Budget Bound or Promotion Junkie?
April 19 2002
UK households fall into one of six main types when it comes to retailers' promotions, with many termed 'Low Price Fixture Ferrets', 'Promotion Junkies' or 'Stock Pilers'. This is according to the findings of new retail consulting data released this week by ACNielsen.
Using recent data from the company's UK Homescan Panel, consultant Jolyon Roe has surmised that we can understand the effect of retailers' low pricing and promotional tactics on our everyday purchasing behaviour.
Roe's analysis shows that shoppers tend to fall into one of the following categories:
- Branded Low Price Seekers: Those who shop around the high street for the best price on brands.
- Budget Bound: Older couples who tend to be brand ambivalent. They prefer the everyday low prices of a small range of high street shops.
- Low Price Fixture Ferrets: Families who are store loyal, looking for best value in store. They tend to stay with a store whilst low prices are available.
- Promotion Junkies: Store and brand disloyal shoppers who enjoy promotions rather than needing them.
- Promotion Opportunists: Those who shop around for promotions and are likely to switch to a store that offers incentives to purchase.
- Stock Pilers: Those who are store loyal but are influenced by other factors in their store choice. They are unlikely to switch unless they find a suitable store with a better promo calendar.
Applying this new schema to the big food retailers, Roe has been able to come up with some interesting new slants on the supermarket's differing consumers. In the case of Tesco, for example, the main shoppers tend to be over-represented among the 'Low Price Fixture Ferrets'. These shoppers emerge as store loyal whilst looking for the best value possible. They stay with the store whilst low prices are available, typically choosing the cheapest items on display. Roe suggests that this profile is broadly consistent with Tesco's own product strategy of value lines, low pricing and promotions.
In contrast, Roe's work has found that, whilst Sainsbury's main shoppers are also store loyal, their choice is largely governed by factors other than price. They tend to be more promotionally promiscuous, switching brands should a better deal be on offer. However, they are also unlikely to switch stores unless there is a suitable store with better promo calendar. Unsurprisingly, Roe concludes that this profile is perfectly matched by Sainsbury's ongoing 'Hi-Lo' pricing strategy.
Turning to look at Asda, the research indicates that the store has focussed on discounting selected items on a permanent basis with other discounts following a more event-driven strategy. This would fit with a consumer profile strongly skewed towards the 'Promotion Junkies' - the core of Asda's regular shoppers. These consumers are characteristically both store and brand disloyal. Given this, low pricing alone usually proves motivationally ineffective. Roe concludes that this set of factors sits perfectly with the store's event-based marketing as crystallised in its Rollback strategy.
All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.
