Wednesday, 8 December 2010

The Demanding Consumer - Wanting it All and Wanting it Now

Consumers are fickle creatures. What they want changes all the time.

The Institute of Grocery Distribution signalled a change in consumer behaviour when they found that exemplary ethics are increasingly expected as the normal way of doing business. No longer, they say, are value seekers and ethical consumers two different groups. Rather, there is an increasing overlap between the two. Consumers are “seeking value for their values” and are not prepared to pay a big premium for high ethical standards.

Another example of change comes from consultants OC&C. They suggest that the days have gone of retailers being known for one particular attribute, like low prices, or great service, or widest choice. Instead, they say, consumers are no longer prepared to make tradeoffs, like swapping price for service, or service for choice, or sacrificing all for the cheapest price.

These changes are not limited to a few consumers. The demanding consumer is everywhere, and we see evidence of retailers rushing to satisfy these demands in store right now.

Waitrose is a great example. Known primarily for its good quality and service, but considered expensive, it has now matched Tesco’s price on 1000 lines, and regularly price promotes its products.

Sainsbury also listens hard to consumers. It too price promotes heavily, it has developed its own Sainsbury brand range to provide cheaper alternatives to major national brands, but it offers a premium range for quality seekers.

ASDA has recently said its food is not of good enough quality, and upped its game with the introduction of “Chosen by You”.

As to why consumers have become even fussier, OC&C reckon that the internet has been a factor, for, at the click of a mouse, consumers see huge choice, at the best possible price, backed by great service, like next day delivery and no hassle returns.

The economic downturn will have played a part too, with consumers understandably wanting to get the best possible value for money, meaning they will search for the combination of price, choice, quality and service that best suits their particular needs.

Probably the major reason for consumers wanting it all and wanting it now is the nature of UK retailing. Grocers in particular are intensely competitive. They are obsessed with not allowing rivals to steal market share and so are highly attuned to the slightest nuance of consumer behaviour change. Their eagerness to respond before their rivals means that even slight hints of consumer change are put into action, to make sure shoppers stay with them as opposed to taking their custom elsewhere. And so consumers get used to having their demands met and understandably keep pushing for more.

Whatever the reasons, we can expect the bar of consumer demand to get ever higher.