Looking at my food cupboard, it has started to remind me of a cupboard my Grandmother kept in her spare bedroom. It was her stockroom where she kept a backup stock of long-life cans and packets. This, I hasten to add was many decades after rationing ended.
So how many of the current Coronavirus shoppers’ behaviour will have longer term impacts? Through our Shoppervista tracking we have identified five shopper trends that as well as impacting today could have longer term ramifications. What do these mean for you today and for your future plans?
- Declining financial confidence
Nothing like the drop in price of oil to demonstrate the huge global economic impact of COVID-19, last week saw the price of Brent crude dropped to a 21-year low. The restrictions put in place to manage the current situation have impacted many industries from restaurants, airlines and entertainment and although the government has financially supported many impacted, there are still high levels of uncertainty among shoppers and therefore a decreasing level of financial confidence.
This lack of confidence is likely to extend past the end of the current pandemic, as we are likely to enter a global recession. This could see the households affected change and widen to more of the population and different parts of society.
Manufacturers will need to keep close to their shoppers and ensure plans are sympathetic to changes in financial circumstances.
- More focused on saving money
During the period of stockpiling and poor product availability shoppers were focused on finding products; price, promotions and value for money were secondary. Once shoppers are confident in stock availability in store and at home value for money will become more important. Building on the current lack of financial confidence and predicted concerns a significant proportion of shoppers plan to increase their focus on saving money when grocery shopping in the year ahead.
During the pandemic we can expect shoppers to employ savvy shopping techniques, taking advantage of promotions to stock up on long life products, buying private label, using coupons and shopping the reduced sections. Coming out of the pandemic, with less restrictions we can expect shoppers to shop around more to save money and look at multi store shopping trips.
Supplier promotional plans will need to support savvy shopping, with increased couponing and single unit discounts rather than multi-buys. Brands cannot take their shoppers’ loyalty for granted and must be able to communicate a clear benefit for any price difference to private label alternatives.
- Top-up Shopping
With current government guidance on only conducting essential travel shoppers are refraining on making unnecessary shopping trips. Local convenience and independent stores are key for top-up shopping, and for the grocery needs of many. Although currently relevant for shoppers’ needs, stores will need to develop their offering to remain relevant as we come out of the lockdown. Manufacturers need to work with these retailers to manage the transition for the stores and help them develop a differentiated offering in the coming months.
With top-up shopping focused on convenience currently; suppliers will need to work closely with supermarkets and hypermarkets to focus on the needs of big shop missions but prepare to transition the offering to include top-up.
- Speed and ease of shop
The need for social distancing and staying safe, has driven the importance of shopping being quick and easy. The steps large stores have had to take to ensure social distancing has added complexity and duration to a shopping trip, driving many shoppers to local and convenience stores.
Large stores need to keep working on how they can manage the balance of social distancing and speed of shop. Once shoppers feel more comfortable in-store and social distancing measures are removed speed and ease of shop will continue to be important store drivers but back to pre-pandemic levels.
- The growth of online shopping
Online shopping has seen growth through increased penetration and larger basket sizes. However, the capacity for online shopping has not kept up with demand leading retailers to prioritise loyal and at-risk shoppers. With age being a key risk factor, many older shoppers are trying online shopping for the first time. Suppliers need to keep close to the changing demographics of online shoppers and ensure their offering is tailored to their needs.
Although coming out of Coronavirus (COVID 19), many shoppers will revert back to physical stores. For many the initial barrier of the first online shop would have been overcome and online will be part of their grocery shopping repertoire. If suppliers hadn’t given focus to ecommerce before, now is the time to ensure capabilities are in place to optimise this channel as it will be increasingly important.
Although it may feel as though the pandemic is changing fast and there is talk of the UK reducing lockdown, there is still a long time to go until normality is resumed for shoppers. It is likely such a large-scale event will have more than a short term impact, as rationing did with my Grandmother.
Initially, building business and category plans for the future will rely more on intuition and understanding the changing shoppers’ needs rather than historical performance data. While a lot of the future is speculation, we can be sure shopping will change; but by how much?
If you are looking for support in planning for the future, IGD Solutions team can help you build strong strategic business plans with the support of our experts via remote facilitation sessions.