The GrowthOps crystal ball for Christmas 2019

29 August 2019

Full disclosure; we don’t actually have a crystal ball. But we do have a dedicated Insights Team, along with a Consumer Research Panel of over 100,000 Australians, which is arguably better.

We asked them a few questions about how they shop, where they shop and importantly why they shop.

We matched that to their plans for this Christmas and their engagement with specific retailers. We then provided some recommendations on how each retailer can maximise their chances for success and hopefully enjoy a very, very merry Christmas.

The Data

Before we get to Christmas let’s set the scene… We wanted to understand how shoppers shop so we could get a better understanding of how the different consumer segments behave and can be engaged. We segmented them into 3 categories:

Value Shopper

They have a predetermined budget that they won't budge on. Everything must fit into the budget, regardless of the deal.

Smart Shopper

Not price sensitive, but they enjoy a deal. They are the most promiscuous bunch of the lot.

Power Shopper

Will hunt & kill for the best deal, whether its luxury or everyday items. These shoppers are informed and motivated!

Segmenting the consumers

fig1-shopper-types

We know everyone loves a deal and feels good about getting one. But how customers perceive ‘the deal’ varies as does the scale of importance of getting it. The custom of smart shoppers is the real battlefield for most retailers not focused on simply offering the cheapest price. Getting them to engage and return is challenging but so worth it. Discounting isn’t always the best way to do this.

How Those Segments Shop

Each segment is approaching their shopping slightly differently so as digital marketers we need to approach each of them separately too:

fig2-how-they-shop

POWER SHOPPERS

  • This group are really driven by feeling like they ‘win’ at shopping, by getting a discount or bargain, with close to 75% saying this is a key driver.
  • They are also more likely to say they actively do their research and will stick to brands that they love.
  • They have high expectations, and reward brands with their loyalty.

SMART SHOPPERS

  • This segment shops intelligently and is less likely to say that sales or discounts are their key driver when shopping, while close to half say they actively research the brands they buy.
  • As could be expected, they are the least loyal segment.

VALUE SHOPPERS

  • Shoppers in this segment are also driven by sales and discounts, though to a lesser extent than power shoppers. They are the least likely to actively research the brands they buy, suggesting a tendency to impulse buy.

Hunting for Deals

Given that everyone loves a deal, where do they go to get them? Turns out a lot of people love eBay, closely followed by retailer sale events. Coupons are popular whereas Cashback is still in its infancy – there’s still plenty of potential there.

fig3-best-deal

How are Consumers Doing and Feeling?

We asked the consumers a few questions to see how they’re feeling right now, and to get a sense of how Christmas sales will perform.

Household finances are on average better than last year which is a good sign for Christmas. Power shoppers are particularly buoyant. Value shoppers were less positive, so they’ll be more price-sensitive than normal this Christmas.

fig4-how-do-they-feel

In other positive news:

  • 40% of those surveyed were expecting a pay rise in the next 6-12months
  • Only 14% said their business or place of work would be doing worse this year than 12 months ago with 40% saying it was performing better, not staying neutral.

On to Christmas!

Thanks for sticking with us this far. When focusing the lens on Christmas shopping, consumers are on average planning to spend about the same as last year, with only the power shoppers planning to spend more.

fig5-christmas-spend

We asked whether people would see the Christmas period as a good or bad time to shop for major household items. Overall there was not much excitement there, which is strange given the amount of good deals we’d expect to see as part of Click Frenzy, Black Friday and Boxing Day sales. Once again, the Power shoppers were the most optimistic. Perhaps there’s still a gap of knowledge on what’s going to be on offer at that time, or customers don’t see it as a good time to shop for household items because they have so many other end of year expenses .

fig6-christmas-good-bad

Individual Brand Data

We compiled unique information on some of some of Australia’s leading brands across fashion, travel, tech, health & beauty, homewares, sportswear, food & beverages, and multi-channel retailers. We have detailed information on each of these brands’ customer age, household income, gender split, propensity to spend, shopper segmentation, deal behavior and brand familiarity. We also know how many customers are considering shopping with each brand in the future and whether they’ll be shopping with them at Christmas. We can then compare that to other brands in each category. This information is a huge advantage in identifying underlying issues that could be hampering growth.

