When I look at the headlines of what's happening at retail, it looks like this year, like most, will not be immune to change. While inflation is softening (finally), consumers will continue to make shifts in order to best take care of their families and finances.
"Asked how they were dealing with the higher prices, 57% of respondents said that they were buying less food, 52% said that they were buying less expensive store brands, and 48% said that they were buying less expensive national brands. Thirty-seven percent of respondents said that they were shopping at less expensive grocery stores".1
Our collective experience over the last few years created trends
The last few years have also given rise to new routines and new consumption patterns. In a recent article, "Where are Consumers Heads - and Wallets - This Year?" two trends jumped out that highlighted opportunities at retail:
"With consumers refocusing their priorities during a stress-filled decade, Euromonitor emphasized the emerging importance of short-term buying approaches that often include surprise-and-delight items. Euromonitor’s experts recommended that businesses create campaigns targeting special occasions and offer instant gratifications that can still fit within budget constraints."2
"The return to regular routines continues as consumers go back to old habits while also embarking on new discoveries. In this marketplace, Euromonitor’s analysts projected that products and services that boost confidence will prevail, and that experiential retail environments will capture consumer attention."2
Change in spending is driven by generations
The consumers driving change are the upcoming power spenders, Generation Z, and Millennials. Social media often drives trends within these groups and they have different tastes than the previous generations. We all know that catering to the upcoming generation is smart business:
"The consumer quest for globally inspired culinary adventures continues to influence product assortments in center store, from shelf-stable sauces and spices to frozen appetizers and meals.
Generation Z and Millennials are not only the most ethnically diverse generations in terms of their own cultural backgrounds, but they also have very diverse palates, said Rachel Shemirani, senior VP at Barons Market, a regional chain based in Poway, Calif."3
Activating the right change is key
Smart retailers are activating change at retail to make the most of trends, shifting shopping patterns, and generational pallet changes. This is where unbiased space planning and planogramming can really help optimize sales at the store level. Third-party space management teams and analytics groups are becoming more relevant as retailers choose to differentiate in their appeal to consumption pattern changes.
Emily, SAS Space Management Director says: "While center store managers know their clientele and corporate category teams know the products - partnering with a team that can come to the table with a totally unbiased view to be able to effectively pull and present supporting data can help. We have successfully partnered up with multiple grocery retailers to build and maintain the most-optimal planograms for any category, in any aisle, and in any store.
An unbiased perspective provides more opportunities
To keep present with ever-changing needs, we partner with clients on an established reset calendar whilst building into the budget (and headcounts) additional room for ad-hoc changes, knowing that trends will shift even over even the course of a year. Retailers are able to work with planogram writers/analysts and the data they bring to the table to determine and even predict what the best decisions may be for sets on this cyclical basis. The data presented during strategic planning sessions are coming again, from an unbiased perspective making it potentially more favorable (or raw) than that of vendors or potentially in-house, where certain agendas or initiatives can be pushed.
Sales data has to speak for itself in some cases and trends can be analyzed and broken down per section to determine whether the time is right for a new item to come to the party or what may not be fitting the bill. Being able to have an effective partnership where everyone can bring their own piece to the puzzle helps the overall goal at the end of the day - get the right items out there to consumers at competitive prices.
Staying competitive means staying up to date on the data and analysis behind the items in each category, thus calling for accurate, impartial information sharing."
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1. Grocery Prices Straining Household Budgets: Report Progressive Grocer Shopper Behavior Market Trends - January 19, 2023
2. Where Are Consumers’ Heads – and Wallets – This Year? Progressive Grocer - Lynn Petrack - January 17, 2023
3. Consumers want multicultural products. And the sales reflect that. Supermarket News - Mark Hamstra - January 18, 2023