1、THE GROCER VISION REPORTTHE GROCER VISION REPORTPAID FOR BY AND WRITTEN IN PARTNERSHIP WITH This is what consumers want in 2023THE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023ContentsINTRODUCTIONGetting to grips with the ever-evolving consumer 4 Shopper behaviour has rarely been more volatile n

2、or more unpredictable.But as a cost of living crisis escalates around the UK,neither has the need for consumer goods brands to understand what their customers want been more urgent.CHAPTER ONEMeet the shoppers 8 Yes,uncertainties remain.But there are some clear behavioural shifts underway that can h

3、elp brands navigate challenges,and leverage opportunities too.CHAPTER TWODeconstructing value in a cost of living crisis 14 Consumers may be preoccupied with price,but that isnt the only product characteristic they care about when deciding what and what not to add to their shopping trolley.What matt

4、ers instead is delivering value,be it through innovativeness,functionality or sustainability.CHAPTER THREEHarnessing shopper insights to drive brand loyalty 18 Gathering the right customer insights is only the first step for consumer goods companies.Next,theyll need to develop agile and reactive pro

5、cesses that allow them to turn these insights into strategic action.CONCLUSIONUnderstanding what consumers want is the key to surviving this cost-of-living crisis 24 It has arguably never been more challenging to get to grips with what your customers want.Not least as shoppers grapple with the unpre

6、dictability of an ongoing financial crisis.But those companies that do manage to achieve this level of insight are set to emerge from this current crisis in a far better shape than the competition.CONTRIBUTORSWords:Megan TatumDesign:Amber Stoddart2TheGrocerVision paid for by and written in partnersh

7、ip with5THE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023TheGrocerVision paid for by and written in partnership withIntroductionGetting to grips with the ever-evolving consumer For UK consumer packaged goods(CPG)the last few years have been nothing short of a rollercoaster.How can brands keep up

8、?The industry has grappled with sweeping disruption to global supply chains,steep cost rises across commodities and logistics,the bureaucratic headache of Brexit and a deeply unstable geopolitical terrain.But perhaps their biggest challenge has been getting to grips with exactly what it is that thei

9、r consumers really want against the backdrop of consistent uncertainty.Rarely has shopper behaviour been more volatile First off,a global pandemic pushed millions of locked down consumers online where they splashed out on reas-suringly familiar brand names,brushed up on their cooking skills and indu

10、lged in premium treats to make up for the lack of social lives outside the home.COVID-19 also brought with it a surging interest in wellbeing.There was a 500%spike in searches for immunity in food and drink following the onset of the virus,found Google Trends data,and by early 2021 an ONS survey rev

11、ealed that more than 80%of UK adults had decided to carve out healthier lifestyles.Then came an end to restrictions from Spring 2021.A shuttered hospi-tality industry reopened to waiting queues,remote workers returned to offices in their droves and shoppers armed with accumulated savings pots sought

12、 out greater convenience and value once again,as they diverted dis-posable incomes toward long-awaited leisure activities.During June,consum-ers splashed out 37%extra on eating and drinking out compared to two years previous,according to data from Bar-claycard-and spent 15.4%more overall during the

13、height of summer even com-pared to pre-pandemic.Now,an escalating cost of living cri-sis looks set to upend consumer behav-iour once again.By October 2022,the Deloitte Consumer Tracker revealed con-sumer confidence had fallen for a fifth consecutive quarter,reaching a record 67THE GROCER VISION:THIS

14、 IS WHAT CONSUMERS WANT IN 2023TheGrocerVision paid for by and written in partnership withTheGrocerVision paid for by and written in partnership withlow of-20%,as sharp increases in the cost of fuel,energy and food left many households forced to cut back.Nearly a third(30%)of consumers said they had

15、 begun to spend less,with home energy consumption(57%),fashion(40%)and entertainment(22%)the hardest hit.Food and drink is by no means immune either.A November survey commissioned by Ingredient Communi-cations,found that 29%of UK grocery shoppers had stopped buying a particu-lar brand or product bec

16、ause of increas-ing prices,half(47%)had purchased a product less often for the same rea-son and 54%had switched to a cheaper brand or private label alternative.In short,CPG brands can no longer take consumer loyalty for granted.In the coming year,theyll need to dig deep if theyre to prevent shoppers

