Market Research

Omnichannel Shoppers Are Big Spenders On and Offline

A report by Grocery Doppio has found not only are omnichannel buyers more loyal than digital-only buyers but they also spend more.

The State of the Industry: The Omnichannel Grocery Shopper report was a study conducted jointly by Incisiv and FMI, in partnership with Wynshop to examine trends among omnichannel grocery shoppers.

The report contains interesting insights, including a growing use and comfort with a hybrid approach amongst American grocery shoppers, with digital experiences playing an ever-growing role. The study found nearly three-in-four grocery customers now shop for groceries online at least part of the time.

Omnichannel buyers spend 1.5x more every month than single-channel buyers and are more than three times more loyal than digital-only customers.

It found digital influence continues to grow, even for in-store buyers. In these categories of grocery, beverages (53%); pantry (73%); personal care (73%); household (76%) and pets (83%) the majority of sales occur through digital channels.

Also, shoppers use digital tools even before entering a store to make shopping lists (77%), confirm item availability (76%), and research an item’s location within the store (69%).

One of the eye-catching findings was omnichannel shoppers spend more than single channel patrons. For instance, patrons who buy via multiple channels spend an average of $1,043/month. This is 1.5x more than those who buy online only ($659) or in-store only ($669).

They are also more loyal than digital-only buyers. Omnichannel buyers churn, on average, after 4.2 bad experiences vs. just 1.3 for digital-only patrons.

The big question mark, and possible opportunity from the study is loyalty seems to be up for grabs. Customers reported the experience that has the highest impact on their loyalty is how grocers handle inventory status and out of stock items (84%), followed by checkout (79%), and the pickup experience (77%).

The Omnichannel Grocery Shopper report reflects interviews with more than 5,100 grocery shoppers and over 200 grocery executives, as well as data from other Grocery Doppio studies.

Consumers Confused by Environmental Labels; Call for Universal Format

A pan-European survey among 10,000 consumers across 18 countries found that consumers are confused by all the different symbols and logos on product packaging. More than two-thirds of respondents would support a universal eco-label for food products.

The research by the EIT Food Consumer Observatory found that almost two-thirds of Europeans - 63% - believe food brands pretend their products are more sustainable than they really are, while only a third of Europeans, 33%, believe their government is transparent about regulating sustainability labels on food.

Among the 18 countries surveyed, Italy, Spain and Poland were those with the highest levels of support for a universal, independent label, with 81%, 79% and 78% of consumers respectively saying they would use it.

Private Label Pet Food Booming, Says Study

Research by Circana shows that EU retailers increased their share in the €10.8 billion pet nutrition segment by 18% (about €3.6 billion) during 2022 across Europe’s six largest pet markets — France, Italy, Germany, Spain, the United Kingdom, and the Netherlands. In the last quarter of 2022, EU retailers ramped up their market share by 25%.

Private label products now boast a 34% value share in the pet food sector throughout Europe, with the largest shares in Germany and Spain. Though inflation and pet ownership are strong influencers of the European pet food market’s growth, innovation in the space also rose to 39%, says Circana.

New product launches in pet food, including both private label and national brands, accounted for 9% of total pet food sales in 2022, according to Circana’s data. This increase in innovation was most apparent in Germany and the Netherlands, with new product launches contributing 28% and 11% of total pet food sales, respectively.

Though unit sales remained strong in pet food, rising prices on their favorite pet foods convinced many pet parents to switch brands to private label.

2024 Global Consumer Trends Identified

Analysts from Mintel have identified five trends that will be shaping consumer behaviour in 2024 and beyond. The trends that the company thinks will have an impact on marketing and innovation are:

Being Human: In a world increasingly dominated by algorithms, we will need human skills and emotion to make the most of this technological revolution.

More Than Money: Consumers will reassess what matters most to them, affecting not only what they want and need, but their perception of what constitutes value.

Relationship Renaissance: Consumers who find comfort through screens at the cost of meaningful, real-life relationships, will seek new forms of intimacy for the sake of their physical and mental health.

New Green Reality: Incorporating sustainability into the day-to-day is not enough; consumers and brands will be faced with the reality that survival within a new climate context has to be the priority.

Positive Perspectives: Brands and consumers will work together in new ways to deal with uncertainty.

Gen Z Cutting Back on Spending

A large majority of Gen Z are changing spending habits to save money in the current inflationary period according to a survey.

The Bank of America’s Better Money Habits Survey reported nearly three-quarters (73%) of Gen Z say they have made major changes in their spending habits in the past year, including by cooking at home more frequently (43%) rather than dining out, and limiting grocery purchases to the essentials (33%).

Most Gen Z respondents who adopted reduced spending habits plan to maintain them over the next year (83%). Just 24% of those surveyed said they expect a stronger economy soon, a strong drop from 41% in 2021. Only 32% expect the job market to improve, compared to 46% in 2021.

Over the last year, more than half (56%) of Gen Z respondents told Bank of America they do not have enough money saved to cover three months of expenses in the event of an emergency. In addition, nearly four in 10 Gen Z respondents (37%) said they have had decreased savings or acquired additional debt over the past year. As a result, 27% reported having to borrow money from friends or family.

Bank of America’s survey was based on nationally representative probability samples of 1,156 general population adults (age 18 or older) and a partially overlapping sample of 1,167 Gen Z adults (age 18-26), including 122 Gen Z adults from a non-probability sample.

Consumers Are Less Interested in Brands' Taking Stances

New research conducted by Gallup and Bentley University finds consumers’ desire for companies to weigh in on current events and sociopolitical topics has fallen as brands such as Bud Light increasingly find themselves caught in the culture war crossfire.

