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Imagine this: I need to buy a birthday gift for my 7-year-old niece. I'm standing in the aisle of a prominent retailer trying to decide on just what to get for this gift-hungry little girl (she's an only child, but that's a whole other story). I know I want the gift to have a positive message and not be simply another toy that will get tossed aside after a few minutes of play. But, that's about it.
Now, if you ask most retail marketers they would say I'm part of the 70 percent of consumers who make purchasing decisions on-site, at the actual store. But, if you were affiliated with New York-based OgilvyAction, you'd quote their recent study that uncovered that I was part of only the 39.4 percent of shoppers who make their decisions in-store.
That's a 30 percent discrepancy between the quoted industry standard and OgilvyAction's study. The company also found that 10 percent of consumers change their minds while at the store (I originally thought I was going to get the niece an educational CD), and 29 percent make a purchase from a section they didn't intend to buy from. A whopping 20 percent will leave a product they originally intended to purchase on the shelf. Overall, the study revealed that 72.4 percent of consumers will make only one out of four purchase decisions in the store.
If you're a retailer, all of this number crunching can seem a little confusing. Who can you really believe? According to an article on Adage.com, the oft-quoted 70 percent stems from a 1995 study by New York-based Meyers Research Center.
Peter Hoyt, executive director of the In-Store Marketing Institute, had this to say: "That 70 percent figure we've all heard over the years always sounded a little high, and we all know it's a little high. Some think it's a lot high. I think what the Ogilvy study does effectively is help decompose [the data]. I think it's closer to what we can accept as statistics having some validity. ... But it's not that 70 percent of every shopping cart is made up of something people didn't [originally] intend to buy. That's just not real."
And I have to agree--70 percent is a lot of impulse buying, while 40 percent sounds like a far more probable and reasonable number. But, what does this new data really mean for retailers today? Surprisingly, not too much. The main focus still needs to be on what forms of advertising most affect consumer purchasing decisions.
Do in-store displays have a greater impact than, say, price (the study confirms that this is true)? Does a solid e-mail marketing campaign generate more purchases in-store, or does magazine advertising? With the rise of the Internet and the variety of advertising outlets available today, it's improbable that consumers would only be consistently influenced to buy via in-store efforts. But, retailers can keep an eagle eye on their marketing expenses to narrow down what tactics seem to have the best results. According to the Adage.com article, that's exactly what some major retailers are doing to get more clarity on their marketing strategies.
Using the OgilvyAction study as a guide, retailers can take heart that in-store product displays do make a difference. That's how I finally settled on a Leapfrog Learning Game System for my niece's birthday present.
Do you agree with the standard 70 percent or think that OgilvyAction is more on target with their recent findings that nearly 40 percent of consumers make purchasing decisions in-store? Leave your comments here!
--Heather Strang
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