Supermarket's plan to get you to spend more
IT HAS happened to the best of us - multiple times.
We head to the supermarket to buy bread and milk and come out blinking into the daylight with bread, milk, a can of Coke, two chocolate bars and packet of biscuits.
Called "impulse purchases", it's our multi-billion dollar weakness, and supermarket giant Woolworths has an aim to double down on our love for impromptu snacks and treats and lever more cash from our wallets in the process.
Some industry analysts say impulse purchases are on the wane as savvy shoppers increasingly resist the urge to swerve from their shopping lists.
But a retail watcher has said it could be a "smart move" by Woolies to differentiate itself in a crowded marketplace and grow market share all in one move.
Australia's largest supermarket has zeroed in on impulse buying as a growth area.
Impulse buys are those products we don't set out to purchase but are seduced by a sale price, special occasion or because they are strategically placed in store, such as at the checkout. Research suggests up to two thirds of shoppers pick up something they never intended to.
In documents seen by The Australian, Woolworths has challenged its suppliers to come up with more products for celebrations, such as Mother's Day, and adult-orientated snacks.
"Adults don't want to feel guilty about what they eat," said the Woolworths presentation. "But they don't want what kids want."
More fancy biscuits were called for while it was pointed out bottled waters were one of the highest growth impulse categories.
Pippa Kulmar, from retail consultancy Retail Oasis, said it was a clever focus for Woolworths given competition in the supermarket sector was so tight.
"Coles and Woolworths are looking for ways to grow. They already price match, they can try and attract more foot traffic but they already have a huge amount of that, so it's about growing the basket. A way of doing that, without raising prices, is through more impulse purchases."
Putting a dollar figure on the impulse market is no easy task, given soft drinks can be sold in grab and go cans at fridges near the checkout or large two litre bottles designed for home consumption in the aisles.
But taken together, the Australian market for confectionary, snacks, chips, soft drinks and bottle water amounts to around $16bn in revenue, according to figures from industry analysts IBISWorld.
Woolworths said it was looking to "build an even better impulse offer across our store" in the next 12 months. But it played down the significance of the documents and said they were simply a call to suppliers to ensure the changing demands of shoppers were being met.
The chain said check-outs only accounted for a small amount of impulse purchases.
Nonetheless, check-outs are familiar areas where large amounts of snacks and drinks are snaffled into baskets and trolleys - often by pestering kids.
Mr Kulmar said if Woolies' plan did eventually led to grown-up snacks like posh chips and nuts being given precedence over chocolate bars, it could be a big win for the supermarket.
"A move into adult snacking is a clever way to move away from kids' snacks and chocolate. It's basically them being self-aware of what's going on with their customers and removing that guilt adults get of kids begging adult for treats."
Woolworths has already introduced free fruit at the front of stores for kids.
ADULT SNACKING HEAVEN
Ms Kulmar cited the strategy of a successful American retailer Whole Foods Market, now part of Amazon.
"If you look at Whole Foods, it's basically like adult snacking heaven. It's a huge growth area," she said.
Not all retail experts are so sure and have said Australians are becoming wary of absent-mindedly plonking products in their trolleys.
Research earlier this year from marketing company Salmat stated "impulse buying is dying" as shoppers kept to their budgets and home-written lists. The firm said 36 per cent of consumers said they rarely or never succumbed to impulse buys.
Professor Gary Mortimer of QUT Business School said the findings showed retailers were out of step with their customers.
"Marketers and retailers who perceive consumers as impulsive purchasers who buy more than they plan should realise that, in reality, Australian shoppers are savvy and undertake extensive research prior to purchase," Prof Mortimer said.
"For retailers to win customers and stay competitive they will need to develop stronger engagement strategies and more innovative ways to cultivate both behavioural and attitudinal loyalty if they are going to loosen an Aussie shoppers' purse strings."
GRAZING PUSHING IMPULSE BUYS
But Ms Kulmar said impulse purchases were here to stay. Moreover, a move away from the classic three square meals a day meant shoppers didn't always have a clear idea of what they wanted to buy before they entered the supermarket. They were open to buying on a whim.
"Anecdotally there is a shift to less formal meals - to morning and afternoon tea, cheese and biccies with friends. It's less about a planned dinner and more about grazing throughout the day - and that increases foot traffic."
Ms Kulmar said the other area Woolies was looking to expand - foods based around events - was shrewd. Annual occasions, such as Mother's Day, Valentine's Day, were "commercial constructs," but customers didn't seem to mind throwing some celebratory chocolates in with their other items.
Some of Woolies' newest stores, such as its Metro format in Sydney and Melbourne, have less of an emphasis on the weekly shop and more on ready meals and ingredients you can pick up there and for dinner that night. It's this unplanned, impulsive habit that Coles is looking to ape as it opens the first of its smaller format stores in Melbourne later this year.
Woolworths wouldn't confirm to news.com.au if the impulse buying strategy would lead to changes at the checkout. The company said the presentation was a joint plan with suppliers to deliver the range and experiences customers wanted.
"We recently met with our suppliers to talk about the ways we can build an even better impulse offer across our store for our shared customers over the next 12 months," a spokesman said.
"We also want to create compelling in-store offers around the seasonal events that matter most to our customers, whether they be Mother's Day, Father's Day or Christmas, and execute well in these periods.
"We know it's important to keep working hard to meet customers changing needs, particularly as they look for an increasingly convenient shopping experience that fits in with their busy lives."