17、 downtrading away from their brand,and demonstrate the value that makes their product worth paying for.To do that,theyll need to understand what is motivating consumer behaviour in the current economic climate.Thats no easy task,of course.It would take a time machine to predict with any certainty ho

18、w consumer sentiment could evolve in the coming months,and how shoppers might respond to further finan-cial challenges in the supermarket.But“Brands can no longer take consumer loyalty for granted.In the coming year,theyll need to dig deep if theyre to prevent shoppers downtrading away from their br

19、and,and demonstrate the value that makes their product worth paying for.”that doesnt mean there isnt huge ben-efit in understanding what behaviour is already beginning to emerge as a result of the cost of living crisis and what dif-ferent customer segments may develop as we move through 2023.By usin

20、g these behavioural insights as a base-line,teams can regularly build on them,developing clear mechanisms via which to monitor what motivates their consum-ers from week to week,and from month to month.Its only by doing so that theyll have any chance of holding onto loyalty in the challenging year ah

21、ead.Thats why in the report,well explore:Expert analysis on how consumer behaviour could evolve in the coming months and changes that are already taking place in stores What value really looks like to shoppers in 2023 How to use these insights across areas such as promotions,merchandising and market

22、ing and how others are already doing so The need to develop mechanisms that allow teams to keep their finger on the pulse going forward 9TheGrocerVision paid for by and written in partnership withTHE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023Chapter OneMeet the shoppersAn escalating cost of l

23、iving crisis looks set to reshape consumer behaviour yet again.What key purchase trends look set to emerge?sectors boomed by 44%in b2b sales and 95%in b2c from 2020 to 2022,accord-ing to research by Salesforce.This has been far less pronounced in the con-sumer goods industry with a peak in online sa

24、les of just 16.1%in January 2021,according to data from NielsenIQ but still reflects a fundamental attitu-dinal shift across many consumers,who have developed a greater comfort and familiarity with digital channels.Not least as,even where final transactions take place in bricks and mortar stores,dig

25、ital platforms are increasingly used as a source of inspiration and informa-tion.As a result,more than two thirds(69%)of 4,000+global companies polled by Salesforce reported investing in new digital channels in the course of the last two years.Then theres the impact of their new hybrid working patte

26、rns,a core legacy of the pandemic.Nearly a quarter(24%)of UK workers had adopted a hybrid sched-ule as of May 2022,according to the ONS,and 38%had carried out at least some of their work remotely in the last seven days.As a result,many residential con-venience stores have reported a steady uplift in

27、 sales as workers pop out to pick up top-up items during the working day,while the food-to-go category has been forced to reassess and reframe its offer.Both these overarching trends have shaped strategies in the last year.But Short of a crystal ball,the coming months hold very little certainty as r

28、egards consumer behav-iour.In fact,“with the pace of change were seeing in the world,I think any-one making big bold predictions about trend buckets anything more than four to six weeks beyond where we are now is asking for trouble,”says Ben Davies,founder of market insights platform Vypr.“Making co

29、nsumer behaviour pre-dictions is hard enough in times of full economic stability,let alone when weve lurched from generational crisis to gen-erational crisis.”Then again,given the events of the last few years,that lack of certainty is practically the norm for CPG companies.Just as brands and retaile

30、rs were forced to adapt and pivot to navigate through the tumult,so too have their consumers adjusted when,where,what and how they shop,evolving at a pace that can be challenging to keep up with.In the midst of the pandemic,44%of shoppers said theyd developed perma-nent changes to their routine shop

31、ping habits,according to research by O2 Busi-ness and Retail Economics many of which have now developed into major macrotrends shaping the consumer goods landscape.Take the migration to digital com-merce fuelled by the pandemic,during which digital order growth across all TheGrocerVision paid for by

32、 and written in partnership with10TheGrocerVision paid for by and written in partnership withTHE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023against the backdrop of an escalating cost of living crisis even these can start to look uncertain.By October 2022,for instance,online sales in grocery fo

33、r instance had declined six percentage points from their pandemic peak to 10.9%as consum-ers opted to compare price at bricks and mortar stores,many opting to use cash rather than card as a way to budget and cut costs too.In short,theres a critical need to ask anew:what is it that consumers want as

34、we move into 2023?There isnt one single answer to this question,of course.The cost of living crisis will impact consumer confidence and expenditure differently depending on their age,income and dependants.While a third of middle-income consum-ers anticipate being financially worse off in the next 12

