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Meet The New Consumer?



By Steve Needel, PhD

Hardly a day goes by that I don’t see a Greenbook or LinkedIn discussion start with something like “as we all know, the new consumer….” Okay, maybe a day goes by, but not many. The New Consumer is someone who’s wired in to the universe, one who doesn’t make a move without consulting the internet. Every product is researched thoroughly in this conception; prices are checked and of course, despite everything Behavioral Economics tells us, we go for the least expensive; a mental tally is made of the collective Facebook opinions; reviews are scoured; and then we make our purchase, often online rather than in the store.  The New Consumer is at the vanguard of the revolutionary manifesto infesting our industry, marching in lockstep with the Innovate-or-Die folk and The-Big-Data-Invaders-Are-Coming cognoscenti.

Here’s the problem I have with the New Consumer concept – I’m not sure it’s relevant for most of the purchase decisions we make. Let’s do a simple back-of-the-envelope calculation: the U.S. Bureau of Labor says the average household spends about $125 per week. Say the average product costs $5. Then we buy about 25 products per week (supported by data from an anonymous client – thank you). That’s 25 “yes” decisions to the products we chose and who knows how many “no” decisions (products we’ve considered and rejected). If you believe Zaltman or Kahneman, most of this purchasing is habit-based or processed below the consciousness threshold, there are no “no” decisions, only “buy this” decisions.  Nielsen and IRI estimate that over the course of a year, shoppers are buying about 300-400 unique SKUs. Either way, that would be 25 products a week or 300ish products a year to look up online, read reviews, and check with your friends, etc. before deciding to buy. Does anyone think this is happening for your typical grocery product?

A hallmark of the New Consumer is that it’s all about connectivity – that the mobile device is fundamental to the shopping experience. In FMI’s 2012 U.S. Grocery Trends study, they report that only 52% of shoppers use technology, in any form, to aid in their grocery shopping (at least 25% of the time). It sounds like a lot until you read the breakdown of how shoppers use technology. Almost two-thirds of the 52% check for coupons, 44% check store prices online before going shopping, and 60% use a mobile device in-store. When we look at what these shoppers do in-store, only 15% of those who use technology use it to check prices while they are in the grocery store; 17% research products (and we don’t know the overlap between these two groups). Only a third of these technology users claim to be reading product reviews prior to shopping.

This is not a revolution in shopping. Much of what shoppers are doing with their mobile devices in stores is what we used to do with paper, pencil, and scissors. This may be evolutionary, but in this case the medium may not be the message. It may just be a simplifying mechanism in the same way that my electric can opener is simpler than my manual one.

Compare this use of connectivity to a recent Polk study that says 75% of car buyers used the internet before buying and  47% of new car buyers cited the internet as the primary source of information for their decision.  I suspect there are several other categories where this type of behavior occurs; fashion, media, and electronics, for example, all seem to be likely candidates. But that begs the question: how often are these purchased relative to consumer packaged goods products? I think the average shopper would be hard pressed to buy 300ish items of clothing, media, and electronics combined in one year.

Adopting a New Consumer approach may well lead us into unproductive research and marketing activities in the CPG world. The focus on social media is likely to be much less important for these types of products. A digital push strategy is likely to impact relatively few shoppers at the point of purchase; again, not a high percentage of shoppers are looking to be fed deals in the store on their mobile devices, according to the FMI study. We can spend a lot of time and effort building intricate websites where all people want is to see if there is a coupon. Making the viewer go through videos and navigating through multiple screens just to find out there is no coupon today is not clever marketing; it’s old marketing in a new medium. Indeed, there is nothing to suggest that New Consumers aren’t susceptible to the usual shopper marketing activities. We shouldn’t confuse new tools with new behavior at the store.

Marketing research has always been segmented. We have always had the qual/quant divide and despite some crossover techniques, we remain thusly split. Durables and CPG have always been separated – researching durables requires a different set of tools, and having always been on the CPG side, I wouldn’t be surprised to find that within durables, there are specializations (automobile v. fashion v. media, for example). Perhaps we need a new level of segmentation, one for categories in which technology matters and one in which it does not much matter. Such a bifurcation would allow those of a revolutionary persuasion to pursue their dreams, while letting those of us who are focusing on the bulk of shopping behavior to get on with our lives.

