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© IGD ShopperVista2012

The connected shopperMay 2012

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Report Contents

1. Executive Summary 1

1.1 Key findings 1

1.2 Implications 4

2. Introduction 8

2.1 Research methodology 8

3. How connected are shoppers? 9

3.1 Internet penetration 9

3.2 Mobile connectivity 9

3.3 Market comparison 11

3.4 Generational dynamic 13

4. How is the internet already shaping shopping decisions? 14

4.1 Online research 14

4.2 Mobile interaction 17

4.3 Online recipes 18

4.4 Comparing prices 19

4.5 Store location 19

4.6 Product availability 19

4.7 Product reviews 19

4.8 Discount vouchers 21

4.9 Social networks 21

4.10 Scanning codes 21

4.11 Market differences 21

5. How do connected shoppers want the internet to help them? 25

5.1 Shopper journey 25

5.2 Shopper benefits 27

5.3 Hunt for value 27

5.4 Desire for inspiration 29

5.5 Young families 30

5.6 Food waste 31


Report Contents (Continued)

6. What innovations are connected shoppers most interested in? 32

6.1 Grocery planning 32

6.1.1 Online promotional cherry pickers 33

6.1.2 Personalised e-promotions 34

6.1.3 Online shopping bill comparers 36

6.1.4 Digital household managers 36

6.1.5 Online customised meal planners 37

6.1.6 Digital shopping list compilers 39

6.1.7 Virtual bulk discount collaborators 40

6.1.8 Market differences 41

6.1.9 Demographic differences 42

6.2 Shopping in-store 43

6.2.1 Smart-shopping scanners 45

6.2.2 Smart-loyalty card users 47

6.2.3 GPS triggered deal responders 48

6.2.4 On the spot price comparers 50

6.2.5 On the spot item finders 51

6.2.6 On the spot provenance checkers 52

6.2.7 In-store satellite navigators 53

6.2.8 Smart-payment adopters 53

6.2.9 Virtual wearing experimenters 54

6.2.10 On the spot network bulk buyers 55


6.3 Brand engagement 58

6.3.1 Online supplier-direct shoppers 59

6.3.2 Crowd sourcing contributors 60

6.3.3 Social network brand followers 61


7. Appendix 63

7.1 Online survey 63

7.2 Focus groups 66

1 Executive Summary

1.1 Key findings

Among shoppers in the six western European markets covered by the research.

Most shoppers (78%) are optimistic that internet and mobile-based technology will improve food and grocery shopping in the future

● Shoppers are primarily hoping that internet-based solutions will improve the shopping experience, by making it quicker and easier for them to shop

Food and grocery shopping in Europe is on the cusp of a mobile revolution

● While the technology is still in its infancy, half (51%) of all smartphone owners have already used their phone to connect with food and grocery websites in the past six months

● Around two fifths of connected shoppers would like to use a smartphone as they shop for food and groceries in the future: to receive location-based promotions when near a store (39%), scan products as they shop (41%), compare the price of specific items with other local stores (37%), help them find specific items in-store (36%), and redeem e-vouchers and loyalty points as they checkout (39%)

Grocery shoppers primarily want internet-based innovations to support them in their hunt for value and desire to save money

● Half (50%) of all shoppers have recently used the internet to compare the price of certain groceries, with almost two thirds (63%) of connected shoppers wanting to do this more in the future

● Six in ten (61%) connected shoppers would also like the internet to help them find the best promotions, with over half (53%) aspiring to become online promotional cherry pickers by using the internet to help them shop around for the best deals

● Around half of connected shoppers would like companies to send personalised e-promotions as part of their promotional strategy (54%), and would like to compare how much their shopping bill would be at different stores (51%)

Many shoppers recognise the potential for the internet to help them better plan their grocery shopping and find inspiration

● Shoppers rank the planning stage as an area they want the internet to help them with in the future ● Finding recipes is currently the most common online activity among grocery shoppers, with six in ten (60%) having

done so in the past six months ● A third (36%) of connected shoppers would like to become online customised meal planners, by using websites that

help them plan meals for the week, tailored to the specific needs and preferences of their household

The internet provides manufacturers with a platform to explore direct selling opportunities

● Almost four in ten (37%) connected shoppers would like to buy products direct from grocery manufacturers through a website dedicated to their brand, while only 7% strongly resist the idea

Social media networks provide an opportunity for grocery brands to engage with certain shoppers

● A quarter (24%) of shoppers claim to be already following a grocery brand or retailer on a social network website such as Facebook or Twitter

● Around the same number (22%) want to interact with grocery companies via an online social media, allowing them to

The connected shopperThe connected shopperThe connected shopperThe connected shopper

© IGD ShopperVista 2012 1

vote for favourite new product ideas, post questions and conduct surveys for example

The connected grocery shopper is not restricted to Millennials

● Web-enabled grocery shopping tools appeal similarly to all connected shoppers under the age of 45, including Generation X as well as Millennial shoppers

● Those solutions that specifically support shoppers’ in comparing prices and hunting for promotions appeal equally across all age groups, including those aged over 65

● Young families are particularly interested in how the internet can support them with budgeting better and navigating stores

The connected grocery shopper has emerged across western Europe, although priorities vary by market

● As earlier adopters of internet technology (94% have home internet access), the Dutch are more ambivalent to potential developments impacting their grocery shopping, with a narrower focus on applications that help them save money

● Swedish shoppers are the most engaged with online recipes, reflecting the dynamics of online grocery shopping in that market, and more likely to respond to proximity-based marketing

● The established online grocery shopping channel in the UK has already provided British shoppers with a suite of tools to help them shop offline as well as online. They are also more interested in becoming smart-shopping scanners, reflecting their growing resolve to stick to a budget

● Connected shoppers in Germany are less interested in how a smart device can help them write a shopping list unless it involves some artificial intelligence, but show stronger interested in becoming one the spot provenance checkers

● French connected shoppers are relatively more interested in becoming in-store satellite navigators, reflecting the prominence of the hypermarket channel

● Spanish shoppers are the least likely to have internet access (64%). However, those that are connected are more likely to own a smartphone, and be enthusiastic about the influence of internet-based technology and online social media networks on their food and grocery habits. This reflects the younger shopper profile in Spain compared to the other markets tested


© IGD ShopperVista 2012

The connected shopper: snapshot

Source: ShopperVista

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The connected shopper: snapshot cont.

Source: ShopperVista

3

1.2 Implications

General Retailers Suppliers

● While online grocery shopping remains a niche channel across Europe, the internet is already influencing many food and grocery shoppers. Those suppliers and retailers that understand how their shoppers, categories and brands are affected by online information sources, and develop a digital marketing strategy accordingly are best placed to optimise the impact of this mode of communication

ü ü

● European markets are at different stages of development regarding internet and mobile connectivity. A tailored approach to digital marketing by market is, therefore, warranted

ü ü

● The online grocery retailing landscape has a significant impact on the tools that are available and used by shoppers in each market. It will be important to monitor the development of the online grocery channel in each market, as this will impact the way in which shoppers interact with brands and retailers online

ü ü

● It will be important to review and adapt the level of digital communication and internet-based innovations to shoppers aged 45 and over, who are less likely to engage with this form of communication

ü ü

Enhancing the shopping experience

● Grocery retailers and manufacturers should continue to prioritise further development of smartphone applications, focussing on those that meet shoppers’ primary needs and help to strengthen relationships with them

ü ü

● Generating awareness of smartphone apps will become increasingly difficult as their number continues to explode. Approaching smartphone apps as brands and encouraging personal advocacy between shoppers will help drive awareness and usage

ü ü

● While many will end up with mobile internet connectively via a smartphone or tablet computer, not all shoppers will. There is a growing challenge, therefore, of catering for both those with and without web-enabled mobile devices

ü ü

● Smart-trolleys could have a profound impact on food and grocery shopping in the future. While their widespread use may not be seen in the short-term, further concept testing can be anticipated. In the meantime, development of smart-shopping scanners is an area to watch closely

ü ü

● There is greater opportunity for apps that help shoppers find specific items than for complete navigation tools, providing a new media for companies to provide shoppers with customer service

ü

● It will be important to monitor the development and usage of smartphones with near field communication, and address shoppers’ security concerns when encouraging shoppers to make smart-payments. This technology could play a significant role for retailers catering for top-up shopping missions

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Demonstrating value for money

● Online applications provide a potential vehicle for grocery companies to demonstrate their commitment to becoming shoppers’ money saving ally, by helping them identify ways of saving money during these financially challenging times

ü ü

● The internet is providing shoppers with accessible, complete and real time pricing information for their grocery shopping. Shoppers will, therefore, become increasingly sensitive to price and promotions when deciding where to shop and what to buy. Clearly communicating quality, performance, health and ethical credentials will help shoppers assess brands and retailers according to broader value perceptions

ü ü

● Price transparency has increased considerably with the development of online services, thus driving greater price competitiveness. Brands that adopt a multi-channel pricing strategy and successfully communicate their points of differentiation online are best placed to offset this affect

ü ü

● Price transparency could increase to a new level with the development of smartphone apps that provide real time pricing information for shoppers on-the-go. This increases the need for brands to clearly and consistently communicate their overall value proposition, including aspects of quality , taste, performance, health and ethics where applicable, as well as price

ü ü

● Smartphone technology provides a significant opportunity for brands and retailers with strong provenance credentials to raise awareness and bring to life their points of differentiation

ü ü

● Grocery companies operating in the Netherlands should consider focussing on developing new online services and innovations that help shoppers save money on their overall grocery budget

ü ü

Inspiring promotional innovation

● While becoming a dedicated online promotional cherry picker can involve considerable time and effort, new and improved websites and smartphone applications, and the potential development of new online grocery propositions in certain markets will make it increasingly easy for shoppers to spot the best deals. Continued low economic growth and growing food price inflation may also accelerate this trend further

ü ü

● By monitoring price comparison and promotion spotting websites companies can ensure that the information shoppers are accessing is accurate and up-to-date, and be alerted to other initiatives within their category

ü ü

● Personalised e-promotions will become an increasingly important technique and could help to improve promotional effectiveness and return on investment. Campaigns should be reviewed to ensure that personalised e-promotions are relevant to each shopper and make them feel valued

ü ü

● The growth of online aggregators and virtual communities provides a new platform for promotional innovation for companies to consider. Those that extend the discipline of measuring promotional effectiveness to these new media will be best placed at optimising their investment

ü ü



● Preference for virtual vouchers is likely to grow as smartphone penetration increases. However, there will remain a large group of mainly older shoppers wedded to the paper option. It will be important to recognise differences in preference and adopt a variety of voucher formats if looking to reach a broad shopper base

ü ü

● Further promotional innovation can be expected through the development of proximity marketing technology, particularly as a mechanic to encourage impulse purchasing. Companies will benefit from assessing the effectiveness of geo-marketing initiatives in order to optimise the return on their promotional investment

ü ü

● Digital marketing should be considered as a key tool for raising awareness and encouraging trial of new product launches

ü ü

Providing planning aids

● Internet-based initiatives and innovations that help shoppers plan their shopping, and that enhance the shopping experience will resonate most strongly with shoppers. Are these the areas that your digital marketing strategy is prioritising?