35、 months,that declines to only 15%of high-income consum-ers,according to EYs Future Consumer Index.In fact,61%of this income bracket say theyre excited about spending money on things that will improve their lifestyle.As a result,there are already some varied customer segments emerg-ing see box:The fo

36、ur shopper types set to shape 2023.But alongside these nuances in con-sumer outlook,there are some overarch-ing themes that brands need to factor in,many of which are only really starting to take shape now,despite months of finan-cial uncertainty.Though relative to each shoppers circumstances,there

37、is undoubtedly a growing desire to save cash.“With the cost-of-living crisis in full force,in 2023 well see consumers increas-ingly embrace a no frills outlook with spend,”says Melissa Minkow,direc-tor of retail strategy at CI&T“Excessive spending has become a thing of the past and more consumers ev

38、en those not so affected by the crisis are cutting costs UK consumers are spending more at supermarkets,but buying less.In October 2022,total grocery sales rose 4.4%,but volume sales declined by 6%.NIELSEN IQIn fact,annual food bills rose to 1,378 in 2022,an average increase of 26.50 per week.In Man

39、chester,the weekly food shop is now thought to be 132 on average.KIRSTYSSeven stats that show how shoppers are responding to the cost of living crisis“Making consumer behaviour predictions is hard enough in times of full economic stability,let alone when weve lurched from generational crisis to gene

40、rational crisis.”Ben Davies,Vypr That has turned price into their highest priority.Sixty-nine per cent of UK consumers say that rising prices are their top concern,compared to 58%across Europe on average.MCKINSEY&COMPANYThey arent afraid to shop around to get the deal theyre looking for.Almost a qua

41、rter of shoppers(23%)are seeking out the best deals rather than sticking with their usual brands and retailers.AMERICAN EXPRESSPromotions are looking far more tempting as a result.Half(47%)of people now say deals and promotions alone would prompt them to buy from or visit a food retailer.Once inside

42、 the store,shoppers are eschewing fresh produce in favour of frozen,as a way to spend less and make food last longer.Volume sales of fresh meat,fish and poultry fell by 8%in October 2022.NIELSEN IQTheyre also looking for affordable treats.Sales at Greggs had shot up by 15%in the three months to Octo

43、ber 2022 as the bakery chain said people indulged in its affordable sausage rolls and iced buns GREGGS1213THE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023TheGrocerVision paid for by and written in partnership withTheGrocerVision paid for by and written in partnership withThe four shopper types

44、set to shape 2023 Practical purchasers Between 18-34 years old on average,this group are also the most likely to spend their cash online.They prioritise convenience(88%)above all else,including sustainability,and would likely ditch a retailer that failed to offer super quick delivery options.For muc

45、h the same reason theyre big fans of subscription models rather than repeat buys(54%)but equally value retailers,such as convenience stores,that facilitate last-minute buys(93%).Savvy spendersGetting a good deal is top of mind for this group,who are likely to prioritise bargains,discounts and sales

46、over showing loyalty to any single retailer.This is driven by a blow to their disposable cash reserves,with 52%saying theyre currently buying less overall and 32%downtrading to more affordable brands.Cost(70%)is their top priority.Sustainable shoppersMade up of predominantly Gen Z consumers,this gro

47、up continue to care about ethical and sustainable shopping despite navigating a cost of living crisis at the same time.Eighty-nine per cent say they believe they can make a difference by shopping in a more environmentally friendly way,which includes seeking out local retailers and brands(86%).That d

48、oesnt mean they arent careful about what they spend though.Nearly seven in ten say they are buying fewer but better quality items.Experience seekers At the opposite end of the spectrum to Practical Purchasers,this group are conservative by nature and prefer familiarity.That means 78%prefer to buy fr

49、om a brand they know and 79%continue to make regular(at least weekly)trips to a bricks and mortar stores.As the name suggests,they prefer to splash the cash on experiences rather than products though.For CPGs that means this group are more likely to be saving up for occasional splurges on leisure an

50、d hospitality than premium products,though theyre also the group that like to pop an occasional treat item in their shopping basket too.where they can,opting for cheaper dis-count supermarkets and cancelling sub-scriptions.In reaction,well likely see retailers place more emphasis on basics ranges to

51、 attract consumers.”And as“consumer wallets are being squeezed”there are two major changes in consumer behaviour,says Adrian Smalley,consumer goods transforma-tion senior director at Salesforce.“Check-ing pricing online to determine how you shop and being selective in which brands are worth the prem