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29 responses to “Meet The New Consumer?

  1. Hi Steve, I always enjoy your thoroughly considered opinion on all topics related to market research, but I have to disagree with your hypothesis here. The only way the New Consumer is NOT relevant to CPG is if everybody is loyal to the product they are buying (or have been used to buying). Interaction along every touch point has the potential to negatively or positively impact brand perceptions and behavior in this new age.

  2. @correlationist suggests that the myriad of touch points that exist now make the process of influencing the new consumer highly relevant to marketing. If you really think about it, it is only social media that is new in this space/ So we might well ask how this plays some new and special role. As Steve Needel points out single source data seems to suggest a pretty boring customer base with little experimentation in many FMCG categories, basically repeat buying based on settled behavioural patterns. And as Steve also points out much search is simply looking for ways to buy the same thing more cheaply. Hardly a thoughtful and considered decision making process. Like Steve I remain skeptical about this New Consumer and the supposed power of social media for many packaged goods caegories. Skate boards and sporting goods yes, but toothpaste and detergents?? We have already seen early reports from Coke and P&G where mobile communications produce next to no effect. Does this same uncorrelated finding extend to geo-location marketing, to Facebook, Pinterest, etc? I think it will be roughly the same – good for information but hardly brand choice shaping.

  3. @correlationist – it’s not so much (imho) that the new consumer is not relevant to CPG, it’s the belief that it’s critical to understand the new consumer (if she/he even exists in the CPG world) in order to do our work. Yes, we need to understand the relevant touchpoints – agree with you. Don’t think, as Chris has said, that there are as many touchpoints as some seem to think.

  4. Maybe I am missing something here but aren’t most new consumers they same as old consumers with new ways to streamline their purchase process? I think Steve is right that a lot of the things being done are the same things that were done by hand but they now have a very different impact and those decisions have a very different set of drivers.

    What’s important is not the medium but rather that the data access has created a more informed consumer. Having a Smart Phone at the point of sale means you don’t need to save 6 cents on a can of peas if you can see on your phone you already have 10 cans in the pantry. It means you don’t forget the main thing you came for because your list app tells you what you need and it means that you’ll can use your loyalty card for ALL the discounts that optimize your purchase without having to mess with paper coupons. It means the digital coupons have a real value (and a real cost to manufacturers) and will be redeemed at a higher rate, especially with high use non-perishable products like paper towels. It means you can find that chicken recipe that looked so good and manage the nutritional a aspect by getting the exact brands they recommend!! It means you can plan what you buy at the grocery and what you’ll stock up on at Costco. It means buying in bulk online for paper goods, toiletries and laundry soaps just became a lot more likely, especially if they are on sales and are delivered to your door.

    What matters is that the use technology has replaced most of the push marketing delivery channels with a more efficient purchase process. Even if today, digital marketing is not driving purchase, it’s the only game in town. In Steve’s scenario he is probably right about their use with regard to marketing, but the real differentiator is not in how consumers interact with the brand, it’s in how they manage their purchase process.

    Smart Phone usage has yet to be measured fully in the innovation process because CPG has been so slow recently to introduce disruptive new products. It doesn’t matter in the case of a new flavor of Oreos, but it does matter if you are introducing a line of cookies made with Stevia. The jury is still out on this one, but my guess is that strong product entries will garner smart phone chatter and grocery level competition and more than a fair bit of consumer scrutiny. The good news is that it will spur lots of innovative and new campaigns for viable products and it will likely weed out the weaker performers pretty quickly

  5. @chris & @steve you seem to suggest low involvement categories dont lend themselves to being affected in this age of the new consumer. I still disagree. Even though the underlying consumption behavior is very difficult to change, CPG marketers have the new age consumer to thank for making it easier to provide awareness, trial, switching, and loyalty cues. IMHO, even if you think there aren’t as many touch points or if not all of them shape brand choice, the new consumer has the expectation that every touch point provides the same brand promise and experience they have become used to. Hence, understanding where your consumers are, and how they consume and disseminate content, is an integral part of the overall brand building process.

