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Sunday, April 4, 2010

Why we shop where we do

Some time back I posted a simple little survey on my blog site that asked "Why do you shop, or otherwise do business where you do?"

Many thanks to the more than 50 of you who participated! At long last I figured out how to crunch the numbers in Excel and am finally posting the results.

As you may recall, the survey was broken into 4 broad product categories as follows:


Groceries - food items, beverages, detergents, paper products, etc.
Major Items - cars, major appliances, furniture, computer equipment, etc.
Financial Services - loans, deposits, credit cards, insurance, investments, etc.
Small Items - clothing, linens, cosmetics, small appliances, hardware, etc.

Here is what you collectively had to say about why you shop where you do:
















So what does all this tell us?

While I'll let you draw your own conclusions, I found it interesting that in every area but financial services product and selection is the major customer driver by a rather wide margin. I was encouraged by the fact that overall, customer service finished second, but surprised by how little it factored in our decisions related to where we shop for groceries, especially as this something we do so often.

I was also taken back by how rewards (loyalty cards and the like) would seem to have little or no impact on our shopping behaviour, which given how much the administration of such programs must add to the cost of goods sold, does cause one to wonder why bother?

Perhaps the most profound finding of all was just how much customer service factors in our decision as per where to buy financial products. This is something I'm not convinced most financial institutions fully appreciate. Go figure!

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5 comments:

  1. Jim, is it not possible that we are not a terribly good sample of the "general public"? I'd guess that most (if not all) of us, fall into the ABC1 demographic category, putting us towards the top of the income/earnings ladder.

    Maybe we have the luxury of choosing "Product/Selection" as our main determinent of shopping choice, whereas someone lower down the ladder, is far more likely to choose price.

    This of course, does not address why "service" is not rating as highly as you (we) might have hoped.

    One "theory" I might hold is that good service is what we expect, but bad service turns us away. So if you surveyed with a different approach, asking why we choose NOT to shop in a certain shop/store etc, I'd suspect the service might well feature more strongly.

    Just my two cents, my friend.

    Cheers, Mike

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  2. Mike,

    You raise two excellent points. First, I suspect those that read Wavemaker Blogs likely don't represent the average consumer. That said, perhaps they do represent a rather attractive market segment. Second I think your "theory" on how the question was asked may hold a fair bit of water. Maybe I should run another survey on why we choose not to shop at...

    As always, your very insightful comments are most appreciated.

    ReplyDelete
  3. Jim,
    Interesting findings. I am particularly interested in the reward program issue, specifically how little importance they appear to play in buying or shopping decisions. Visa and Mastercard recently implemented incremental charges to merchants who happen to accept a card which is attached to a reward program, ie BMO Airmiles, RBC points program etc. My cost, as a merchant, have increased by about 50% on these "premium" cards. If your survey is reflective of the shopping public, it appears that I am getting screwed by the Credit Card companies (what a surprise). My question to them is why should merchants be penalized by having to pay extra for a program that only benefits Visa/Mastercard? There is absolutely no benefit to the poor merchant accepting the card--just extra cost which will ultimately be passed on to the consumer. Talk about value added customer service.
    Cheers
    Brian

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  4. To Mike's first point, my bet is many of us so called high earners are actually more price conscious or value driven than others. It never ceases to amaze me what typically lower income people will spend on nonessential items.

    As per Brian's point, it would seem the only ones benefiting from rewards programs are the companies that run them. To use Brian's words, the merchants are getting screwed. Let’s not kid ourselves, over time this can only result in higher prices for the consumers.

    Personally, I'd rather pay less for everything at the till and reward myself my way rather than have the card companies dictate my travel plans or send me cash back. What's with that anyway? The card company charges the merchant, taking a rather nice cut for themselves then returns a lesser amount to the customer, but because the merchant has to cover his costs, he simply charges more for the items sold. So in the end the customer pays more and gets less! Rather than cash back, how be it nobody takes it away in the first place?

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  5. Thanks for sharing & "keep 'em coming!"

    Best regards,

    Al

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