52、ium-experimenting and switching is likely going to acceler-ate.a category.”The transparency of pricing online means many shoppers are migrating to the discount channel.In the three months to September,Aldi reported 1.5 million new customers had walked through its doors,with non-food spe-cialists suc

53、h as B&M also seeing strong growth.For brands without a presence in this channel thats potentially problem-atic for loyalty,as consumers are more likely to try a substitute rather than go on another shopping mission.But the extent to which brands are exposed to this behaviour relates to the latter,w

54、ith some big variations by cat-egory.Fresh produce,dry goods and household products are proving par-ticularly vulnerable to downtrading for instance,while alcohol and cosmetics are more likely to hold their own.There are already some strong indica-tors as to how this growing focus on price and affor

55、dability is likely to filter through into consumer behaviour by category and by channel as the crisis gains pace see box,Seven stats that show how shoppers are responding to the cost of living crisis but at the crux of it all is a new scrutiny on which brands represent the best value.This doesnt sim

56、ply mean cutting prices.It requires CPG companies to demonstrate clear and unequivocal value next to their competitors on the super-market shelf even if they cost a few pence more.But what exactly does great value look like in the current climate?“Excessive spending has become a thing of the past an

57、d more consumers even those not so affected by the crisis are cutting costs”Melissa Minkow,CI&TTo reflect the varied ways in which consumers are responding to a cost of living crisis,American Express surveyed 2,000 UK adult shoppers.Here are the four shopper profiles that emerged15TheGrocerVision pa

58、id for by and written in partnership withTHE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023It comes as no surprise that,in the midst of an escalating cost of living crisis,the concept of value is gaining plenty of column inches.Chapter TwoDeconstructing value in a cost-of-living crisis More than

59、three quarters of UK consumers now say they want products that offer value for money,according to a poll of more than 2,000 UK shoppers by American Express in October 2022.But what does the concept of value in the current climate actually mean?There is no doubt,of course,that price and affordability

60、 are a key constituent of value for many consumers as they grapple with significant inflation in their weekly shopping baskets.“Value and price are absolutely front and centre of all purchase decisions being made,no matter what the demo-graphic,segment or profile,”believes Davies.“Value means lots o

61、f different things to lots of different people,but the need for low price products has never been so high.Brands can still thrive by trading on their core DNA,but only if they place value and price first in the queue for consumers.”As explored in the chapter above,this focus on price is prompting ma

62、ny con-sumers to actively seek out brands and retailers offering price discounts or pro-motional deals.Theyre also far less loyal in this climate and will go so far as to switch stores if it means finding a low-er-priced option,a behavioural change that is likely to see private label alterna-tives e

63、xperience the same surge in pop-ularity as during the 2008 recession see box:Lessons from the past:how con-sumers responded to the 2008 economic crash.But it would be mistaken to see main-taining or dropping prices as the only way to hang onto share of wallet,par-ticularly given the inflationary pre

64、ssures that continue to push up costs along the consumer goods supply chain.Instead,companies need to provide value that goes beyond this one metric.“Whilst the obvious response to the cost-of-living crisis is to look at pric-ing and tighten organisational belts,we shouldnt be focusing on a race to

65、the bottom,”agrees Joe Harrison,global head of brand experience and design at Reckitt.“Now more than ever we need to provide value and communicate our purpose,offer services and not just products.This is how we can continue to build brand loyalty.”This includes product quality,func-tionality and inn

66、ovative formats that offer greater convenience.As consumers 1617TheGrocerVision paid for by and written in partnership withTheGrocerVision paid for by and written in partnership withTHE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023spend less on leisure activities outside the home for instance,br

67、ands could inspire new ways to socialise while stay-ing in with scratch cooking kits,cock-tail recipe bundles or restaurant-quality ready meals.This concept of value also extends to broader brand characteris-tics,such as sustainability,with many consumers still conscious of the environ-mental and et

68、hical status of consumer goods despite the pressure on their household income.In fact,according to a recent ESG benchmark report by tech company Glow,consumers are switch-ing to brands with the strongest sustain-ability credentials at twice the rate of the average brand.“Downtrading on price is not

69、uniform across all consumers or categories except for amongst the most financially inse-cure groups,”points out Glow CEO Tim Clover.“The majority of consumers will actively make choices about which cate-gories and products they look to save on and which they are unwilling to swap.In these circumstan

