Don’t shortchange the in-store experience

By April 20, 2017 Marketing 6 Comments

The consumer path to purchase is traditionally depicted by a purchase funnel, a model beginning with brand “Awareness” and (hopefully) ending with a “Conversion” or purchase transaction. Businesses need to move shoppers through this funnel to fuel growth. A company can choose to focus on the ratio of each move through the funnel (i.e. get more people from “Awareness” to “Consideration”) or focus on a specific area of the funnel, assuming your ratio of movement through will support your business needs (i.e. get more “Awareness”, and the rest will follow).

Developed by E. St. Elmo Lewis in 1898, the model is seldom applied in its original format because of the advent of new media outlets over the last century. For many consumer goods, a shopper’s journey does follow the stages of the traditional funnel, provided they shop in a dedicated brand store/site.

Rick Wood, ArchPoint Partner & Executive Director Canada, shares his experience from a study conducted during his time at VF Corporation: “If a shopper chose to visit one of our brand’s stores, the buying decision emulated the funnel perfectly. If, however, they chose to make their purchase at a multi-brand store (for example Dick’s Sporting Goods, REI, Macy’s or a multi-brand website), a second funnel effectively opened as soon as they walked through the door.”

“In our research, at times we found shoppers going in wanting our product, but for a variety of reasons leaving with another brand. We wanted to better understand the reasons why this occurred. Our goal was to make sure if they came in for one of our products, they did not leave with a product from a competitor.”

This phenomenon was one that Wood and his team at VF studied in great detail. It turns out that a shopper’s intent to purchase a specific item is influenced in several ways once they cross a store’s threshold.

The in-store purchase funnel
Through extensive shopper studies at VF, Wood learned that at the point when a shopper considers a product choice to the point when they make a purchase, they are faced with a new set of considerations which can alter their original purchase intent. These considerations make up an “in-store purchase funnel” and are critical in the path to purchase.

For consumer goods, elements of this secondary purchase funnel can include placement on the shelf, stock levels, promotional collateral and in-store testing. Every shopper has had some variation of this experience: you see a commercial for a product you want to purchase, travel to the store, find the product you intended to purchase but leave with an alternative. What happened once you entered the secondary funnel in a store that prompted you to choose another brand?

The components that comprise a secondary funnel are relative to your product type and greatly vary by category. Do you have a handle on what makes up your secondary funnel? Are you maximizing its potential to drive customer’s purchase decisions?

The in-store advantage of small brands
Smaller businesses can have a dramatic effect on a shopper’s purchase decision by focusing on the in-store funnel. Big brands drive people into the store, but smaller brands can hijack the sale at the final moment. Consider the amount of marketing resources Tide laundry detergent spends on media advertising. A shopper may go to a store with the full intention of purchasing Tide, but instead chooses an alternative brand for two-thirds of the price on a promotion.

There’s a reason guerrilla marketing is used by small brands in stores – because it works. It’s an opportunity for businesses who cannot afford to go through the traditional purchase funnel, since building awareness usually requires a significant spend. A small brand can focus on the in-store funnel because it’s the closest point to the shopper where they actually touch the transaction.

You may be wondering why a brand shouldn’t focus solely on the in-store funnel, if efforts to drive awareness can be quashed by some small brand offering a price promotion. There are two reasons why both funnels must be considered: first, many consumers who walk in with intent to purchase do indeed act on that intent. The second reason is that the in-store funnel is rarely within a brand’s control. Despite your best efforts, it’s ultimately the store’s decision on how your brand is positioned in their location. What happens when a salesperson puts you on the top shelf or forgets to restock one of your products? In contrast, original marketing tactics can be controlled – you know exactly who is watching your ad, focus the messaging and even stipulate the placement of your advertisement in regard to your competitors.

This is why both are important. Businesses must take out-of-store efforts and the in-store experience into consideration to effectively plan marketing efforts and spend.

Digital’s effect on the purchase funnel
Another factor that upsets the traditional purchase funnel model is the availability of product choice through digital channels. Today’s consumers are far more informed, astute and have access to a seemingly endless breadth of product choice. They also have access to on-demand brand assessments in the form of product reviews and social media interactions. A consumer can be in a Nike brand store trying on running shoes, reading peer reviews on Amazon and asking their social media network if they should make the purchase simultaneously.

Despite the rise in online shopping with the maturation of the internet over the last few decades, 85% of consumers say they still prefer to shop in brick-and-mortar stores according to TimeTrade Research*. For shoppers entering a physical store location, the in-store funnel should be designed with the knowledge that consumers are armed with brand information gleaned from the internet and will use that information, in addition to in-store marketing cues, to ultimately make their purchase decision.

The act of a consumer making a purchase is the goal of every product marketer’s strategy, regardless of the product. By making sure your marketing efforts are balanced across traditional and in-store marketing tactics, you ensure marketing resources are realized to their full potential and provide the best experience for your customer.

Utilizing his 20 years of global consumer product experience, with expertise in brand management, consumer insights and product creation, Rick Wood helps ArchPoint clients develop long-term strategic product development roadmaps and marketing plans. Click here to contact Rick today.

*http://www.retailtouchpoints.com/topics/shopper-experience/85-of-consumers-prefer-to-shop-in-physical-stores

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