According to the research, 41% of Americans say businesses in general should take stances on current events, which is a decrease from 48% in 2022, with declines found across all age and ethnic groups, according to the survey.

However, deeper down, the survey’s findings illustrate the increasing complexity that marketers face in navigating a divided society. They also hint at opportunities for businesses to meet consumers’ growing demands in other areas.

Gallup found, for example, that most young, Black, and Asian consumers still want brands to speak out on issues that matter to them. Most respondents overall said businesses should speak out on the specific issues of climate change and mental health.

Eighty-eight percent of respondents said businesses have some power or a great degree of power to make a positive impact on people’s lives. But only 8% believe they have been extremely effective in doing so, with 50% saying they have been somewhat effective.

“Most U.S. adults think businesses are not delivering on the core functions of what they think a business is for,” said Zach Hrynowski, a research consultant at Gallup. “That feeds into why people are less likely to want to hear from businesses, because they just don’t trust them.”

A few controversial topics do inspire something approaching consensus. Fifty-five percent of respondents in the Gallup survey said brands should speak out on sustainability. That may be because businesses have a more demonstrable effect on climate change than on other sociopolitical matters, said Hrynowski, the Gallup research consultant.

Most French have trouble making ends meet

A survey conducted by Appinio/LSA in August reveals that nearly 75% of the French say that it is a complicated exercise to make ends meet at the end of the month. That’s a +12.9 points increase versus January ’22.

More than two thirds of French people believe that their purchasing power is bad (in January 2022: 38%), and it has now become difficult to save for 84.5% of French people (+13.5 points in a year and a half). 84.5% of the interviewees say that they are worried (+17.5 points). Clearly, the gloom is general and has seriously worsened in 18 months.

Battle for Central European shoppers

Research by McKinsey highlights key forces driving market changes in the next year. After surveying 4,500 CE consumers, interviewing regional retail and CPG leaders, and merging insights with additional research, a remarkable transformation in the grocery sector emerges. This shift may alter the way consumers shop, the way grocers build their value propositions, and the way manufacturers build their brands.

Consumers prioritize budget-friendly options to ease financial strain, leading to reduced loyalty to brands and grocers when enticed by better prices. That is why the report states that it is “time to battle for a new shopper”. The primary insights revolve around four key trends: a focus on grocery affordability, crafting value propositions for budget-constrained yet discerning shoppers, the growing significance of Generation Z as a new consumer force, and the margin squeeze faced by retailers and CPG manufacturers.

Based on the survey, 54 percent of CE consumers intend to increase shopping at budget-friendly retailers to save money in 2023 and beyond. Consumers are also planning to save by favoring private label brands (53 percent), selecting lower-priced options (51 percent), and reducing overall grocery volume (48 percent). Additionally, 58 percent of retail shoppers in Central Europe are stocking up on products when they find attractive prices.

The recommendations of the researchers for Grocers and CPGs is that they should build advantage with private label, drive consumers acquisition and loyalty, twist consumer Experience in online and prioritize cost excellence.

McKinsey Names Five Trends for Remainder of 2023

In its latest consumer research report, “The State of Grocery in North America,” McKinsey consulting identified several strong trends grocers should keep an eye on for the rest of 2023 and store brands are one of them.

The overall trends include increased economic pressure driven by inflation, increased digital engagement, additional pressures on profitability, continued upheaval in the labor market and sustainability becoming a more important part of business strategy.

McKinsey found saving money continues to be a priority across all income groups and 44% of consumers are planning to buy more private brands. In addition, 73% of consumers report that discounts have become more important in their grocery shopping decisions compared with a year ago.

In ecommerce, McKinsey’s survey reported convenience, in the form of time savings, delivery and more, was the overwhelming draw for consumers. However, shoppers were turned away by high delivery fees and a lack of personal contact with products in store. “Grocery retailers would likely need to enhance the online experience to boost ecommerce penetration further,” the study stated.

The report recommended grocers respond to these trends by focusing on an elevated personalized experience across channels for consumers; entering new categories and developing new sourcing strategies; using AI to better harness customer data; and McKinsey recommends grocers prioritize sustainability quickly to ensure longer-term success as it grows in importance to consumers.

Private Brands Snacks on the Move

According to new data from NielsenIQ (NIQ), increased snack prices have led many consumers to turn to private label options.

Unveiled at Groceryshop 2023 in Las Vegas, NIQ’s new ‘Snackonomics’ reported snack category dollar sales have increased 12.8%, driven by increased retail prices. Inflation in the snack category is higher than food overall, according to NIQ and prices have risen 18% over the last year. The snacking industry in the U.S. has approximately $135bn in annual sales.

“Overall, private labels are up across all departments. It's up 13.5% total market and 16.7% in that value channel that I was indicating,” said Lorelei Bergin, VP or North American Retail at NielsenIQ who spoke of the report. “Snacking is no different. It's definitely an increase in this space. But what's important to note here is that if the branded items do not start coming up with more strategic ways of combating private labels, they're going to lose out."

Statistics from Circana’s Unify+ database, available at plma.com, reflect these findings. Private label salty snacks rose over 28% in dollar sales and 8.4% in unit sales over the past 52 weeks ending Sept 10, 2023. Subcategories like potato chips, increased 31.2% in dollar sales and 5.9% in unit sales while tortilla chips (29.1%-dollar sales/11.6% unit sales) and pretzels (23.8% dollar sales/13.7% unit sales) also showed strong store brand growth.

Bergin added that snacks are becoming a large area where consumers trust private label products and are willing to switch. According to the NIQ data, 44% of consumers believe that private label has good value, if not equivalent, to branded items, and that it’s a good alternative to branded items. More than a third (35%) said that private label snacks are “higher quality for equal value.”