ü ü

● The development of online tools to help shoppers plan meals is likely to develop rapidly, providing shoppers with greater levels of personalisation and integration with the shopping process. These services provide grocery suppliers and retailers with new opportunities to influence shoppers earlier in the journey

ü ü

● The development and appeal of internet-based solutions to help shoppers plan their food and grocery shopping better could limit volume growth within the industry going forward. Business models may need to change to accommodate this dynamic, particularly in markets with static population growth

ü ü

● Shopping decisions are already being influenced by online recipes and cooking instructions. Food companies that proactively promote the versatility of their products as ingredient items, and publish recipes and cooking instructions will benefit from this trend

ü ü

● Food companies may want to consider how they can benefit from the development of initiatives that link recipe websites with online grocery retailers

ü ü

● The effectiveness of recipe and meal planning websites is party dependent on hitting the right tone, with a slightly different approach suited to each European markets

ü ü

● There are opportunities to target young families with specific online applications that help them manage their evolving shopping needs and budget

ü ü

● Encouraging shoppers to use digital shopping lists can help to increase retailer loyalty by helping them feel more organised and making the shopping experience more efficient

ü

● Following years of anticipation, the possibility of in-home connectivity is now becoming a reality. While the penetration of smart-fridge owners is unlikely to grow fast, it could change the replenishment cycle for certain perishable foods for a small group of shoppers, either positively or negatively. Understanding the impact of this technology on first movers will help companies in the fresh and chilled sector prepare for a more connected future

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New ways of engaging shoppers

● The internet provides manufacturers with a new platform to explore direct selling opportunities. However, suppliers looking to develop a direct selling strategy will need to consider how to generate traffic to the site, deliver shoppers’ orders and encourage repeat usage, as well as the ongoing cost investments required. Further research and testing will be required in order to hone the proposition, particularly for manufacturers that trade across multiple categories and brands

ü

● Online social networks provide retailers and manufacturers with a potentially powerful forum for interacting with shoppers and hence, build affinity with the brand. The commitment required from companies to maintain dialogue with shoppers and demonstrate that the feedback is listened to should not, however, be underestimated

ü ü

The impact of product reviews

● The diversity of preference for different types of product review creates a challenge in meeting the needs of all shoppers

ü ü

● Measures to optimise the integrity of product ratings and reviews will become more important to shoppers as they apply greater scrutiny to them

ü ü

● Consider how product reviews for everyday grocery items can be made more compelling to shoppers, as well as easier and faster to access and navigate

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● 1,013 interviews in Britain ● 1,019 interviews in France ● 1,014 interviews in Germany ● 1,002 interviews in the Netherlands ● 1,008 interviews in Spain ● 1,003 interview in Sweden

In addition, six focus groups were conducted among connected shoppers in Britain to complement the survey results. The sampling criteria are detailed in the appendix.

All fieldwork was conducted between 1st and 16th March 2012.



2 Introduction

The digital world is rapidly changing thanks to advances in technology and a growth in mobile internet devices. This has led to the next generation of shoppers: connected shoppers. These shoppers are using new technologies and mobile internet devices to research products, keep shopping lists, find the best deals and promotions, and access product reviews before they go shopping as well as in-store. The industry should recognise that more and more shoppers are now switched on and have high expectations of how technology can enhance the shopping journey.

This latest European report explores the role of internet and mobile technology in changing the way people shop now and in the future, and how you can win from a shopper perspective.

This research will help you to:

1. Identify how digital technology is already impacting grocery shoppers at different stages of the shopping journey2. Understand how shoppers envisage digital technology shaping their food and grocery shopping in the future3. Sharpen your digital marketing strategy with in-depth shopper insight 4. Optimise your investment in digital technology by prioritising initiatives that deliver greatest benefits to shoppers5. Gain a European perspective through insightful analysis of shoppers from Britain, France, Germany, the Netherlands,

Spain and Sweden

2.1 Research methodology

Detailed insight for this report was gained through a mix of both quantitative and qualitative research.

An online survey was conducted among a sample of connected shoppers, namely main household grocery shoppers with internet access, in six European markets.

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3 How connected are shoppers?

3.1 Internet penetration

While the term ‘connected shopper’ may sound futuristic, in reality, the future is already upon us. In the six markets covered by this research, most grocery shoppers are connected, in that their household has internet access, and typically broadband.



Most shoppers are ‘connected’, although levels differ

Source: Eurostat 2011, Base: All households

Internet penetration does, however, differ by market. Almost all Dutch households are connected, compared to two thirds of all households in Spain. For this particular report, we have investigated the behaviour, interest and preferences of these connected shoppers, namely those main household grocery shoppers with internet access.

3.2 Mobile connectivity

European markets also differ considerably in the level of mobile connectivity that they have. Retaining a view of all shoppers, the chart below distinguishes between three types of mobile phone owners.

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1. Smartphone and tablet owners

● Those with a smartphone (i.e. a mobile phone with high speed or wifi internet access, allowing users to download apps and fully browse the web) or tablet computer (e.g. iPad, Samsung Galaxy or Sony tablet) have the greatest connection capability

● This group represents as many as four in ten grocery shoppers across these six European markets

Shoppers’ level of connectivity differs considerably

Source: ShopperVista , *combined with data from Eurostat 2011, Base: All main shoppers

For this group, the smartphone has become like a ‘vital organ’, with many claiming “it has changed my life” and “I don’t know how I could live without it”. There are three over-arching benefits that smartphone owners particularly appreciate.

● Immediacy – smartphones facilitate spontaneity, allowing people to live in the immediate, with the world brought to their fingertips

● Efficiency – smartphones enable people to use their time more efficiently by allowing things to be done on-the-go, providing speedier solutions to laborious tasks, and enabling multi-tasking

● Relationships – smartphones help people get and stay in contact with each other

2. Owners of a mobile phone with limited internet access

● A further 16% own a mobile phone with limited internet access, allowing them to check emails and access certain websites, but not allowing them to easily shop using their phone for example

● This group are, therefore, limited in their ability to use the internet out of home or in-store ● This group may begin to evaporate as many are upgraded to smartphones as their contract matures



3. Those without mobile internet access

● The third group of connected shoppers, representing just shy of three in ten, can only access internet based technology to aid their food and grocery shopping at home

● The vast majority of this group do have a mobile phone, albeit one that is not web-enabled ● This group may also shrink over time, as they upgrade their handset and as those getting their first phone jump

straight to higher spec models

Implications

● While many will end up with mobile internet connectively via a smartphone or tablet computer, not all shoppers will. There is a growing challenge, therefore, of catering for both those with and without web-enabled mobile devices

3.3 Market comparison

The level of mobile connectivity by market is not always in parallel with overall internet penetration.



Comparing these two metrics highlights two markets in particular.

● The profile of Spanish shoppers is relatively polarised. While fewer are connected, those that are, are more connected than elsewhere. In fact, six in ten (59%) Spanish connected shoppers own a smartphone, compared to half (48%) across the six markets on average

● Conversely, while virtually every household in the Netherlands has internet access, they are less likely to have mobile connectivity. Dutch connected shoppers are, therefore, less likely to have the ability to scan a QR code than their Spanish counterparts, for example

These differences reflect a broader dynamic among the connected shopper population in each market.

Levels of mobile connectivity also differ by market

Source: ShopperVista , *combined with data from Eurostat 2011, Base: All main shoppers, boxes denotes significant differences between markets

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The Dutch are generally more ambivalent to the potential of internet and mobile-based technologies providing genuine benefits to their food and grocery shopping. This is driven by a variety of factors:

● As first movers within the digital age, they may now be harder to please, or more sceptical of new applications before they are tried and tested

● The Netherlands does not have an online grocery shopping channel

Spanish connected shoppers tend to be more enthusiastic about technology, and the potential for internet and mobile-based solutions to revolutionise food and grocery shopping. There are a number of contributory factors behind this:

● Connected shoppers represent a smaller proportion of all grocery shoppers in Spain. As a result, their profile is skewed towards early adopters of new technology

● The shopper profile in Spain is younger than in other European markets, with a larger proportion of Millennials (i.e.



Cultural differences between European markets will also be influencing the level of engagement with digital connection to companies and shopper networks.

Spanish connected shoppers are younger and more enthusiastic about technology

Source: All main shoppers with internet access, boxes denote characteristics that are more prevalent in Spain

Implications

● European markets are at different stages of development regarding internet and mobile connectivity. A tailored approach to digital marketing by market is, therefore, warranted

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Tablet computers provide an even more powerful platform for engaging with shoppers digitally. At present, three quarters (73%) of shoppers with a tablet also own a smartphone. An age skew is less evident among tablet owners, with Generation X shoppers (i.e. those currently aged around 30-44) as likely to own a tablet as Millennials.

There is a generational dynamic to connectivity

Source: All main shoppers with internet access by age group

Implications

● It will be important to review and adapt the level of digital communication and internet-based innovations to shoppers aged 45 and over, who are less likely to engage with this form of communication



3.4 Generational dynamic

There is a clear generational dynamic to shoppers’ level of internet connectivity. This correlation is illustrated by comparing the penetration of smartphone ownership by age.

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4 How is the internet already shaping shopping decisions?

In this section we assess the extent to which shoppers are already using the internet and mobile technology to help them shop and engage with brands in the six western European markets covered by the research. To aid comparison between markets, the majority of the analysis within this section is based on all shoppers.

4.1 Online research

Non-food retailing has changed dramatically over the last decade. As well as shopping online, many shoppers use the internet when planning to buy big ticket items such as an electrical appliance or item of furniture for example, which has spawned a variety of new shopper journeys. Having learnt the art, many have transferred the skill to searching online for information about food and grocery products or brands.



Half are researching grocery products online

Source: ShopperVista, Q3/4, Base: All main shoppers

Half (53%) of shoppers have researched information online about food and groceries in the past six months. While high, this is not yet at the level for all products (73%).

● Interestingly, this differs very little between the six European markets, despite the differences in internet penetration and familiarity with researching online for non-food products

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Shoppers are using the internet to search for value and find inspiration.

● Finding recipes and comparing prices are the two most common ways in which European shoppers use the internet for food and groceries

● This is followed by finding the nearest store, checking product availability and reading product reviews or ratings

As well as attitude to and ownership of digital technology, the experience of interacting with food and groceries online is also strongly related to age.

Researching recipes and prices is most common




The chart below looks at some of the more specific activities and types of research that shoppers use the internet for in relation to food and groceries, and other products.

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Younger shoppers, under the age of 35, are currently the most connected for food and groceries.

● Parents of under six year olds are most likely to have followed a recipe online while cooking

Men and women differ in the ways they use the internet for food and groceries.

● Women are more likely to have used the internet to find or follow a recipe, enter a competition or play a game provided by a brand or retailer, acquire a voucher from a discount website (e.g. Groupon), and follow a brand or retailer on a social network website (e.g. Facebook, Twitter)

● Men, on the other hand, are more likely to have used the internet to compare prices, read a product review, sign up to receive email or text updates from a brand or retailer, and scanned a product, barcode or QR code

Shoppers aged under 35 have connected the most

Source: ShopperVista, Q4, Base: All shoppers with internet access

Implications

● While online grocery shopping remains a niche channel across Europe, the internet is already influencing many food and grocery shoppers. Those suppliers and retailers that understand how their shoppers, categories and brands are affected by online information sources, and develop a digital marketing strategy accordingly are best placed to optimise the impact of this mode of communication



● In total, only a quarter (25%) of shoppers across the six European markets have used a mobile phone to connect with a food and grocery website in the past six months

● This does, however, rise to half (51%) of all smartphone owners



4.2 Mobile interaction

The vast majority of internet interactions between shoppers and food and grocery companies are currently via a personal computer rather than a mobile phone.

