Looking for a deal: Acosta study: Shopping behavior has ‘fundamentally changed’
Shoppers of consumer packaged products are buying less, and more than half say the majority of their purchases are bought "on deal."
The results are found in a trade promotion study by AMG Strategic Advisors, the growth strategy consulting unit of Jacksonville-based Acosta Sales & Marketing.
Acosta is a full-service sales and marketing agency in the consumer packaged goods industry.
The study, "A Shift in the Lift: A Study of Key Factors Influencing Trade Promotion Effectiveness," analyzed key issues affecting the retail environment.
Those issues included insights into shopper behaviors, trends in consumer packaged goods and retailer marketing, and tips for creating an effective trade promotion strategy.
"Shopping behaviors have fundamentally changed and shoppers are making fewer impulse purchases – and often expecting to find their favorite items on promotion," said Carrie Shea, president of AMG Strategic Advisors, in a news release.
"Because of this, trade promotion is no longer generating the same level of promotional lift as it has in the past, and manufacturers must shift their trade promotion strategies to become better aligned with the changing marketplace," she said.
Shea said trade promotion strategies will continue to evolve as manufacturers "increasingly realize the benefits of shopper marketing programs, digital and social media investments across the path to purchase, and new behavioral economic strategies."
Among the findings:
Shoppers are looking for everyday value.
• 67 percent of shoppers said they are "buying less and sticking to a budget."
• More than half (54 percent) of shoppers indicated they are buying fewer items on impulse, making it more difficult for retailers and manufacturers to persuade shoppers to purchase unplanned items.
• 59 percent of shoppers indicated more than half of their shopping basket is filled with items that are "on deal."
• Shoppers have become accustomed to buying products on promotion. In fact, 65 percent of shoppers said they "expect certain products to be on sale, and if they are not, they will wait until they are on sale to purchase."
Retailers continue to look for ways to drive profitability.
• It's expected that over the next three years, nearly 75 percent of retailers will use either "everyday low price" or some form of hybrid everyday-low-price/high-low format.
• 67 percent of retailers did more digital advertising in 2012 compared with 2011.
• 46 percent of retailers are moving toward a more "clean floor" policy, limiting the available display space in stores.
Manufacturers continue to seek strategies to maximize promotional spending.
• Shopper marketing is estimated to be 16 percent of the total marketing dollars spent.
• 25 percent of manufacturers are shifting trade funds toward digital promotions.
• 42 percent of manufacturers plan to spend more on long-term temporary price reductions to buy down prices.
AMG Strategic Advisors said the research was sourced from 35 retailers representing more than 80 percent of total commodity volume across the country. For the full report, visit www.acosta.com/hottopicreports.