Podcast

Retail Wrap-Up 2020: Shopper modes are the new purchase channels

In our last week’s podcast, we discussed why retailers should stop using the term “omni-channel” as it’s not a strategy anymore, but an expectation. Retailers must move from omni-channel to focusing on shopper modes as the new purchase channels. The biggest change that’s happened through the pandemic, related to customer experience, is customer expectations.

“So it’s this shift that’s happened forcefully, it’s been gradually happening but it’s forcefully happened throughout 2020 from, “I’m going shopping today,” to, “I need something right now when I want it.” And that’s really driving consumers and how they’re purchasing versus a channel” states Kristin Demel, Retail Strategy Director at Callahan.

It’s important for brands and retailers now, to understand the five different types of shopper experiences that consumers are looking for as they’re shopping and engaging with a brand:

  • Task mode – I’ve got a list of things and it needs to get done quickly.
  • Social mode – Shopping is a social activity and I may or may not make a transaction.
  • Discovery mode – I’ve got something in mind but not sure where I need to go or what it might be yet.
  • Entertainment mode – The goal for my shopping trip is purely entertainment.
  • Aspirational mode – I’m looking to plan a vacation or plan a family dinner, etc.

Now that consumers can get anything from anyone whenever they want, they now have higher expectations of who they’re spending money with. Retailers and brands must know how to deliver on what consumers want, when they want, how they want it and in the shopping experience mode they’re in at the moment. In this podcast, Kristin and Joe Cox, Director, Communication Strategy at Callahan discuss the five shopper modes that are driving consumers now.

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Other podcasts in our Retail Wrap-up 2020 series include:


Joe:
Welcome to Callahan’s Uncovering Aha podcast. This is a place where we talk about a range of topics for marketing decision-makers with a special focus on how to uncover insights and data to then drive brand strategy and inspire creativity. My name is Joe Cox, I lead the communication strategy here for Callahan and today I am joined once again by Kristin Demel, our director of retail strategy and we are continuing our Retail Wrap-up 2020 series. This time talking with Kristen about the large shift in consumer behavior since the pandemic and how that will be affecting this 2020 holiday retail season.

Joe:
And just as a small reminder, we started this conversation on holiday 2020 about a month ago so we have a couple, if this episode is interesting to you, you can go back and catch the previous two and we’ll be continuing this on … for the rest of the holiday season.

Joe:
With all that activity it could be easy for brands and retailers to feel the need to quickly react this holiday season versus that intentional planning and strategic way in that we’re all searching for. So what we’re talking about here really is not to affect your plans right now because we know those plans are going, right? You have your head down, but what we want to do is help you observe what’s going on in retail holistically to be able to go into 2021 really taking those lessons from what we’re learning this holiday season.

Joe:
So to get started, Kristin, you really can’t avoid hearing about consumer behavior changing during 2020. I mean, it’s everywhere and a lot of it is around this large shift to online shopping, right, because that has brought people in that have never been in and there’s really been a necessity for it for the first time. How should brands and retailers be thinking about their omni-strategy, right, their omni-channel strategy that goes in retail as well as digital channels?

Kristin:
Hey, Joe, thanks for having me today. I’m super excited to talk about this topic with you. You’re exactly right. Right now we can’t avoid hearing about this massive shift to online. I think I get greater than 20 emails a day from research companies and marketing agencies, et cetera, all making sure that I know that customers are now shopping online and that I should be ready for that as a former retailer. And out of that omni has definitely become a big buzzword.

Kristin:
All these emails include omni-strategy, omni-strategy, et cetera. As you think about the history of omni with retail, retailers in the past have viewed this concept almost in a binary way. When they’re developing strategies, thinking about their tactics, even down to how they build teams and organizations with inside retail organizations it’s brick and mortar and online and it’s one or the other. And whole strategies and investments have been made against either brick and mortar or online.

