1600 Shoppers Define "Ideal" Shopping Trip, and It Doesn't Track With Today's Experience

IBM Report Finds Winning Retailers Will Be Those Who Cater to the New Consumer, Redefining the Retail Space

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WHITE PLAINS, NY - 21 Jan 2005: The notion of the "average consumer" will be left in the dust as shoppers themselves prove that demographics, attitudes and patterns of buying behaviors continue to shift, according to a new report from IBM Business Consulting Services. As a result, retailers will need to change the way they do business in order to succeed.

To gain further insights on how consumers' motivations for shopping affect their buying patterns, IBM surveyed over 1600 U.S. shoppers to explore why they shop, the thinking processes behind choosing one store over another and what constitutes the "ideal" shopping experience.

Across the board, profound shifts in age, wealth, ethnicity, life stage patterns and value systems are making consumers harder to define, categorize and reach. These demographic changes are contributing to shifts in the decision patterns of individual shoppers, which ultimately will necessitate retailers offering more tailored and relevant shopping experiences.

"With the idea of 'mainstream' social norms and consumption patterns becoming increasingly difficult to define, retailers must delve deeper to understand the wants, needs and purchase decision processes associated with the ever-increasing numbers of customer segments," said Joseph Gagnon, IBM Business Consulting Services Global Retail Executive. "Retailers are not yet adequately addressing these new customers. The winners in the market will be those who can become truly customer-centric -- flexibly delivering distinctive shopping experiences to meet the new needs of their customers."

The shoppers surveyed made it clear that retailers must offer customers more tailored shopping experiences, designed to target specific customers' shopping occasions and needs -- and not focus merely on products.

Highlights of the survey, which focused on the areas of consumer electronics, apparel and groceries, include:

Consumer electronics shoppers
The survey demonstrates that consumer electronics shoppers have different shopping motivations based on their specific objectives in any given situation. The top reasons for shopping in a consumer electronics store include, browsing new technologies (18%), finding a specific accessory (17%), upgrading equipment or technology (16%), and replacing a broken item (15%).

The findings are clear that the retailer of the future must be able to satisfy consumers with a diverse range of "needs states." Among other things, winning retailers will need to be able to do the following:

Apparel Shoppers
The survey also examines a wide range of distinct apparel shopping "occasions." The top reason is to replace basic wardrobe items (30%). Other reasons for shopping for apparel include purchasing work-related clothing (11%), wanting something new and different (9%), and purchasing a gift (7%).

All apparel shoppers surveyed chose a particular store to do their clothes shopping based on convenient location and the ability to get a good deal. But, there are notable differences in secondary motivations. Those shopping for work-related clothing want an efficient, easy shopping experience -- such as access to information on product availability and having merchandise displayed so that it is easy to assemble outfits -- and to be able to shop for other things at the same time. In contrast, shoppers looking for "something new and different" especially wanted customized products, to be able to summon sales help from the dressing room, and to receive promotions at checkout.

The findings show that apparel retailers of the future will need to:

Grocery shoppers
Consumers' reasons for grocery shopping were not as varied as the other categories. The vast majority of consumers grocery shop for the purposes of general replenishment (58%) and quick stop for convenience (23%).

However, to meet the needs of these two distinct shopping occasions stores will need to consider new and innovative approaches.

Most grocery stores today consist of endless, highly-stacked aisles. People that go to a grocery store other than their usual one, find it boring, confusing and time-consuming. Successful grocery stores of the future will need to change that experience by doing the following:

Retailers in all categories must create a more customer-centric shopping experience. Developing deeper insights into the consumer through more sophisticated approaches to segmentation and innovative analytical models, is a key step in that direction.

The report also provides information and examples of how retailers can use Consumer Decision Process (CDP) modeling to develop deeper insights. This process applies sophisticated quantitative analytics to the customer decision making process. It provides insights into the numerous factors that truly drive the "why" behind consumers' actions, in a way that is missing from traditional qualitative and quantitative research studies.

Through CDP modeling, retailers can deconstruct customer behavior into the thousands of tactical elements that affect their decisions: from personal attitudes to competitive prices, from advertising messages to salesperson tactics, and from individual emotions to product characteristics. This approach enables objective measurement of how much impact any given element has on the final decision.

Survey Methodology
The IBM Institute for Business Value conducted an online survey of a representative example of more than 1600 U.S. Consumers in October 2004. To learn more about this study and others that focus on the future of the Retail Industry, visit http://www.ibm.com/bcs/retail.

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