How are consumers handling the economic downturn? In the white paper, "Shopper Advocacy: Building Consumer Trust in the New Economy," you'll learn the results of a survey of 30,000 U.S. retail consumers, conducted by the IBM Institute for Business Value. You'll see how customers are relying more on retailers they trust and the importance of attracting new customers.
IBM Global Business Services
IBM Institute for Business Value
Retail
Shopper
advocacy
Building consumer trust
in the new economy IBM Institute for Business ValueIBM Global Business Services, through the IBM Institute for Business Value, develops fact-based strategic insights for senior executives around critical public and private sector issues. This executive brief is based on an in-depth study by the Institute's research team. It is part of an ongoing commitment by IBM Global Business Services to provide analysis and viewpoints that help companies realize business value. You may contact the authors or send an e-mail to iibv@us.ibm.com for more information.
Shopper advocacy
Building consumer trust in the new economy
By Robert Garf, Laura VanTine and Maureen Stancik Boyce
The IBM Institute for Business Value recently surveyed 30,000 U.S. retail
consumers to understand their shopping behavior in light of current
economic conditions. While many retailers are in a scramble to survive,
our survey found that there are two groups of consumers that retailers can
leverage: one group is loyal to retailers they trust, while the other seeks
relationships with new retailers. We believe that retailers that execute on
the requisite strategies to attract and retain these addressable markets can
position themselves to emerge as winners.
Introduction . Consumers have fundamentally changed In September and November of 2008, the shopping behavior. A full 91 percent of IBM Institute for Business Value conducted consumers are sacrificing in some spending a survey of 30,000 U.S. retail consumers areas, while 59 percent in November have to understand the drivers of their behavior less discretionary budgets than in 2007. and spending patterns across several These shoppers are dealing with market product categories: Grocery, Apparel, Home conditions by buying fewer items or delaying Merchandise, and Pharmacy, Health & purchases, buying more promoted items or Beauty Care (Pharmacy & HBC). The survey changing to lower-priced products.revealed that consumers who are anxious . Advocacy has radically grown. In these due to economic conditions rely on retailers uncertain times, consumer advocacy has they trust. Highlights from our survey include nearly doubled - from 21 percent in 2007 findings regarding consumer behavior, the to 38 percent in 2008. Thirty-one percent of value of loyal shoppers, the importance of Advocates have increased spending at their attracting new customers and the most critical primary retailer over the past two years.operational capabilities:
1 Shopper advocacy. A valuable consumer segment is motivated reasons respondents shift purchases to to seek new relationships. Thirty percent other retailers. Our findings also show that of consumers are shifting their purchases retailers cannot ignore the other key capa-to other retailers. This valuable segment bilities that drive trust: Product Availability, spends 31 percent more per trip and Assortment, Customer Service and 37 percent more per month than those Multichannel Retailing. consumers who do not move purchases to other retailers. We believe that retailers that deliver on brand expectations and build consumer trust during . Eight operational competencies attract and this era are in a better position to increase retain shoppers. Quality, Store Experience loyalty and market share in the new economy.and Convenience remain top attributes for building consumer advocacy. Price/Promotion and Convenience are the key
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Building consumer trust in the new economy
We found that while Consumers have fundamentally dollars than in 2007. This means that they are changed shopping behavior directing more budget dollars toward essential consumers place a high premium on Quality, Market conditions have forced consumers to products in lieu of discretionary categories. make tradeoffs and alter their spending habits. Store Experience and Some product categories are getting Our survey data indicates that shrinking Convenience, Price/ hit harder than others due to consumer wallets have compelled shoppers to make spending changes and sacrifices (see Promotion and Convenience more prudent buying decisions - restricting Figure 1)... [download for more]