Kristin:
But I think what’s interesting when you think about this from a strategic lens is that customers don’t actually think of themselves this way. A customer would never be sitting on their couch saying, “Okay, I’m going to go be a online shopper today,” or, “I’m going to go to a store.” So when you think about retailers and how they’re developing omni-channel as a strategy, I’m not sure if omni-channel is a strategy anymore or if it’s just the way of retail.

Kristin:
If you think about would a retailer ever develop a strategy that says, “You know what, I think I only want to be in one channel and be one thing.” That doesn’t necessarily sound like a strategy that you’re going to hear across the board. And so, I would almost say as we start to think about omni-channel, we should just stop saying omni-channel. It’s just retail now. Now I get it, it could be important as you think about what do I need to invest in from a capability’s perspective but that starts to put it as a tactic, not necessarily as a strategic choice.

Joe:
Yeah, it’s interesting how important sometimes words are and if you are really looking for ways and you said something really interesting of these two pieces, online shopping and in-store shopping being separate, separate budget line items and probably not a lot of communication there. The words that you use for that can either bring those budgets further apart and can start getting you to communicate with each other a little bit more and getting more integration in there.

Joe:
But if we’re not thinking about customers by channel, right, that’s how internally it’s been done for so long, then how do you think we’re going … what would you say are some ways in which we could think about it?

Kristin:
Yeah, so I think on this mind shift from reacting to what’s going on to starting to think intentionally the focus should really be on how customers are thinking. Customers, like we just said, are not thinking about themselves as an online shopper, a mobile shopper, a social shopper, a store shopper, et cetera. They’re just thinking, “what do I need? Where do I need to get it? How do I want to get it? And when do I need it?”

Kristin:
So it’s this shift that’s happened forcefully, it’s been gradually happening but it’s forcefully happened throughout 2020 from, “I’m going shopping today,” to, “I need something right now when I want it.” And that’s really driving consumers and how they’re purchasing versus a channel.

Kristin:
I think if you take this down to the younger generations you’ve got Gen Z that’s always been connected, so they don’t necessarily even think about shopping. They just are in one environment digitally and it just happens to translate into shopping or they’re out and about and that just also happens to end up at a retailer and they end up making some sort of transaction that way.

Kristin:
And so I think as we think about stopping the reactionary behavior that’s happening right now we really need to stop thinking about channel and start thinking about what actually compels somebody to engage with my brand today?

Joe:
Yeah, that’s really interesting and it’s instead of planning for the day of shopping it is, “I fit shopping into the gaps when needed, based on whatever need or whatever, how I’m feeling and my needs at that any given moment.” That’s interesting.

Joe:
So if customers aren’t classifying their shopping trips by channel, that makes sense. I’m not really worried about where I’m at. I’m more worried about what I’m trying to do and my needs at that time and they’re not really classifying their activity as even a shopping trip, right? What does compel someone to engage with a retailer brand. It seems like it could be a tough place for retail to then meet that consumer without some kind of construct.

Kristin:
So, Joe, when you ask the question, what compels someone to engage with a retailer or a brand, they’re really looking for an experience and I was at a customer experience conference a couple years ago and listened to a speaker talk about what types of customer experiences people are looking for to get from a brand and it really stuck with me and it really made sense to me.

Kristin:
And so, there are five different types of experiences that consumers are looking for in their life and as they’re shopping and engaging with a brand. So the first one is task mode. So this one I think resonates really strongly with me. For me a lot of my grocery trips are task mode. I’ve got a list of things. I need to get in and get out, whether that’s digitally get in, get out or a physical store. I just want this to be over quickly. I’m not getting any sort of delight out of this. It’s just something that’s on my to-do list that I got to get done.

Kristin:
The next one is social. So we are social creatures and there are different shopping trips that I know that I personally go on where it’s just a social activity. I’m just trying to be with other people. I may or may not purchase a lot of things. I might purchase a few things but shopping and making a transaction is not the number thing on my list that day. It’s really to engage with the people around me.

Kristin:
The third one is discovery mode. So this is really where I kind of have something in mind but I’m not really sure what the exact solution, product is, even retailer or brand that I want to transact with. So I’m looking to find something new. Looking to find something that meets my needs at that time and it could be a need that’s not fully defined.