It’s early days for mobile interaction with groceries

Source: ShopperVista, Q4, Base: All shoppers with a smartphone/tablet vs. mobile phone with limited internet access

Finding the nearest store is the most common reason that shoppers access the internet when on the go, followed by finding a recipe, comparing prices, scanning a product or code for information and checking product availability. Usage is much higher among those with a smartphone, due to the added speed and functionality over other mobile phones. However, there are many smartphone owners who have yet to use it for food and groceries. There are a number of barriers that have limited this take-up.

● App awareness – There are so many apps available for smartphone users to download, many are still unaware of the full range of food and grocery related apps that are already available

● In-store access – Some shoppers have experienced poor internet reception while in a supermarket, which has dented their enthusiasm for downloading apps to help them shop

● Shopping speed – People tend to want food and grocery shopping to be as quick and easy as possible and are, therefore, resistant to using tools that may slow them down

● New technology – The development of mobile sites and apps for food and groceries is still in relative infancy

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Implications

● Grocery retailers and manufacturers should continue to prioritise further development of smartphone applications, focussing on those that meet shoppers’ primary needs and help to strengthen relationships with them

● Generating awareness of smartphone apps will become increasingly difficult as their number continues to explode. Approaching smartphone apps as brands and encouraging personal advocacy between shoppers will help drive awareness and usage

4.3 Online recipes



Finding recipes is the most common online activity among European grocery shoppers, with six in ten claiming to have done so in the past six months.

● Shoppers’ use of online recipes and cooking instructions differs considerably by market. This is explored further in section 4.11

There are a plethora of recipe websites and smartphone apps available across European markets, including those provided by grocery retailers, branded manufacturers, food magazines and celebrity chefs. In addition, as highlighted by our British focus groups respondents, there are those linked to specific diets or health organisations (e.g. British Heart Foundation), as well as ideas collected on social networks (e.g. netmums and Pinterest). Often, however, shoppers simply search for a recipe using their default search engine (e.g. Google); selecting the recipe that they’re most attracted to irrespective of its source.

● Examples of existing online meal planning services are included in section 6.1.5

Interest in finding recipes online is spurred by a number of factors:

● Greater variety – Many shoppers want to expand the repertoire of meals that they can prepare, with the internet proving to be an expedient source of inspiration

● Scratch cooking – The cooking from scratch trend continues, driven by a growing engagement with food as well as a desire to save money

● Search ease – Many find searching for recipes much quicker and easier online, particularly when looking for ways of using a particular combination of ingredients. Some online tools help shoppers further by creating a shopping list, or adding items directly into their online grocery shopping trolley (e.g. BBC Good Food and Ocado in the UK)

● Cost efficiency – Many online recipes are free or inexpensive compared to cook books

Slightly fewer (39%) have followed a recipe or cooking instructions online while preparing food in the past six months. Having found a recipe that they like, people often print it off or write down the instructions. However, some are following the recipe on their laptop, smartphone or tablet in the kitchen as they prepare food.

Implications

● Shopping decisions are already being influenced by online recipes and cooking instructions. Food companies that proactively promote the versatility of their products as ingredient items, and publish recipes and cooking instructions will benefit from this trend

● Food companies may want to consider how they can benefit from the development of initiatives that link recipe websites with online grocery retailers

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4.4 Comparing prices

Two thirds (68%) of shoppers have used the internet to compare the price of products in the last six months. This is a well-established process when buying non-food products, financial services and utilities. However, it has also become a common practise for food and groceries (50%).

Rather than comparing the price of every food and grocery item purchased, shoppers are more likely to compare prices for specific items:

● High ticket items – Shoppers are most likely to compare the price of high ticket grocery items such as alcohol (e.g. champagne, spirits, crate of beer), fresh meat (e.g. joint), and household products (e.g. laundry detergent)

● Bulk buying – Shoppers are also more likely to compare prices on those specific occasions when they are buying in bulk (e.g. for a special occasion, to stock up)

● Total basket – Some are using online tools to help them assess which retailer is cheapest for their full shopping list, either by using price comparison websites or by toggling between two grocery retailer websites



Some shoppers confess to using their smartphone to compare the price of a non-food product while at the fixture (e.g. book or electrical appliance), and then buying it from a competitor website while in-store. At present, connected shoppers rarely report doing this for food and groceries, although growing familiarity with the approach may increase future likelihood.

Examples of existing online tools that are helping grocery shoppers compare prices are included in sections 6.1.3 and 6.2.4.

Implications

● Price transparency has increased considerably with the development of online services, thus driving greater price competitiveness. Brands that adopt a multi-channel pricing strategy and successfully communicate their points of differentiation online are best placed to offset this affect

4.5 Store location

Four in ten (39%) shoppers have used the internet to find their nearest grocery store in the past six months, rising to half (53%) when also including non-food stores. The focus group discussion identified two typical scenarios when shoppers used the internet to find a grocery store.

● Firstly, when they are not in their local area, e.g. on holiday ● Secondly, when they are looking for a very specific item, e.g. for a recipe

4.6 Product availability

Using the internet to check whether a product is available in a particular store is also a relatively common activity among food and grocery shoppers (37%). Again, this tends to occur when buying an important item for a special occasion (e.g. birthday, Christmas). In addition, some shoppers have looked at the website of a more exclusive brand to find out which stores it is available in.

4.7 Product reviews

Shoppers are more likely to read a product review than they are to write one. This is true for food and groceries as well as other products.

Shoppers are generally less inclined to make use of online product reviews for food and groceries because they are already familiar the products, prefer their own assessment of taste, and because individual grocery products tend to be relatively inexpensive compared to non-food purchases.

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Product reviews are more pertinent when there is a higher risk; for example when considering food intolerance (e.g. nut allergy) or skin sensitivity (e.g. washing powder), buying a new product, buying a gift, or for more expensive products. Reviews are also considered more influential where there are a wide range of niche brands and options (e.g. wine, olive oil).



Shopper based reviews preferred in certain markets

Source: ShopperVista, Q12, Base: All main shoppers with internet access, boxes denote significant differences between markets

The type of product review that grocery shoppers are most motivated by varies considerably by market:

● Shopper reviews, whether individual comments or aggregated into average product ratings are favoured by British, French and Spanish connected shoppers

● Endorsements, either from a website or an expert (e.g. famous chef or catering college), are relatively more influential in Spain and Germany

● Advertising claims that use results from a product review website (e.g. ‘9 out of 10 shoppers liked our product’), or the number of ‘likes’ a product had attracted on Facebook or another social network appeal to a much smaller audience. This could reflect the newness of these approaches

● Product ratings and reviews are least likely to influence connected shoppers in the Netherlands

In all markets, opinion between reviewing individual shopper comments or average rating scores is split, although slightly more favour individual comments. In reality, however, shoppers tend to rely on a mix of the two.

● Shoppers like the honesty, detail and additional insight provided by reading comments provided by other shoppers. However, they can also be regarded as unreliable; exaggerating the influence of outliers and open to manipulation. Some follow rules of thumb when reviewing comments in order to gain a more balanced view, e.g. by reading a minimum number of reviews, or by ignoring the first ten and last ten comments

● They also like the balanced opinion of an average rating, particularly if it’s based on a robust number of shoppers. Some use average ratings as an initial screening criteria to narrow the consideration set, while others use it as the final decision variable between options perceived as otherwise identical

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Implications



● The diversity of preference for different types of product review creates a challenge in meeting the needs of all shoppers

● Measures to optimise the integrity of product ratings and reviews will become more important to shoppers as they apply greater scrutiny to them

● Consider how product reviews for everyday grocery items can be made more compelling to shoppers, as well as easier and faster to access and navigate

4.8 Discount vouchers

Three in ten (30%) shoppers have used a voucher for food or groceries from an online discount website in the past six months. This includes obtaining a discount voucher for eating out at a restaurant, followed by money off a single trip to a supermarket when spending over a certain threshold. Some of our British focus group participants also cited free delivery vouchers for online grocery retailers as something they have taken advantage of in the past.

Some shoppers are reactive, responding to deals as they are notified about them, while others are more proactive, searching for the best deals before they decide where to eat out or go shopping. Having subscribed to an online service, some shoppers express fatigue at receiving a regular bombardment of email and text messages advertising the latest deals, particularly if they are deemed irrelevant or encourage them to buy things they don’t really need.

4.9 Social networks

A quarter (24%) of shoppers claim to be following a grocery brand or retailer on a social network website such as Facebook or Twitter.

Based on the qualitative insight, some join a branded Facebook or Twitter community having responded to a competition, registered for a discount or voted for a new product, sometimes inadvertently. Others intentionally follow a favourite grocery brand. However, even some brand advocates can become disengaged by the frequency of correspondence from brands in an environment still strongly associated with personal socialising rather than brand marketing.

Shoppers’ interest in engaging with food and grocery companies using online social networks is explored more thoroughly in section 6.3.2 and 6.3.3.

4.10 Scanning codes

Relatively few shoppers have begun to regularly scan products, bar codes or QR codes on food and groceries. This is partly because the technology is relatively new, but also because of the lack of perceived benefits and difficulties experienced in trying to use the technology. However, many are interested in ways in which scanning can aid them with their food and grocery shopping in the future. This is explored further in sections 6.1.6 and 6.2.

4.11 Market differences

There are online activities that shoppers in certain markets have been more prolific at to date. Rather than reflecting the relative stage of internet development within each country, these differences are driven more by the nature of the retail landscape, and the availability of online tools.

Despite the high internet penetration in the Netherlands, fewer Dutch shoppers have used the internet to help them shop than those in other European markets, except for researching general information about non-food products and brands. Likewise, shoppers in other markets, where internet penetration is lower, have been quicker to adopt certain online behaviours.

Online recipes

The extent to which shoppers have used the internet to find and follow recipes differs considerably by market.

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Swedish shoppers are most engaged with online recipes.

● They are by far the most likely to have found an online recipe in the past six months (74%) and, along with Spanish and French shoppers, are more likely to have followed instructions online when preparing food

● This reflects the dynamics of online grocery shopping in the Sweden. While representing a small proportion of total grocery sales, online grocery retailing is based around recipes and ingredient lists that are built into weekly meal planners. Section 6.1.5 provides examples of these services

Using online recipes is highest in Sweden


While they are more likely to have followed a recipe online while cooking, Spanish shoppers are less likely to have searched for a recipe online than those in other markets.

● This may reflect more widespread scratch cooking culture in Spain, with many shoppers confident about what to cook, and with younger shoppers keen to learn how to create traditional dishes

British online grocery tools

The established online grocery shopping channel in the UK has provided British shoppers with a suite of tools to help them with shopping, irrespective of whether they then purchase groceries online.

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As a result, British shoppers are more likely to have used the internet to compare prices, check product availability, read a product review, find the nearest store and sign up for text or email updates from a grocery brand or retailer. These tendencies are also more evident for non-food shopping among the British.

Other differences

Spanish shoppers are the most likely to be following a brand or retailer via a social networking site, reflecting their younger profile.

