Lithuanian shoppers are bargain hunters, thrifty, seeking benefits and completely disloyal to store chains or brands.
These insights were revealed at the Baltic Retail Forum by BALTMI Baltics Market Insights business development head Artūras Urbonavičius.
He outlined how Lithuanian shoppers are unique, why a third of the clothes we purchase are used and why we are se keen to hunt bargains. This occurs not from high living standards, instead the effect of the two Lithuanias is revealed through observation of people’s consumption.
“They hunt bargains and this hunt is unique. They are thrifty, seeking benefits or low prices. This is also part of the Lithuania which is trying to survive called impoverished Lithuania,” he says.
Crazy for bargains
Based on consumer monitoring research from BALTMI, A. Urbonavičius revealed that Lithuanians are particularly disloyal to store chains.
“They are completely disloyal. A few years ago I quipped that how can we expect loyalty when 50% of couples which gave their vows before God end up divorcing. So how can they then be loyal to cheese or butter?” he joked.
Lithuanians are equally disloyal to market brands. “Well, I have no such love to market brands as to my close relatives. Better offer me a lower price, interest me, give me a taster and I’ll come to you with arms wide open,” the expert detailed the typical shopper.
At the same time Lithuanians particularly like bargains and are particularly loyal to them. A. Urbonavičius points out that they can wait for 30-40% discounts for unspooling goods for a very long time.
Among such products we find shampoo, coffee, cheese, juice and soft drinks.
When analysing the research data one must admit that Lithuanians are particularly sensitive to prices, which is why retail chains compete in discounts.
A. Urbonavičius says that particular aggression in price competition was unleashed after the 2008 crisis when retail chains struggled to generate revenue flows.
“One chain advertises several product discounts very aggressively, but then go to another retail chain – you’ll find the same products for the same prices, if not better. The chains are mimicking one another’s bargains and the shoppers are also no fools – they exploit it cunningly,” he says.
Around 51% of our shopping is comprised of bargain goods.
Furthermore there are so many bargains that even if you do not intentionally seek it, they will still inevitably appear in your shopping.
Nevertheless the fervent pursuit of bargain prices shows that life is not all good and our average wages are particularly low.
“Wearing costumes and arriving at a luxurious building in our fancy cars in Vilnius we think that all of Lithuania is like this. Certainly not. There is a second and even third Lithuania.
A part of the shoppers are in poverty, these are our countrymen, who merely fulfil their basic needs, they do not care about the composition of the product, they only buy what is cheapest and are only loyal to low prices. These people are always in pursuit of the cheapest products,” he says.
A. Urbonavičius revealed that this is clear in not only the grocery market.
“There is scandalous data, you will see these numbers first, how clothing retail looks. There are brand clothing stores such as Apranga, Reserved for youth, Mexx and such and there are small clothing stores, markets under roofs, as I call it, where individual companies sell only slightly better goods than in outdoor markets.
“It is very interesting that Maxima, Norfa and Rimi also sell clothing and occupy a fairly large market share when used clothing has only 7-8% market share. But if we look based on units sold, I can tell you that a third of clothes bought in Lithuania are second-hand.
And here we are once more talking about the impoverished Lithuania, though of course we cannot say that only the poor buy at second-hand clothing stores, but trust me, they would gladly buy new clothing, not used,” he said.
Lithuanians buy clothing at an average of once per month, spending 18.7 euro per purchase.
Seeking healthier produce
A. Urbonavičius also revealed that Lithuanians are increasingly seeking what they see as healthier products.
“I recall I spoke with the head of one of the largest retail chains and he tells me “You oversold healthy for us, we set up shelves with healthy products, brought in all sorts of eco and bio goods, but no-one is buying anything from them.
But I am talking about the Lithuanian perception of health, how our grandparents say that the best vegetable is ham,” he quips, “Lithuanians think differently, that it is not what is marked bio that is healthy, but that when you go to your grandparents in the countryside you can buy ten, perhaps not very clean, eggs, but at least the chickens are roaming outside there.”
Lithuanians are particularly demanding regarding freshness and in recent years a trend has been observed that shoppers are migrating from one category of goods to another.
“For example comparing Q1 2017 and Q2 2016, far less lemonade was purchased. Where did they migrate? The purchase of juice rose. Some think this is healthier. The sales of bottled water are also on the rise and this is an undeniable sign of healthiness,” he says.
Furthermore Lithuanians continue to attend outdoor markets where they potentially seek fresher, more natural assortments.
Consumer behaviour research has revealed that outdoor markets are visited on average every third week and shoppers spend an average of 10.5 euro per visit.
The Lidl phenomenon
A. Urbonavičius also discussed the Lidl phenomenon because this retail chain, according to him, has never had such a successful market entry story in any European country.
“Many calculations and much modelling was done, how much market share Lidl will occupy. We all thought, even I said and have to apologise for that Lidl will take the clients most sensitive to prices from the Norfa and Aibė chains. This is not what happened,” he said.
It turns out that this retail chain was chosen by Rimi, Iki and also Norfa shoppers, but mostly by those of Maxima.
A. Urbonavičius explained that this happened because “Based on shopper profiles, family sociographic composition, Lidl shoppers are the most akin to Maxima shoppers, the statistic, and beautiful Lithuanian family of mommy, daddy and 2-3 children. A young family often visits the store, buys large amounts, they care about quality and price.”
Nevertheless he predicts that the fascination with Lidl will gradually decline and even now shoppers are not loyal to this retail chain.
“We never expected that Lidl would become the place where people would go intentionally, that it would become a destination. It would appear that people go there for basic products and go elsewhere for everything else. Lidl shoppers are not all that crazy or loyal for just Lidl, they spend 16% of their allocated funding in Lidl and then go elsewhere, usually to Maxima, sometimes also to Rimi, Norfa and Iki,” he explained.