Here’s some de-identified examples: The % represents the portion of total people surveyed who are either:

  • Familiar with the brand (this is a level beyond aware – they need to understand who the brand is and what they sell)
  • Would considering purchasing from that brand in the future
  • Have shopped with that brand in the past
  • Intend to shop with that brand over the Christmas period this year.

fig7-brandawareness

This retailer has a high recognition within its category, but they’re not converting strongly. Customers know what’s there but they’re not loving it. Customers need to be educated and persuaded that their products are great, and they can be incentivised to improve conversion rates.

fig8-brandpurchase

In this example, there’s a clear drop off from customers that would consider the brand to those that have actually shopped. It’s in a competitive category, so this retailer needs to find a competitive edge along with engaging digital marketing strategies to grow the consideration pool.

fig9-brandpurchase-xmas

This large retailer is generally doing OK, but customers aren’t considering it for Christmas shopping. To change this, they’re going to need to be front and center during Christmas retail events. We’d also recommend creating a gifting widget or adding content so that gift buyers can feel confident in shopping there for others. They could also look at pushing gift cards or using marketing automation to engage their audience.

We have information on all brands below. If you work for one of these and haven’t already had someone from GrowthOps share the information about with you, we would love to run you through our findings and recommendations. Please get in touch. We’d love to share our insights with you.

Apple, Amazon, Asos, Agoda, BWS, Adairs, Amcal, Adidas, Bing Lee, Big W, Bonds, Avis, Coles, Bed Bath N Table, Chemist Warehouse, Decathon, Dell, Catch of the day, Cotton On, Booking.com, Dan Murphy's, Canningvale, Clinique, JD Sports, HP, David Jones, Country Road, Budget, Deliveroo, Forty Winks, Estee lauder, Lulelemon, JB Hifi, eBay, General pants, Expedia, Foodora, Freedom, Lancome, Nike, Kogan, Groupon, Glue Store, Flight Centre, Hello Fresh, Ikea, Priceline, Rebel Sports, Lenovo, Harvey Norman, Marks & Spencer, Hotels.com, Liquorland, Matt Blatt, Sephora, Reebok, Microsoft, Myer, Net-A-Porter, Webjet, Marley Spoon, MyHouse, Specsavers, Sony, Scoopon, ShowPo, Menulog, Snooze, Strawberry Net, The Good Guys, Target, The Iconic, Woolworths, Temple & Webster

In Summary

While we’d love to have some earth-shattering results to blow your minds, the truth is somewhat tamer – we’re probably in line for a similar performance to last year. But how people shop is evolving – they’re becoming increasingly conscious of getting a good deal and they’re savvy about how to achieve that through a wide range of media.

It seems fair to assume most retailers want to have a better Christmas than last year and if shoppers aren’t going to be spending more, then retailers are going to need to up the ante and get better coverage, provide targeted offers to the right shoppers and win share from competitors to realise growth.

If you’re a retailer, looking to do exactly that, we recommend ensuring you have the right solutions and detailed strategies to get the most out of these 6 key digital marketing channels:

Partnership Marketing – Engaging traditional affiliates like cashback, loyalty and deal-based sites can add huge volumes of incremental sales if used right. But you must have a strategy and you must push for additional exposure. Create partnerships with relevant suppliers, aligned merchants and content publishers where there’s direct synergies or a demographic match of customers. Plan for events like Click Frenzy and Black Friday well in advance and lead with strong headline deals.

Discovery (SEO) – Look for efficiencies to streamline your team and identify and fix content voids now, so that come Christmas you are covered. If you want to build content fast, use an AI solution to get you scoring for key terms.

Research – You need to fully understand the shopping habits of both your customers and people who haven’t chosen to shop with you - you’ll need to engage a research panel in order to do that. Armed with this knowledge you can build a Christmas strategy that will grow your customer base and maximise sales from it.

Marketing Automation – Integrate your email and SMS communications into one platform and build a strategy around regular customer engagement to maximise your customer lifetime value.

Social & Content – Social channels drive genuine engagement that leads to app downloads, online sales and build social following. Used intelligently, you’ll have an audience ready to hear about your Christmas offers and gift recommendations. Build an integrated content plan that works with your SEO and content affiliates.

Digital Media – Programmatic solutions can help you recapture lost customers and entice in new ones. It can also be used to drive physical store visits.

The real magic happens when you have an integrated multi-channel strategy across all your marketing activity that combines the best of these offerings simultaneously.

GrowthOps have specialist teams and access to world class technology to help you with each of the six areas. Please get in touch with us if you’d like to see how we can help you get ready to own Christmas 2019.

Written by by Roger Lee, Head of Affiliate, James Taylor, Research Lead and Kiran Ganesh, Research Manager.

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