š shopper groups react to economic changes in surprising waysNavigating shoppersā new behaviors.
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January 8, 2024
517 words | 2.5 minutes to insight
economic pressure spurs surprising behaviors by income level.
high-income shoppers are changing trip-saving tactics to shop food & beverage
š¼ļø big picture: Due to a significant drop in their savings since 2021, high-income shoppers are embracing the spending habits commonly associated with their more budget-savvy counterparts. Deal-driven shopping trips are up 11.6%* from last year, and thereās a shift to the Club channel as more than half of high-income shoppers are realizing the cost savings of larger pack sizes. At the same time, thereās also an unexpected move to the Dollar channel for these shoppers.
šÆ get granular: Retailers can consider the following strategies to appeal to high-income shoppers:
Create enticing occasion bundles for lunch and dinner because shoppers are eating leftovers more often.
Provide incentives to encourage impulse purchases, as a quarter of shoppers showed increased interest in making unplanned purchases to take advantage of a deal.
Take advantage of the opportunity to offer more variety in large pack sizes to satisfy the increased demand.
low-income shoppers want more than just low costs
š¼ļø big picture: Low-income shoppers are becoming more purposeful, looking beyond coupons and price points to make their dollars stretch. These shoppers are very fond of making grocery lists and sticking to a budget while also being increasingly intentional about how they factor the convenience of online delivery. They are actively seeking retailers that have consistent pricing online and in-store.
šÆ get granular: Ways retailers can leverage this new low-income shopper mindset:
Secure a place on shopping lists by utilizing pre-shop marketing levers such as social media ads and influencer recommendations. Focus on simple, high-quality meal ingredients and meal replacements.
The primary reason for not making an impulse purchase is often the absence of desired products. Therefore, prioritize the right assortment, specifically indulgent items, that appeals to low-income shoppersā wants and needs.
Consider larger pack sizes, which are also in increasing demand for this segment, as theyāre currently seeking Mass retailers for value-sized products and convenience.
planning ahead for future shopper trends
š¼ļø big picture: While grocery budgets are less impacted by inflation (vs. last year), retailers must consider unpredictable finances for most shoppers. Over half of shoppers are more intentional with their purchases in the top food and beverage impulse categories, and 70% still feel financially stretched. This trend includes a decline in āStock-Upā and āMeal Prepā trips, as well as an increase in "Get a Deal" trips compared to the previous year. However, thereās still opportunity to drive impulse among the nearly half of shoppers who havenāt been cutting back on unplanned purchases.
šÆ get granular: Retailers can work to stay ahead of behavior shifts across income levels by maintaining relevance with their shoppers:
Implement strategic pre-shop and in-store/online marketing tactics that lead with cost-effectiveness, taste, variety, and quality.
āStock-Upā trips are still the #1 trip driver where retailers have the opportunity to build baskets through in-aisle, cross-merch signage, which can remind shoppers about items that may have been left off their shopping list.
Itās all about finding the right impulse areas of the store ā in the last quarter, the Sports, Energy, and Nutrition items have seen impulse purchase rates increase by 4%.
*PepsiCo Demand Accelerator, "Shopper Response to Macro-Economic Factors & Student Loan Repayment Deep Dive," September 2023
Partner with your PepsiCo team to identify growth opportunities across various shopper groups through our pepvizā¢ approach. Find out whatās driving the shifts in different shopper cohortsā behaviors in our ongoing pepviz Shopper Habits series.
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