Recession changes shopping behaviour, says Scamell-Katz

Scamell-Katz: fear of unemployment creates a massive shift in consumer behaviour

Shoppers are changing their behaviour and spending less in recession but there are quick fixes that will capture more sales for convenience retailers, according to Siemon Scamell-Katz, founder of TNS Magasin.

Speaking at the Insight NACS Global Convenience Benchmarks event in Dublin last month (March), Scamell-Katz echoed the views of Greg Hodge, analyst at Planet Retail, on the growth of discounters and private label.

“Discounters are increasing their share of the market and private label shares are growing,” he said. “Shoppers are trading down.”

According to TNS, the UK is the only market in Europe where the balance between national brands and private labels is static as consumers trade down out of premium own labels into national brands and out of national brands into own label.

Scamell-Katz shared findings of a recent study in Germany, which revealed the impact unemployment has on consumer behaviour.

It showed shoppers spent 10% less as they moved into unemployment and they spend more money in discounters and buy more private label.

However, for every person that loses their job, three more are in fear of unemployment, said Scamell-Katz.

“That creates a massive shift in behaviour because they reduce expenditure by almost as much as the unemployed group.”

The current climate is also driving a switch to more organised main shops and more people are shopping with lists, said Scamell-Katz.

“Convenience suits discounters,” he added, “so convenience stores have to work harder when people come through the door.”

Scamell-Katz told the conference retailers spent a lot of money on things that have no influence on what people buy.

That includes point-of-sale outside the store. TNS Magasin research showed 50% of shoppers, when asked, did not know the brand of the store they were in.

“There are things that we do on the outside of the store that are not as effective as we think they are,” said Scamell-Katz.

TNS Magasin has monitored what consumers look at on the shopping journey via its eye tracking technology. It highlighted the importance of store layout and the categories or shopping missions that are key drivers.

“The different types of shopping mission are extremely important in how people are considering the store space,” he said. “For example, a top-up shopper will behave differently to a snack and drink shopper and, if you understand the missions, you can manipulate the space more efficiently.”

Scamell-Katz recommended retailers dot baskets around the store to encourage top-up shopping and revealed one retailer had recorded an 11% sales uplift using this tactic.

In another retail initiative, TNS Magasin worked with Unilever and United Co-operatives to design a store layout based on shopping missions such as lunchtime, meal for tonight and top-up.

“The numbers of people shopping for all categories increased,” he said.

Overhead signage is also a waste of money, said Scamell-Katz. Consumers use visual cues such as colour to navigate around a store, especially beacon brands. Scamell-Katz warned that the shift to private label might erode the way in which national brands help people to shop.

Gondola ends are not visible to shoppers either, he added. Scamell-Katz recommended retailers promote within categories, “because people shop in the category not outside it”.

Impulse products do work when they are positioned at the checkout, however, but must be within reach of a queue, said Scamell-Katz. Shoppers will also look at store staff and he urged retailers to consider the impact of staff at the cash register.