Recessionary Shopper Behaviour a Non-Story in Canada. Sorry.

We're desperate to report some news on how shoppers are making dramatic changes to their their shopping habits because of the recession.

Problem is that they haven't here in Canada.

Sure there are some changes but we are not seeing the kind of channel shifts to supercentre and dollar stores that they see at the moment in America.

We just completed our 2009 World of the Shopper research and do not see dramatic changes to channel choice. We see some more pre-planning (flyer checking has increased) and shifts in trip triggers. We can see some greater focus on pricing and we also see a higher value stock up trip while quick trips remain flat.

Oh, and by the way, in the last issue of Canadian Grocer Nielsen is reporting that that private label is not disproportionately growing here either.

Sorry. I know everyone wants some news about the recession. And I know journalists are trying to fill pages with anecdotal stuff about 'recessionistas' but the fact is that we haven't changed much. When people are skeptical I ask them simply "what have you changed?". Usually there is some micro and in store behaviour but not major shifts.

Do you plan to increase or decrease your spending on single serve beverages in the year 2011?

I think one of the most potentially misleading questions that we can ask in a survey is “do you plan to increase/decrease your spending on [blank]” for household items and packaged goods. I honestly think that the responses given to these kinds of questions have a very tenuous relationship with actual behaviour.

One of the reasons for this is because these questions do not take into account the mental accounting that people use to budget. People do not think of their spending by individual items – unless it is cars or holidays or large ticket items. They group things together. Within these groups they subsititute. And the groups themselves are dynamic. For example – people are unlikely to plan their future expenditure on ice cream. They are likely to consider “groceries” and there are a myriad of ways in which they could calculate their spending on that – by month, by trip etc. Research we conducted on alcohol found that young adults simply exclude beer from mental budgeting! Of course when prompted they may give a response that they plan to cut back but the fact is they hadn’t really considered it until we asked the question.

So when a research asks “do you plan to increase/decrease your spending” on an individual item this may be the first and only time they really think about it. The fact is they have no “plans” regarding this item. This is especially true if we are asking about their plans for the future. I do not believe that a consumer can accurately tell us what he or she plans to do about spending on alcohol or ice cream or paper towels “after the recession”. And even if they do I do not think their response reflects what might happen – which can depend on their ‘mental accounting’ and where that category fits into their budget as well as a myriad of other changes – channel preference, occasions etc.

The right way to do this is to understand their mental accounting process, the heuristics they use for budgeting and which bucket the category falls into. And of course you need to also understand circumstances such as changes in channel choice and occasions. He problem is of course this requires a lot more questioning that “do you plan to …”. But hey, if you want to get it right

Americans and Private Label

I am getting a little bored with the coverage of the success of private label in the US. No offence to them. I am sure it is big news there.

But the rest of the Western world has been through it. Private label penetration in Europe is almost double that of the US. Retail brands are trusted. Often they are not value options but in the case of Tesco's Finest or Marks and Spencer considered better quality. Partly because retailers have been far more consolidated in those markets and were able to build their brands.

I read today that dollar stores is the one channel in the US that brands are not facing private label competition. Cold comfort really. I recall in the early 1990's before I left the UK you could go slumming and buy national brands at discount grocery stores or you could get quality private label at the national retail chains. Not a great position for brands to be in.

American brands need to face up to a new reality. This will not go away with economic recovery. Why should it? They need to start thinking about their value.

The Problem with Researching Green Consumerism

There is probably more rubbish market research data available on green consumerism than any other topic.

Each year, on Earth day Joel Makower rounds it all up, questions its validity and wonders what the heck it all means. See his 2009 summary here.

He quite rightly questions the enormous overclaim in the responses to these surveys. Stuff like 36% of Americans "always or regularly buy green products" from Mintel.

What does that mean?

It is certainly not reflected in the market shares of green products in the US which represent a fraction of total products bought. I suspect it is a combination of consumers wanting to buy green stuff, not really knowing what it is and occasionally buying something greenish. Easy them to say you "buy green".

The problem with research on green consumerism is in some respects the problem with the concept itself. The elephant in the room is that consumerism (as an ideology) and sustainability pull in opposite directions.

Environics social values research identifies about a quarter of Canadians as being "green" - in terms of agreement with willingness to pay more and discriminate green products. A large number of this group are established baby boomers concerned with their legacy, who use consumerism as a means to affect change. But they do not really know how to do it. This group tend to be very enthusiastic consumers. When we look at their attitudes to shopping, they enjoy it very much. They are more enthusiastic than the general population. The other largest group are younger liberal progressives. They are not enthusiastic consumers and they actively dislike shopping. We did a recent survey for Bullfrog Power (where people pay a premium on their electricity bill for renewable energy). This is pure "green purchase" with no benefit of status or joy of consumption. Their customers (real "green consumers") were overwhelmingly liberal progressive.

The current problem with research on green consumerism is that these groups are not differentiated. The established boomers will buy some organic granola and Method brand hand soap and happily check the box that says they "usually" buy green products. This does not reflect reality.

