An already chaotic retail landscape was rendered virtually unrecognizable by the global pandemic, and after more than a year of lockdowns, economic hardship and transformed shopper behaviors, retailers are beginning to think ahead to what shoppers’ behaviors may look like as the world emerges from the depths of COVID.
Fortunately, a just-completed global shopper study illuminates shoppers’ preferences, perceptions and behaviors today – as well as their expected behaviors in the post-COVID landscape. DemandTec President and General Manager Cheryl Sullivan and VP of Data Science Geoff Pofahl dive into these findings and their implications for retailers in a lively presentation and discussion moderated by Mike Troy, Editorial Director for Retail Leader and Progressive Grocer. If you missed the live event, which was attended by hundreds of retailers, you can access the replay at your convenience. Meanwhile, here are some quick highlights.
Shoppers are More Price-Aware than Ever
With large swaths of shoppers impacted by furloughs, layoffs or income reductions, and many others living in uncertainty about their economic futures, price awareness and sensitivity is extremely acute. Across the shoppers surveyed in Brazil, France, Germany, UK and the U.S., a whopping 59% state that price will be even more important in the future. Now much more inclined to compare prices before purchasing, shoppers also report that they are noticing more price changes today than they did pre-pandemic. Clearly retailers must get prices right the first time, or risk losing shoppers to competitors who present more relevant prices on the items that shoppers pay most attention to.
Shoppers Who Went Online will Stay There
While 58% of pre-COVID shoppers shopped in-store “always” or “almost always,” that number has dropped to just 28% today. In contrast, 34% now shop “always” or “almost always” online, with the balance rating their preferences for in-store v. online about evenly. This means that every aspect of pricing, from everyday price to promotions and markdowns, must be relevant to the shoppers in the channel where they shop. And the days of relying on home mailers or in-store flyers to communicate key prices and promotions are eclipsed by mobile apps and websites. Retailers must leverage channel-aware price, promotion and markdown science to provide the right prices at the right times and in the right place to keep their shoppers engaged.
In a reversal of early perceptions of private label, an astounding 81% of shoppers perceive private label to be of higher or similar quality compared to national brands.
Rise of the Private Label
It’s not likely to come as a surprise that these price-aware shoppers are much more receptive to trying private-label brands than they were in the pre-pandemic era. What is eye-opening, however, is their perception of quality in private-label v. national brands. In a reversal of early perceptions of private label, an astounding 81% of shoppers perceive private label to be of higher or similar quality compared to national brands. Clearly the time is right to tap science insights to strategically position and price private-label offerings against national brand options, and home in on the best ways to capitalize on these traditionally margin-rich items.
Geoff also gave provocative insights into how vendors can take a fresh, modern look at applying data science in the realm of retail pricing science to deliver flexibility, adaptability, efficiency and better overall accuracy and performance.
Cheryl and Geoff had many additional insights to offer, along with actionable steps retailers can take to ensure that they achieve the elusive win-win of pricing: providing shoppers with prices they love on the items that matter, while knowing where in the assortment retailers can safely recover margin to keep a sustainable, healthy business model. You’ll get value not only from the content Cheryl and Geoff presented but from the wide-ranging Q&A that followed. I encourage you to watch the replay today – it will be well worth your time.