Shoppers are settling in, adapting to the weak economy and high gas prices. They are eating at home more, relying on a few favorite brands and supplementing with lower-cost private label brands they have discovered over the last few lean years. Shoppers continue to seek value and will move from store to store to locate the best deals.
Some 66% expect their incomes to remain the same with 79% saying they have to spend more at the grocery store because prices are up (average monthly grocery budgets are up 11%), according to a new study from Acosta Sales & Marketing.
The study also found:
* Shoppers with annual incomes of less than $45,000 and shoppers with annual incomes over $100,000 are making purchasing decisions based on similar factors, including price.
* 55% of shoppers bought more items on sale than last year
* 71% plan their trip before heading out to the store
* 88% of shoppers have taken advantage of buy-one, get-one offers even if the product is not on their shopping list
* 50% of shoppers cut coupons
* 84% of shoppers stick with what they have bought before. Only three out of 10 reported that they would continue to purchase store brands when their budgets increase.
An interesting trend that emerged found that shoppers want flexibility in promotions. For example, they would like to mix and match items attached to discount offers instead of having to purchase two set products. Shoppers also want to be rewarded with lifestyle choices for their loyalty, such as being rewarded for purchasing multiple products that provide a complete meal solution.
Based on the findings, the study offered the following recommendations to consumer-packaged goods companies and retailers to create sustainable demand.
1. Explore opportunities to create premium products and extreme value products to address the growing divide in income groups.
2. Understand which channel(s) produce results when and why. Develop customized marketing strategies accordingly.
3. Seek ways to offer more flexible and customizable promotions for shoppers. Collaborate with strategic brand partners to create co-branded shopper marketing promotions.
4. Infuse traditional marketing programs such as store circulars, shelf tags and P-O-P displays, with digital marketing elements. Also look for ways to use technology to improve and enrich the shopping experience.
5. Shoppers need meal solutions that are inexpensive, easy and provide options for different tastes and dietary requirements, even within the same family. Grab the attention of shoppers in the store since many shoppers are not pre-planning meals and need compelling messages to deviate from their usual purchases.
“Faced with an increasing competitive business environment, more of the same is just not good enough. To break the cycle, CPG companies and retailers must look beyond simple promotional tactics to create true sustainable demand. They need to redefine value as benefits over price, and cultivate demand with compelling product innovation, unique benefit claims and superior product experiences,” the study said.
Methodology: The survey was fielded in February 2012 with a random sample of 1,098 shoppers via Acosta's proprietary ShopperF1rst online survey.