70、ces consumers need a compelling reason why they shouldnt swap a brand for a cheaper alternative.Along with quality,sustainability con-cerns are likely to be a key factor con-sumers evaluate.”This has informed the strategy at Reckitt.The brand owner says it is cur-rently trialling paper-based packagi

71、ng for its dishwashing brand Finish(a move that will eliminate the need for more than 2,000 tonnes of plastic annually)while its toilet cleaning brand Harpic partners with Water.org to provide improved sanitation for families.“Initi-atives like this show our commitment to a cleaner world and it mean

72、s that cus-tomers can feel better about purchasing our products,knowing that the brand theyre spending their money on is striv-ing for innovative solutions,”adds Harrison.Premium products that provide a sense of affordable indulgence at home appear to be another component of value that appeals to sh

73、oppers,the so-called lipstick effect.“Yes,people are being cautious but theyre also not spending 50 on a meal in many cases so theyre happy to create their own special occa-sion at home,”says Simon Waterfall,managing director of soft drinks brand Soda Folk.“Were definitely getting more of a sense of

74、 the product being used dur-ing occasions as a more cost-effective treat whether in a cocktail or making a float for the kids.”Its this behavioural shift that led the brand to relaunch the full-sugar variant of its original Cream Soda SKU in November,having replaced it with a non-HFSS reformulation

75、only five months previously.The decision was made as Waterfall says he noticed indulgence and taste trumping health for many of the brands consumers in the current climate.The reality is some consumers will be fixated on price as they struggle to make ends meet.For these consumers,value is singularl

76、y focused and can only be sat-isfied by deals,discounts or smaller for-mat packs.But for others,products that deliver affordability alongside quality,“Now more than ever we need to provide value and communicate our purpose,offer services and not just products.This is how we can continue to build bra

77、nd loyalty.”Jos Harrison,Reckitt Lessons from the past:how consumers responded to the 2008 economic crashinnovativeness,sustainability and a sense of indulgence can also satisfy their evolving idea on what constitutes great value.The bottom line is that“to get a han-dle on changing consumer behaviou

78、rs,brands need to make sure that their offering stands up to increased scru-tiny as to whether its worth buying or that its value for money,”says Andrew Walker,client knowledge director at Kantar Worldpanel UK.“Brands can achieve this by offering good pack sizes and price points,but the real differe

79、n-tiation will come from the other side of the value equation whether the availa-ble product or service will add value to a consumers life.”“Theres a clear opportunity for the fmcg industry to change the narrative in 2023 and beyond,”concludes Harrison.“It starts with viewing our customers as people

80、 rather than consumers people with whom we can build rewarding rela-tionships based on long-term mutual value.”There are clear differences between the circumstances that surrounded the 2008 economic crash versus the current cost of living crisis.But there is still plenty to be gained from understand

81、ing how consumers reacted the last time their household income took a blow and their notion of value shifted.Here are five of the biggest behavioural changes CPGs saw 14 years ago.Consumers ditched multibuy promo-tions for straightforward price drops.By 2014,Bogofs were worth less than a third of wh

82、at they had been in 2010,according to Kantar Worldpanel.More expensive fresh produce was swapped out for cheaper cuts.Volumes of fresh beef and lamb fell by 6.3%and 9.9%between 2011 and 2014,according to Kantar,while pork fell by just 4%and chicken rose by 3%.Areas of sustainability that also helped

83、 consumers cut costs,such as reducing food waste,saw big growth however.The proportion of food purchases thrown away declined from 22.2%to 18.5%between 2007 and 2012.Elements of sustainability that overlapped with cost cutting saw big growth however.Such as waste.The proportion of household food pur

84、chases thrown away declined from 22.2%to 18.5%between 2007 and 2012.Premium tiers outperformed value in some cases,as consumers reached for small treats in their supermarket shop.Value sales of premium tier own-label lines at the big four had risen by a third between 2008 and 2014.19TheGrocerVision

85、paid for by and written in partnership withTHE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023to happen the only thing you can do is stay close to your retail partners and to share insights on changes to consumers behaviour and react as quickly as possi-ble,”he says.To do this requires a firm gras

86、p of the critical role of data within a consumer goods organisation.Without compre-hensive insights on evolving shopper preferences,interests and priorities brands can do little more than guess at what their consumers want.But against a backdrop of privacy concerns,the way in which this data is made

