Rising prices, supply chain delays and record-high inflation affecting CPG and Grocery
SAN ANTONIO, July 28, 2022: A recent annual survey conducted by Vericast found that consumers across key demographic groups are scrapping long-held retail behaviors and finding entirely new ways to shop for household essentials, creating new opportunities for savvy marketers.
Vericast’s 2022 CPG and Grocery TrendWatch reveals how rising prices, supply chain delays and record-high inflation have affected consumer behavior as they shop for groceries and other consumer packaged goods. The report outlines how some key segments are spending, what they are looking for and how marketers can capture their interest at a time when loyalty is more unpredictable than ever. Nearly 2,000 adults in the U.S. and more than 300 Consumer Packaged Goods (CPG) and Grocery/Drug/Mass industry professionals were surveyed.
Notably, 61% of all shoppers say that one of their biggest challenges is rising prices and almost a third are regularly switching products because their preferred product is not available. This represents an opportunity to guide shoppers to stores where products are in stock, or to drive awareness of other products that meet the same need.
“Consumers across all key demographics are switching shopping gears in this economic environment,” said Aimee Englert, Executive Director, Client Strategy at Vericast. “Marketers who understand this and plan accordingly will be top of mind as buyers focus on value and saving. To successfully retain and acquire new shoppers, marketers must know how different segments spend, their unique behaviors, and how to capture their attention quickly and effectively.”
Across the key demographic groups, top findings from the survey include:
Baby boomers are the most sensitive when it comes to price
Eighty-three percent of baby boomers indicated that price increases are the biggest challenge when it comes to shopping for food, health and beauty, personal care, or household items online or in-store. As a result, baby boomers are most likely to make a switch; more than one-third have switched products because their preferred products are not available.
Just over 40% of baby boomers say they are most influenced by coupons that arrive in the mail or newspaper. However, more baby boomers are searching for coupons both in print and online, proving that an omnichannel approach to offering deals will pay dividends when it comes to shoppers looking to save.
Millennial parents crave convenience but struggle to balance it with cost
Over half (53%) of millennial parents struggle to afford essentials. And due to rising gas prices, 63% of millennial parents are more likely to shop at fewer stores, compared to 56% of consumers overall.
Despite rising costs, this generation more than any other will pay extra for the convenience of a subscription service. However, they still rate the in-store experience higher than online (70% versus 63%), so marketers should look for ways to invigorate the online shopping experience to help these consumers discover new products with increased convenience.
Affluent households increasingly seek value online
Even higher-income households are cutting back on spending. In fact, 57% of affluent shoppers say the rise in prices is their biggest challenge when shopping for food, health and beauty, personal care, or household items online or in-store.
Affluent shopper purchasing habits are changing as much as other consumer groups in a volatile economic environment. Forty-two percent are stockpiling products, 39% have switched to shopping more online and 23% are using cashback rebates or apps more often. Indexing toward a quality, convenient online shopping experience will attract shoppers with the most disposable income.
Gen Z is purpose-driven and digital first
Members of Gen Z are most influenced by social media advertising to shop at a new store/ website or try a new product. Further, 50% use their phones when shopping in-store and nearly half (48%) are interested in virtual reality to see how products can fit into their lives. While it’s still early, marketers should begin exploring how virtual and augmented reality, as well as the metaverse, can enhance marketing strategies for this demographic.
Additionally, Gen Z are looking for products that align with their social, environmental and/or political values. This is especially important when it comes to food products (21%) and beauty and personal care (22%). Brands should ensure messaging emphasizes their brand values to gain and keep loyalty.
View the full 2022 CPG and Grocery TrendWatch.
Vericast is reimagining marketing solutions one business-to-human connection at a time. By influencing how over 120 million households eat, shop, buy, save and borrow, Vericast fuels commerce, drives economic growth and directly accelerates revenue potential for thousands of brands and businesses. While its award-winning portfolio of products, technology and solutions are part of the Vericast story, its people are the true differentiators; trailblazers in data intelligence, marketing services, transaction solutions, campaign management and media delivery.