  6. @Ellen – you’d be right if people were actually doing all this, but what the FMI study shows is that it is happening much less than we all think in the grocery store. We’re not making lists on the phone, we’re making lists by hand. Maybe we carry it on the mobile device, but we’re still making it by hand. We’re not checking on product prices, we’re not looking up recipes, etc. at a very high incidence rate. Again, my big concern is that we, the industry, behave as if everyone is doing this and they are not and there are good reasons why not.

  7. @correlationist – I think you’re missing the point. With most CPG categories, the shopper is not hitting on lots of new touchpoints. The fact that we, as an industry, have created lots of new touchpoints to deliver a message doesn’t mean people are going there and getting the message. Despite the movie, it’s not clear that if you build it, they will come. They may come, but they’re looking for a coupon.

  8. That’s interesting because I did a recent study where even older and lower socio-economic groups said they were using their phone for lists (and the grocery actually had that in their app). I was actually surprised at how prevalent the unaided comments were on this subject. They also were parceling out their purchases for fresh and other to maximize healthy eating and budgets. It was quite fascinating but it was only one chain, although a pretty large one.

  9. @steve Are you saying System 1 thinking is too ingrained, and behavior is unlikely to change? I think the status quo will be challenged (sooner, rather than later) due to the exponentially multiplicative nature of the connected, and empowered new age consumer.

    My question is how would you then help your current clients with their research needs, given the current state of the interplay between technology, business, and the consumer?

    Thanks for continuing the dialogue, and I would love to get my hands on the FMI study, if you have it handy. :))

  10. @correlationist – no, I know from my own research (virtual reality shopping) that we can alter purchase behavior for consumer packaged goods. What I’m saying is that there is little to no evidence to suggest this product domain is driven by consumers being connected and empowered. You assume an interplay between technology, business, and the consumer – I’m not sure that’s real in this neck of the woods (as we say down south)

    Send me an email ([email protected]) and I’ll send you the FMI study. Anyone else who wants it, feel free to email me too.

  11. I still think it is a matter of when, and not if this intersection becomes a universal reality (even in your neck of the woods – in fact, it is happening in rural India at a pretty rapid place).

    It would be great to hear from the other incredibly thoughtful contributors on this blog.

  12. @all, the “New Consumer” in discussion here could also be called the “Connected Consumer” or “Generation C”. Nielsen, for example, has conducted several studies about this new consumer:

    As Nielsen says, “their ownership and use of connected devices makes them incredibly unique consumers, representing both a challenge and opportunity for marketers and content providers alike. Generation C is engaging in new ways and there are more touch points for marketers to reach them.”. So @Steve, I don’t agree with you when you say that “Adopting a New Consumer approach may well lead us into unproductive research”.

  13. I love the the sounds marking the beginning of honest marketing. This article by Jermiiah in a compeletly different business field (digital Media) also talks about the advent of new consumer. however, the real essence is this consumer is old but tricks are new and so are the brands. The real question is not about starting fresh, the real dilemma is how to now standby the promises we have been making to consumers for so long when they actually have become smarter than brands. Thanks for sharing the article, loved the picture though. Quick, Clean, To the point

  14. The other layer to this I haven’t seen discussed is the absolute appalling use of technology in-store to promote the use of connected devices in the purchase process at retail. Walking into a mass retail store these days doesn’t feel much different to walking into one 10 years ago in the pre-Google era. Very little has changed. Retailers don’t do a good job at innovating at the point of purchase. Likewise, CPG companies are mostly dinosaurs when it comes to this as well. Sure, there are ample smart Marketing folks who dream up a range of potentially innovative uses of technology, but these rarely filter down through the various silos of the company and hardly ever get any real traction in the store. So we can bemoan consumers all we want and point to research that tells us they aren’t really using mobile devices for anything in-store, but in the same breath, we have to concede that mass retail is largely void of innovation in this area. They aren’t doing anything to push boundaries to help see what’s possible.