87、 available to brands is changing.Already the likes of Apple have blocked many third-party cookies using their Intelligence Tracking Prevention(ITP)feature while Google is set to phase them out by late 2023.For years,cookies have provided an inval-uable tool with which to build customer segments and

88、target messages and their decline poses a major challenge to con-sumer goods.“It creates a clear imperative for indi-vidual brand owners to create reliable sources of first-party consumer data instead,”says Smalley.“These may be insights built off a direct-to-consumer platform,leveraging the power o

89、f a strong brand community to gather feed-back on social media or crafting loyalty schemes that require the exchange of Chapter ThreeHarnessing shopper insights to drive brand loyaltyGetting to grips with consumer behaviour is only half the battle.The next critical step is turning insights into acti

90、on.“In an environment where you have no idea whats going to happen the only thing you can do is stay close to your retail partners and to share insights on changes to consumers behaviour and react as quickly as possible”Adrian Smalley,Salesforce It isnt enough for brands to sim-ply understand what t

91、heir shop-pers want and need.Instead,it is those brands that leverage these behav-ioural insights to adapt and respond via marketing,promotions or even product development that will see the tangible benefits on their ability to navigate the current crisis.The reality is that not all CPG compa-nies g

92、et this,points out Saikat Bagchi,CPG and retail analytics expert at The Smart Cube.“There is an entire spec-trum to this maturity,”he says.“At one end,less mature organisations are in the process of bringing together informa-tion sitting in silos.In the middle,there are many who are leveraging infor

93、ma-tion in a reactive manner to act on the four Ps of marketing:product,price,place,and promotion.At the mature end of the spectrum,some organisations are adopting a proactive approach to using this information,such as implementing a create to value approach and design of experiments.”But wherever t

94、hey currently rank on this maturity scale,the cost of living crisis should propel brands to progress higher.At the crux of this will be agility,points out Smalley“In an environment where you have no idea whats going 21TheGrocerVision paid for by and written in partnership withTheGrocerVision paid fo

95、r by and written in partnership withdata but create reciprocal value for both consumer and brand.”Whatever form it takes its a process that needs to be owned internally too,to ensure speed and flexibility.“The days of briefing an agency and waiting weeks for the report are long gone,says Davies.“A c

96、onstant dialogue with consumers needs to be opened up,so that hypoth-eses and assumptions can be validated or debunked.The only way to do this in a cost-effective manner is through tech-nology,so that the consumer voice can quickly be disseminated throughout organisations so they can optimise their

97、decision-making in real time.”“Making decisions on market data that is even three months old may be dangerously misleading;the behaviours that a consumer displays today may be uprooted by changes in the macro eco-nomic environment within weeks,both for the positive and negative.Its crucial for brand

98、s to remain in constant dia-logue with consumers through this time as they navigate through this crisis.”And,of course,use this dialogue to act upon the insights it provides.Those most able to do so will be those with teams and systems that are set up for rapid responses and adjustments.For example,

99、“those that invested in their digital capabilities a few years ago are probably going to be in the best place to respond as things change and evolve,”adds Smalley.For those stuck on spread-sheet driven annual planning cycles meanwhile,will struggle to adapt in the current volatile,high inflationary

100、world.Its going to be an incredibly challenging period.THE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023Where and how consumers shop has never been more fragmented.Yes,many have returned to bricks and mortar stores for their weekly grocery shop since an end to COVID-19 restrictions,but they now

101、increasingly split their spend across the multiples,discounters and convenience stores in search of the right deal.Digital platforms too continue to play a significantly enhanced role in their purchase journey,even where final transactions take place in a physical store.Consumers now use social medi

102、a for recipe and product inspiration,budget their shopping baskets using comparison sites and download personalised discounts on retail loyalty apps.That means it isnt enough to know who consumers are,brands increasingly need to understand where to find them and tailor their messages carefully accor

103、ding to the channel.Thats getting harder to achieve though.Just as channels have become more fragmented so too are teams grappling with declining marketing budgets.Spending on marketing for consumer goods decreased slightly from 8.3%in 2021 to 8.0%in 2022,according to Gartner,making it ever more cha

104、llenging to craft strategies that hit every digital and physical touchpoint.In short,brands need to be doing more with less.All which amplifies the need for brands to boost the efficacy of their media spend.Currently,around 60%of cash spent on digital advertising is wasted,according to a report by A

