P2PI Shopper Behavior Monitor: The Post-Pandemic Grocery Shopper

REVIEW FULL RESULTS FROM THE RESEARCH REPORT The COVID-19 pandemic triggered wild shifts in consumer behavior, forcing brnds and retailers to adapt to drastically altered shopping preferences, supply chain upheaval, mandated changes to store operations and an economic downturn — all at once. Nine months after the pandemic hit the U.S., much of the early turmoil has subsided as retailers and shoppers reverted back to the “norms” of February 2020 (although the threat of a second pandemic wave again wreaking havoc was not out of the question as this magazine went to press). Some of the critical changes in shopper behavior are lingering, however. While they may initially have been forced to change their shopping activity in response to safety concerns or even local-government regulations, it now seems clear that many shoppers like the new habits they’ve adopted and have no intention of returning completely to their pre-pandemic routines.An online survey of more than 1,000 primary household grocery shoppers conducted in September by the Path to Purchase Institute examined shifts in a wide range of behaviors, including online shopping, alternative fulfillment, brand swapping and price sensitivity, and how those changes have evolved over the course of the pandemic. Here, we’ve compiled some of the most critical findings related to grocery shopping, along with details on how the industry has responded. (Institute members have access to a variety of additional data, including a channel-specific look at grocery shopping and information on the home improvement and consumer electronics channels.)Planning Is Far More ImportantGrocery shoppers are spending more time planning their trips than they did in the early stages of the pandemic, taking time to check their home inventory and plan meals for the household while also browsing digital circulars and coupon opportunities (see chart). This behavior can be attributed to several factors, including the need for shoppers affected by the current recession to save money, a desire to use products purchased during the initial panic-buying phase, and the wider variety of shopping options (and time to utilize them) available to stay-at-home consumers.“Getting on the shopping list is more important than ever for brands, and product availability is crucial,” says Carlos Garcia, industry manager for CPG-Retail at Facebook. “To drive discovery of new products and innovations, brands have been relying heavily on digital channels as time spent has increased during the pandemic.”While many retailers and brands scaled back promotional activity in the early days of the pandemic to avoid sparking unfulfillable product demand, unhealthy store traffic or inappropriate messaging, most began resuming their standard practices by May — albeit with a much heavier focus on digital shopper engagement. And that has led to an increase in personalized offers that can deliver custom pricing based on specific shopper needs.“You have the ability to identify audiences [and determine] if they need a deep discount or if it’s more of a loyalty play and you’re going for a lighter discount,” says Heather Campain, Johnson & Johnson customer leader for omnichannel strategy and activation. “By really studying the audience, it allows you to really customize your expenses.”Omnichannel Has ArrivedThe most consequential and likely most lasting impact of the pandemic on shopper behavior is, of course, the rapid acceleration in adoption of online grocery shopping. Online retailers have only grown more popular, with 47% of survey respondents saying they were using e-commerce options more frequently in September than they did in the early stages of the pandemic, and 15% saying that they started shopping online for the first time due to the pandemic.The shift online has even been widespread among senior shoppers, who have been particularly concerned about their safety, according to Alysia Ross, director of insights & planning for Coca-Cola Beverages Florida. Although many retailers have devoted special hours to seniors-only shopping, the demographic has embraced online ordering and both home delivery and click-and-collect fulfillment, Ross said, while speaking at a recent Institute virtual roundtable. “For those folks who had never tried it before, it was incredibly easy and incredibly safe from their perspective.”The majority of consumers surveyed said they plan to shop online at least as often or even more often than they currently are after the pandemic is resolved. Brands have been expecting this, and so continue to accelerate their e-commerce efforts.“We continue to evaluate our investment in [home delivery] providers such as Instacart and Shipt,” says April Carlisle, Coca-Cola Co.’s vice president of shopper marketing. “We were using them more prior to COVID for driving trial and awareness. Now we’re thinking of them more holistically as a true trip driver for us.”While pure e-commerce remains a relatively small portion of Coke’s whole business, the company has seen dramatic increases in click-and-collect purchases, particularly through Walmart and Kroger, Carlisle says. The challenge now is modifying some of the tactics the company has traditionally used in stores to fit the e-commerce environment. One example: using a home-page takeover on a retailer website as the equivalent of a store lobby spectacular.“We’ve created a digital-to-physical conversion chart,” she says. “We’ve identified the points of inspiration in a physical store and come up with what the equivalent is to each of those. We’re really educating our internal stakeholders that we can’t just do one, we have to do them all.”Campain says J&J is also working on developing new digital tactics to emulate basket-building or impulse-buying efforts in-store, such as popup ads asking shoppers if they’ve forgotten an item or suggesting products complementary to what’s already in the basket.“The relevance of it is really important,” she says. “You don’t want it to be an annoying popup if it’s just one more thing to say no to. [But] it can be something that’s even more helpful than taking your cart around and seeing a display, in that it’s really personalized based on your behavior.”Staying in Stock Still CriticalWhile the majority of surveyed shoppers listed price as their No. 1 priority when selecting a retailer, the second most important factor was finding the products they need. While panic buying cleared off many shelves in the early days of the pandemic, lasting shifts in consumer lifestyles have continued to cause disruptions in many categories, from toilet paper to beer.