A big shift has happened in the world of Consumer Packaged Goods (CPG) in recent decades. We’ve moved from going into local stores and paying with cash (and more recently into chain stores and paying with credit cards) to anytime/anywhere shopping, online and off, and paying digitally.
With this shift and so many shopping options, the one “typical consumer,” the kind of shopper who used to come through your physical doors, no longer exists. Consumer motivations and behaviors are more varied than before, making marketing to your audience increasingly complex.
Fortunately for advertisers, the rise of digital technology in commerce also means more data on those consumers. Let’s look at who the “typical consumer” has become, and discuss some ways to build their brand loyalty in the digital landscape.
What Does Today’s Typical Consumer Look Like?
According to Nielsen data, online CPG shoppers are grouped into seven categories based on their motivation and behavior as consumers. They range from the technology averse to digital advocates, and their spending habits are equally varied.
The seven kinds of shoppers (see image below) each fall into one of four categories of motivation:
- Online assortment of goods, as well as a low level of trust and savviness with tech
- Convenience, little concern with the value/enjoyment of the shopping experience
- The experience, which includes research and use of tech savviness
- Full investment in online shopping bolstered by enjoyment of the process
Interestingly, the largest group of households falls into the first motivation, and includes people who are not all that thrilled about using digital technology for the purchase of their CPG. Advertisers may want to keep in mind that not all of their shoppers necessarily want to be buying online.
The amount of money the seven kinds of shoppers spend online isn’t always what you might expect. It makes sense that digital advocates, who are heavily invested in online shopping, would spend more (over-indexing at 214), and that the tech-averse would spend little (only indexing at 56).
However, the tech-savvy and researchers (indexing at 80 and 54, respectively) actually spend less online than do the non-planners (indexing at 100) who are mainly interested in convenience.
The reason for this is that the tech-savvy and researchers use tools and skill to find the perfect products at the ideal prices, and then go to the brick-and-mortar stores to buy them.
The advent of digital shopping obviously makes your audience harder to pin down. Of course, all that digital activity leaves a trail of data, which advertisers can use to better understand all these different consumers. Let’s look at that next.
Using Data to Understand the Diverse Customer Journeys
In this new shopping landscape, advertisers need new ways to reach and win over their target audiences. According to Nielsen (link above), using data for measuring and engaging with consumers is happening in four primary ways:
- Observing consumers’ use of technology to understand behavior across boundaries. For example, are digital ads bringing people into the physical store?
- Integrating data sets to find and measure new insights. For example, looking at weather and the stock market to predict consumer demand.
- Finding opportunities to connect with customers on their unique journeys. For example, creating digital stores that cater to the motivations and behaviors of the “Grab-and-Go” shoppers looking for convenience.
- Improving engagement with personalization to drive loyalty. For example, providing customized coupons and shopping maps.
Nielsen published another piece – a report on capturing brand loyalty for the future. We’ll look at a few ways to get consumer attention today to nurture their brand loyalty for the years to come.
First, accept that digital shoppers do not always search by brand, and certainly not to the degree that in-store shoppers do. Nielsen data found that, for men’s shaving products, online shoppers are 12 percent less likely than in-store shoppers to search by brand.
Instead, digital consumers search by category, and are 21 percent more likely to do so than in-store shoppers. Ultimately, their purchase choice is driven by the overall shopping experience, and cost perks like free shipping.
Going back to the seven types of online shoppers, we know that not everyone shops and buys for the same reasons and with the same goals. How do you create the ideal experience when that means something different to various segments of your audience?
Since we know that the convenience and advocate shoppers are the largest spenders online, it might be wise to put significant efforts into reaching them with efficient processes and pleasant experiences.
To reach the other kinds of shoppers, consider trying promotions, mobile apps and ramping up your retail website:
It’s safe to assume that online shoppers will continue to evolve as the digital marketplace itself does. To secure their brand loyalty for a future full of competition, focus on the experience you create online and off, and stay aware of the great diversity within your target audience.