Saturday, 13 February 2016

Price Still the Most Important Consideration for at Least 35% of Shoppers

From IGD comes research which groups shoppers by attitudes and behaviour rather than the more traditional demographic analysis of AB, C1 etc..
IGD have found 6 categories of shopper:
Brand purists (26%)
These shoppers are more brand loyal than the average shopper, and will plan their shopping in the knowledge that they will be able to find the brands they like.
Habitual loyalists (13%)
Like to plan their shopping, buy familiar products and stick with one or two stores rather than shop around. They tend to be older, with an average age of 59.
Savings seekers (18%)
This is the group that puts price ahead of all other considerations.
 Discounter enthusiasts (17%)
Like savings seekers this group is also concerned with how much they spend on food and groceries but are not willing to compromise on quality
Technology adopters (16%)
These shoppers have the highest interest in using technology for food and grocery shopping and do more online shopping than the average to save their precious time. They tend to be younger, London based, and shop frequently.
Foodie adventurists (10%)
Are the most likely to cook from scratch, try new recipes, and to buy new products on impulse.

It is dangerous to be overly definitive when assessing how to make snapshot data like this actionable, and shoppers will fall into more than one box, but some points jump out.
First, it is perilous to underplay the importance of price.  At least 35% of shoppers (savings seekers and discounter enthusiasts) are very price conscious, and it would not be rash to suggest that a good proportion of those in the other boxes are price conscious too. Indeed it is striking that the IGD has not found a category that subordinates price in favour of some other attribute.
Aldi certainly feels that price remains critical. It announced yesterday that it intended to be "cheapest for ever" in Britain, and cut its prices on meat fruit and vegetables. Meanwhile Sainsbury announced that it was pulling away from multi-buy promotions in favour of everyday low prices.
Secondly, people remain very traditional in their food buying habits. Only 10% can be described as adventuresome compared with the 39% of brand purists and habitual loyalists who do not stray too far from the familiar.
Thirdly, the percentage of technology adopters is surprisingly small given all the hype we read about consumers supposedly turning in droves to shopping on smartphones and tablets. The number may explain why online grocery shopping  is not reaching the average 15% per annum growth rate some had predicted. Ocado, the dedicated online grocer, clocked up 13% growth in the most recent quarter, and Sainsbury just under 10%. Tesco stated that their growth over Christmas was around 5%. Tellingly, Dave Lewis, Tesco chief executive officer, said that the company was being “much more thoughtful about the economics of online versus the offer elsewhere in the estate.” , which suggests that Tesco does not intend to push for high online growth rates at the expense of profit.