“There’s still a big challenge for us making sure we’re staying in stock,” Greg Kearns, Kimberly-Clark’s global consumer engagement enablement leader for global marketing capabilities, said in September at an Institute event. “There are challenges with people buying one or two more [SKUs]. We have to be prepared if there is a second wave and people start buying in bulk again to stock up. We have to be ready to respond to those challenges.” [Note: In mid-November, Kroger and Publix reinstituted purchase limits in some categories.]Coca-Cola has been particularly hard hit because the company uses different forms of product packaging across channels. For instance, special bottles manufactured exclusively to sell in conjunction with attractions at Disneyland and Disney World have piled up due to the park closures, and beverages typically sold to airlines, cruise ships, stadiums and vending machines have also fallen off, Ross at Coke Florida explained. Meanwhile, concerns about safety forced Coca-Cola to find new ways to sell fountain drinks, such as changing the interface of its Freestyle soda machines and providing tamper-resistant lids to restaurants. In addition, as beverage consumption has shifted away from venues to the home, beer and soda companies have been competing for aluminum cans, creating a major shortage. “We continue to work with our bottler partners to have package options available,” Carlisle says.Brand Swapping is Need-DrivenFifty-eight percent of survey respondents reported buying a new brand or product during the pandemic, with much of that involving a shift to private labels or other alternatives for out-of-stock household cleaning favorites and similar categories that have been in particularly high demand. That trend has created both a challenge and an opportunity for brands.“We want to get the people who ... are loyal to our competitors but are forced into a purchase of our product because it’s there when our competitors aren’t,” Kearns said.Kimberly-Clark has worked to do that by bringing shoppers into its first-party database to build relationships with them and show off the company’s charitable efforts — which many consumers have viewed as a particularly important part of purchase consideration during the pandemic. Among K-C’s recent efforts were a pledge to donate one case of Huggies (up to 5 million diapers) to the nonprofit National Diaper Bank Network for every promotional package bought at Walmart during September, and tying purchases of U by Kotex SKUs at Meijer in August and September to donations for the Alliance for Period Supplies.“Some brands have cut back on marketing, not wanting to advertise to empty shelves, while others have doubled down to retain mental availability even if physical availability is disrupted. Procter & Gamble and Clorox, for example, have both been public recently about increased advertising during the pandemic,” Garcia says. “[The companies] that are investing into pandemic-fueled growth are largely looking to convert new users into repeat users, as well as shoring up those already loyal to their brands. They are doing this through value-based messaging that reinforces why choosing their brand was the right choice.”Meal Solutions on the RiseThat quaint old practice of preparing family meals at home has made a comeback. While restaurants have reopened in most states (at least until some recent outbreak-related setbacks), consumers remain reluctant to eat outside of the home: Approximately half of respondents said they had not eaten at a restaurant (indoors or outdoors) in the previous 30 days. And only one in five said they are more likely to eat at restaurants more often even when the pandemic ends, indicating this is likely to be a lasting shift. Additionally, about one-third of respondents said they are planning their household meals/menus more often.One of the biggest winners in this shift have been meal kit makers, which had been struggling to attract new customers pre-pandemic as growth in the relatively new category had slowed, according to Garcia. “The pandemic breathed new life into the category, leading to a significant increase in demand,” he says. “As an industry, we need to figure out what the intersection is between CPG food, CPG retail and meal kits. What is the role for branded products in a meal kit? Is there an ingredient play? Is it a sampling opportunity?”With consumers now eating most of their meals at home, brands and retailers feel they can win big by providing convenience, inspiration, or both. For years, Coca-Cola has been running programs at major retailers that pair its beverages with prepared foods, but the manufacturer has ramped up such efforts since March, both by partnering with other CPGs companies such as Mondelez International and Kellogg Co. and by leveraging its own marketing assets.“We are leveraging partnerships with our ambassador talent, such as celebrity chef, Robert Irvine,” Carlisle says. “We’ll bring recipe content from him and help you think of how to make game-day tacos and pulled pork sandwiches. We sponsor NASCAR, and many of our NASCAR drivers are actually pretty good cooks. We’ll do content that leverages our NASCAR drivers to bring excitement to the at-home viewing occasion, since fans can’t go to the race.”The Readiness is AllMost respondents expect their holidays to be very different this year, which has brands looking ahead cautiously and expecting the need to continue adapting to rapidly changing situations.“Expect more surprises,” Stuart Vass, Pernod-Ricard USA’s region chain manager for strategic customers, said during a recent Institute event. “Throughout the pandemic, anyone who says they know what’s going to happen ... has been proven wrong. There’s just so much change that you have to be nimble, you have to be ready.” METHODOLOGY: An online survey was fielded Sept. 18-22, 2020, by the Path to Purchase Institute. The survey results reflect feedback from 1,024 consumers in the U.S. Respondents were required to be the primary decision-maker for grocery shopping in their households and to have made at least one shopping trip in the previous week. Respondents were recruited to be representative of gender, generation and geographic region distributions.