British shoppers are aided by online grocery channel

Source: ShopperVista, Q4, Base: All main shoppers in Britain compared to the European average

Implications

● The online grocery retailing landscape has a significant impact on the tools that are available and used by shoppers in each market. It will be important to monitor the development of the online grocery channel in each market, as this will impact the way in which shoppers interact with brands and retailers online



As with the Dutch, German shoppers have generally been less inclined to use the internet to research products or engage with brands. However, they are more likely to have written a product review online for a non-food product in the past six months.

Other differences by market

Source: ShopperVista, Q3, Base: All main shoppers in selected markets compared to the European average



5 How do connected shoppers want the internet to help them?

The development of internet technology will provide significant opportunities to influence grocery shoppers in the future. The potential applications for internet-based technology are seemingly endless. Understanding shoppers’ needs is essential for navigating through the possibilities, and prioritising the areas that warrant investment. In this section, therefore, we investigate shoppers’ priorities for how they want internet-based solutions to help them with their food and grocery shopping.

On average, eight in ten (78%) connected shoppers across the six western European markets covered by the research believe that the internet and mobile technology could help improve food and grocery shopping in the future.



Shoppers are optimistic about the role of technology

Source: ShopperVista, Q6, Base: All main shoppers with internet access

In keeping with their general attitude and current behaviour, Spanish connected shoppers are the most enthusiastic about the role of digital technology, while the Dutch are the most measured in their response.

5.1 Shopper journey

There are many stages to the grocery shopper/consumer journey, from planning the trip, through to waste disposal. Our research has identified the stages that shoppers would most like food and grocery companies to help them with, as well as those they think the internet could help improve in the future. For this exercise, the shopper journey has been broken down into six stages, based on the framework developed by ECR Europe (source: The Consumer and Shopper Framework, ECR Europe).

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Shopping

Primarily, shoppers want companies to prioritise making shopping quicker and easier (48%), and envisage internet-based solutions to be an integral element of this (47%).

Speed and ease are key shopper needs, driven by the frequency of shopping for groceries, increasingly busy lifestyles, and the tedious nature of shopping felt by many. Shoppers are hopeful that new technologies will enhance the shopping experience, both offline and online, by making it more enjoyable, as well as by saving them time, effort and money.

Planning

While generally not a high priority (29%), shoppers also recognise the potential for the internet to help them plan their food and grocery shopping better in advance (40%).

Faced with economic pressures, many grocery shoppers have or aim to increase their level of planning in order to economise where possible. Tools to help shoppers plan better are, therefore, particularly welcome.

Disposal

Help with the appropriate disposal of packaging and food waste is the second highest priority among connected shoppers (35%); however few (14%) anticipate internet based initiatives providing part of the solution.

Shoppers’ growing concern about the environmental sustainability of food and groceries is often focussed on the issues of packaging and food waste. Alongside the demand for improvements across the supply chain, shoppers want companies to support their efforts in the home, primarily through better information and improved collection services. At present shoppers prioritise on-pack and other offline sources of information, and cannot conceive how the internet could help beyond this.

Help with shopping and planning is most wanted

Source: ShopperVista, Q5/6, Base: All main shoppers with internet access



Implications

● Internet-based initiatives and innovations that help shoppers plan their shopping, and that enhance the shopping experience will resonate most strongly with shoppers. Are these the areas that your digital marketing strategy is prioritising?

5.2 Shopper benefits

The key priority among shoppers is for internet-based applications to support them in their hunt for value. This is followed by a desire for inspiration, including new products and meal ideas.



Shoppers want help finding bargains and ideas


These two themes are investigated in further detail below.

5.3 Hunt for value

Six in ten connected shoppers would like the internet to help them compare prices (63%) and find the best promotions (61%). This is due to a culmination of factors.

● Getting the best possible value for money is the most common ambition among grocery shoppers generally, and is the key driver for multi-channel shopping across Europe (source: Shoppers’ Evolving Channel Mix, April 2011)

● The challenging economic situation has prompted a stronger commitment among shoppers to search for the best value by investing more time and effort in planning, shopping and managing waste

● The internet has already supported shoppers in those efforts, by providing increased price transparency, making searches quicker and easier, and by inspiring promotional innovations

While interest in internet technology tends to be strongly correlated with age, solutions that support shoppers’ hunt for value appeal equally across all age groups, including those aged over 65.

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Older shoppers are as keen to benefit from the money saving opportunities that the internet offers as their younger counterparts, although their interest beyond this is much narrower.

There’s also a slight gender skew, with men preferring to compare prices, while women prioritise identifying the best promotions.

On the same theme, a third (36%) of connected shoppers want the internet to help them stick to a budget.

● This request is higher among connected shoppers in Britain (44%) and lower in Sweden (28%) and the Netherlands (25%)

● Previous IGD research among British shoppers has highlighted ‘budgeting better’ as one of the savvy shopping tactics that continues to gather momentum as the mood of austerity continues

Internet based bargain hunting appeals to all ages


Implications

● Online applications provide a potential vehicle for grocery companies to demonstrate their commitment to becoming shoppers’ money saving ally, by helping them identify ways of saving money during these financially challenging times



The third most popular area is for the internet to help shoppers find out about new products, requested by four in ten (40%) connected shoppers. Again, the typical age profile is not evident here, with 35-44 year olds (45%) and those with children aged 6-9 (45%) most interested in being alerted to new products via the internet. This may reflect their stage of life, and their desire to identify products that will suit and attract their maturing children, and help to expand the repertoire of food they like.

Meal ideas

The other type of inspiration that shoppers prioritise from an online source is meal and recipe ideas (38%), particularly among female shoppers (44%). This is the area that most strongly differentiates shoppers from the different European markets.

The chart below compares the relative interest in internet solutions that help inspire meal ideas, with those that support shoppers with planning what meals to have. The analysis is presented as an index, where a score of 100 represents the average across the six European markets included in the research.

Implications

● Digital marketing should be considered as a key tool for raising awareness and encouraging trial of new product launches



5.4 Desire for inspiration

New products

Swedish shoppers want meal ideas and planning aids

Source: ShopperVista, Q7, Base: All main shoppers with internet access, showing relative interest as an index

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● Reflecting their current behaviour, Swedish connected shoppers are the most interested in using the internet for recipes and help in planning meals

● The Spanish are more likely to know what they want to cook, but are looking to the internet to help them be better organised

● Interest in internet tools to aid planning are also a higher priority in Britain, while tools for providing inspiration appeal relatively more strongly in the Netherlands

● Connected shoppers in Germany are least likely to want more inspiration or help planning their meals ● French connected shoppers are also less interested in planning meals, but are more open to some inspiration

Implications

● The effectiveness of recipe and meal planning websites is party dependent on hitting the right tone, with a slightly different approach suited to each European markets

5.5 Young families

Young families (i.e. those with children aged 0-5) want the internet to help them budget better and navigate around the store.



Those with young children are more likely to be interested in internet solutions that help them:

● Budget better – Many new families have to cope with increased financial constraints, such as feeding a larger household and reduced income

● Navigate stores – Shopping with small children can increase the desire to get in and out of the store as quickly as possible. New families also have the challenge of finding products they haven’t bought before

Young families want help budgeting and navigating


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In general, shoppers are more likely to want help finding individual items than they are navigating their whole shopping trip, unless they are in an unfamiliar store, or the store layout has changed significantly. Certain items are more difficult to find because they are bought less frequently (e.g. table salt), aren’t perceived to fit neatly into any one particular category fixture (e.g. glucose syrup), or are dual sited (e.g. certain herbs and spices).

Implications

● There are opportunities to target young families with specific online applications that help them manage their evolving shopping needs and budget

5.6 Food waste

While relatively low on the list of priorities, using online solutions to help reduce food waste is a higher priority among connected shoppers in Britain and France.



This reflects the strong industry and government backed initiatives and communication on food waste reduction within these two markets over recent years. As with hunting for value, support from the internet to reducing food waste appeals equally across all age groups.

Online food waste aids prioritised in Britain & France

Source: ShopperVista, Q7, Base: All main shoppers with internet access, showing relative interest as an index

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6 What innovations are connected shoppers most interested in?

Utilising IGD’s broad knowledge of developments within the food and grocery industry, we have identified 19 hypotheses for how grocery shoppers may use internet and mobile-based technology in the future. The following section gauges interest among connected shoppers in adopting these behaviours, by identifying two groups:

● Those who would like to do it – those shoppers who are keen to use this type of internet or mobile-based technology if it were available, including those who are already doing it where possible

● Those who can image doing it eventually – all those who can imagine using this type of online tool in the future, including those who don’t have a strong desire to do so immediately

The 19 behavioural traits are divided into three types related to different stages of the shopper/consumer journey:

● Grocery planning – those that help grocery shoppers plan their food and grocery shopping in advance ● Shopping in-store – those that help people as they shop for food and groceries, and decide what to buy while

shopping ● Brand engagement – including shoppers connecting with food and grocery brands through online social networks,

and supplier-direct online shopping

6.1 Grocery planning

The table below describes the six behaviour traits related to the planning stage of the shopping journey.

Shoppers are most interested in how internet-based solutions can help them save money on their food and groceries.

Online promotional cherry pickers Using the internet to look at all the best deals on food and groceries and then shopping from a variety of supermarkets to get the lowest overall price

Online shopping bill comparers Using the internet to compare what my total shopping bill would be at different stores, based on a shopping list I have created online

Digital household stock controllers

Using a smart device in my kitchen to help manage the stock of food and groceries I have at home, to identify things that are running out and prevent me buying things I have already got in-stock

Online customised meal planners Using a website to plan my meals for the week, based on the specific needs and preferences of my household

Digital shopping list compilers Adding items onto an online shopping list throughout the week by scanning products or codes from adverts or packaging using my mobile phone

Virtual bulk discount collaborators

Joining an online group to negotiate bulk discounts from food and grocery companies



Planning – shoppers want to know where’s cheapest


Implications

● The development and appeal of internet-based solutions to help shoppers plan their food and grocery shopping better could limit volume growth within the industry going forward. Business models may need to change to accommodate this dynamic, particularly in markets with static population growth

6.1.1 Online promotional cherry pickers

Over half (53%) of connected shoppers would like to use the internet to look at all the best deals on food and groceries and then shop from a variety of supermarkets to get the lowest overall price.

● This is the highest level of interest recorded across all 19 behavioural traits tested ● It is also the one trend that has already begun to emerge in considerable force, with 16% already claiming to be an

online promotional cherry picker

There are already a wide range of online tools that online promotional cherry pickers are using to help them identify the best deals. For example, the British focus group participants we spoke to used a mix of supermarket websites, price comparison websites (e.g. mysupermarket.com), money saving advice websites (e.g. moneysavingexpert.com), and online discount voucher websites (e.g. vouchercodes.com, myvouchercodes.co.uk and hotukdeals.com).

Guzzle (www.guzzle.co.za) is an interesting example of an online promotion spotter service that we have come across recently in South Africa.



Rather than providing a full price comparison service, Guzzle tracks the promotions available across all major retailers in the country, including grocers. It provides shoppers with the start and end date of each promotion, and allows them to search by product type, supplier and location.

