Consumer Behavior Shifts in Response to High Inflation Present a Grocery Marketing Opportunity

 

As 12% grocery inflation affects consumer behavior nationwide, it presents a grocery marketing opportunity to increase market share.

  • Rural shoppers are using traditional & discount formats more often.
  • Shoppers are making more, smaller trips. This is often at multiple groceries and retailers as shoppers seek to lower the cost of their weekly market basket.
  • Many consumers can’t afford the larger baskets or bulk sizes at warehouse stores.

Discount models such as Aldi, Lidl, Trader Joe’s and Dollar General are experiencing growth and adding stores. While big box discount stores like Walmart will always have their share, smaller local stores can set themselves apart by staying top-of-mind as consumers are cross-shopping for deals more than ever.

As Inflation Grows, so Does the Number of “No Preference” Shoppers

Historically, the consumer segment with no brand preference has grown during weak economic times.

National Market Share by Brand, July 2022:

  • No Preference represents a larger percentage than Kroger, the largest national grocer
  • No Preference is 7.4% and growing

Understanding this invisible “competitor” presents a tremendous opportunity to gain loyalty and drive new customer growth.

Inflation Is Impacting Spending & Shopping Behaviors

In June 2022, 81% of shoppers changed what and where they made purchases in June, up 50% from fall 2021.

  • 54% seek sales specials
  • 45% skip non-essentials
  • 33% find coupons
  • 29% buy private low-cost brands
  • 17% cherry-pick across retailers, even amid high gas prices

A Plan to Drive the Path to Conversion

What is the most effective way to engage the “no preference,” price-conscious consumer and ensure your grocery store is their first preference?

While grocery retailers have traditionally relied on newspapers to distribute their weekly circulars, newspaper coverage continues to shrink across the country. Nearly 300 newspaper/total market coverage (TMC) publications have stopped circulation since 2019 – 100 during the first six months of 2022 alone. Mspark solutions can help fill those gaps.

As newspaper coverage shrinks, direct mail is more relevant than ever. The mailbox isn’t as noisy as the email inbox or the social media feed. That’s the beauty of direct mail marketing: There’s less competition for attention, and your audience is open to receiving it.

Engagement with the Mailbox is at an All-Time High: Consumers spend 11 minutes sorting, opening, and reading mail daily, and 79% of recipients look forward to checking their mailbox each day

Direct Mail Has a Higher Trust Factor: Younger consumers don’t associate direct mail with “junk mail” the way older consumers do.

Direct Mail Stands Out: Young people get hundreds of media messages a day but only a few pieces of actual mail. Sending physical mail is a way to stand out from the crowd.

Direct Mail is More Shareable: Unlike one-to-one marketing, physical mail goes to a household. Retail Wire reports 88% of key purchase decisions for retail are discussed at home, and direct mail pieces give recipients a reason to talk over the offer.

Direct Mail has a Longer Lifespan: Most media messaging has a lifespan of just a few seconds, RetailWire reports, while direct mail’s average lifespan is 17 days.

Direct Mail Increases Coupon Usage Across All Ages: When coupons are distributed in the mail, usage increases 78% among millennials, 86% among parents, 88% among millennial parents, and 79% among affluent parents.

Coordinated Exposure with Digital Strategies Increases Results

Through integrated advertising campaigns, grocers can promote awareness, sale events, and services while targeting their best potential customers.

  • When print campaigns are complemented with coordinated digital exposure, response rates increase up to 118% and conversion rates up to 28% compared to direct mail alone.
  • 92% of consumers are driven to online activity after receiving direct mail.
  • Consumers are more likely to make a purchase after receiving both print and digital ads from a brand, including:
    • 50% of millennials
    • 47% of generation X
    • 32% of baby boomers

Learn more about how grocery and supermarket clients have benefitted from our solutions in our case studies. Reach out today to plan your strategy!

Sources: Pacer.ai May 2022; Prosper Insights & Analytics July 2022; Vericast July 2022; RetailWire 2022; US Small Business Assoc. 2022; USPS Mail Moments Survey, Spring 2021; AdMall AudienceSCAN 2021; Millward Brown Print Campaign Analysis; Simplifi; SG360 The Future of Direct Mail 2021