Shoppers’ attitudes are changing when it comes to their finances. And it’s set to have a significant effect on grocery shopping behavior, according to a new consumer survey from Kroger.
According to the survey, conducted in December, some 24% of shoppers reported a decrease in optimism surrounding their personal finances, and 56% said saving money is their top financial resolution for 2023.
The survey comes from 84.51°, a Cincinnati-based retail data science, insights and media company owned by The Kroger Co.
When it comes to grocery, shoppers are, unsurprisingly, both looking for aid as well as scaling back purchases. That looks like:
- 71% are looking for sales and coupons to offset increases in grocery store prices
- 62% are scaling back on non-essentials
- 55% are switching to a lower cost brand
- 42% are purchasing fewer items
“It is critical to analyze how customers are engaging with brands and categories today, and with so many consumers putting financial resolutions at the top of their list, CPGs need to adapt,” said Barbara Connors, 84.51° vice president, strategy and acceleration.
Price increases, she said, have created new constraints and pressures for customers and led to significant shifts in shopping activity. “The most notable increase in behavior has been the consistent and persistent desire to seek out sales, deals and coupons more often,” Connors said.
In addition, there is a move toward smaller, more frequent trips and an increased propensity to switch brands to find lower cost options, she added.
Yet, money-conscious customers are creating both a threat and an opportunity for brands. “Whether customers are shopping in-store or online, delivering value is a top priority to drive conversion,” according to Connors.
To help keep pace with evolving shopper conduct, brands should re-evaluate their promotional strategies and effectiveness.
“When customer behavior is changing so dramatically, it means that old best practices around what worked best in driving incrementality may not hold true anymore,” she said. “It is critical to analyze how customers are engaging with brands and categories today, and so CPGs can design promotions on the right products, with the right offer, and at the right times, to drive the return they seek.”
Merchandisers should also focus on both in-store and online promotions, including targeted digital initiatives that enable brands to deliver more variable and potentially deeper discounts to the customers who matter most, Connors said. “When paired together, brands ensure they are delivering value wherever customers are shopping and blending scale and precision to maximize return,” she added.
It is important to emphasize shopper participation in loyalty programs as well, which enables brands to deliver personalized offers to their most loyal customers; thanking them for continued engagement; and incenting future purchases.
“Customers are shopping both in-store and online, trying new things, adapting their routines, and forming new habits,” according to Connors. “Brands should leverage the breadth of digital touchpoints and capabilities to influence both the ecommerce trip and the in-store trip.”
The online quantitative survey was conducted with 400 customers who had shopped at a Kroger outlet in the previous three months.