For years, retailers lived on price perception strategies, to control their margins. Grocery market campaigns were aiming to create price perceptions on consumers.
The most powerful brands and retailers could control their margins and the loyalty of their customers this way.
Times have changed and consumer habits have changed dramatically. New generations, now in control of most of the global spending, rely more on self-research and peers and friend’s opinions, rather than on corporate marketing. The context has evolved from ‘retailer selling’ to ‘consumer buying’.
Today, consumers search for the information they need to make decisions. Supported by technology and their mobiles, they use the internet for product reviews or for word-of-mouth recommendations from friends and family.
Marketers moved from ‘pushing’ messages to ‘influence’ consumers via social media. Price opacity is giving way to price transparency, and as more consumers are informed and knowledgeable, the more retailers have to move to promotional activities to attract consumers. In groceries, the promotional activity has always been high, but with the growth of the online it escalated.
Pandemic times are only reinforcing this trend. With less visits to the store to prevent physical contact and comply with mobility restrictions, consumers rely even further on their mobiles to make their buying decisions.
The pandemic as also producing other changed habits on groceries buying. A flight to private label has occurred (as it usually happens during crisis periods). Home eating has increased due to stay-at-home restrictions, baskets are bigger due to less visits, and spending is targeted on essentials. Consumers have tried changes in brands, stores and channel (online vs store), at first, due to the frequent out-of-stocks in the early days of the crisis and many of these changes will create new habits.
With the uncertainty of the situation, more consumers will become more cautious with their spending and will focus on value and affordability. Grocery spend (one of the largest bills of families) will be impacted.
Grocery retailers, on their side, will also adapt to the new normal. The shape and wide range of competitive responses is still difficult to predict, but they will definitely put an increased attention to value and affordability.
We expect to see a rise of cautious consumers using tools and technology to help them with savings.
At the Market Radar we’ve been helping families with the technology and the knowledge to help them save thousands of euros in groceries. Our studies reveal that cautious buying in groceries leads to bills reductions of 25-30%.
If you are not using it yet, we encourage you to learn about our method here, and to download the Market Radar here
Whether you already make some savings or willing to learn how to do it, the Market Radar is a system for getting more traction. And it is for free. It is focused on grocery spending, one of the largest family spends, but lessons learned here, are applicable to many other purchases you or your family make.
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