  15. @Adriana – Nielsen can say whatever they want about the challenge, opportunity, potential and I can’t disagree with that. However, when we as an industry focus on a behavior that is rather rare (shopping for CPG products with a mobile device, especially while in store), we are not going to explain much. It’s purely a numbers game – shoppers are not engaging with CPG products in a way that is being portrayed by those with a vested interest in a mobile world. At least not yet and not for the forseeable future.

  16. Two parts to Steve’s important blog:
    1. Not many consumers have been activated in FMCG with these tools. (hard to argue this).
    2. Then conjecture on how important researching this customer is TODAY given the levels of activity. Great question.

    I also think that we need to pursue:
    What do the numbers MEAN? Are they growing?
    Why aren’t they bigger?
    How does influence peddled thru these tools compare with influence with more traditional tools?

    Bill Bishop in BrickMeetsClick is coming out with some important new work in this area (specific to grocery) and that will certainly be worth the read

  17. @Paul – are you suggesting that because we have a technology and it’s not being used much that the problem is one of implementation? Marketers are turning over in their graves! Perhaps it’s because there is little demand for technology in a grocery store.

  18. Steve, I’m so glad you got such a good debate going, always fun. BUT, I don’t have time to read all of the point and counter point though – because in addition to my busy job at my insight and data based consultancy, three kids, husband and dog – I have to leave at least 12.5 hours for some weekly grocery shopping; so many prices to compare, ingredients to look up, etc.

    (In case my snarky-ness needs translating: of course Steve is basically right, folks — take a step back and look at your own behavior, and that of those around you in the grocery store. It’s not that social media, new platforms, smart phone driven HH management tools and on-line presence of any form etc doesn’t matter, but it needs to be put into perspective – one piece of a comprehensive whole, and that it it is evolving. A complete game changer for CPG has not arrived – at least not quite yet).

    1. I just got this email today from my buddies at Columbia, and their data seems to challenge a bit of the thinking here:

      Have you found a product you liked in a store, but then purchased it later online, or maybe on your smartphone right there in the store? If you answered yes, you are part of the “showrooming” phenomenon that has concerned retailers for years.

      Given the growing penetration of the smartphone market, our Center on Global Brand Leadership, in collaboration with global loyalty experts from Aimia, sought to better understand how these new mobile-assisted shoppers (“M-Shoppers”) were actually using their devices in store aisles.

      We are pleased to share with you today the results of this research in our new report, Showrooming and the Rise of the Mobile-Assisted Shopper. We surveyed 3,000 consumers in three markets (US, UK, Canada) to examine how smartphone owners use their devices in-store and then analyze what strategies retailers need to consider for these mobile-assisted shoppers.

      Our study found that all M-Shoppers are not the same. We identified five unique segments of M-Shoppers, each with different attitudes toward physical stores, patterns of showrooming, and motivations to pull out their phone or tablet within a store. We uncovered some threats, but also several opportunities for retailers to strategically enable M-Shoppers to use their phones as part of the shopping experience.

      DOWNLOAD the full report (.pdf) at:

      SAVE THE DATE: On October 3, 2013, we will host a webinar on the research.

      READ coverage of the report and its findings in BusinessWeek.

      VIEW an infographic that summarizes some key data from the report.

  19. @Lenny – my reading of this is that maybe there are 5 types of consumers, none of whom are using this much in grocery (note that all of the pictures in the report are of durables). Their data shows that about 16% are using a mobile device for food and beverage “regularly” – that doesn’t strike me as a lot compared to durables. So their data strikes me as consistent with the FMI data.

    1. I think you nailed it @Ellen; this report is possibly indicative of broader trends in shifts in the integration of technology into shopping behavior and should at least be considered a red flag not to assume there isn’t a growing trend. The success of companies like ShopKIck (P&G is a HUGE client for them) and a thousand other mobile shopping and deal providers (including Facebook) certainly points to a larger opportunity. And of course as we look at other markets, particularly Asia where mobile grocery shopping is a rapidly growing model or Africa where mobile commerce is creating whole new currency models, these trends are even more established.