This is one area where asking about attitudes, intention and general reported behaviour is worthless and even potentially very misleading. A record of actual behaviour or very specific questionning on actual behaviour is the only way to understand the topic.

Power of the Brand in Convenience Channels

It is often said that convenience stores are hotbeds of impulse purchasing.

According to our Convenience Shopper Canada study, among those who buy soft drinks in those channels, 66% had made up their mind on category and brand before entering the store.

Granted, 13% knew they would be buying a soft drink and decided brand in store and 21% decided to buy the category in the store.

But that's an awful lot of power from out of store communication.

The Case Against "Why" - Part 2

My last post was about how market researchers’ constant questioning of respondents on why they do things can provide misleading responses.

By coincidence, I have read two experiments that show us just how much of a mistake it can be.

These experiments by Tim Wilson, professor of psychology at University of Virginia show how asking people to focus on why they do something actually causes them to make choices that do not reflect their true preference.

He conducted two experiments. In one he asked students to rate different brands of jam in terms of their preference. One group was asked to do so and list the reasons, the other was not asked to list the reasons.

The outcome of the experiment is described here as follows:

Wilson and Schooler found that subjects in the control group, who had not been required to list reasons for their opinions about the jams, gave evaluations that were very close to those given by the trained experts. Both the subjects and the experts agreed on which jams were best, and which were worst. The subjects in the experimental group, who had been required to explain their preferences, subsequently evaluated the jams in line with the reasons they gave …Their evaluations, however, did not correspond well with the evaluations of the experts. The jam the experts had rated as the best and the jam the experts rated the worst were both regarded by the experimental subjects as being rather mediocre.

Basically, those who were asked ‘why’ had to engage their pre-frontal cortex, come up with ‘reasons’ and align their stated preference to those reasons. When they did this they picked the worst jam.

The second experiment concerned posters. Students were asked to choose from a range of posters that they could keep – some of famous paintings others photographs of animals. Again, they were split into two groups. One group had to give reasons and the other did not. The group that had to give reasons was much less likely to select the paintings. They tended to select cute animals. And when the two groups were re-contacted a few weeks after the experiment, that group was far less satisfied with their choice.

The conclusion is summed up here:

When people think about reasons, they appear to focus on attributes of the stimulus that are easy to verbalize and seem like plausible reasons but may not be important causes of their initial evaluations. When these attributes imply a new evaluation of the stimulus, people change their attitudes and base their choices on these new attitudes. Over time, however, people's initial evaluation of the stimulus seems to return, and they come to regret choices based on the new attitudes.


These experiments teach us a lot about how to conduct and how to evaluate market research. Firstly, it supports the notion that ‘first view’ responses to product concepts and brand preference questions are the only valid ones. But it also brings into question all of the responses from focus groups and questionnaires after that ‘first view’. By asking respondents to utilize their ‘reason’ are we in fact making them state preferences that do not reflect reality? Ones that could in fact be the opposite?

We know from neuroscience that many purchase decisions use very little ‘reason’ as the pre-frontal cortex is hardly active. So when we encourage respondents to use it by asking ‘why’ we could indeed me encouraging responses that are nonsense – not just in terms of the reasons that are given but the actual preference to which those reasons allegedly lead.

Less "Why" and more "How"

I spent last Friday afternoon listening to advertising planners, designers and some people who, to be honest, I have no idea what they do (but I think the words “digital” and “experience” are involved). It was a rare and enjoyable event here in Toronto - the initiation of meeting of Toronto Planners Unite.

The courier bag carrying, black plastic rimmed glasses and ironic western shirt wearing crowd is a cultural world away from the store managers and sales managers that populate the kind of retail conferences I sometimes go to. Retailers and salespeople tend to give presentations with 90’s clip art rather than big black backgrounded slides with only the words (in a unique and cutting edge font) “Crisis is the crucible of innovation” or some passage from the Tao Te Ching.

However, a conversation afterwards with an account planner for a mutual restaurant client pulled it together for me. The commonality for a researcher are that both of these crowds need to understand “how” people are behaving and get limited value from the endless “why” questions that make up our surveys. He was suggesting a better way of developing a strategy to position new products was to first understand how consumers are using them and then develop positioning around that – rather than push out a pre-defined positioning. This is putting consumers (or “people”) are the forefront of communication and marketing rather than seeing them as recipients of the messages marketers wish to broadcast.

To me what we call “shopper insights” are the means of doing exactly this for packaged goods. Let’s understand how people buy and consume. Let’s not ask them too many questions why or what they intend to do. Most of the time they do not know what they going to do or why.

I am preparing the first report from our newly launched Convenience Shopper Canada study. The richness of the information is beyond anything from any usage and attitude study. The questionnaire is 10 minutes and simply records behaviour in past 24 hours. It is 90% reported behaviour (how) and 10% attitude (why).

Market research has traditionally focused on the attitude and has delivered the opposite – 90% why and 10% how. The technology we have now allows us to measure and observe what people are actually doing like never before. The value of what we produce will be increased for all our clients – whether they work in a downtown agency or manage a chain of convenience stores – if we what we deliver is more of the “how” and less of the endless and often misguided “why”.