The Why Behind the Buy

Executive SummaryShoppers have not seen an improvement in their financial situations over the last six months while prices both inside and outside the grocery store have increased. This has put additional pressure on shoppers’ budgets. At the same time, shoppers have more choices when it comes to their grocery needs — choices that range from where to shop and which brands to buy, to what methods to use to save money and how technology may help their shopping.When The Why? Behind The Buy survey began in 2009, shoppers’ behavior to more conservative spending seemed to be a temporary shift. The expectation was shoppers would revert back to less conservative spending habits when the economy or their personal finances improved.However, today it’s clear the shift in shoppers’ behavior is permanent. Just as economists describe a “new normal” economy, there’s a “new normal” shopper. We call the new normal shopper: Shopper Inc. Whether he or she realizes it, today’s conservative, educated and prepared Shopper Inc. is approaching shopping much like a business approaches financial decisions. Today’s shopper is researching, planning, weighing options, making decisions, and even looking for ROI.Download the full report from the attached files section at right.HighlightsShoppers have not seen an improvement in their financial situations over the last six months.Shoppers are prepared. 72% make lists for their routine shopping trips. Major decisions on what to buy have moved from in-store to at home.85% of shoppers say store circulars influence them and almost half clip coupons from the circulars.33% of shoppers surveyed go online or use apps to save money.To save money, shoppers consolidated trips due to rising gas prices, traded down to store brands, traded out of categories, and 54% bought more items on sale.The primary reason 33% of shoppers go online is to save money. They are using online coupons, retailer and brand websites, and email subscriptions.The younger shoppers do not pre-plan as much, but they are more likely to use online resources, apps and social media for shopping.RecommendationsExpect conservative spending behavior to continue.Shoppers are more sophisticated and prepared. Become a shopping partner by providing value while also helping shoppers stretch their budgets.Digital will continue to grow in influence. Use it to communicate brand value and build loyalty.There are two economies, one for under $50K and one for more than $50K. Understand the increasing divide between low-to-middle income households and higher-income households, and what it may mean for your brand.Key Conclusions Today’s shoppers are conservative, educated and prepared.Tough economic conditions shaped a “new normal” especially for middle class and lower income shoppers. Many shoppers are still treading water financially. Since food is not a discretionary item, shoppers have adopted new habits to save money – from using coupons, trading down to less expensive brands, consolidating trips, etc. Trends show that these changes are more permanent than previously expected and shoppers are not expected to simply revert back to less conservative habits even if their financial situations improve.As the “great divide” in income groups continues to deepen, shopping habits among the lower/mid income vs. higher income becomes more pronounced.Both CPG companies and retailers should be devising marketing programs for two distinct economic groups. While middle-class shoppers are trading down, higher- income shoppers seem to be driving an increase in sales of premium products.Pre-planning has become more important in the shopping equation.Considering today’s smarter, more prepared shopper, CPG companies and retailers need to focus on diverse ways to influence shoppers before they get to the aisle. Shoppers, with the possible exception of the younger generation, are planning and preparing by making shopping lists, clipping coupons, checking their circulars, going online, and using other pre-shopping methods more than ever.Now is the time for CPG companies and retailers to build brand awareness and shopping habits in young (under-30) shoppers.Shoppers are creatures of habit. They buy what they usually buy to cook meals they’ve made before. And today’s under-30 shoppers will soon be tomorrow’s biggest shoppers. Rather than trying to change existing shopping habits, there’s great opportunity for CPG companies and retailers to focus their marketing efforts on creating brand awareness and building shopping habits among today’s under-30 shoppers.The digital influence continues to spread.Not only does digital continue to grow in influence for pre- shopping, it also reaches today’s younger shoppers who are tomorrow’s heaviest shoppers. Currently, the primary use of digital resources is for couponing, deal-finding and other efforts to save. However, the foundation is there for CPG companies and retailers to reach shoppers in the home to build brand loyalty and influence shopping habits.

The Why Behind the Buy

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