Kristin:
The fourth one is entertainment mode. So personally I love shopping and so shopping is entertainment for me. So this could be, just using myself as a consumer, one, this could be me going to a sporting goods store with my kids and letting them try out new balls or looking at new gloves or any sort of equipment that they might be looking at. So it’s something for us to do as an activity. We want to be occupied. We want to be engaged with something, whether that be a store associate or whether that be a product or a store experience, et cetera. But really the full goal of the shopping trip is entertainment.

Kristin:
And then the last one is aspirational. So we’re looking for something to aspire to, imagining a different version of reality for ourself. That could be an aspirational trip around vacation planning, some sort of remodeling project. If you’re at the grocery store on an aspirational trip it could be a family dinner that you’re planning. I could be on Pinterest looking for recipes, then navigate to some sort of grocery retailer to purchase the items that I need because I’m aspiring to have this amazing family dinner come together for my guests and for my family.

Kristin:
But I think the other thing to note as you think about all of these experience modes is that consumers aren’t 100% one mode or the other and so these are different experiences that we all have a different percent of our shopping trips that fall into these buckets. I’m going to use my husband now as an example. He is the king of task mode. However, 100% of his shopping trips are not task mode. He is not a task mode customer. He just over-indexes in task mode, compared to the average.

Kristin:
So as we’re thinking about brands and retailers and how we design what our customer experience should be, we really start to have to think about appealing to consumers across multiple modes and not just one or the other and not designing our environment to meet one or the other.

Joe:
Yeah, I really love these because as you were going through those and I think anyone listening would be the same, we’re putting it to the test and I’m saying, ‘Oh, absolutely. There is a time where I am physically at a place or I’m going physically to a retail location for each one of these and there are times outside of that where it’s the same feeling inside the brain that we’re getting”.

Joe:
I mean, entertainment jumped out for me because we were just as a family trying to bring some family fun time in a couple weeks ago and we started getting the toy catalogs, right? So that behavior of, “Hey, we’re going to take 15 minutes and circle those things in the catalog,” really it’s not inside retail but it’s a place that that entertainment shopping is happening.

Joe:
So how do we draw it back then? I am all the way on board with consumer first thinking, understand that their needs state and what needs state that they’re in. How do we connect it to the concept of channel so we can actually start planning against it?

Kristin:
So there’s not a direct tie. You can’t go through the five different experiences that consumers are trying to get and say, “Well, this one mode fits in this exact channel.” Let’s pick on social media, for example. You can’t say that any sort of shopping that happens in social media is by definition going to fulfill the social shopping mode. That’s just not how it works.

Kristin:
But prior to the pandemic when you look at task mode, that was the experience that was rapidly shifting online and so had we been having this conversation a year ago I probably would have been advising brands and retailers to really be thinking about their online shopping experience and how it can fulfill task mode. How can we make that easy and fast for consumers?

Kristin:
But now, what you’re seeing is a lot of these other modes are rapidly shifting to other channels. I love your example of the toy catalog. For your family and for your kids specifically and for my kids that’s aspirational mode for them. They’re really aspiring to and thinking about what is their holiday going to look like and what might they get and how is their life going to be different when they get that brand new doll?

Joe:
Totally. Yeah.

Kristin:
That’s a total shift out of physical retail. I know in your example there was a physical catalog in hand but that kind of aspirational shopping can also happen online and happen online as early as six. I know both of us have six year olds here and that’s definitely happening for them at the age of six.

Joe:
Yeah, and it’s funny how for them it’s aspirational. For me it is, “Hey, how do I have some time, some fun time with my kids?” That’s really interesting.

Kristin:
Well, and then maybe for the grandparents it becomes task mode. Here let me slide this back over to you and you can get your shopping done in an easy way.

Joe:
Love that.

Kristin:
And so I think what I’ve learned through the pandemic and what I’ve seen happening is, we as brands and retailers have to be ready to meet all of these different customer experiences either on a digital or in a physical sense and across every single channel. So I think to your question of how do we think about channel this way? I think it goes back to that your brand has to feel seamless across channel and so that way your consumer, in whatever experience they’re looking to get, can really get that out of your brand, regardless of how they engage with you across channel.

