Behind the headlines of the slumping economy shoppers are being forced to make some hard choices every day. What these choices are, how they affect your business, and most importantly, what their choices will be if the economy were to worsen, are the subject of the recent Unilever Trip Management study.
The study reveals the different shopping tactics that different demographic groups employ to navigate this new economy. It tells you how shoppers are planning their shopping, what compromises shoppers are willing to make to stay within budget, and what could spur even more change in shopping behavior.
The bottom line is your shoppers are looking for the same retail experience that brought them to your stores in the past. With the information gathered from this report, creativity and determination, you can maintain and even strengthen your bond with shoppers in uncertain times.
To compensate for rising gas prices half of consumers (49%) are reducing their retail spend, 70% combine shopping trips and errands, and 39% percent stay home more, according to a recent Nielsen study.
“Quick trips” (typically the most profitable trips for grocers since this type of shop is used to save time over money) and “Intermediate Needs Trips” for the three demographic groups studied suggest that shoppers are carefully planning their shopping.
The three demographic groups studied were Low Income, Middle Income and Baby Boomers.
Lower Income shoppers are very smart shoppers. They do their research, prioritize, and make trade offs. They typically start their shopping around the kitchen table in a volume of coupons from newspapers, circulars, and direct mail offers. They show up at their store on or near payday, budgeted cash in one hand, circular in the other. They look for loyalty card discounts and stock up on essentials only if in-store deals make it possible. They focus more on private label value products.
Middle Income shoppers go through a similar though looser routine. They use coupons for higher priced items and meal planning is typically a diversion rather than a budget driven necessity. They have more wiggle room for the impulse purchases. They desire larger economy packs and will continue to purchase name brand products.
Baby Boomer shoppers are considered the been-there-done-that demographic who may collect a few coupons but are more likely to leave them at home. They’ll use a list, more to remind them than to constrain their spending. Gas prices haven’t completely dissuaded them from shopping around a bit for freshness and variety. They’re more likely to stock pile on quality sale items and their favorite name brands. Since most people in this group are empty nesters, decisions revolve around what they want not the kids.
Looking at category loyalty the study showed the top categories consumers will stop buying were Air Fresheners (17%), Beer/Wine (13%) and Soda (11%). The top 5 departments shoppers indicated they would reduce spending on were Deli, HBA, Household Cleaning and Paper Products, Beverages and Meat. These were very similar across all demographics.
Surprisingly, the study showed that even as they’re squeezed shoppers don’t want to give up on product quality and they’ll continue to search out trusted brands across the store. Areas where they would move to private label values were more relevant in Household Cleaners and Paper Supplies.
From the study Unilever provided 10 promotional strategies to connect to how shoppers are shopping:
* Circular tactics built around whole meals will resonate with the growing number of shoppers carefully budgeting and planning their meals
* Sales across multiple quality levels within a category help maintain your store appeal with both brand and loyalists and shoppers are more willing to trade down
* Increase sampling of product across the store can encourage shoppers – especially low income – to make a purchase they had not intended
* Shoppers are already skipping aisles and may do so even more – tempt them to shop all aisles-feature super-low prices on attractive items in every aisle
* With saving minded shoppers increasingly buying big or small, let them know about the different product sizes you offer… consider more value packs
* As shoppers of all types become more proactive in their planning, attract them with complementary product sales – buy a bagged salad, save on your favorite dressing
* Cross promote right at the shelf to stimulate sales in categories shoppers are ready to abandon in tough times – for example, coupons for cookies in the milk section
* With bulk buying for sharing on the rise, showcase “Friends and family” specials on your economy sizes
* Tag products that have a high wellness quotient – two/thirds of adults say health drives their food selection
* Position yourself as a complete one-stop shop for essential categories to draw shoppers cutting back on trips due to high gas prices