Protecting loyalty with pickup substitution analysis

Josh Kassman
By: Josh Kassman, 84.51° Senior Data Scientist

As online grocery sales continue to climb post-pandemic, lingering supply issues are presenting shoppers with a new test to their brand loyalty: the out-of-stock substitution. While many consumers are open to receiving substitutions in their orders when their first choice is out of stock, these swaps expose brands to the risk of the pickup substitutes driving shoppers to competitive brands.

To combat that threat, brands are taking a closer look at what is being substituted in when their products are not available, and the post-sale shopper behaviors that follow. Innovative solutions like Pickup Substitution Impact Analysis enable CPGs and retailers to see what’s happening in the store and how consumers respond afterward. This helps ensure customers get what they need while helping brands maintain existing relationships and cultivate new ones.

Shifts in brand loyalty

Substitutions are one of many factors causing shifts in brand loyalty today. 84.51°’s latest research on shoppers’ changing brand loyalty attitudes shows price, trust, value and selection are all important considerations when making purchase decisions.

Our research also found that to a majority of shoppers, brand loyalty means buying a brand “most often” while being open to purchasing other brands. This sentiment means brands cannot be complacent and must continuously work to earn shopper dedication — especially as it relates to out-of-stock scenarios and pickup and delivery.

Shedding light on subs

The Pickup Substitution Impact Analysis tool provides brands with insights about what happens in the store when substitutions are made during online order fulfillment. When their product is not available, it identifies what shoppers and store pickers substitute in its place. On the flip side, it also tracks what their item is subbed in for when their product is being used as a substitute.

The solution analyzes substitution events down to the specific product pair. If a product is out of stock, it identifies the top five products that are substituted instead. And because shoppers tend to have patterns of what they select, those top five products typically cover more than 90% of substitutes.

It also analyzes long-term behavior after a substitution happens, by looking at a customizable period of time after a substitution is made and identifying what shoppers did afterward. The tool can look at every single basket that household purchased over that defined period and see whether they bought the original item they wanted, the substitute, both or neither.

Prioritizing products

These actionable insights help brands identify opportunities to strengthen customer relationships by ensuring their products are in stock and in the consideration set. For example, if a brand offers two similar items and one of them tends to be out of stock more than the other, they can see if customers are buying their other one. If not, they can activate marketing strategies to change that behavior and increase acceptance rates.

Because Pickup Substitution Impact Analysis reveals the acceptance rate for a given substitution, brands can also identify what they consider to be good substitutions and then prioritize what's on-shelf. If they find their product is being used often as a substitute for either their competitors’ or their own items, they can focus efforts on ensuring it stays in stock.

When brands discover their products are being used as substitutes, that’s also a potential activation trigger, because they now have a group of households that received their item when they didn't select their specific brand. That new exposure is an opportunity for brands to identify those households and run campaigns to reach that group to keep them aware of their products and try to encourage them to be loyal to their brand.

Similarly, if a brand notices its items are getting subbed out often in specific households, it can be a good starting point to identify which products to focus their advertising efforts on. If people continually buy a product that has been substituted in, instead of the item they originally wanted, that’s an opportunity for the original brand to remind those customers of the product features they valued and reverse that lapsed purchasing behavior.

Satisfied shoppers

If substitutions are putting product loyalty at risk, Pickup Substitution Impact Analysis helps ensure the right products are available, to be found or used as a substitute if necessary. No matter which side of a substitution they’re on, when brands understand what items are in stock, what items should be in stock and what items customers really want, they can ensure the right products are on the shelves so shoppers are able to find what they want.

Uncover more insights about brand loyalty today

As brand loyalty continues to evolve, it’s important for brands to understand the patterns that are emerging to create exceptional shopper experiences. We can help with that. Let’s connect

Josh Kassman
Josh Kassman, 84.51° Senior Data Scientist
Josh Kassman is a data scientist on the 84.51° Commercial Insights and Loyalty team working on developing and enhancing our suite of commercial solutions. His work focuses on process automation, performance tuning, an...

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