Joe:
So then do you think the pandemic changed what customers are looking for an experience with that brand or are there new experiences that shoppers expect from brands and retailers? How has that shifted?

Kristin:
I think the largest change that’s happened through the pandemic related to customer experience is really customer expectations. With this massive shift to digital channels that has happened during the pandemic consumers now realize that they have more options than ever. I think if you were to ask customers where they shopped you would often find that it was in a five mile radius, a 10 mile radius of where they were physically located and that often translated as well on to who they shopped from digitally.

Kristin:
Well now that we can get anything from anybody whenever we want I now have higher expectations of who’s going to get my spending and consumers in general. And so customers expect retailers and brands to know them and to deliver on what they want, when they want, how they want it and in the shopping experience mode that they’re in at the moment. And so I think that that really puts a lot of pressure and it’s something very different that has happened post-pandemic than what we might have been talking about nine months ago.

Joe:
So looking through that lens, what should then we expect from retailers during holiday 2020, right? What do you expect to see when we’re looking at these different channels and strategies?

Kristin:
So as you look at what’s been going on inside retail corporate offices there has been mass scaling of digital capabilities. I don’t want to just say online. I mean, websites have definitely been a focus but it’s really been about scaling all sorts of capabilities to meet customer needs in an efficient way when they’re interacting with you digitally versus when they’re interacting with you physically in store.

Kristin:
And so I think what you’re going to start to see is a lot of transition digitally. So these brands and retailers are going to have to evolve their online and digital experience beyond just providing this sort of frictionless, easy transactional type experience. They’re going to be trying to deliver digitally against modes like social, discovery, entertainment, aspirational and I think that’s really what you’re going to see in a big way when you look at customer experience digitally.

Kristin:
Now, when you look at physical retail, in the past this is where a lot of task mode has happened, especially around the holiday season. I’ve got these gifts that I need to get or I have this group of family members coming over to have this type of engagement at my house and I need to get in and get out because my holiday season is busy. I’ve got parties. I’ve got concerts. I’ve got events. I got to get out Christmas cards, if you still do that.

Kristin:
And so physical retail has really had to figure out a way to deliver upon that quickly. Now, I think what you’re going to see this year is physical retail really trying to over deliver on that holiday feeling in store and really rewarding those folks that do leave their home to feel aspirational when they’re in store.

Kristin:
We’ve all been trapped in our houses and I … trapped is a little dramatic but if a consumer and a customer does choose to leave their quarantine mode and the safety of their home and come to stores I think that’s where you’re really going to see retailers trying to over deliver on that holiday experience to really reward consumers for leaving their house.

Joe:
Yeah, it almost becomes a form of escapism and it’s like, hey, you kind of know everybody’s going through that same kind of thing so giving them that feeling of the holidays when there’s a lot of gaps, or there may be a lot of gaps with this is just not your traditional. That makes a ton of sense.

Joe:
This always goes by so fast because I always learn so much and I am … Super thank you for helping give us that consumer lens to see this entire 2020 holiday retail season because I know a lot of the people in the industry it is tough because your head is down because you are so focused in on what your plans are but we really … it’s such a big opportunity if you can see this wider angle to be able to see the whole thing. So we try to really break that down into smaller pieces so you don’t have to go in and keep up.

Joe:
So, Kristin, thank you for doing that work for us and keep us with that viewpoint. And thank you to everyone that listened to us today. If you are digging this strategic observation and breakdowns of this holiday’s retail season please join us throughout the rest of the year as we continue to focus in on the big learnings from this season that will help us go into 2021 feeling more confident in our plans and more ahead of the game.

Joe:
From Kristin and I here at Callahan we will see you very soon. Have a great week.

 

You’ve been listening to the Uncovering Aha! podcast. Callahan provides data savvy strategy and inspired creativity for national consumer brands. Visit us at callahan.agency to learn more.