I promised data, here’s some of my takeaways from the National Retail Federation convention in New York City:
2008 National Shopping Behavior Study by Cavallino. The survey was designed and managed by The Gordman Group. Research was conducted by Weise Research Associates. Out of 815 people phoned in December:
- 55% said they spent less this holiday than 2007 BUT 18% spent more
- 6% spend most of their money in a department store vs. 2000 when that was 15%
- 54% shopped closer to home
What I found particularly interesting as the author of You Can Compete: Double Sales Without Discounting is that when they asked about advertising, respondents did not care about discount coupons, loyalty rewards, delayed payment, layaway or contests used to get them in the door. In fact the presenter John Rittenhouse said by looking at the numbers, you had to ask why the question was even asked responses were so low.
Also interesting were attitudes about shopping in 2009:
- 69% expect to spend less BUT 58% of customers 18-24 plan to spend the same or more – if this is your target market – you’re in!
Finally attitudes about their own financial situation:
- 46% expect to have a better financial situation than 2008
- 42% expect it to be about the same
- 12% expect it to be worse
IBM presented a study of 30,000 that was reported as well:
- 91% of respondents are making spending sacrifices
- 68% are buying less
- 63% are buying promoted items
- 43% are trading down to lower quality
- 12% had more descretionary income
All this sounds interesting until Martin Lindstrom, the author of Buyology: Truth and Lies About Why We Buy, got up and said that what people say and what people do are most times very different. That the rational brain only engages 15% of the brain. He said that 15% is not what needs to be engaged – that’s just price and promotion.
To succeed, you need to tap into the unconscious which is the driving force. He quoted his study on smoking that showed conclusively the warnings on cigarette packages actually encourage smoking, areas of the brain light up when they see it. That is contrary to what conventional wisdom says should happen.
One of his case studies was simply playing French music in a wine store. No additional POP, no additional salesmanship, just played French music. Sales went up 77% for French wines. When he asked people, “Why did you buy French wine today?” all they could say is, “I don’t know, just seemed like a good wine.” A branded smell can do the same thing.
All that to say is there is a lot of data out there you can find “interesting,” but at the end of the day nothing has changed in 2009 vs 2000, we are still trying to understand what our customers do, rather than what they say. And we can only truly measure that by what they buy.
