Insight Instore’s landmark study busts the 70% rule!

In an earlier blog, we wrote about how we were questioning the rule that ’ 70% of purchase decisions are made in-store’, in the context of Traditional Retail (Kirana stores) in India.

The results of this landmark study are out and they throw up a few surprises for sure!

To start with, this study at traditional stores in India indicates that most shoppers here believe they do not make impulse purchases. Only 5% of the shoppers who had made impulse purchases on that day (self reported and validated by our observation) actually say that they indulged in impulse purchases in general. Is this denial? Is it because we have a culture of relative frugality as compared to others?

We don’t think so. In our view, shopper behaviour is not understood only by asking the shoppers what they think. Human psychology studies show that we humans are notorious for thinking one thing but saying another. Ethnographic research proves that humans in the shopper mode are no different. A case in point is that shoppers have been found to say they visited a certain part of the store (in larger retail formats) when observation of the same shopper has shown that they did not visit that section or sometimes that such a section did not even exist!

The report goes on to explore and interpret if this could be the case at kiranas and also analyses the impact of the insight on the incidence of unplanned buying.

When Paco Underhill also said “Fully 60 to 70% of purchase decisions are unplanned, grocery industry studies have shown us” in his popular book ‘Why we buy: The Science of Shopping’, he was definitely not referring to the Indian shopper at traditional retail.

In-store advertising evangelists have been quick to refer to this in their eagerness to grow their business and a lot of money has probably found its way into in-store advertising because of this one often misinterpreted statement alone. We are not saying this is totally unfounded.

We are saying that the actual incidence of unplanned buying varies depending on a host of factors including the country, the retail format, factors like the age, income and buying habits of the shopper and including category variances. It is also impacted by design elements (and this is where the aspect of in-store advertising really kicks in). And finally, the execution challenges in a market like India cannot be ignored either – they can make or break the buying decision at the point of purchase.

So we find that 70% of all purchase decisions are NOT made at the traditional retail store in India

The truth is in fact far from this. We then go on to analyze all the other shopper behaviours that emerged during our study and explore their contribution to the level of unplanned buying that is actually seen.

For example, convenience is really at the core of kirana shopping. For most of the traditional retail shoppers, it turns out to be a pretty quick trip to the store. There is a strong pre planned mindset that dominates these shoppers and it clearly has a strong bearing on the time spent shopping as well as the basket size. Finally, it impacts the incidence of unplanned purchase as well. The incidence of unplanned buying at traditional retail in India is therefore not exactly what has been widely believed and propagated all these years.

While we find that convenience is key for the shopper at traditional retail, the aspects that make up the bundle of convenience make for interesting insight as they correlate with the incidence of unplanned buying.

Not only on a lighter vein but also as serious study, gender differences in shopping have for long, been the subject of many discussions and studies. We know that there are some vary basic and stark differences in the shopping behaviour of men and women. Our study brings out the most important dimensions that these differences take on at traditional retail in India.

In fact, there are many examples of retail activities that are conceived in the conference room with little understanding of these on the ground shopper behaviour & retail format related intricacies. Most of these are driven by beliefs that are not always based on researched realities. We say that there is a better way of planning and executing an effective shopper marketing strategy.

A lot has to be understood in developing a strategy that seeks to impact the buying process. We believe that there cannot be a standard formula for Shopper Marketing at retail and that these insights need to be used effectively by brands seeking to go the extra length. More than just insight, Successful Shopper Marketing at retail is really all about converting shopper insight into actionable insights to deliver the right marketing mix of product, price and promotion (communication) in the right place (environment).

The sheer diversity of the nation and its multi lingual cross cultural population spread across a large geography also means that a strategy that holds good for the goose may well not be good for the gander. There is also a huge wave waiting to happen at rural retail and if shopper behaviour in urban retail in itself not understood well enough, venturing into rural retail without proper insights into shopper behaviour will be like driving a car blindfolded.

To that extent, we think the study has achieved two important objectives. One, it allows us to share a learning platform with those who wish to further their shopper behaviour insights. Two, it has allowed us to soak in a deep understanding of the nuances of traditional retail, in turn giving us great insight in the work we do for brands in this format.

The report contains actual findings and details from our study and is useful for brands, retailers, agencies, designers and any other enthusiast of shopper behaviour who seek insights into this relatively unexplored field.

Gopi Krishnaswamy

Gopi Krishnaswamy is the CEO of Insight Instore

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