Five Truths, No Lies
SHOPPER PERCEPTIONS AND BEHAVIOR IN A POST-PANDEMIC WORLD:
Customer A once loved to shop for groceries in-store, but when the COVID-19 pandemic struck, she switched to online ordering. She may occasionally visit the supermarket now that the pandemic is winding down but will mostly continue her pandemic shopping pattern.
Before the pandemic, Customer B responded primarily to “snail mailed” promotional offers. She’s now more inclined to redeem digitally delivered offers.
These are among five key truths about shopper perceptions and behavior in a post-pandemic world, revealed through a survey commissioned by DemandTec by Acoustic and conducted by RIS News parent company EnsembleIQ.
The survey is a follow-up to a DemandTec/EnsembleIQ research study undertaken in summer 2020 to identify shopper perceptions and behaviors just a few months into the COVID-19 pandemic.
Onboard with online shopping
Works across full assortments at store level
Uses data science to identify demand signals and make price adjustments
Supports systematic, dynamic KPI optimization
Identifies true KPIs within everyday workflows
Five generations of consumers as defined by the Pew Research Center:
• Generation Z
• Generation X
• Baby Boomers
Findings from the new study—conducted in spring 2021—reflect feedback from:
Feedback from far and wide
Truths create critical retail tech initiatives
All five truths brought to light by the survey create different imperatives, many of which center on technology.
A clearer view of price transparency
Supermarkets see the greatest share of shoppers who are more likely to compare prices today (37%).
Driving demand, decreasing price sensitivity
Shoppers are now “very or somewhat willing” to pay higher prices for their purchases in return for free home delivery (58%), express shipping (54%), and standard shipping (50%).
Needed: new pricing tools
These changes call for pricing tools that:
Align with today’s problems and patterns—including the move to online shopping
Are built for omnichannel retailing
Accommodate varying shopper expectations about prices, promotions, and markdowns across different channels
Myriad technology capabilities a must
Retailers need to provide more dynamic and engaging prices online and in-store, using dynamic pricing technology that:
COVID has increased the likelihood that consumers will opt into promotional offers.
Pushing the Promotions Envelope
Utilize both cross-item affinity analysis and shopper price sensitivities as variables in recommending optimal prices, promotional offers, and markdowns
Fewer grocery visits, Higher spend
Shoppers are making the same number of, or fewer, trips to stores now than before COVID. However, per-trip spend has increased.
Consolidating shopping trips
Over the past year, consumers picked up the pace of private-label product acceptance as out-of-stocks on name brands and budget considerations bolstered reliance on store brands. Some shoppers have evolved into private-label loyalists.
Passionate About Private Label
Economic hardship and/or uncertainty have made shoppers more more aware of pricing, taking the importance of price perception to new heights.
Sharper Eye On Prices
In private-label products, consumers trust
Strategically position private-label offerings against national brands while identifying and harnessing other ways to capitalize on their potential
Present customers with appealing prices on these items while continuing to generate high margins
A job for pricing science and tools
Optimal price differentials between private-label and brand name products vary across different categories and brands. Finding the right gaps between the price of these items and formulating other strategies for capitalizing on the potential of private-label options is a job for pricing science and tools, not manual methods.
The lasting effects of the pandemic on shopper perceptions and behaviors are significant and will continue to be so. Automating and modernizing business processes—using upgraded technology that leverages modern data science and techniques as a linchpin—will be key to retailers’ success now and in the future.
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752 consumers in five countries:
• United Kingdom
• United States
Consumers with primary or shared grocery decision-making responsibility in their household
An equal number of male and female consumers discussed their shopping experiences in seven retail sectors:
• home improvement
• home furnishings
Real return on investment
Consumers’ tendency to spend more money—and less time—in the grocery store means retailers must focus on maximizing shoppers’ market basket. Retailers’ greatest return on their technology investment will come from solutions that:
Consumers who “always” or “almost always” shopped online:
Before the pandemic
Consumers who will “always” or “almost always” shop online in the future
Perceived: more frequent price changes
Drugstore/health and beauty
Diving into dollar discounts, favoring ‘freebies’
Digital offers for the win
Fifty five percent of shoppers are now “extremely likely or very likely” to respond to offers delivered via smartphone/mobile app versus 21% pre-COVID.
Home mailers not a hit, flyers not flying high
Home mailers and in-store flyers generate lower levels of responsiveness than digital offers, with a respective 42% and 41% of customers “extremely likely or very likely” to respond to them.
Putting consumers’ preferences first
It’s more important than ever for retailers to leverage pricing science to deliver all relevant pricing information to consumers in their preferred shopping channel.
of shoppers visit the supermarket less frequently now than before the pandemic
of these consumers, now make “slightly fewer” and 12% make “substantially fewer” grocery store trips
Changing perceptions call for strategic positioning
With changing perceptions of private-label products comes a need for retailers to:
consider private-label brands to be of similar quality to or higher quality than national brands
think private-label brands are of much higher quality than national brands
consumers believe national brands are superior to private-label brands
of consumers are “extremely likely” or “very likely” to respond to “dollars off” discount offers, versus 55% pre-COVID.
of consumers are “extremely likely” or “very likely” to buy into “buy one, get one free,” versus 55% pre-COVID
of consumers find percentage-off discounts attractive, versus 53% pre-COVID
of consumers are “extremely likely” or “very likely” to respond to “buy several, get several free” deals, versus 48% before COVID
Top three retail segments where shoppers believe prices are changing most often:
Pandemic sparks shift to online shopping