As researchers and consumer insights specialists are all too aware, shopper behavior is changing. And it’s changing rapidly. What started with the global pandemic (lockdowns, job losses, health problems) was further catalyzed by record-high inflation and has since been impacted by increasing tendencies towards online and convenience shopping. These changes are happening more quickly than some research methods can keep up with. Only agile research is capable of keeping up with the changes we’re seeing and future-proof brands for the future of retail.
How Is Shopper Behavior Being Impacted by Inflation?
Brands have always relied on consumer insights research to predict and adopt emerging retail trends, but the current inflationary crisis has turned even tried-and-tested practices on their heads. While inflation is at 40-year highs (in August 2022 was down to 8.3%, the lowest in four months), it is impacting each sector differently:
- Gasoline costs increased by 25.6% in the last month
- The energy index increased 23.8% (below 32.9% in July)
- Natural gas inflation sped up to 33% versus 30.5% in the last month
- Inflation rose for food by 11.4%, the most since 1981
- Housing costs rose 6.2% (the biggest increase since 1984)
- Used cars and trucks saw a 7.8% increase
- Consumer price figures from July to August were flat (rising only 0.1%)
- Meanwhile, core CPI (which excludes volatile energy and food prices) increased 6.3% year-on-year
Whilst few could have predicted the scale of the global pandemic, its impact on inflation and the subsequent roll-on effect on consumer behavior was not impossible to anticipate. Those using agile insights could see the signs that took others a fraction too long to appreciate.
What we are seeing now is consumers turning to dollar stores for their essential items and forgoing the more expensive grocery stores they used to frequent. Coupon shopping and brand-switching to save a penny has become second nature to many shoppers, whilst others have opted to buy in bulk to keep the budget under control.
Where sustainability was the hot-button issue for a growing percentage of consumers only a couple of years ago, its level of importance at the market shelf has all but disappeared for a huge portion of the population. When making ends meet becomes a struggle, environmental issues take a back seat.
- 65% of shoppers have changed their behavior due to inflation
- 86% of consumers are somewhat or very concerned about inflation
- Only 66% of shoppers are somewhat concerned about the environment
- At least 10% of buyers have switched stores to avoid impulse purchases, and
- Around 25% of shoppers have changed stores to take advantage of coupons or bulk savings
With these figures in mind, how do brands offering a more premium product or a more sustainable product go about marketing their solution? Brands might assume consumers are hunting down low-cost alternatives and foregoing indulgences when times are tougher, but the situation is more nuanced than that. The weekly steak dinner might be traded for a less expensive yet still indulgent gourmet burger night, for example.
It’s important to remember that inflation is impacting different demographics and consumer segments in different ways and with varying severity. Consigning sustainability messaging to the dustbin is not necessarily the answer. Presenting a solution to those shoppers who are still concerned with sustainability or higher quality requires having a better understanding of how to influence their shopping decisions to take a greater share of the shopping basket. Better yet, having tiered solutions that cover a broader range of the shopping public means meeting the needs of more of the consumer population. Sounds simple enough. But these approaches require detailed and up-to-the-minute readings on consumer behavior to have any success.
How Agile Research Solutions Save the Day
As consumer sentiment and behavior changes so quickly, it’s important to be ready with agile research solutions. The future of retail is largely unpredictable (will there be another pandemic? What will its severity be? How will that impact the shopper?) and relying on traditional (and less agile) methodologies and technologies means risking being outpaced and outsmarted by more savvy competitors.
Making changes to packaging, package sizing, or signage is not something that can be done overnight. But without a doubt, being ready to tweak a product offering or marketing strategy is key to hitting crucial consumer buttons. That is why access to quick insights is so important for brands. Thankfully, there are agile consumer insights solutions available.
PackEXPRESS – Customized Agile Insights
Imagine getting insights into a broad range of design ideas in days, rather than weeks or months. Here at Explorer Research, we’ve designed the PackEXPRESS online tool, which utilizes realistic environments to measure behavior, System 1 measurement, and attitudinal measures. This tool allows for early screening for a large number of designs, before narrowing down those designs for online shelf testing. Automated and customizable, PackEXPRESS lets brands test solutions more quickly and get to market faster – a crucial factor in today’s rapidly shifting retail environment.
Path to Purchase and Pulse Check
In such volatile times, brands must understand the path to purchase and the obstacles that may stand in the consumer’s way. Customers are making trade-offs in many of their shopping cart decisions, from brand-switching to substitution, to sacrificing sustainable products for more budget-friendly alternatives. Agile insights that offer quick pulse-checks on touchpoints that shoppers are using are the key to finding out what matters to shoppers and getting those changes to market before sentiment shifts again. Whether it’s investing in flyers, deals, price drops, or changing signage, agile insights like surveys with quick turnarounds can help brands better understand where their customers are hurting and how best to help them.
Understanding Pricing Gaps for Both the Shopper and Manufacturer
Although price isn’t the only factor to reconsider in inflationary times, it’s certainly an important one. Inflation is impacting both shoppers and manufacturers. So, how do brands find and take advantage of price gaps, whilst being sensitive to manufacturers’ rising costs? Finding the sweet spot of pricing changes can safeguard brands from pricing themselves out of the market or taking a nose-dive on profits for little return.
Shopper Decision Tree for both Online and In-Store Experiences
Understanding the shopper decision tree is important, whether consumers are facing inflationary pressures or not. But getting those insights promptly, with such rapid fluctuations in consumer behavior, means employing more nimble research solutions. Eye-tracking technology in both online and in-store environments delivers lightning-fast results for brands. It can help validate product and marketing initiatives in time to make a positive business impact.
Explorer Research partners with some of the world’s leading brands to deliver agile insights that not only help weather the storm of inflation we’re currently experiencing but future-proof brands against those harder-to-anticipate market fluctuations. For more information on our agile market research solutions, get in touch with our team today.
