Wiser consumers will seek more value, local foods

The silver lining in the nation’s dreadful 2008 is how consumers have begun to shop smarter, and how retailers emphasized innovative brands, cost controls and new media messaging strategies to distinguish themselves. These lessons were costly last year, but will pay dividends to consumers, CPG and retailers that stick with their new disciplines in 2009. Looking at consumer behaviors this year, here’s what supermarkets can expect, according to Phil Lempert’s outlook session with Nielsen Wire: • To save, they’ll purchase more store brands, and use coupons and shopping lists more. • To buy healthful foods, they’ll pay more attention to package labels and ask retailers more direct questions. According to a recent SupermarketGuru.com/Readers Digest Entertaining Group survey, “72% of shoppers will continue to use the shopping strategies they’ve discovered over the past six months, even when the economy recovers,” described Lempert. “The rules have changed, and more than ever the consumer is the commander of the shopping experience.”

The silver lining in the nation’s dreadful 2008 is how consumers have begun to shop smarter, and how retailers emphasized innovative brands, cost controls and new media messaging strategies to distinguish themselves.

These lessons were costly last year, but will pay dividends to consumers, CPG and retailers that stick with their new disciplines in 2009.  Looking at consumer behaviors this year, here’s what supermarkets can expect, according to Phil Lempert’s outlook session with Nielsen Wire:
•    To save, they’ll purchase more store brands, and use coupons and shopping lists more.
•    To buy healthful foods, they’ll pay more attention to package labels and ask retailers more direct questions.

According to a recent SupermarketGuru.com/Readers Digest Entertaining Group survey, “72% of shoppers will continue to use the shopping strategies they’ve discovered over the past six months, even when the economy recovers,” described Lempert. “The rules have changed, and more than ever the consumer is the commander of the shopping experience.”

He urged CPG and retailers to strengthen and expand relationships with shoppers, because shoppers will reward companies that provide the stability and accountability they seek.

Since three out of four (76%) of consumers are bored with the foods they eat, Lempert suggested that a stream of new products, recipes, flavors and conveniences could help differentiate brands and stores—especially at a time when people are buying more food in supermarkets and eating out less.

As the shift back to food stores continues, people will likely trial the smaller-store formats of 10,000 to 15,000 square feet. These can penetrate more neighborhoods, reduce overhead and deliver profits on smaller volumes.

Inventiveness will be in this year, and so will be local food sourcing. “People want to know where their products come from—especially imports. Consumers expect packaged goods to identify their source, much as bottled water has done for decades,” observed Lempert. “Marketing the source, quality and taste of ingredients will become the advertising sweet spot in 2009.”

Those messages will increasingly be conveyed in “new media that are less costly, faster, more targeted to produce, and instantly measurable….The old mode ad vehicle simply doesn’t appeal to future consumers….Less glitzy and more personal ads” could be the key to winning shoppers, he added.