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70% of purchase decisions are made in store?

70% of purchase decisions are made in store. Right? In the first of our new “myth busting” series of articles Ian Addie, Golley Retail’s Head of Shopper Research (and infamous 5th Ghostbuster), investigates whether the statistic that is used so widely to justify investment in shopper marketing activity is all that it seems. 

For as long as I care to remember the adage that 70% of purchase decisions are made in-store has been used as a justification for investment in in-store shopper marketing activity.

In recent years there has been much conjecture over the 70% figure. So where does it come from?

The basis for the figure dates to 1965 when Point of Purchase Advertising International (POPAI) first developed the Instore Decision Rate to raise awareness and the profile of in-store marketing within the wider advertising mix.

Over the years since its inception POPAI has conducted several studies to measure the Instore Decision Rate in various markets, with results varying from around 66% to 75% of decisions having been made in-store. However, the 70% figure that as a profession we seem to have adopted comes from one such study conducted in 1995 in the US.

How was that 70% calculated?

The Instore Decision Rate is calculated from survey data of real shoppers; two surveys to be specific:

  1. Shoppers are approached as they enter a store and asked about their purchase intentions.
  2. On exit they are approached again and asked about what they bought and their answers are compared.

All purchases are classified into one of these 4 buckets:

Specifically planned
Purchases the shopper specifically identified by name in the pre-shopping interview and subsequently bought.

Generally planned
Purchases that were referred to generically (e.g. by category) in the pre-shopping interview and bought.

Substitute purchases
Purchases that were specifically identified by name in the pre-shopping interview, but the actual purchase reflected a substitute.

Unplanned purchase
Purchases that were not mentioned in the pre-shopping interview and consequently bought on impulse.

70% = the sum of all purchases that weren’t categorised as specifically planned. 7 in 10 purchases were influenced by the store.

Fair enough, I hear you say, all the other buckets of products show a degree of influence having been exerted by the in-store environment in order to bring about their selection, be that in terms of finalising the brand or variant selected or in some cases the category itself.

The Myth Busting Part

The impact of survey design on the 70%

Considering that this is a survey and is based upon the verbal reportage of the shoppers being interviewed we must be mindful that:

  • Unplanned purchasing may simply be a product of the shopper having omitted to mention a product in the pre-shop survey.
  • Generally planned purchasing figures may be impacted on the shopper’s language at the pre-shop interview e.g. referring to the product as ketchup, when in fact they always buy Heinz without fail.
  • Substitute purchasing may be a consequence of product availability as opposed to the gravitas of instore marketing.

The Impact of using a generic measure on the 70%

Any single figure describing the level of purchase decions being made in-store is also quite generic and doesn’t take into consideration the wider context of shopping behaviours and external influences.

One shopper may work with a list and be very brand loyal whilst another may be far more slap dash with less affiliation to one brand or another. In fact the same shopper, on different purchase occasions, may show varying behaviour owing to the context of their shopping trip. Even how close I am to my next pay cheque may influence how open I am to a deal on a brand I wouldn’t typically buy.

When we think about it in these terms the actual Instore Decision Rate may be considerably lower.

Furthermore, in some categories product selection may be far more open, whilst in others very blinkered. So whilst I might be quite happy to buy whatever loaf of bread floats my boat on the day, I may never deviate from the precise brand and variant of shampoo that I select.

As such whilst the 70% figure makes great headlines it cannot be used as a guideline as to how much opportunity is available to the shopper marketer of any given brand in any specific category in the store.

So why should I invest in shopper marketing?

All this taken into account, it may seem like I am creating an argument for divesting in in-store marketing activity. However that couldn’t be farther from the truth, just that as a shopper marketer you cannot rely upon an assumption that you have the opportunity to shift a potential 70% of purchasing towards your product.

Shopper marketing activity can and does work , as is evident in observations real shopper behaviour in-store in A/B testing studies. However the magnitude of the shifts we observe tend to be considerably lower than 70%. This does not mean that it is not worth investing in shopper marketing. On the contrary, grocery retail is a volume business where a shift in purchasing behaviour of just 1% can have a huge impact on brand sales when multiplied across an entire retailer estate for several weeks. And with a relatively low investment level compared to other marketing activities such as ATL TV advertising, in-store marketing may well yield a good return on investment.

Achieving that return however requires that in-store activation is designed with the shopper in mind. Specialist shopper marketing agencies such as Golley Retail with a wealth of experience in activating shoppers across categories and store formats understand the shopper missions and mindsets that both prevail and offer opportunity in target categories and can be critical in unlocking sales.

Contact us if you’ve got a myth that you’d like debunked!