Thoughts from the Shoppers Marketing Institute LEAD Marketing Conference

Earlier this week I attended the Shoppers Marketing Institute LEAD Marketing Conference, which is an annual event devoted to understanding emerging technologies, attracting and maintaining shoppers, and understanding “Loyalty, Engagement, Analytics and Digital” applications — “LEAD.” I was there both to speak (as a panelist on the topic of Coupon Redemption) but also to learn more about shoppers’ behavior — basically, why we do what we do! There were many retailers in attendance, as well as numerous manufacturers, coupon redemption centers, and the like.

It’s always interesting to hear about the issues and challenges that retail is facing, as well as how they view consumers and what’s trending industry-wise. Here are some random notes I took during the event’s sessions:

On digital coupons (both print-at-home and load-to-card):

• Digital coupons have now been available for over a decade.
• Digital coupons have enjoyed a 35% redemption growth rate since 2006. Digital coupon offerings went up 76% from 2010 to 2011, and digital coupons now make up 5% of all coupons redeemed.
• (The rest of the percentages? According to Inmar, FSIs [inserts] make up 43.9% of all coupons redeemed – instant-savings coupons 12.8%; electronic checkout [Catalinas] 7.7%, and tearpad coupons 7.0%.)
• Digital couponers make an average of 69 trips to the store per year, as opposed to 57 trips per year for a non-coupon shoppers — that’s 22% more trips.
• Digital coupon users, on average, spend $10 more per trip to the store. They also make more “stock up” trips (trips in which they spent $70 or more) per year than non-coupon shoppers — averaging 18.6 stock-up trips per year versus 12.6 trips per year for a non-coupon shopper.
• The average digital coupon user uses 3 digital coupons per trip and saves $231.21 annually with digital coupons.
• Save-to-card digital coupons are “moving aggressively” to gain more market share each year.
• Statistically, digital coupon shoppers have “50% more buying power” than non-coupon shoppers.
• Digital coupon shoppers have an average income of more than $80K. A representative from Acxiom, who deals heavily in consumer demographics, noted that “these are not ‘poor people,’ adding that 67.9% of digital coupon shoppers have an annual income of more than $125K per year.
• Coupons.com has 22 million unique visitors per month.
• $470 billion dollars worth of coupons for consumer packaged goods were distributed in 2011. That is 70 times the amount of money that the U.S. Treasury prints each year!

On coupons and coupon shoppers:

• Heavy coupon shoppers buy 45% more during trips
• Heavy coupon shoppers make 1.6 trips to the store per week
• Heavy coupon shoppers spend a little more than $3000 per year more than non-coupon shoppers
• With regard to extreme coupon shoppers Neal Heffernan of GFK, a service research firm, stated: “We’re not seeing extremists. They’re not dominating the marketplace — that is overhyped.” (Valassis released numbers stating that extremists make up less than .3% of shoppers – that’s less than three-tenths of one percent!) The theme that not everyone is extreme-couponing was often repeated throughout the conference, to the relief of many retailers and manufacturers in attendance. It was also one of the topics I spoke on during my panel.
• My panel also discussed hard-to-enforce terms in the fine print of coupons that put undue pressure on the cashiers. Cashiers should not have to play “coupon police” in the lane to interpret vague or unclear coupon terms. Manufacturers can further use the fields within the new barcode to return error messages to the cashier on the register screens like “Overlapping Items” or “No Qualifying Items” to take the pressure off of the cashier if a customer presents a coupon that cannot be used on a particular item or variety.

On shoppers and social media:

• 70% of consumers asking a question of a brand on Facebook expect an answer within 24 hours. If companies are not providing one in that timespan, they are failing their audience.
• The topic of “Showrooming” was discussed heavily at the conference. Showrooming is when a shopper comes to a physical store, looks for a product they’re interested in buying, takes photos of it with their phone, and then looks up better prices at competing retailers with a smartphone, or goes home to order the product online for a better price. Showrooming is seen as a threat to many retailers and was a topic of strong concern among the audience. One panelist pointed out that Walmart has stopped selling the Kindle in stores due to showrooming — so many people looked at it and later decided to purchase it online that they stopped stocking it.
• Better customer service was discussed as a way to combat showrooming. Panelists talked at great length about the rise of the iPad as a device to combat showrooming — theorizing that if an employee in the store could pull up additional options on the tablet to show to the consumer, he or she could convince the consumer to purchase online from them, or to visit an alternate location with that particular item in stock. One panelist stated, “People are always going to showroom. But if the sole determining factor I have to make the sale is just price, that’s when I worry.”
• The switch to iPads from traditional cash registers was also discussed at length as a way to improve customer service — JC Penney and Nordstrom have led the way with that, along with Urban Outfitters and a few other retailers. Retailers discussed the issues of not having a cash drawer for shoppers wishing to pay in cash.
• Brands were told that their number of Facebook “Likes” is not as important as the number of “Friends of Fans” that they have. Friends of fans are even more influential than those who like the brand. A “Friend of Fan” was defined as a person who is using Facebook and sees a message inviting them to become a fan of [Brand,] because your friend “Jill Cataldo likes [Brand.]” The fact that someone a shopper knows and trusts likes the brand carries more weight than the brand simply trying to reach a new customer on its own.

It’s always interesting to learn more about the retail world, as it pertains both to grocery and non-grocery shopping. And, it was fascinating to learn how detailed much of the research is on us as shoppers, why we do what we do — and who’s watching what we do.