  20. @lenny – That’s pretty interesting. As to how it relates to CPG, one thing is for sure, the days of shifting discounts from one grocer to another are no longer as beneficial to the grocer/discount store (or other CPG provider), especially since they are often within walking distance of one another.

    What seems important here is the technology incorporation. I think it highlights the decision patterns and in particular that consumers decide what they want before they shop using interactive media and are agnostic for the most part about where they purchase. They look for the best deal. The item becomes a commodity. It also demonstrates how tactile humans are in that they actually want to see before they buy.

    With smaller purchases, obviously less of that goes on but secondary shoppers are likely cherry picking and deciding whether the savings are worth a second trip – so I think the changes might be more about what’s not happening than what happens in the store. Primary shoppers will come but they are now more aware of competitors as well, so I would look strongly at changes in high volume shoppers, even if they are small. That’s often the problem with syndicated surveys, they do a good job with what’s asked but not necessarily with the context. There’s a big difference between “Do I use my phone to aid my shop in the grocery?” and “Do I use a phone to aid/plan my grocery shopping?”

    I would say it makes a strong case for 3D ads and live streams. If I were a grocer I would have live feeds of my fresh product online and have the ability to order and pick-up prepaid at a certain time. As a CPG provider, I would be thinking about adjusting my packaging to accommodate my buyers. If you use volume data to see consumption by, say family type, and then use digital media to promote the packaging you create demand. Mickey D’s does a great job with the sauces- there is always just enough for whatever size you order – so it can be done – I might also think about store only coupons that only appear at the point of sale ???

  21. @steve I understand your point about the lack of behavior change, despite these new realities. I think the behavior change is inevitable as these newer, agile (and accessible) touch points become avenues for reinforcement or weakening of system 1 conditioning.
    It is a huge opportunity for MR to become more influential in c-suite discussions. Thoughts?

    @ellen if you were to believe choices we make are (mostly) automatic, trackers and other questionnaires would not be riddled with rational & thought engaging questions.

    @lenny I agree it will be myopic to disregard these new media behaviors, but it would be great to have an objective perspective, without competing reports having to argue their data/methodology, etc.

  22. @correlationist – I don’t think choices are automatic but they are mission driven and I do believe they are planned, by necessity. Most people answer in a best or worst case scenario so the delta often averages out when the question involves intent or action but that doesn’t take into account hard parameters (finance, health, etc.) which people often minimize in thought exercises. When they plan, they do consider those factors. In other words, their actions are often far more rational (within their context) than the answers related to intent and thus the irrationality factor is significant. Take some focus group participants or even some quant respondents on a Shop a Long if you doubt the logic. 🙂

  23. I think the use of new technologies such as smart phones for reasons such as social-media interaction, gaming, information-seeking, or coupon-gathering have unraveled the “way of life” of the of smart-phone savvy user bunch particularly the attention-seekers. In social media, people are either sharing photos of experiences, different activities and even food and selfies-foto, articles, and you-tube videos. This behavior is a small peek at an ethnographic-point of view but also qualify as a form of advertising-technique. Sure you can get a bit of insight, but marketing researchers should find ways to quantify how much of this social-media interactions affect the buying behavior in the midst of awareness acquired from such media.
    On information-seeking and coupon gathering, you can also do your own behavioral search in your own groceries, department stores, and restaurants. How many do you see holding their cellphone scanning QR codes or truly seeking information (and not just texting or doing something else). You can also ask the cashiers how may use their cellphones to show coupons in a typical day. Based, on my own observations around commercials areas in Northern NJ, I seldom see people depending on their cellphones, but I see them having a cut-out coupons and for sure, the Town paper still include coupon inserts and pamphlets. There are a few college-looking ones (around 2 or 3) reading labels or scanning QR codes in store like Whole Foods, but not significant contribution as a whole.
    Also, look at the data on smart-phone-used; how many with unlimited or limited data, what kind of apps are downloaded and how much time being spend on that app. As of late, I think the smart-phone savvy individuals should still be segmented depending on usage, attitude, and behaviour.

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