Solution for online promotional cherry pickers

Source: www.guzzle.co.za

Implications

● While becoming a dedicated online promotional cherry picker can involve considerable time and effort, new and improved websites and smartphone applications, and the potential development of new online grocery propositions in certain markets will make it increasingly easy for shoppers to spot the best deals. Continued low economic growth and growing food price inflation may also accelerate this trend further

● By monitoring price comparison and promotion spotting websites companies can ensure that the information shoppers are accessing is accurate and up-to-date, and be alerted to other initiatives within their category

6.1.2 Personalised e-promotions

Our research also asked connected shoppers whether they are interested in personalised e-promotions, and found that many are, although only to a certain extent.



Overall, connected shoppers are split, with just over half (54%) interested in receiving some personalised promotions sent to their mobile phone, and the remaining half (46%) either preferring all promotions to be made available to everyone who visits the store or are undecided.

Those that like the idea of personalised e-promotions are attracted to getting exclusive deals that are particularly relevant to them on the types of products they like to buy. A tailored deal can make shoppers feel valued, by singling them out as eligible for a particular promotion. The fact that smartphone users are more likely to prefer personalised e-promotions suggests that this trend will continue to grow alongside smartphone penetration.

Those that object to personalised e-promotions do so for a variety of reasons.

● Some do so based on their experience of being sent promotions or given recommendations that are supposedly tailored to their preferences but are perceived irrelevant

● Others find the concept too ‘big brother’, or are concerned about personal data security issues ● Some are also concerned about missing out on deals if companies decide to direct a large proportion of their

promotional investment at personalised mechanics

Interest in personalise e-promotions is variable by market, with Spanish shoppers most enthusiastic, and Dutch shoppers least interested. This spectrum of response mirrors the over-arching sentiment of shoppers in different markets towards internet and mobile technology on food and grocery shopping.

There’s some interest in personalised e-promotions


Implications



● Personalised e-promotions will become an increasingly important technique and could help to improve promotional effectiveness and return on investment. Campaigns should be reviewed to ensure that personalised e-promotions are relevant to each shopper and make them feel valued

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6.1.3 Online shopping bill comparers

Half (51%) of connected shoppers would like to use the internet to compare how much their total shopping bill would be at different stores, based on a shopping list they create online.

● Rather than shopping around, these shoppers are keen to consolidate their shopping at the destination that they know will be the cheapest overall

● This is the second most established trend overall, with 8% of connected shoppers claiming to already be online shopping bill comparers

At present, many shoppers we spoke to imagine the process of entering their entire shopping list onto a website to be prohibitively time consuming. Ideally, therefore, online shopping bill comparers would like to be able to scan items using their smartphone, or upload their usual purchases using their loyalty card or an old till receipt.

Existing online shopping bill comparers are using some of the same tools as online promotional cherry pickers to help them identify the cheapest store for their entire shopping list, particularly supermarket and price comparison websites.

● Some of the British online shopping bill comparers we spoke to use mysupermarket.com to compare the price of their shopping list between different grocers before deciding which store to visit or online retailer to use

● Others enter their shopping list on multiple grocery retailer websites, and switch between them to compare the overall cost

● Some also use retrospective price comparison services such as Asda Price Guarantee or Tesco Price Check, which enables them to compare the cost of a recent shopping bill with other retailers, and receive a discount under certain conditions

The Belgian retailer, Colruyt, provide an ongoing Price Barometer which compares the price of a selected list of items across competitor stores. Whilst not representing the shopping list of an individual shopper, it does aim to communicate the price credentials of the retailer.

A continued focus on saving money and the development of new online tools will help to accelerate the increase of online shopping bill comparers.

Implications

● The internet is providing shoppers with accessible, complete and real time pricing information for their grocery shopping. Shoppers will, therefore, become increasingly sensitive to price and promotions when deciding where to shop and what to buy. Clearly communicating quality, performance, health and ethical credentials will help shoppers assess brands and retailers according to broader value perceptions

6.1.4 Digital household managers

Four in ten (41%) connected shoppers would like to have a smart device in their kitchen to help manage their stock of food and groceries, identify things that they are running out of, and to prevent them buying things they don’t need.

Digital household managers are motivated by the prospect of minimising their household’s food waste, and avoiding the annoyance felt when they run of something, particularly in larger households where things can be consumed without the shoppers’ knowledge.



However, not everyone is attracted to a smart-fridge or similar concept. Some imagine that it would involve considerable time and effort to organise the initial stock check, and then to ensure that the device correctly notes everything that’s being used. The anticipated cost of such a device is also a barrier for some.

LG has recently unveiled a new “smart” fridge.

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Using their smartphone or a panel on the fridge, users scan items or their till receipt as they put them away. They are then able to check what items they have in in-stock and review expiry dates. The technology can also provide recipe recommendations based on items available, communicate with a smart-oven, and automatically add items onto a shopping list or grocery shopping website.

Solution for digital household stock controllers

Source: IGD Retail Analysis, LG Electronics

Implications

● Following years of anticipation, the possibility of in-home connectivity is now becoming a reality. While the penetration of smart-fridge owners is unlikely to grow fast, it could change the replenishment cycle for certain perishable foods for a small group of shoppers, either positively or negatively. Understanding the impact of this technology on first movers will help companies in the fresh and chilled sector prepare for a more connected future

6.1.5 Online customised meal planners

A third (36%) of connected shoppers would like to use a website to plan their meals for the week, based on the specific needs and preferences of their household.

While online meal planners already exist, the ability to tailor the plan to the specific needs and preferences of individual households is often limited. Ideally, online customised meal planners would like a meal planning service to account for a variety of factors, including:

● The number of people in the household, and their respective appetites ● The likes and dislikes of each household member ● Religious and food intolerance considerations ● The larder items shoppers already have in-stock ● An ability to allow other members of the household to input information direct



Others are, however, concerned that trying to automate the process would be too complicated, anticipating that it would require a lot of time and effort to keep their profile up-to-date, and leave little flexibility in responding to evolving needs during the week. The most organised shoppers are already confident at accommodating the complex needs of their household intuitively as they shop, without requiring further tailored online support.

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Many examples of innovations targeting online customised meal planners are beginning to emerge throughout Europe, including:

● Vardagsmaten is an online operated food planning service available in Sweden. It provides shoppers with weekly recipe suggestions and shopping lists, focussing on child-friendly meals. The recipes are adapted to reflect the products and promotions available at the shopper’s local Hemköp and Willys stores

● Linas Matkasseis is another meal planning service available in Sweden. In this instance, shoppers select one of the set menus, providing either three or five meals for around four people, and including a mix of quick, medium and more involved recipes. The groceries are delivered every fortnight, either on Sunday or Monday evening

● Coop Sweden also provides a meal planning app with over 400 free recipes that are updated every week. Shoppers are encouraged to shake their phone for some inspiration, which will randomise the suggestions

● Hello Fresh is an online grocery and meal planning service available in London. The site provides a choice of meal plans every week, which shoppers can tailor based on the number of meals wanted and number of people in the household. The food is then delivered to the shopper on Tuesday evening

● In Britain, Ocado have recently teamed up with popular recipe website, BBCGoodFood.com. The facility links the recipe ingredients to a shopping list created on Ocado’s online grocery shopping site

● Foodie.fm is an online community currently available in Finland and Britain, that some have referred to as ‘Facebook for groceries’, where participants can share recipes and cooking tips. Based on the personal profile of the user, including their normal purchases, intolerances and grocery budget, the site suggests recipes. The site then compiles a shopping list based on the recipes selected, including those provided by other members of the community. In the UK, the site then transfers the shopping list direct to Tesco.com, where the shopper can fulfil their order

Solutions for online customised meal planners

Source: www.vardagsmaten.se, www.linasmatkasse.se, www.hellofresh.co.uk, www.bbcgoodfood.com



Solutions for online customised meal planners cont.

Source: www. uk.foodie.fm

Implications

● The development of online tools to help shoppers plan meals is likely to develop rapidly, providing shoppers with greater levels of personalisation and integration with the shopping process. These services provide grocery suppliers and retailers with new opportunities to influence shoppers earlier in the journey

6.1.6 Digital shopping list compilers

Three in ten (31%) connected shoppers would like to add items onto an online shopping list throughout the week by scanning products or codes using a smartphone.

The primary attraction to compiling a shopping list using a smartphone is that it could prevent shoppers forgetting to buy something that they needed. Ideally, some digital shopping list compilers would like the device to work using voice recognition, to help speed up the process, to avoid scanning errors, and to add items that they don’t currently have in-stock.

Others do not regard shopping list smartphone apps as adding any benefit to a written shopping list, unless they envisage shopping online in the future. Some shoppers do not write shopping lists, and are unlikely to be persuaded to change their behaviour with the availability of a digital device to aid them.



Examples of innovations targeting digital shopping list compilers include:

MyShop List from Auchan in France, which also incorporates voice recognition, helps shoppers compile their shopping list, and allows them to share it with others

Albert Heijn in the Netherlands has developed an app which allows shoppers to build a shopping list using a bar code scanner. The list is then reordered according to where products sit in-store, helping the shopper to get round the store as quickly as possible

Solutions for digital shopping list compilers

Source: www.auchan.fr, IGD Retail Analysis, Android Market

Implications

● Encouraging shoppers to use digital shopping lists can help to increase retailer loyalty by helping them feel more organised and making the shopping experience more efficient

6.1.7 Virtual bulk discount collaborators

Three in ten (29%) connected shoppers would like to join an online group to negotiate bulk discounts from food and grocery companies, rising to over half (54%) when including those who can imagine doing so eventually.

A few (3%) connected shoppers have already become virtual bulk discount collaborators. These trailblazers are beginning to use bulk buying websites that offer tiered discounts depending on the number of people who sign up to buy it, and signing up to services such as Groupon to benefit from special deals generated by the aggregated demand that the site represents.



There have been recent examples of grocery companies using Groupon to attract shoppers:

● Real in Germany ran a promotion through Groupon to encourage shoppers to visit the Altwärmbuchen Real Drive “click and collect” store when it first opened. Shoppers were offered a “Pay €9 instead of €20” deal on orders over €30

● Sobey’s and Wholefoods have also been experimenting in this area while Unilever, together with Supervalu fascia Jewel, launched an ice cream promotion with Groupon last summer

In addition, cashback websites have gained considerable popularity over recent years, particularly for non-food and financial services. Their relevance for food and grocery shopping is limited by the ability and willingness of shoppers to buy their groceries online. Some shoppers have found that using cashback websites requires considerable commitment and perseverance to join and use, as rewards can take time to accrue and are not always guaranteed.

Solution for virtual bulk discount collaborators

Source: IGD Retail Analysis, Groupon Germany

Implications

● The growth of online aggregators and virtual communities provides a new platform for promotional innovation for companies to consider. Those that extend the discipline of measuring promotional effectiveness to these new media will be best placed at optimising their investment

6.1.8 Market differences



In keeping with other results, Spanish connected shoppers are the most enthusiastic about following each of the behavioural traits explored, while the Dutch and German are the least interested in using the internet or smartphones to help then plan their shopping. The analysis below, therefore, highlights differences in the relative appeal of different approaches by market, where 100 corresponds with the average of the six European markets.

