Follow the Crowd?

Posted by Oliver Koll on Jul 02, 2020

Crowding impacts shoppers differently. For some people a crowd adds to their experience while for others it spoils the trip. Retailers can reduce shoppers’ perception of crowding, for example, via their store layout or induce crowding via discounts or the structure of their aisles. But it is unclear how crowding influences instore choice and the composition of the shopping basket.

A recent study across seven retail chains in the Dutch grocery market investigates for 3,600 households and for more than 15,0000 shopping trips how crowding influences choice. After each shopping trip consumers had to rate their subjective perception of crowding in the store. The results show that

  • in packed store environments shoppers prefer hedonic products (e.g., chocolate, crisps) over utility products (e.g., kitchen cleaner). Crowded environments limit the cognitive capacity of consumers and they rely more on emotion which favours less healthy choices.
  • shopping baskets include relatively more brands than PLs if there are many other people around. Three reasons come to mind: (1) National brands offer greater hedonic value to shoppers compared to PLs. (2) Shoppers trust brands more in stressful contexts where decision-making processes are more automatic. (3) Finally, there could also be more pressure to signal status which the choice of brands can relieve.
  • the number of items and the total spending amount increase with higher levels of crowding (see figure).

Retailers who want to increase the choice of hedonic products and brands can work with design aspects to increase crowding perceptions (e.g., free flow layout, instore displays or lower ceiling height). It will be interesting to see how COVID-19 influences crowding and choice. As shoppers will more carefully seek distance from each other, stress from crowding could decline. Is social distancing a lever to enhance private label growth or will the stress have the same effect as crowding?

Source: Aydinli, A., Lamey, L., Millet, K., ter Braak, A., & Vuegen, M. (2020). How Do Customers Alter Their Basket Composition When They Perceive the Retail Store to Be Crowded? An Empirical Study. Journal of Retailing.