Do your shopping budgets match your behavior? Surveys by market researcher Purchased provide real-time insights into why they might not.
How much did you spend on Valentine’s Day? What did you buy? When, and where, did you buy it? This is the type of information that retailers have always wanted to know. But with the advent of e-commerce and mobile shopping, consumers’ shopping habits are changing rapidly, and stores are struggling to keep up.
You saw some of the impact this confusion had on consumers during the holiday season. UPS personnel had a hard time delivering all those online shopping orders in time for Christmas, and consumers took to Twitter and other social media to complain. Brick-and-mortar stores were slashing prices, and news stories circulated about how some in-store employees were being taught the art of bargaining in order to help make a sale.
As retailers report their fiscal year-end earnings, we’ll see some of their responses to this changing landscape. Wal-Mart Stores Inc. yesterday gave us some insight into how they plan to handle the effect of last year’s sluggish sales. The company said in its earnings report that it plans to open more, smaller stores to reach new customers, particularly in urban areas, and expand the integration of Internet shopping with its physical locations. Wal-Mart had found that using stores to fill online orders during the holiday shopping season had been one successful tactic as it combatted competition from Amazon.com. It’s just one example of how retailers with both a traditional and online presence are trying to capture “omni-channel” shoppers and win a bigger share of their wallets.
Just as technology is changing consumers’ habits, companies are turning to technology to help them understand the shifts. One company, Brookline, Mass.-based Purchased, is offering the industry unique insights into consumer behavior by running studies that look at actual purchases, as they’re being made.
The company makes use of the accelerating growth in smartphones by recruiting regular shoppers through its app, Shopalong, which is available for download on iTunes or through Google Play. Shoppers are given a small stipend or gift card in return for participating in the surveys. In addition to collecting the regular demographic info of any marketing study, Purchased asks consumers their shopping plans before they go out – what they expect to buy, where, and how much – and then asks them to check in when they enter actual stores.
If a person does make a purchase in a store or online, they’re sent some follow-up questions to answer in real-time, and also asked to snap a photo of their receipt so that Purchased can confirm the data.
“We’re really trying to understand shopper behavior as it’s actually happening,” said Walter Carl, chief research officer at Purchased.
One of the insights Carl’s company offers is data on the difference between what people plan to do versus what they actually do. We all know the challenge of matching our budget intentions with our actual behavior, and Purchased’s study provides granular details into where many of us go astray.
Take Valentine’s Day. Carl and his team ran a study of more than 500 Shopalong participants, collecting over 1,300 receipts during a two-week period. According to the results, people on average spent 18 percent more than they had planned.
“You can’t rely on self-reported data,” Carl said. “Only 27 percent of shoppers were able to accurately predict what they were going to spend. Most people can’t estimate what they’re going to spend.”
What categories threw people off the most? Those who took a celebratory evening out – whether dining at a restaurant or taking in a show or movie – and those who splurged on electronic gifts.
Carl’s study also showed how actual behavior can differ from a “culturally accepted norm.” Jewelry, for example, would presumably be on many gift lists, and in fact 21 percent of shoppers said they planned to buy some for Valentine’s Day. But ultimately only 9 percent did – and more women made those purchases.
In terms of which stores got the biggest share of people’s wallets for Valentine’s Day gifts, Amazon.com won the top spot, followed by Wal-Mart and Target. The online-only retailer got 11.3 percent of all money spent on Valentine’s Day items, while Wal-Mart obtained 8.1 percent and Target 5.5. The reason?
“People go to Amazon.com to buy what they’re looking for. If they’re going to the site to buy Valentine’s Day items, they buy them,” Carl said. “What allowed Amazon.com to win share was that the amount each person spent on average was higher” compared with what they spent at the other stores.
When people shopped at Wal-Mart and Target, their shopping experience was less targeted, as they tended to mix in non-Valentine’s Day items as well, he said.
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