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A few of the web-enabled behaviour traits that help shoppers plan their grocery shopping have greater traction in specific European markets:

● Dutch connected shoppers are particularly drawn to becoming online promotional cherry pickers. This is partly because it provides a very tangible benefit, appealing to their desire for practical solutions that help them save money. In addition, the retail landscape in the Netherlands enables shoppers to shop across a broad repertoire of store fascias in pursuit of the best possible value

● Connected shoppers in Germany are relatively more interested in becoming digital household stock controllers, but less interested in becoming digital shopping list compilers. This illustrates how German shoppers are more focussed on internet tools that provide genuine added value, rather than marginal improvements. For example, they are less interested in how a smart device can help them write a shopping list, unless it involves some artificial intelligence

● French connected shoppers are relatively more interested in becoming virtual bulk discount collaborators

Planning – key differences by market

Source: ShopperVista, Q8, Base: All main shoppers in selected markets, showing relative interest as an index

Implications

● Grocery companies operating in the Netherlands should consider focussing on developing new online services and innovations that help shoppers save money on their overall grocery budget

6.1.9 Demographic differences

In general, the appeal of new technologies is closely correlated to age. However, with regard to web-enabled grocery shopping tools, the age distinction is dulled somewhat, appealing similarly to all connected shoppers under the age of 45.



Food and grocery shopping is particularly important for shoppers in their late 30s and early 40s, given their larger average household size compared to younger shoppers. They are, therefore, as interested in how the internet can help make shopping easier, cheaper and more interesting as younger, more tech-savvy shoppers.

Female shoppers are more likely to become digital household managers and online customised list compilers, reflecting their higher propensity to be mainly responsible for the household’s meal preparation.

Internet developments appeal equally to under 45s

Source: ShopperVista, Q8-10, Base: All main shoppers with internet access

6.2 Shopping in-store

The table below describes the ten behaviour traits related to the shopping stage of the shopping journey.

Smart-shopping scanners Scanning my shopping using my mobile phone as I go round the store, so that it keeps a running total and speeds up the checkout process

Smart-loyalty card users Collect and use loyalty card points using my mobile phone, rather than using a separate card and paper coupons

GPS triggered deal responders

Being alerted to special offers on my mobile phone when I’m close to the relevant store

On the spot price comparers

Using a mobile phone while I’m shopping to compare the price of an individual food or grocery item with other local stores

On the spot item finders Using my mobile phone to identify where a specific item can be found in-store



Shoppers are most interested in smartphone applications that can help make shopping for food and groceries quicker, and can help them find the best value in-store.

On the spot provenance checkers

Finding out where and how a product was produced by scanning it with my mobile phone

In-store satellite navigators Being guided round the store in the most efficient way by my mobile phone, based on a shopping list I created online

Smart-payment adopters Paying for my grocery shopping in-store using my mobile phone (e.g. via PayPal), rather than using cash or a card

Virtual wearing experimenters

Using the internet or mobile technology to virtually ‘try on’ products, such as clothes or make-up

On the spot network bulk buyers

Using my mobile phone when I’m in-store to link up with other shoppers so as to benefit from bulk discounts



Around two fifths of connected shoppers would like to adopt each of these five in-store behaviour traits should the technology be available, and a further fifth can imagine doing so eventually even though they are not currently enthusiastic about it. Opinion is, however, somewhat polarised, with the remaining two fifths of shoppers less enamoured with the idea, or rejecting it completely.

Shopping – apps wanted to aid speed and value hunt


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Fewer shoppers are interested in adopting each of the other five behavioural traits tested; suggesting that apps developed to facilitate them will appeal to a more niche group of shoppers. These traits are less likely to be perceived as providing a significant long-term benefit, appealing more out of initial interest rather than fundamental necessity.

Each of these is evaluated further in the following sections.

Shopping – interest in other apps is more polarised


6.2.1 Smart-shopping scanners

Four in ten (41%) connected shoppers would like to scan their shopping using a smartphone as they go around the store, so that it keeps a running total and speeds up the checkout process.

● As with most smartphone apps designed to aid the shopping process, 16-34 year olds are more likely to adopt this approach (53%), with appeal dropping among successively older groups (e.g. 24% among 65+ year olds)

Those wanting to become smart-shopping scanners are primarily motivated by the prospect of speeding up the checkout procedure. In addition, some value the ease of keeping a running total, thus allowing them to stick to a set budget, and prompting them to remove products from or add them to their trolley before paying for the shopping. Some have also become accustomed to hand-held scanning devices provided by certain retailers.



checkout. Concerns are also raised about the security of leaving a smartphone exposed while shopping. In addition, some are pessimistic about the speed with which in-store internet access will be improved.

Technology to support smart-shopping scanners is being developed.

● For example, ScanIt! Mobile from Stop & Shop in the US allows shoppers to ‘scan and bag’ products while shopping. It works in a similar way to handheld scanners, allowing shoppers to scan items while walking around the store. The technology also synchronises with the shopper’s loyalty card, providing personal promotions depending on the categories visited



Others anticipate the extra time and effort involved in using their smartphone in this way offsetting any time gained at the

Solution for smart-shopping scanners

Source: IGD Retail Analysis, Android Market, Chaotic Moon

There is considerable overlap between smart-shopper scanners, smart-loyalty card users, GPS triggered deal responders, on the spot price comparers and on the spot item finders, indicating considerable interest in an app or device that would achieve all five of these functions.

Various companies have tested smart trolley prototypes over recent years, including Sainsbury’s and Sky, as well as Shanghai Lotus supermarkets.

● More recently, Whole Foods Market, Chaotic Mood and Microsoft have reportedly tested a smart-shopping trolley concept. As well as aiding navigation, keeping a running total and speeding up the checkout process, the device can also alert the shopper if they add something they may be intolerant to and suggest alternatives

Implications

● Smart-trolleys could have a profound impact on food and grocery shopping in the future. While their widespread use may not be seen in the short-term, further concept testing can be anticipated. In the meantime, development of smart-shopping scanners is an area to watch closely

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6.2.2 Smart-loyalty card users

Similarly, four in ten (39%) connected shoppers would like to collect and use loyalty card points using their smartphone, rather than a separate card and paper coupons.

● This appeals most to 25-34 year olds (52%), reflecting their greater propensity to own and use a supermarket loyalty cards compared to younger shoppers

The appeal is driven mainly by the eradication of paper vouchers and coupons. Many shoppers deem paper coupons inconvenient, as they can sometimes lose or forget to use them, and they take up room in the purse or wallet.



Initiatives that target smart-loyalty card users are beginning to emerge, for example:

● The Shopkick app, developed in the US, rewards shoppers with points or ‘kicks’ as they walk into participating stores. Additional ‘kicks’ can be earned by scanning featured products, and then turned into rewards such as iTunes gift cards, Facebook credits, restaurant vouchers or cinema tickets

● ICA is reported to be trialling a near field communication (NFC) loyalty programme at its ICA to Go store in Kista, Stockholm. Shoppers collect a virtual stamp every time they purchase a lunch via their smartphone. The shopper is rewarded with a free lunch when they collect six stamps

The same proportion of shoppers (39%) would prefer all vouchers and coupons to be virtual instead of on paper, again rising among 25-34 year olds (51%).

Solution for smart loyalty-card users

Source: IGD Retail Anlaysis, Shopkick, Android Market

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A majority of smartphone users would prefer virtual over paper vouchers in most of the European markets covered.

Potential smart-loyalty card users and virtual voucher users would expect their smartphone to prompt them to consider buying a discounted product before the expiry date, as well as automatically adjust the bill at the checkout.

Most smartphone owners prefer virtual vouchers


Implications

● Preference for virtual vouchers is likely to grow as smartphone penetration increases. However, there will remain a large group of mainly older shoppers wedded to the paper option. It will be important to recognise differences in preference and adopt a variety of voucher formats if looking to reach a broad shopper base

6.2.3 GPS triggered deal responders

Similarly, four in ten (39%) connected shoppers would like to be alerted to promotions on their smartphone when they are in the vicinity of a store.

GPS triggered deal responders are motivated by applications that increase their awareness of promotions and help them to take advantage of them in-store. Some are also attracted to the possibility of cherry picking promotions on an unplanned shopping trip while in the area.

Some, however, are concerned about being inundated with regular alerts or long lists of promotions. Ideally, therefore, some



GPS triggered deal responders would like to personalise the service to only show relevant promotions, or to sign up for alerts from specific branded manufacturers that they particularly like.

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Grocery companies are beginning to experiment with geo-marketing technology, for example:

● In Belgium, Red Market uses the location based social media site Foursquare as a marketing tool, allowing customers to use their smartphone to 'check-in' when they are at the store and display this fact to their friends, and offering free products to those who use the service

● When Swedish retailer ICA launched its flagship ICA to Go store in 2011, it encouraged customers to check in on location-based software Gowalla when they visited the store. The shopper with the most accrued visits won an iPad while regular visitors were rewarded with discounts and promotions

● The Co-operative Group became one of the first UK supermarkets to take advantage of mobile proximity marketing in a tie up with O2. During campaigns shoppers were sent a text message offering them a free product when they were within a certain radius of a store

Solution for GPS triggered deal responders

Source: IGD Retail Analysis

Implications

● Further promotional innovation can be expected through the development of proximity marketing technology, particularly as a mechanic to encourage impulse purchasing. Companies will benefit from assessing the effectiveness of geo-marketing initiatives in order to optimise the return on their promotional investment



Almost four in ten (37%) connected shoppers would like to use a smartphone while shopping to compare the price of an individual food or grocery item with other local stores.

● Making on the spot price comparisons appeals most to 16-34 year olds (51%) ● 4% of connected shoppers claim to be already doing this for certain food and grocery items, using an existing

smartphone app

On the spot price comparers would tend to reserve the activity for more expensive grocery items (e.g. laundry products, household paper products, alcohol and nappies), or when buying in bulk for a special occasion. Some also envisage doing so to check the authenticity of a promotional claim.

On balance, more shoppers would like to compare the cost of their entire shopping bill (51%), than the cost of individual items (37%). This preference is driven by those reluctant to spend more time or fuel shopping around for marginal cost savings. In addition, some perceive on the spot price comparison apps to be time consuming or cumbersome. Some also prefer to compare prices in the comfort of their own home, rather than adding another task the actual shopping trip.



6.2.4 On the spot price comparers

There are already many bar code scanning apps that allow shoppers to compare the price of items by scanning them with their smartphone (e.g. RedLaser, ShopSavvy and PriceRunner). Apps are also being tested and developed that are specific to food and groceries, for example:

● Géocompare uses a barcode reader or search function to find the best deal on that item across Auchan, Leclerc and Casino stores in France. Shoppers are also able to compile a full shopping list based on the cheapest basket for the products desired, and redeem web coupons and loyalty discounts

● The ‘MyPrixAuchan’ app lets shoppers scan products in a local competitor store and get an instant price comparison with the Auchan store in Issy Les Moulineaux store in France

Solutions for on the spot price comparers

Source: IGD Retail Analysis, Géocompare, Auchan

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Implications

● Price transparency could increase to a new level with the development of smartphone apps that provide real time pricing information for shoppers on-the-go. This increases the need for brands to clearly and consistently communicate their overall value proposition, including aspects of quality , taste, performance, health and ethics where applicable, as well as price

6.2.5 On the spot item finders

Over a third (36%) of connected shoppers would like to use a smartphone to identify where a specific item can be found in-store.

