An assumption often made is that what works in one country, will also work in another country. Even though we see similar shopping behavioural patterns and motivations across countries worldwide, its translation to a specific country or market requires some delicacy. Every country has its history, system and beliefs that should be considered. Even for an everyday task such as doing grocery shopping, there are different crucial factors between countries. And so, this applies to Russia.
Russia is the biggest country in the world, taken from a geographical perspective. Though, with a low population density. Moscow, the economic heart of the country, draws the most attention, followed by other essential cities like St. Petersburg, Novosibirsk and Krasnodar.
In the past five years, we have been working closely together with different Russian food retailers on various challenges and have done extensive UX research with Russian consumers. Looking through the lens of consumers, we’ve learned what makes Russian food retail and loyalty different from other countries.
In this article, we deep dive into Russia's food retail and loyalty and share an anthropological view on how crucial factors in decision-making, motives and experiences of consumers are different compared to other countries.
Considering Russians' history, it is not a surprise that the Soviet period left a mark on the country. Thirty years after the fall of the Soviet Union, it’s still in the mind of Russian people. Especially among the people (now between 45–65 years old) who have experienced what it was like at a younger age and who have opposed socialism. Surprisingly, some of the elderly mentioned having fond memories of this period as they have seen circumstances getting worse after the fall. Nevertheless, it's a critical thread still running through many consumer experiences, motivations, and decision-making.
Let’s start with (technical) innovation. Not often, Russia is mentioned as being the technical innovator. However, Russia caught up in a relatively short period and does offer some top-notch technical services in food retail. An example is Samokat, with its 15-minutes food delivery service in Moscow and St. Petersburg.
It’s interesting to look into some of the challenges food retailers are facing in this field of ‘innovation’. Take, for example, e-commerce. Food retailers struggle most with boosting the fresh category because people want to be in control of having fresh products. This feeling of control can be related to Soviet times when they could not choose themselves as there was a high scarcity of commodities. Not only the freshness of fruits and vegetables makes e-commerce challenging, but Russian consumers also have a different view on expiry dates of perishables. A product with an expiry date of half a year will not be put in the basket by a Russian consumer as it should last for at least one year.
Also, in physical stores, there's this implication in consumer experiences. Supermarkets are finding ways to optimize the offline experience in stores, for example, by staffed food corners where consumers can get their cheese or meat freshly cut and prepared. Where for most consumers outside Russia, this service feels like a luxury, for some Russians this reminds them of the times when they could not pick it themselves and consequently they prefer self-service.
Price tags not corresponding with the original price is another crucial hurdle in consumer experiences. Again, this relates to the feeling of not being in control but also to the trustworthiness of the store. Every consumer will be frustrated or disappointed when they find out at the check-out that the price was not accurate, but in Russia, this feeling carries a different flavour than most other countries.
Another aspect that needs attention in the Russian market is nostalgia. Although nostalgia is an essential theme for food retailers worldwide, especially since COVID-19, we should carefully translate this concept to the Russian market. Nostalgia is related to memories that makes one feel safe and well. However, it shouldn’t remind them of memories during communism. This might sound obvious, but how do you know whether it does if you didn't ask people? When we were working on a new range of pans to offer in our loyalty programmes, we found during home visit-research that the look and features of a particular type of pan triggered this memory. During Soviet times, the less prosperous had no choice but used what was available. As for pans, often stainless-steel pans of the lowest quality.
Whereas in other countries, the same items recalled good memories, like the stew their mother used to prepare in similar pans. In Russia, it certainly was not the best option to offer. But as every country has its history, it’s important to understand its context.
One of the other things that became very clear since we’ve been working with Russian clients, is that the country is subject to some extremes. Extremes in the level of wealth. Extremes in consumer spend. Extremes in experiences. These extremes outline another challenge for Russian food retailers. And that is: the average Russian consumer doesn’t exist. This might sound obvious, but a lot of food retailers target their consumers based on average consumer profile(s). This can be effective in some countries but in the Russian market, it carries a higher risk. Although the rich population is slightly decreasing, the difference between the poor and the rich is still big. What will happen if you take the average? You will end somewhere in the middle which is not affordable for the less prosperous and not attractive for the prosperous. We found some remarkable examples of consumer experiences related to these extremes.
Let’s take assortment and price as an example. Two important drivers in decision-making for which store to go shopping. Whereas we often find in research that price attracts people, this cannot be taken for granted in Russia.
The same pattern related to extremes we found in loyalty reward programmes where people could collect stamps in a specific period which could be redeemed for a range of high-quality products. Based on spending a consumer receive stamps. The more someone spends, the more stamps and thus products can be redeemed.
What’s also remarkable for Russian shoppers is their frequency of visiting grocery stores. In general, 68% of Russian consumers visit a supermarket more than four times a week and 38% of the consumers visit a supermarket more than six times a week. The high frequency of doing grocery shopping does not automatically mean that the share of wallet at a certain retailer is high as well. A lot of consumers are loyal to more than one retailer as they prefer certain products or product categories from a specific retailer over another.
A consumer who visits three different stores every week is likely to be very loyal to these three. However, we discovered many Russian consumers don’t always feel truly rewarded by their retailers. Most loyalty reward programmes in Russia are similar and reward consumers based on their spend. Consumers don’t experience a lot of difference between these programmes. This is where the general ‘why-not’ attitude towards the current loyalty programmes arose. Consumers feel stupid if not collecting for stamps or participating in a cashback programme. But often they are not able to fully enjoy the perks or recognition of a loyalty reward programme as the mechanics don’t all seem to fit the shopping behaviour of the consumers*:
Retailers want their shoppers to be engaged, and that all starts by making consumers feel recognised and rewarding them accordingly. So, the main challenge we found in the Russian landscape of loyalty is not about deciding whether to focus on one or the other. It’s about understanding the experience of loyalty programmes from a consumer perspective and defining new mechanics that reward consumers on different styles of (loyal) shopping instead of exclusively spend.
If you wish to know more about your shoppers' behaviour, reach out to us via the link below! We're thrilled to help you discover more about your shoppers and learn what drives them.
*Even though older women are not the primary target audience of loyalty reward programmes, it is still essential to understand their experiences and motivations as they often do participate in programmes (for their children).
Traditional research in retail has always focused on demographical and transactional data to group people into fixed categories. It suggests that each individual and their motivations can be entirely defined in one particular way. The reality is more diverse and fluid: at different moments in life or even during the day, a consumer may behave as any or all of these personas. Read further to discover why you must focus on mindful moments!Go to article
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