105、lixPartners,and fails to deliver a positive ROI.So,here are three ways brands can use data and insights to cut waste and reach consumers in the right places.Dont spread resources too thin.Identify three to four channels with which others in the category have a strong track record on ROI and focus yo

106、ur efforts there.Create channel-specific data silos to understand how consumers are making use of a particular platform and which message would therefore resonate Use digital ad spend to build brand equity as well as drive sales.In other words,create a full-funnel strategy tailored to different digi

107、tal touchpoints“Making decisions on market data that is even three months old may be dangerously misleading”Ben Davies,Vypr Getting to grips with the new multichannel mix2223THE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023TheGrocerVision paid for by and written in partnership withTheGrocerVisio

108、n paid for by and written in partnership withShould shrinkflation ever be a part of consumer goods strategy?First coined all the way back in the 1980s,the term shrinkflation has worked its way into mainstream rhetoric in recent years thanks to some high profile examples and equally high profile back

109、lash.From tins of Quality Streets getting quietly smaller each Christmas,to incrementally larger gaps between Toblerone triangles and shrinking cans of Coca-Cola,theres an extensive list of consumer goods brands that have reduced pack sizes to maintain prices.But given that it often leaves consumers

110、 feeling cheated,should shrinkflation play a role in the current cost of living crisis?The data suggests its already happening.According to a 2022 study by IGD,80%of UK shoppers have noticed shrinkflation happening in retail in the last 12 months,with this awareness varying by category.Fifty-nine pe

111、r cent of consumers have noticed items getting smaller in the last year,for instance,while for chilled products,such as ready meals and prepared meats,this drops to just over a quarter.Fresh meat and fish sits lower at 19%and dairy at 17%.Those CPGs that pursue this strategy should do so with cautio

112、n though.Where introduced without clear transparent communication on the decision to reduce pack size(and the reasons for doing so)brands risk being labelled dishonest or even deceptive.Its also important to consider how the brands particular target audience might react.For example,the same study fo

113、und that a sizeable chunk of consumers would prefer to pay more for a product than see packs shrink but this varied significantly by income levels.Forty-seven per cent of the most affluent consumers(AB income bracket)would prefer to pay more,compared to 28%among the lowest earning consumers(DE incom

114、e bracket).There are organisations,of all types and sizes,that have already demon-strated the impact of rapidly responding to consumer preferences.In March 2022,Asda unveiled its plans for a new Just Essentials own label tier in stores,for example,just as shoppers began to grav-itate toward private

115、label products.The UK grocer reportedly gave its suppliers just four weeks to support the 300-strong range,with many questioning the via-bility of such a rapid rollout.But two months later,at the end of May,the first products hit stores.As of November 2022,Asda became the fastest growing super-marke

116、t in Britain,with an increase of 7%in shopper visits to stores,according to Nielsen IQ.In August,Leeds-based sausage brand Heck leveraged similar insights to launch a new,standalone value tier brand called the Yorkshire Sausage Co lowering the meat content to 42%in its pork sausages to support a pri

117、ce point of just 2 for a 410g pack,33%cheaper than its more premium line-up.And after insights showed its brand portfolio was losing consumers to own label alternatives,Unilever also announced its decision to boost spend on advertising and marketing by 200m in order to maintain market share in an in

118、flationary environment,and reas-sert the value and purpose of its brands.Though the multinational brand owner expects to see its market share drop as a result of its stance on price,it maintains that this focus on brand equity will see its portfolio sustain and even gain share in the long term.In a

119、call with investors in October,CEO Alan Jope said 80%of its brands were either holding or gaining brand power as a result of its approach.As well as major campaign or product launches though,there also is huge value in carefully utilising shopper insights to identify those consumers most at risk of

120、abandoning the brand and developing hyper-targeted communications focused on this group,suggests Smalley.“It cant just be above-the-line brand building.If youve got an extra pot of money then you need to identify those consumers at risk and make sure youre hyper-focused on targeting those through so

121、cial and media channels where youve got the capacity for precision targeting.”Make use of the tools that are increas-ingly available to turn data and insight into action,agrees James Cuthbertson,CRO of Relative Insight,which recently carried out an 18-month study using social listening metrics to cr

122、eate a pic-ture of changing shopper behaviours.“Intelligence gathering matters more than ever,”he says.“Headline stats or numbers only tell us the what,rather than the why.Yet still,many do not leverage unstructured text data.Fortu-nately,today technology renders this possible,in near real time and