● Men (38%) and 16-34 year olds (48%) are most likely to become on the spot item finders



Many shoppers struggle to find certain items when shopping, either because it’s not bought often, it’s a slightly unusual product, it’s from a small category (e.g. ready to roll pastry), or it has been moved. On the spot item finders are attracted to a smartphone app that will avoid them having to find a member of staff or repeatedly walking up and down the aisles to find something.

Some on the spot item finders would ideally like a silent satellite navigation tool that will guide them to the correct fixture, while others would prefer a map on their phone that indicates where each category is positioned.

For example, in-store Goggle Maps provides a tool that can help shoppers navigate inside buildings.

Solution for on the spot item finders

Source: www. maps.google.com

Implications

● There is greater opportunity for apps that help shoppers find specific items than for complete navigation tools, providing a new media for companies to provide shoppers with customer service

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6.2.6 On the spot provenance checkers

Three in ten (30%) connected shoppers would like to find out where and how a product was produced by scanning it with their smartphone.

Many shoppers are increasingly interested in knowing where a product has come from, in order to identify those with national or local sourcing credentials, or as an indicator of product quality. Likewise, many want to know how their groceries are produced, again driven by a mix of ethical and quality factors.

At times, the information provided on-pack is insufficient or too small for the shopper to read. Smartphone apps that allow shoppers to find out more about the provenance of a product, provides an efficient mechanism for over-coming these two constraints. On the spot provenance checkers are also drawn to the possibility of multi-media communication bringing the provenance story to life, through videos and images of the farm, factory and producer involved. However, some envisage using the facility at home rather than in-store, when they have more time to review the content to inform future purchase decisions.



Various retailers have launched tools to help on the spot provenancecheckers access information using their phone.

● In the UK, the Co-operative Group has launched its ‘Grown by Us’ app, which provides product traceability information on items within its range. Shoppers scan the barcode of linked products to get further details, including aerial photos of the farms involved

● Barcoo is an app available in Germany and the UK, providing independent consumer information for products scanned by shoppers using their smartphone. It provides sustainability information, as well as price comparisons, test reports and health information

Solutions for on the spot provenance checkers

Source: IGD Retail Analysis, The Co-operative Group, www.barcoo.com

Implications

● Smartphone technology provides a significant opportunity for brands and retailers with strong provenance credentials to raise awareness and bring to life their points of differentiation

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6.2.7 In-store satellite navigators

Three in ten (31%) connected shoppers would like to be guided round the store in the most efficient way by a smartphone based on a shopping list previously created online, particularly 16-34 year olds (42%).

As previously noted, shoppers are more likely to want internet based solutions to help them find the location of an individual item in-store (36%) than they are their whole shopping list (31%).

In-store satellite navigators are attracted by the significant time savings potentially made by being guided around the store in the most efficient route. However many do not feel the need for such a facility, as they are sufficiently familiar with their regular store, visit every aisle, or welcome the opportunity to browse. Others are concerned about annoying others or being annoyed by others using the device, particularly if sound is used.

6.2.8 Smart-payment adopters



A quarter (23%) of connected shoppers would like to pay for their grocery shopping in-store using a smartphone, rather than cash or a card.

● This is highest among men (27%)

The checkout experience can be one of the most stressful and time consuming elements of shopping. Some are, therefore, attracted to the possibility of making this as quick and easy as possible by using a smart-payment app. Some envisage this facility being best suited to paying a restaurant bill, where it would avoid having to wait for a waiter to bring the bill and process the payment, and enable diners to split the bill more easily.

Solution for smart-payment adopters

Source: IGD Retail Analysis, Pizza Express

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Various examples of smart payment apps have been launched.

● In the UK, shoppers are able to use the Pizza Express app to pay their bill at any stage of their meal using their smartphone. In addition, the app allows customers to book a table, browse the menu and download promotional codes and vouchers directly to their phone. Free Wi-Fi is also being rolled out across restaurants to help transition to the new payment system

● Barclays have launched Pingit, which is an app that allows customers to send or receive up to ?300 a day using their smartphone

Security is the main concern that shoppers have about making smart-payments. Others bemoan the potential loss of personal contact with store staff. As a result, a fifth (19%) of connected shoppers reject this trend, claiming that they would strongly resist doing it.

Implications

● It will be important to monitor the development and usage of smartphones with near field communication, and address shoppers’ security concerns when encouraging shoppers to make smart-payments. This technology could play a significant role for retailers catering for top-up shopping missions

6.2.9 Virtual wearing experimenters



Over four in ten (43%) connected shoppers can imagine using the internet or smartphone technology to virtually ‘try on’ products such as clothes or make-up, although only a quarter (23%) are keen to do so.

● This appeals more strongly, although not exclusively, to women (27%) and those aged 16-24 (36%) ● Interest in apps that provide a ‘virtual mirror’ is somewhat polarised, with half unable to imagine (35%) or strongly

resisting (15%) ever using them

Solutions for virtual wearing experimenters

Source: IGD Retail Analysis, www.Ezface.com, www.clothingattesco.com

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Devices that provide a virtual mirror are being developed, for example:

● Users of Ezface, developed in the US, enter their personal details and upload a photo onto the site. Virtual mirror technology is then used to show what the shoppers would look like wearing different cosmetic products

● Tesco has recently launched a virtual fitting room in the UK. Having uploaded their measurements and a photo of themselves, shoppers can use the site to try clothes on their virtual 3D self to see how they look and whether they fit

Many are sceptical that the technology will be good enough to provide an accurate virtual representation of them. Others would want to know how the product feels or how it would react with their skin. Our qualitative respondents suggested hair dye and glasses as the most practical application of the virtual mirror technology.

6.2.10 On the spot network bulk buyers

Over a third (37%) of connected shoppers can imagine using a smartphone when in-store to link up with other shoppers and benefit from bulk discounts, with only a fifth (20%) keen to do so.

● Men are slightly more drawn to become on the spot network bulk buyers (22%)

Search engines, social networking sites and smartphone applications have introduced or enhanced their use of location information, allowing users to declare their whereabouts and discover who’s in their vicinity. Despite these developments, few shoppers can conceive of how this facility could be harnessed to provide them with additional discounts while shopping, and many doubt whether sufficient demand could be combined at any one point in time to deliver significant additional discounts.



At present, shoppers regard this type of solution to be best suited to rewarding loyalty to individual members based on visit frequency, rather than encouraging members to spontaneously combine their shopping. Some find apps that reveal their precise location too intrusive and are concerned about the security implications. As a result, almost a fifth (18%) of connected shoppers would reject doing this.


Spanish connected shoppers are the most enthusiastic about using internet enabled technology to help them shop, while Dutch and German shoppers are least interested. The analysis below, therefore, highlights the relative differences between markets.

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British connected shoppers are relatively more interested in becoming smart-shopping scanners.

● Half (50%) would like to do become smart-shopping scanners, with almost three quarters (72%) able to imagine doing so in the future

● This echoes the relative high priority they place on internet tools that help them stick to a budget ● The more developed online grocery shopping channel in the UK has highlighted the benefits of an automated process

for keeping a running total of the amount being spent to a wide base of British connected shoppers ● Previous IGD shopper research has also identified a growing resolve to stick to a budget among British shoppers as

the mood of austerity continues

Swedish connected shoppers are relatively more interested in becoming GPS triggered deal responders.

● Four in ten (40%) would like to become GPS triggered deal responders, with two thirds (66%) able to imagine doing so in the future

● This may reflect a more relaxed attitude to location based media and social networking in Sweden, which has the highest smartphone penetration among shoppers across the six markets researched

Connected shoppers in Germany are relatively more positive about becoming on the spot provenance checkers.

● A third (32%) would like to become on the spot provenance checkers, with half (49%) able to imagine doing so in the future

● This reflects a relatively strong interest in artisan foods, brand heritage and regional sourcing credentials among German shoppers

Shopping – key differences by market

Source: ShopperVista, Q9/10, Base: All main shoppers in selected markets, showing relative interest as an index, * can imagine doing it eventually



In-store satellite navigators are relatively more strongly represented among connected shoppers in France.

● Over four in ten (43%) would like to become in-store satellite navigators in France, with two thirds (65%) able to imagine doing so in the future

● This may be driven by the prominence of the hypermarket channel in France, where a device to help shoppers navigate a very large store would be most appreciated

Connected shoppers in the Netherlands are relatively more interested in becoming smart-payment adopters.

● While only 14% are keen to do so, almost half (46%) can imagine using smart-payment apps eventually ● This matches the Netherland’s experience of being early adopters of financial services technology, following the

introduction of the Chipknip electronic cash system in 1996

French, German and Spanish shoppers show higher interest in becoming virtual wearing experimenters compared to the other three markets tested.



Virtual mirrors appeal more in certain markets

Source: ShopperVista, Q10, Base: All main shoppers in selected markets, showing relative interest as an index

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6.3 Brand engagement

The table below describes the three behaviour traits in which shoppers connect directly with food and grocery companies via the internet

Many connected shoppers are interested in buying products directly from a grocery manufacturer, while engaging with brands through social media networks also appeals to some.

Online supplier-direct shoppers Buying products direct from the grocery manufacturer through a website dedicated to that brand

Crowd sourcing contributors Voting for my favourite new product ideas from a grocery company using an online social media network

Social network brand followers Interacting with grocery companies using an online social media network, for example, by posting questions and conducting surveys



Many are interested in connecting with brands


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6.3.1 Online supplier-direct shoppers

Approaching four in ten (37%) connected shoppers would like to buy products direct from grocery manufacturers through a website dedicated to that brand

● In total, up to two thirds (65%) are able to imagine doing so at some point in the future, while only 7% would strongly resist the idea

● The concept of buying groceries direct from the supplier resonates most strongly with 25-44 year olds, among whom 45% would like to do it

● The level of interest is similar between the different European markets



There are examples of manufacturer brands establishing a direct selling platform online.

● Mysupermarket.com in the UK is now hosting micro-sites for Kellogg’s, Activia and Nivea, where shoppers can browse the products and promotions in an area dedicated to that brand. Shoppers can also sign-up to receive exclusive promotions and cashback opportunities from the brand

● Evian deliver bottled water direct to homes in France. Shoppers set up a regular order by selecting the delivery frequency and slot, as well as the products they want delivered through the manufacturers’ website

Solutions for online supplier-direct shoppers

Source: www.mysupermarket.com, www.evianchezvous.com/

Implications

● The internet provides manufacturers with a new platform to explore direct selling opportunities. However, suppliers looking to develop a direct selling strategy will need to consider how to generate traffic to the site, deliver shoppers’ orders and encourage repeat usage, as well as the ongoing cost investments required. Further research and testing will be required in order to hone the proposition, particularly for manufacturers that trade across multiple categories and brands

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6.3.2 Crowd sourcing contributors

Over a fifth (22%) of connected shoppers would like to vote for their favourite new product idea from a grocery company using an online social media network such as Facebook or Twitter, doubling to 44% when including those who can imagine doing so eventually.

Most of the crowd sourcing contributors we spoke to in the UK had voted for a new flavour for a snack or confectionery brand (e.g. Cadbury, Walkers). In these instances, contribution to the crowd sourcing exercise was prompted by a high profile advertising campaign, an element of fun, and a brand that appealed to the whole family.



