Despite signs of an economic recovery, shoppers remain cautious and frugal, relying heavily on value to decide which channels to shop, according to SymphonyIRI's "2012 CPG Year in Review: Finding the New Normal."
Rather than shopping far and wide, though, shoppers are reducing the number of channels they visit and limiting their spending to channels that they perceive as offering them the best value. The number of consumers who shop fewer than five channels is slowly, but steadily, increasing.
Millennial consumers, who have been particularly hard hit by the economic climate, are expected to reinforce this trend. According to SymphonyIRI's MarketPulse report, about 33 percent are struggling to afford weekly groceries.
At 50 million strong, millennials are becoming the new baby boomers, and they are forming habits and loyalties now that will likely last throughout their lifetimes. Savvy manufacturers and retailers will invest to understand what makes these consumers "tick" and develop marketing programs based on this knowledge. Only then will they earn the long-lasting loyalty of this sizable consumer wave.
New media is becoming traditional media for this group, and the number of shoppers using the Internet to facilitate the shopping process continues to grow. As the first "digital native" generation, millennials embrace technology not only to seek information, but also to share their preferences and experiences.
Manufacturers and retailers should expect the influence of digital media on shopping behavior to get stronger and deeper in the decades to come, for its momentum is not just confined to millennial shoppers. Rather, consumers across age and income segments are experimenting with new media at various levels today. As accessibility and comfort increases, so will the power of these marketing tools.
"Advancing technology, evolving demography and a transforming economy are coming together to catalyze an industry revolution like none before," says John McIndoe, senior vice president of marketing, SymphonyIRI Group. "An intimate understanding of all of these market forces and how they impact a marketer's most important shoppers is a required foundation for building a bridge of near constant and real-time communication with these shoppers that will drive purchase behavior and solidify long-term shopper loyalty."
Despite recent improvements in the economy, consumers remain unsure about the future and continue to pursue value intensely. Many are reducing the number of channels they shop and limiting their spending to channels that they perceive as offering the greatest value.
Though the frequency of shopping trips has slowed during the past several years, visits to value-oriented channels increased during 2012. The grocery channel still commands the greatest share of shopping trips, but trips to club, dollar and supercenter channels are increasing.
The Internet is already a key influencer of shopper behavior, particularly among the nation's youngest shoppers. A vast majority of shoppers are at least experimenting with some type of online shopping, and more than half of young adults are downloading coupons from third-party and retailer websites.
44% of consumers choose the stores they shop specifically because they offer the lowest prices on needed items.
TIP: Understand that value does not necessarily equal cheap. Value is perceived differently across consumer segments, channels and CPG categories. Invest to understand how your most important shoppers perceive value and deliver against that concept.
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