As headlines warn the cost of living is rising at an alarming rate, there’s no doubt we’re in for an extended period of belt-tightening.
Rocketing fuel, energy and food prices are going to be with us for the foreseeable future, leaving many people with little spare cash to spend.
In these circumstances, it’s unsurprising to see value-focused brands doing well. Kantar data shows consumers are already switching where they shop, with Aldi and Lidl recording their highest ever market shares.
But new research from the Chartered Institute of Marketing (CIM) reveals that whilst value is important, consumers may not behave exactly as expected as money gets tighter. The survey reveals convenience tops the table of the fastest-growing consumer needs (83%), closely followed by value for money and environmental impact, which are tied at second place (78%).
The study, which explores the views of 500 in-house and agency marketing professionals, shows the effects of e-commerce on consumer behaviour.
The ability to be able to buy almost anything we need with the click of a button on our phones or tablets has become so ingrained that we are prepared to sacrifice value for money in favour of convenience.
CIM’s survey also reveals consumers are concerned about companies’ performance on diversity and inclusion, which is in third place (74%), followed by shopping locally (73%). Interestingly, having a physical store to visit is one of the least important consumer needs (38%), highlighting the shift towards online shopping.
What these figures reveal is that despite the tighter market conditions, brands can compete on convenience and the values they promote and advocate, even if they cannot match their competitors on price.
I believe this demonstrates a fundamental change in the way consumers think about brands, which means it’s no longer possible to simply compete on price. Corporate values are increasingly important.
A pre-Covid CSR study by Ebiquity Global found 91% of global consumers expect companies to do more than make a profit, and to also operate responsibly to address social and environmental issues. Eight out of 10 say they seek out responsible products whenever possible, whilst 90% said they would boycott a company if they learned of irresponsible or deceptive business practices.
So what does this mean for grocery businesses? In the next 12 months it will still be fundamentally important to offer value. However, if consumers can’t buy from your website or find you quickly and easily online, expect a tough time. Businesses need to invest to ensure their digital offer keeps pace with consumer expectations. You’ll win more sales with features like ‘one-click’ shopping, click & collect, next-day delivery and free returns.
However, convenience shouldn’t come at a human and environmental cost. Marketers have a responsibility to balance the shift towards convenience and ensure they are shaping the right societal behaviours such as sustainable supply chains and good labour practices.
There’s no doubt the months ahead are going to be tough, but brands that recognise the changing nature of consumer attitudes will be the ones that prosper.