123、without manual intervention,making it p ossible to uncover a treasure trove of insights which go beyond more rudimentary personas or consumer segmentations.”25TheGrocerVision paid for by and written in partnership withTHE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023ConclusionUnderstanding what

124、consumers want is the key to surviving this cost-of-living crisis It might not be easy.But itll be those consumer goods companies that get to grips with what consumers want that will survive this crisis.Its undeniable that getting to grips with what motivates consumer behaviour has always been a cri

125、t-ical part of success in consumer goods.Understanding how shoppers make choices,what theyll pay extra for and what are their red lines:its all integral to building brands to which theyll remain loyal.But never has it been more valua-ble nor more challenging than in the last few years.From the globa

126、l pandemic to the ongo-ing conflict in Ukraine and the constant threat of climate change,the cost of liv-ing crisis is the latest in a string of major disruptions to have unsettled typical con-sumer behaviours and shifted priorities.For consumer goods brands this con-stant rollercoaster ride of shop

127、per behav-iour can feel incredibly challenging to grapple with.Not least given the dual challenges they face with rising costs and ongoing disruptions in their own supply chains.But challenging as it may be,staying on top of how consumers are responding to this latest crisis should be a non-negotiab

128、le.It is those CPG companies that con-nect the dots across the organisation and dig deep into data and insights to build up a picture of how this behaviour might evolve in the coming 12 months that stand the best chance of emerging from this latest crisis with their market share intact.This isnt sim

129、ply about relying on shopper personas that ring true now either.As explored in this report,there are a number of emerging trends that brands should pay attention to,from the risk of downtrading,to the variations in consumer confidence by demographic and the well-documented lipstick effect,by which s

130、hoppers seek out small affordable indulgences,create new at home consumption habits in the midst of financial difficulties.This report has broken down the changing concept of value too.The way“From the pandemic to the conflict in Ukraine and the threat of climate change,the cost of living crisis is

131、the latest in a string of major disruptions”By Adrian Smalley,Customer Transformation Senior Director,Consumer Goods at Salesforce.26TheGrocerVision paid for by and written in partnership withTHE GROCER VISION:THIS IS WHAT CONSUMERS WANT IN 2023“If the last few years have taught the industry anythin

132、g,it is to prepare for the unexpected”Adrian Smalley,SalesforceHow Salesforce can helpAt Salesforce,our expertise can help consumer goods brands get on top of behavioural changes and react fast-even in the most volatile climate.We can help you give consumers exactly what they want to deliver success

133、 now,by:Creating strategies that increase productivity&efficiency whilst engaging with customers on their terms Reducing customer acquisition costs to make the most of every marketing pound Driving more business value using the data and resources you already haveTo find out how were helping brands l

134、ike yours achieve a 32%increase in Marketing ROI,get in touch here.Our experts are ready and waiting to talk you through exactly what we can do for your business.in which price is only one lever that brands can pull in order to create com-pelling product propositions,with pack size,premium positioni

135、ng and environ-mental impact still holding sway with different segments and generations of consumers.These topline insights should abso-lutely feed into strategies as we head into 2023 but brand teams should regard them as a starting point,a baseline for an ongoing pulse check month by month,or even

136、 week by week.This will mean not only gathering data from vari-ous sources,but sharing with teams reg-ularly to analyse and take action,be it to tweak promotions or pricing,NPD or shopper marketing campaigns in order to reflect the current zeitgeist.Its true that many brand owners arent set up for t

137、his.On the one hand,they often lack the capabilities for pre-cision marketing and the mechanisms via which to gather first-party data,both of which are required to build the right segments and target the right consum-ers with the right messages.Plus,they lack agility.They rely on agencies to do this

138、 work on their behalf,slowing down decision processes and,added to this,they continue to use annual planning that leaves little scope for even quarterly adjustments.But as the industry navi-gates this latest crisis that will need to change.If it doesnt already exist,agil-ity will need to be reverse

139、engineered into each process,with cross func-tional teams collaborating to drive faster approvals leveraging software to make data-driven decisions significantly faster.Nobody has a crystal ball for exactly how the cost of living crisis will impact consumer behaviour in 2023.If the last few years ha

140、ve taught the industry any-thing,it is to prepare for the unexpected after all.Thats why embedding insights and data-driven actions must be at the core of operational decision making over the next 12 months,with brands set up to respond to evolving consumer prefer-ences,whatever that may look like a year from now.