There are an increasing number of examples of manufacturer brands and grocery retailers using crowd sourcing techniques to engage with shoppers. For example:

● Nestlé launched Peanut Butter Chunky KitKat in the UK earlier this year following a vote by shoppers using Facebook. The campaign involved a wide range of media, including television, posters and Blippar

● In France, Casino’s C’Vous website community encourages shoppers to suggest ideas for in-store developments, request new listings and vote on other members’ ideas through competitions across particular categories

● Lidl in Germany invited fans of its Facebook page to help choose the colour of a limited edition drill they wanted to introduce. Fans voted for a pink drill, which was later advertised both in-store and online with a clear link to Facebook

Some shoppers, however, are disinterested in becoming crowd sourcing contributors either because they aren’t interested in new flavours or limited edition product launches, feel the process is open to manipulation, want to avoid attracting regular correspondence from brands, or simply don’t have the time.

Solutions for crowd sourcing contributors

Source: IGD Retail Analysis, Lidl Germany, Nestlé, Casino

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6.3.3 Social network brand followers

The same proportion (22%) of connected shoppers would like to interact with grocery companies via an online social media network by posting questions and conducting surveys, for example. This also doubles to 43% when including those who can imagine doing so eventually.

Connecting with shoppers via social networks can work very powerfully. A few of our focus group respondents recalled very positive experiences from following brands via social networks. This included a respondent receiving a ‘thank you’ note from a leisure venue having just tweeted that they had visited it and had had a great time, and someone else enjoyed the amusing interaction they had with a grocery brand again via Twitter.



Most social network brand followers we spoke to had started following a brand as a result of entering a competition or registering for a discount. The challenge in these instances, however, is to develop the engagement into a meaningful and rewarding experience for the shopper. Some expressed the frustration of being bombarded with messages, which they soon resented or ignored. Others felt they had connected with a brand inadvertently, and weren’t sure how to terminate the link.

The above example from the Spanish retailer Eroski thanks shoppers for recommending products from the premium private label range SeleQtia on Facebook. Shoppers’ feedback is included in its 'Best of the best' campaign, both in-store and online, demonstrating its commitment to listening to shoppers and acting on the feedback received

Some shoppers object to brands using certain online social networks.

● Some would rather join a group based on a common interest (e.g. weight loss) rather than a specific brand ● Others regard brands on social media networks as an invasion of personal space

Solutions for social network brand followers

Source: www.eroski.es

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Implications

● Online social networks provide retailers and manufacturers with a potentially powerful forum for interacting with shoppers and hence, build affinity with the brand. The commitment required from companies to maintain dialogue with shoppers and demonstrate that the feedback is listened to should not, however, be underestimated


Spanish connected shoppers are the most likely to be interested in connecting with brands and other shoppers using online social media networks.



Spanish connected shoppers are more likely to aspire to be crowd sourcing contributors, social network brand followers, and on the spot network bulk buyers. This reflects the younger age profile of Spanish grocery shoppers, and their general enthusiasm for internet based technologies.

● 43% would like to become crowd sourcing contributors ● 43% would like to become social network brand followers ● 38% would like to become on the spot network bulk buyers

Spanish most interested in social networking

Source: ShopperVista, Q10/11, Base: All main shoppers in Spain, showing relative interest as an index

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7 Appendix

7.1 Online survey

In total, over 6,000 main household grocery shoppers were interviewed using an online methodology, with over a 1,000 in each of six European markets (Britain, France, Germany, the Netherlands, Spain and Sweden). Controlling quotas were applied to the sample to ensure that the profile was representative in terms of gender, age and region.

The following questions were asked in each market:

Q1. Which of these statements best describe your approach to new technologies?

1. I love new technology and try to get hold of the latest gadgets 2. I like to adopt new technologies as they begin to catch on 3. I get there eventually, once the technology has become fairly common 4. I hold out for as long as possible as I prefer to keep life simple

Q2. Which of the following do you own, if any?

1. Mobile phone without any internet access 2. Mobile phone with some internet access, where I can check email and access certain websites but cannot shop

using my phone 3. Mobile phone with high speed/wifi internet access (i.e. smartphone), where I can download apps and fully browse the

web (e.g. iPhone, Android, Windows Phone) 4. Tablet computer – e.g. iPad, Samsung Galaxy, Sony tablet 5. Laptop or Netbook computer 6. Desktop computer 7. Broadband connection at home 8. None of these

Q3. In which of these ways, if any, have you used any of your electronic devices in the past six months (including your mobile phone, tablet or computer)? For those you have done, please indicate whether you have done this at home, on-the-go or both?

1. To find the nearest store 2. To compare prices 3. To research information about a product or brand 4. To check whether a product is available in a particular store 5. To read other people’s reviews or ratings of a product 6. To scan a product, barcode or QR code for information 7. To scan a product, barcode or QR code to buy a product 8. To get a voucher from an online discount website (e.g. Groupon) 9. To play a game or enter a competition provided by a brand or retailer

10. To follow a brand or retailer on a social network website (e.g. Facebook, Twitter) 11. To write a review about a product online 12. To sign up to receive email or text updates from a brand or retailer 13. To find a recipe from an online source 14. To follow a recipe or cooking instructions online while preparing food

Q4.And which of these, if any, have you done specifically for FOOD AND GROCERY shopping in the past six months? Again, for those you have done, please indicate whether this was at home, on the go or both?



help from food and grocery companies, if any?

1. Planning my food and grocery shopping in advance 2. Deciding exactly what to buy while I’m shopping 3. Making shopping quicker and easier 4. Preparing meals at home 5. Disposing of packaging and food waste 6. Providing feedback and ideas to brands and retailers 7. None of these

Q6. And at what stages of your food and grocery shopping, if any, do you think the internet or mobile technology could help in the future?

1. Planning my food and grocery shopping in advance 2. Deciding exactly what to buy while I’m shopping 3. Making shopping quicker and easier 4. Preparing meals at home 5. Disposing of packaging and food waste 6. Providing feedback and ideas to brands and retailers 7. None of these

Q7. In which of these ways, if any, would you like the internet or mobile technology to help you with your food and grocery shopping in the future?

1. Planning what meals to have 2. Comparing prices 3. Sticking to a budget 4. Finding the best special offers 5. Finding my way around the store 6. Finding where certain items are located in-store 7. Finding out where and how products are made 8. Researching health and dietary information 9. Being inspired with meal/recipe ideas

10. Finding out about new products 11. Reducing my household’s food waste 12. None of these

Q8. Here is a list of statements about using internet and mobile technology to help people plan their food and grocery shopping. For each one, please indicate which of the options best describes you.

1. Using the internet to look at all the best deals on food and groceries and then shopping from a variety of supermarkets to get the lowest overall price

2. Joining an online group to negotiate bulk discounts from food and grocery companies 3. Using the internet to compare what my total shopping bill would be at different stores, based on a shopping list I have

created online 4. Using a website to plan my meals for the week, based on the specific needs and preferences of my household 5. Adding items onto an online shopping list throughout the week by scanning products or codes from adverts or

packaging using my mobile phone 6. Using a smart device in my kitchen to help manage the stock of food and groceries I have at home, to identify things

that are running out and prevent me buying things I have already got in-stock



Q5. I’d now like you to think about the different stages of your food and grocery shopping. At what stages would you like more

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2. I would like to do this 3. I can imagine doing this eventually, even if I’m not enthusiastic about it 4. I can’t ever imagine doing this 5. I would strongly resist doing this

Q9. Here is a list of statements about using internet and mobile technology to help people as they shop for food and groceries in a store. For each one, please indicate which of the options best describes you.

1. Using your mobile phone when you’re in a store to see if somewhere else can offer a better price 2. Using your mobile phone when you’re in store to link up with other shoppers so as to benefit from bulk discounts 3. Using a mobile phone while shopping to compare the price of an individual food or grocery item with other local stores 4. Using my mobile phone to identify where a specific item can be found in-store 5. Being guided round the store in the most efficient way by my mobile phone, based on a shopping list I created online 6. Scanning my shopping using my mobile phone as I go round the store, so that it keeps a running total and speeds

up the checkout process 7. Paying for my grocery shopping in-store using my mobile phone (e.g. via PayPal), rather than using cash or a card 8. Collect and use my loyalty card points using my mobile phone, rather than using a separate card or paper coupons

Q10. Here is a list of statements about using internet and mobile technology to help shoppers choose what food and grocery products to buy. For each one, please indicate which of the options best describes you.

1. Being alerted to special offers on my mobile phone when I’m close to the relevant store 2. Finding out where and how a product was produced by scanning it with my mobile phone 3. Using the internet or mobile technology to virtually ‘try on’ products, such as clothes or make-up

Q11. Here are a few statements about using internet and mobile technology to help shoppers CONNECT with food and grocery brands and companies. For each one, please indicate which of the options BEST describes you.

1. Voting for my favourite new product ideas from a grocery company using an online social media network (e.g. Facebook, Twitter)

2. Interacting with grocery companies using an online social media network (e.g. Facebook, Twitter), for example by posting questions and conducting surveys

3. Buying products direct from the grocery manufacturer through a website dedicated to that brand

Q12. What type of online product review, if any, would be most likely to influence you when deciding whether or not to buy a particular food or grocery item that you hadn’t tried before?

1. Average product rating from other shoppers (e.g. score out of five) 2. Individual comments made by other shoppers 3. Endorsement from the website itself 4. Endorsement from an expert (e.g. famous chef, catering college) 5. The number of ‘likes’ it had attracted on Facebook or another social network 6. Advertising claims that use results from a product review website (e.g. ‘9 out of 10 shoppers liked our product’) 7. None – I wouldn’t consider reviews for a food or grocery item

Q13. Which of the following types of special offer would you prefer for food and groceries, should the technology be reliable?

1. A paper coupon or voucher to keep in my wallet/purse 2. A virtual coupon or voucher that’s kept on my mobile phone 3. Don’t know



Options for Q8-10

1. I’m already doing this

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fewer special offers available overall 2. General special offers available for all shoppers using that store, with nothing sent to my mobile phone 3. A mix of both techniques 4. Don’t know

7.2 Focus groups

Six focus groups were conducted by an IGD moderator, each with eight participants and lasting an hour and a half, between 1 and 8 March 2012.

All respondents were:

● Mainly responsible for the household’s grocery shopping ● Early adopters or early followers of new technology ● Recent users of internet or smartphone technology to help them shop and/or engage with brands ● Interested in how web-enabled technology can help plan and shop for food and groceries, and prepare meals at home

Post-family shoppers and social grades DE were excluded from the sample.

The focus group sample was structured as follows:

No Location Gender Life-stage (age) Working status Social grade Attitude to technology

1 Stockport Female Mature family (40-55) Part time or not B Early adopter

2 Stockport Female Young family (25-40) Part time or not C1C2 Early adopter

3 Warwick Female Pre-family (25-35) Full time C1C2 Early follower

4 Warwick Female Young family (25-40) Full or part time B Early follower

5 Bushey Male Pre-family (25-35) Full or part time B Early adopter

6 Bushey Female Mature family (40-55) Full or part time C1C2 Early follower



Q14. Which of the following types of special offer would you prefer for food and groceries?

1. Personally relevant special offers sent to my mobile phone based on the type of things I buy, even if that means

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The connected shopper - brakes-source.co.ukbrakes-source.co.uk/assetfiles/...shopper_The_connected_shopper_p… · IGD also acts as a forum for discussion and learning, a voice for