Growth opportunities emerging as “new norm” presents itself in shopping behaviour
A new report from America has highlighted the key changes in shopping rituals that present both opportunities and threats to food and beverage firms.
The latest IRI Times & Trends Report, “Price Promotion & Merchandising: The Reinvention of CPG Marketing,”recommends a number of strategies for both manufacturers and retailers to capture the attention of the ever-demanding consumer.
“There is no question-consumers are looking for value,” IRI Consulting & Innovation President, Thom Blischok, commented. “But, consumer perception of value is morphing. Our report shows that the three key factors shoppers use in selecting a product is overall quality, price and trust-this is now the affordability equation in the minds of shoppers.”
“While brand name is still a consideration factor, it’s only important to about one-quarter of shoppers. CPG marketers cannot assume their brand name is enough to ensure shopper loyalty. CPG marketing strategies must continually evolve and address shifts in shopper behaviors and tout clear, persuasive messages based on the shopper’s changing definition of value.”
One of the areas where IRI sees these strategies playing out is merchandising. After falling for several years, merchandising activity is rebounding in the downturn economy across all channels and is playing an increasingly critical role in providing value to shoppers. Targeted programs based on sound consumer knowledge are a recipe for volume growth and for building loyalty with the shopper, according to the market researchers.
The most effective merchandising tactics will be those that address the fact that consumers are increasingly making shopping decisions at home, so the researchers expect to see an increase in feature ads in the near term, likely supported by in-store merchandising initiatives. Price-based promotional activity will increase as well, providing consumers with sought-after price relief.
IRI recommends that retailers and manufacturers take the following action steps to effectively serve consumers’ new shopping behaviours:
* Monitor price point, price sensitivities and price gaps on a frequent basis to ensure that pricing strategies remain in line with corporate and partner goals, as well as with the needs of key consumer segments.
* Leverage a granular understanding of consumer attitudes and behaviours to develop highly-targeted, store-specific merchandising strategies against high-potential categories and segments.
* Re-evaluate marketing and merchandising strategies through a lens of home-centric living and pre-planned shopping strategies.
* Drive purchase behaviour with solutions-based merchandising programs prominently featuring new, innovative CPG solutions; aggressively test pre-launch and track consumer response to enable mid-program modifications and builds.
“Consumer attitudes and behaviours are changing quickly,” Mr Blischok warned. “We are now entering the fourth stage of this economic sea change where shoppers are adapting to their trade offs, such as choosing private label over national brands and shopping in different stores where they believe they get more value for their dollars. CPG marketers must adapt to these new rituals and remain alert and ready for action.”