Shifts in Consumer Behavior: How Retailer Decisions Are Affected
Consumer purchase behavior is the focal point of retailer decision–making. With increased emphasis on prices, omnichannel shopping, demand for gourmet frozen and prepared foods, health-conscious shopping, and weightloss medications— retailer decisions surrounding digital engagement and shopper activation are more important than ever.
Prices
77% of shoppers see price as the most important factor when choosing a grocery store. Budgets for shopping have become slimmer, and shoppers are willing to have a less enjoyable in-store experience if it means they get to have better deals. Shoppers have increasingly looked to use coupons, bundle deals like BOGO, loyalty programs, and shopping private label. So, what can retailers do?
- Create personalized offers and promotions
- Digitally integrate coupons
- Enhance loyalty programs
- Use AI to analyze pricing & discounts
Consumers are more willing to compromise on shelfed items and purchase private label to secure a more affordable basket price. If retailers enhance their shopping experience in-person and online, specifically pushing promotions and bundle deals, shoppers are more likely to purchase from said store.
Omnichannel Shopping
80% of shoppers are highly satisfied with an online shopping experience, however many prefer a combined method of shopping online & in-store. Many shoppers utilize store apps to research products, prices, location of products, and promotions before entering the store. Many order online, and pickup in store (BOPIS). This gives retailers an opportunity to:
- Promote or add buy online pick-up in store methods to apps or websites
- Create mobile apps & digital shopping lists
- Consumer access to real-time inventory
- Have a consistent experience across channels
Consumers already rely on AI or other technological tools to create lists and prefer to shop places where omnichannel shopping is consistent across platforms. If retailers can integrate these experiences into their own platforms, consumers will be pleased.
Increased Demand for Gourmet Prepared & Frozen Foods
Gen Z has changed the grocery market significantly, but has had a special impact on prepared foods. Gen Z reaches for an easy, prepared, healthy lunch, rather than a family style dinner. 50% of Gen Z shoppers buy prepared lunches, followed by 37% of Millennials, and 23% of Boomers. Stores have seen increases in fresh prepared foods like salads, sushi, and chicken. This category has broadened a lot from the Boomer focus on family-style dinners. With this more non-traditional desire for prepared foods, this gives retailers the unique opportunity to:
- Create digital meal planning tools centered around prepared foods
- Offer personalized prepared food recommendations
- Create mobile promotions tied to prepared foods
- Place meal bundles on display
Retailers are now in a place where they must make decisions that boost shopper activation, especially keeping in mind the influence of price. By noticing purchase behavior from specific groups of people, certain segments can be targeted to promote deals. If Gen Z buys prepared foods more, creating bundle deals can increase consumer spending.
Health-Conscious Purchasing
Consumers more than ever are looking for healthy alternatives to products and reading ingredient lists. 76% of consumers see themselves as “health-conscious” while placing a greater emphasis on sustainability. This gives retailers the optimal opportunity to:
- Publish health-related product tagging online
- Make personalized wellness recommendations
- Produce digital content around nutrition and healthy lifestyles
- Retail media campaigns targeting health-focused audiences
Health-conscious purchasers are more likely to spend more money to ensure a product has clean & healthy ingredients. If retailers can maximize healthy branding on their products both in-store and online, they can increase consumer activation.
Weight-Loss Medications
GLP-1s have emerged as a more widely adopted solution for weight management, with 1 in 8 Americans citing their use for weight-loss. People focus more on how many calories are in a product, on serving sizes, and are placing more emphasis than ever on protein and fiber. Snacks are not as popular anymore, which has shifted the industry greatly. However, this gives retailers a unique opportunity to cater to the needs of people using weight-loss medication by:
- Getting new product assortments based on protein and fiber
- Creating personalized promotions for popular products
- Using shopper insights to identify changes in basket patterns
- Target digital engagement around nutritional needs
Key Takeaways
Consumer behavior is continuing to evolve around trends, value, convenience, health, and personalization. Retailers that leverage both digital engagement and shopper activation to meet these changing expectations are more likely to promote brand loyalty, influence purchase decisions, and create a more meaningful shopping experience for customers.
