6 key trends impacting grocery shopping habits

Enterprises seeking to understand the opportunities and challenges in the consumer packaged goods (CPG) sector should take note of the major trends impacting the industry so they can adjust their growth and marketing plans accordingly, says a new report from NielsenIQ.

The trends report shares six of the biggest industry movements impacting the grocery category, and provides insights on how companies can use this knowledge to expand and promote their business.

Inflation has been identified as the biggest factor causing the biggest shifts in the market, spurring consumers to spend more for fewer products and leading to dipping unit sales per transaction, says the leading global consumer intelligence company.

In conjunction with rising prices, consumers are shifting their habits to make their money go further and cover the basic necessities. For firms, this means they need to reevaluate their pricing and promotion strategies to better align with consumer needs and avoid getting their products left on the shelf.

Another key development is how private labels, or house brands, are making big gains. Consumers have taken notice of the potential savings in the current inflationary climate and pivoted to private label in droves. This means grocery brands need to work even harder to compete with private label growth.

“Some ways to compete include building brand loyalty, leaning into product innovation, and optimizing your pricing and promotion strategies to compete. Understanding why your consumers may be shifting their behaviors can help you react more effectively,” says the report.

Meanwhile, sustainability is gaining more and more favor among consumers, providing ample opportunity for entrepreneurs to align their product offerings and marketing to match this demand.

“It’s clear that brands and retailers need to make it easier for shoppers to discover and purchase planet-friendly products. This requires making their sustainability attributes accessible on product pages and clear on packaging,” says NielsenIQ.

But affordability is also a major factor to consider. Balancing sustainability and costs may be difficult, but offers the best chance of connecting with consumers.

Also a significant trend is the rise in bulk buying, another reason for the unit sales drop, says NielsenIQ. Consumers are buying larger sizes of products with long shelf lives as a savings strategy to get a lower cost per use.

“To stay relevant with these shifting consumers, more premium grocery brands may need to do a better job of conveying the true value of their products and position them as purchases worth the extra expense,” the paper advises. “This may be due to the quality of the product, its innovative nature, or some other differentiator. The key to marketing your products to this segment is to understand what other factors they care about beyond just product price.”

Entrepreneurs must also become aware of another emerging trend—the power of promotions to drive sales. Shoppers are willing to stock up when their brand is on sale, and some shoppers only buy what is on sale.

“This means that promotions will remain a key deciding factor in where consumers shop and what they buy. This means a smart promotional strategy may be key to grocery brands for the remainder of 2023. But, it’s important to understand how effective your promotions are and whether they’re actually adding any value,” says NielsenIQ.

Relative to this, grocery brands should also consider their omnichannel shoppers when planning out promotions.

“If your promotion only targets one channel, you may be missing out on sales in another. But, you’ll also want to identify your omnichannel split and determine which consumers are the most likely to give you the best benefits from a promotion. If all of your online sales occur on promotion, there may be an issue,” the report notes.

Finally, omnisales are growing, but slowly. “The omnichannel retail landscape in 2023 is a bit complicated. While eCommerce shopping has been growing for years, more consumers than ever are choosing to shop with an omnichannel mindset,” says the research.

In fact, it says, more shoppers now plan an in-store shopping trip combined with a prior online order. “This means consumers are taking every opportunity they can to seek out products and make purchases in a way that is convenient for them.”

Growing a grocery brand and increasing sales in an omnichannel world requires focus and accurate, actionable data. Tracking retail sales, market trends, and consumer behavior all play a role. Only then can a company’s product offerings align with consumers’ needs and be visible across all channels, NielsenIQ says.

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