5 Shopper Stats Arguing for Aggressive Retail Promotions
The COVID-19 pandemic wreaked havoc on grocery operations. So it’s entirely understandable that retailers and brands cut back on promotions in 2020. But with conditions continuing to settle and shoppers beginning to look expectantly toward the holidays, it’s time for trading partners to reassess their marketing strategies — because shopper sentiment points clearly to the need for a return to active and consistent promotion.
Our recent survey of grocery shoppers surfaced five key statistics that argue for retailers and brands to reinvigorate their promotions in order to re-engage and retain a shopper base that has developed even greater expectations of savings and service when it comes to their grocery shopping.
71% of shoppers are currently looking for ways to save money on grocery items.
That shoppers are actively looking for opportunities to save on their groceries is nothing new, but what is new is the increasing number of options they have to find those savings. The continued expansion of the limited assortment channel, the exponential growth of grocery e-commerce offerings and the proliferation of private label are combining to create an increasingly competitive marketplace.
While competing on price full-time is not an option for most traditional grocers and brands, projecting a positive price image through strategic, cadenced consumer and trade promotions is an effective, affordable defense that will attract, and keep, shoppers working to stretch their grocery budgets.
44% of shoppers may not return to their favorite brands after purchasing alternatives.
The panic buying and pantry stocking that led to widespread out-of-stocks early on in the pandemic may have passed but the effects linger. Having been exposed to other brands, many shoppers have not (yet) returned to past purchase habits while a significant proportion have become ambivalent regarding their brand choices.
Relying simply on restored product availability to win back lapsed shoppers is risky. Brands that invest now in pre-shop promotions — both traditional paper coupons and targeted digital promotions — will gain a significant competitive advantage over those that rely on pre-COVID loyalty.
While FSIs have their place in the promotion method mix, their declining popularity and shoppers’ growing preference for digital offers should move marketers to allocate budget resources accordingly. The ability to customize offer values and purchase requirements for digital promotions enables marketers to drive increased activation by targeting offers to shoppers based on their documented brand relationships.
50% of shoppers switched retailers due to conditions created by COVID-19.
What’s more, 46% of shoppers who switched say they plan to continue shopping at their new retailers. However, with the uncertainty that still pervades the marketplace, it would be unwise for retailers — on either side of the migration — to presume on the permanence of this newly professed retailer loyalty.
Keeping new shoppers, re-engaging those who have “strayed” and preventing further erosion of an established customer base will require more than hand sanitizer stations and employees in masks. Shoppers’ expectations of value demand that regular delivery of relevant and attractive offers remains an integral part of the marketing plan.
58% of shoppers are concerned about their personal finances in the near future.
Employment in the U.S. rose by 1.4 million in August, but there are still tens of millions of Americans out of work, and sectors across the business spectrum continue to struggle. With further assistance from the government uncertain, shoppers are looking to retailers and brands to support them, help them weather the crisis and feed their families.
Consumer and trade promotions that demonstrate this support and help economically stressed shoppers make ends meet will be critical to maintaining store traffic and protecting retailer and brand loyalty that suffered due to earlier supply chain issues.
36% of shoppers cite frequent sales and specials as central in choosing where to shop/
While safety has joined — and, in some cases, overtaken — convenience and cleanliness as a key determinant as to where consumers shop, value remains highly sought after and highly influential in attracting shoppers. This finding also highlights the need for traditional retailers and brands to be aggressive in their use of promotions - or risk losing shoppers and product sales to other sellers and brands.
Shoppers want to save. And they’re going to shop where they can save.
For all that has changed — including some remodeling of the value equation — shoppers still expect retailers and brands to help them maximize the purchasing power of their grocery dollars. Those trading partners that consistently meet this expectation through aggressive use of promotions will gain and hold a distinct competitive advantage. And it will be an increasingly valuable advantage as we move forward into a still uncertain future.
John Helmle is executive VP, president of fintech at Inmar Intelligence.