shifted in powerful ways. Brands can’t lead just by making more noise than the other guy. The other guy has changed. Interaction points have changed. Consumers are more empowered. It’s not about what you say; it’s about what you do and what other people say about it. Hoping they have nice things to say isn’t much of a strategy. Andrew Kinnear V.P. Customer Experience ” Insights for your business 16
  • 17. We invite product manufacturers to share these With a rich knowledge of your consumer, you can insights with their retail partners, and in turn then evaluate the experience through their eyes. In encourage retailers to build on the insights by the two scenarios illustrated above, brand managers asking questions like: How do the needs addressed and retailers tapped into this knowledge to deliver by this product at home also find expression from an experience that reflects an appreciation of their the consumer when she’s in my store? What other consumers’ needs beyond the basics. Shutterbug needs remain unmet that we can address? How do may have leveraged segmentation insights to consumer attitudes toward this product extend to their help staff recognize Tom as an informed buyer attitudes about their preferred retail environment? and prosumer, and thus engage him in a richer What does this suggest about how the product can conversation. The makers of Fruity-O’s, together with best be merchandized, priced and promoted through the retailer, understood all too well how stressful my store? How do my customers use digital channels grocery shopping can be with a busy toddler. Each of to shop for the products I stock? How else are they them listened to their consumers and learned from engaged online? How do they use mobile? them, considered their product category, and met them where they are at. We encourage clients to expand their dialogue with business partners to establish a more comprehensive understanding. Retailer/manufacturer collaboration only increases the likelihood of success. By sharing Consumer digital and acting on consumer insights, retailers and behaviour product manufacturers can leverage digital media to enhance the customer experience in ways that are uniquely relevant to their specific consumers and product category. Customer Product Brand Experience category Strategy In short, at Delvinia the first step is always to listen and learn—dig deep into consumer needs, attitudes and behaviours. We look for ways that the product brand and the retailer are linked through the customer online. These connections facilitate Channel the creation of seamless, synergistic shopping experiences that help the customer solve a problem, spark an idea, or start a conversation. The grocery and cereal partners in particular showed tremendous innovation and a willingness to experiment, or play, with digital technology to connect with shoppers. They delivered a solution that employed Retailer Customer Product brand the lens we at Delvinia recommend. That is the lens that is found at the intersection of four critical inputs in to the retail experience: consumer digital behaviour, channel, product category and brand. That is to say, know who your customers are, how digitally engaged they are, how they leverage different channels when shopping for in your product category, and how they relate to your brand specifically. Insights for your business 17
  • 18. conclusions By digging deep into consumer insights, retailers and Retailers must also listen to their customers to manufacturers can better identify social and time- determine how to develop digital strategies that starved consumers—those who are leading the way in enable them to connect. Simply ignoring or refusing the digital space. Those who fail to take their cues from to inhabit the digital world can result in mutual these connected shoppers are missing an opportunity. consumer/retailer alienation, leaving both retailers These are the customers of the future and they will and manufacturers to grapple with shrinking respond positively to efforts to connect digitally. consumer loyalty and sales. Get closer to these consumers by providing solutions and experiences Retailers must also understand how each of these that reflect a knowledge of their lives overall, not groups uses technology to interact with their merely as buyers of specific products or patrons of products and must be receptive to the changing specific retail outlets. These consumers will reward needs and wants of their customers. They need to you for the risks you take. The social shoppers in revisit the fundamentals of their business—product, particular will reward you with valuable feedback that place, price and promotion—and be prepared to you can use to learn and further refine your offer. adjust and respond effectively. But the power to modify the old four P’s is no longer exclusively the By sharing and acting on customer insights, retailers purview of the retailer or product manufacturer, and product manufacturers can leverage digital and the context in which these decisions are made media to create customer experiences relevant to extends well beyond the in-store environment. the needs of each consumer group. Just keep asking the question: How does this experience validate and reward my consumer? There are only a few on the new digital frontier who really understand this. END NOTES i This data is derived from a separate proprietary survey conducted by Delvinia from September 28 to October 18, 2010 with a representative sample of 360 Canadians online. ii ibid Insights for your business 18
  • 19. ABOUT DELVINIA ABOUT THIS RESEARCH Founded in 1998, Delvinia is a digital strategy and This proprietary survey was conducted from customer experience design firm. With customer November 19 to 22, 2010 with a sample of 500 insight capabilities powered by AskingCanadians™, Canadians who shop online. Respondents were our online community of 160,000 Canadians, we sourced from Delvinia’s own AskingCanadians™ are able to gain customer intelligence to fuel our panel. Established in 2005, AskingCanadians™ is award winning strategy and design team. Delvinia is Canada’s most influential online survey community dedicated to helping its clients in the financial, media, with a panel of more than 160,000 members across education, retail and technology sectors craft effective Canada. Joining the AskingCanadians™ panel is digital solutions anchored in customer behaviour. free to Canadians who are in the age of majority in the provinces they reside, or have the permission of Our mission is simple: create experiences that their parents or legal guardian. Qu’en pensez-vous™ enrich people’s lives. We work in partnership with (www.quenpensez-vous.com) is the sister community our clients to inspire new thinking and approaches in Quebec. www.askingcanadians.com is owned that deliver results. We believe digital platforms can and operated by Delvinia Data Collection for more create deeper connections between companies and information go to www.delvinia.com/askingcanadians. consumers; by focusing on relevancy, utility and Delvinia also wishes to acknowledge Shoptoit ongoing engagement. We also believe that great (www.shoptoit.ca), which surveyed a sample of 360 experiences are built in collaboration with the people customers about their online shopping behaviour, for that use them and continually evolve to meet their their contribution to this report. changing needs. STAY TUNED Watch for your invitation to the next Delvinia Webinar featuring more insights from our latest retail research, including case studies that bring the Delvinia perspective to life. Contact Delvinia today to discuss the significance of these insights for your business. Delvinia 370 King St West Toronto, ON M5V 1J9 www.delvinia.com Insights for your business 19