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Lollipop ethos could help retailers woo Chinese buyers
By Faye Tang |
April 27, 2012, Friday
|
Print Edition
Print Edition
WITH the May Day holiday just around the corner, most retailers are once again unveiling plans for sales and promotions, aiming to stimulate another round of consumption and, perhaps, substantial profits.
Is discounting the only way to attract customers? Definitely not. Chinese consumers do like to chase value for money, but they have become more mature and sophisticated shoppers. Retailers need to recognize emerging shopping trends and offer a more pleasant shopping environment to woo customers.
Segmented consumers
The combination of growing individual incomes and the increasing cost of living has created a complexity of consumer needs. We might classify consumers into five segments: the penny pinchers, the time savers, the trendsetters, the elite, and those who pursue lifestyles of health and sustainability.
To define a tailor-made marketing strategy and achieve sales targets, the marketers of brands need to understand the demographics, lifestyles, spending patterns and emotional needs of these groups. Demographics show us who they are - age and gender. Lifestyle defines their current situations, be it student, new graduate or young couple just starting out. Shopping patterns tell us how frequently they shop, how much they buy on a given trip, what media prompts shopping decisions and which stores they prefer. And so it goes.
Retailers need to understand these factors so they can set up the right mix of products and a store layout best suited to their target buyers.
The value of uniqueness
Consumers now seek novelty and uniqueness in their shopping experiences. They are no longer satisfied with traditional retail formats, such as duplicated hypermarkets or shopping malls.
One in three consumers wants to see distinctiveness in every store they enter, whether it be a convenience store near their home or a prestigious luxury brand shop. Alldays sells fresh eggs; FamilyMart has good lunch packs; 7-11 offers quality coffees; prices in Walmart are attractive; seasonal promotions in Tesco are impressive. We can't expect retailers to integrate the merits of every store and provide ideal shopping for all customers. They must find the strategy that is most appealing to the largest number of their targeted segment of consumers.
Lollipop magic
One respondent in a shopping research survey told us that he often goes to a convenience store near his home just because the assistants there all greet him like an old friend. Sometimes they even give him a free lollipop if he brings his daughter along. This is the magic of the lollipop - the importance of professional and personalized services.
Retailers need to understand that while people may get sufficient material pampering, they are starting to seek more emotional satisfaction, including a pleasing shopping environment and more personal respect. It is something we can't see, but it is vital for retailers to recognize this intangible plus.
'Shoptainment'
As retail formats diversify and move online, shopping is not just shopping itself any more. Rather, it becomes a journey of entertainment. The challenge for retailers is how to extend in-store time by providing a pleasant shopping experience from the entrance to the exit
Data show that consumers will spend 30 percent more if they stay in a convenience store for more than 10 minutes, 58 percent more if they stay in a hypermarket for more than 90 minutes and 26 percent more if they remain in a shopping mall for more than 2 hours.
However, retailers need to remember that one strategy doesn't fit all. A store inside an office complex may attract a different mix of shoppers from the store near a railway station. Furthermore, one brand needs to have multiple marketing strategies, differentiating upper and lower tier cities.
Illuminera Group is a group of insight and market strategy companies. The opinions expressed here are her own.
Is discounting the only way to attract customers? Definitely not. Chinese consumers do like to chase value for money, but they have become more mature and sophisticated shoppers. Retailers need to recognize emerging shopping trends and offer a more pleasant shopping environment to woo customers.
Segmented consumers
The combination of growing individual incomes and the increasing cost of living has created a complexity of consumer needs. We might classify consumers into five segments: the penny pinchers, the time savers, the trendsetters, the elite, and those who pursue lifestyles of health and sustainability.
To define a tailor-made marketing strategy and achieve sales targets, the marketers of brands need to understand the demographics, lifestyles, spending patterns and emotional needs of these groups. Demographics show us who they are - age and gender. Lifestyle defines their current situations, be it student, new graduate or young couple just starting out. Shopping patterns tell us how frequently they shop, how much they buy on a given trip, what media prompts shopping decisions and which stores they prefer. And so it goes.
Retailers need to understand these factors so they can set up the right mix of products and a store layout best suited to their target buyers.
The value of uniqueness
Consumers now seek novelty and uniqueness in their shopping experiences. They are no longer satisfied with traditional retail formats, such as duplicated hypermarkets or shopping malls.
One in three consumers wants to see distinctiveness in every store they enter, whether it be a convenience store near their home or a prestigious luxury brand shop. Alldays sells fresh eggs; FamilyMart has good lunch packs; 7-11 offers quality coffees; prices in Walmart are attractive; seasonal promotions in Tesco are impressive. We can't expect retailers to integrate the merits of every store and provide ideal shopping for all customers. They must find the strategy that is most appealing to the largest number of their targeted segment of consumers.
Lollipop magic
One respondent in a shopping research survey told us that he often goes to a convenience store near his home just because the assistants there all greet him like an old friend. Sometimes they even give him a free lollipop if he brings his daughter along. This is the magic of the lollipop - the importance of professional and personalized services.
Retailers need to understand that while people may get sufficient material pampering, they are starting to seek more emotional satisfaction, including a pleasing shopping environment and more personal respect. It is something we can't see, but it is vital for retailers to recognize this intangible plus.
'Shoptainment'
As retail formats diversify and move online, shopping is not just shopping itself any more. Rather, it becomes a journey of entertainment. The challenge for retailers is how to extend in-store time by providing a pleasant shopping experience from the entrance to the exit
Data show that consumers will spend 30 percent more if they stay in a convenience store for more than 10 minutes, 58 percent more if they stay in a hypermarket for more than 90 minutes and 26 percent more if they remain in a shopping mall for more than 2 hours.
However, retailers need to remember that one strategy doesn't fit all. A store inside an office complex may attract a different mix of shoppers from the store near a railway station. Furthermore, one brand needs to have multiple marketing strategies, differentiating upper and lower tier cities.
Illuminera Group is a group of insight and market strategy companies. The opinions expressed here are her own.
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