Research on Consumer Behavior

[OzarkB]

Is anyone aware of a report (from a reputable source) about the affects of caffeine on shopping behavior? In particular, I'm looking for research that supports the notion that shoppers are more likely to spend time in a store - and thus purchase more - if they're sipping a latte while they shop. This, I presume, is why you see carts and kiosks in front of grocery stores, home improvement stores, malls, etc.

Thank you!

 

[javahill]

We supply coffee to a few kiosks outside big box home improvement stores as well as in supermarkets and a few thousand other resellers. The more sophisticated customers (big box stores, supermarkets and others) have come to realize they are in the real estate business. They increasingly think of their job as to maximize profit per square foot.

They don't necesarilly sell coffee so people shop more. The 2 primary motivations are to make rent money and to stay competitive. If they sell additional products, that would be gravy - but it certainly is not the primary motivation.

When I was in B-school 15 years ago, we did a case study with Mobil. They were wondering what to do with the real estate. Keep the 2 bay garages for light repairs, use the gargages for quick change oil to compete with Jiffy Lube or have convenience stores. A Senior VP from Mobil was in to help us with the case study. He said, "We realized that we are in 3 businesses: gas, gas and gas." What they did with the space had to maximize their gas sales. The On the Run concept followed - with coffee and other high demand products. There is a great Harvard Business Review by Kaplan and Norton about Mobil called - Having Trouble with Your Strategy - Then Map It. I think it was late 1990s or early in the 2000s. Recently, sales in the store exceeded sales at the pump. Coffee has played a big role, but it is only part of the overall strategy.

One of the things they say about convenience stores is, "When you own the morning, you own the day." Frequent short trips is what they are about. everything is aligned for simple transactions (think Speedpass, pay at the pump) and high quality branded products to drive frequency. Coffee is habit forming.

If you want to understand a reseller like a big box store, you have to think about the whole concept and how coffee fits. What is the Lowe's experience? How could coffee support it? If you can answer that, you have the answer to your question. It really is how coffee can help a customer go to market or just make more money on the real estate.