American consumers have relearned how to shop and in the process reshaped the playing field for both consumer products marketers and packaged goods retailers. The recession has made it necessary for Americans to rethink and adjust their shopping patterns, which has resulted in a more strategic, informed and even calculating approach to a shopping “game” previously driven by impulse, advertising responsiveness and the fundamental attractiveness of brands.
A joint study by Deloitte and Harrison Group, “The 2010 American Pantry Study: The New Rules of the Shopping Game,” found that 92 percent of people surveyed have changed their grocery shopping behavior in the last two years. In particular, 89 percent said they’ve become more resourceful, while 84 percent say they’re more precise when they shop.
In addition, the survey showed that while this new shopping approach is generally based on spending less, about two out of three (65 percent) people don’t feel like they are sacrificing much. In fact, 79 percent reported feeling smarter about the way they shop vs. two years ago. Moreover, consumers have embraced a persistent recessionary mindset, as 93 percent surveyed said they’ll remain cautious and keep spending at their current level, even if the economy improves.
“We continue to witness consumers creating a whole new rule book and skill set for shopping that’s based on value, not boasting of brands,” said Pat Conroy, vice chairman and U.S. consumer products practice leader at New York-based Deloitte. “Our analysis concludes that personal gratification and a desire to feel smart about what consumers are putting in their shopping carts are trumping brand satisfaction, and that price consciousness, value orientation and bargain hunting will remain prevalent for years to come.”
To play the new game of shopping, consumers plan resourcefully. The study revealed four distinct shopper decision strategies, embodied by four segments of consumers, each reflecting their own attitudes and resourcefulness:
—Super Savers manage their resourcefulness at the cash register, hunting for and taking pleasure in savvy price management through extensive coupon collection
—Sacrificers manage resourcefulness at the shelf, selecting among competing products on the basis of unit price, shopping more store brands and eliminating convenience shopping
—Planners address resourcefulness through pantry management: planning out meals, accepting bulk-pack discounts and setting fixed spending limits
—Spectators are the most loyal to national brands and were the least affected by the recession, but still strive to be resourceful. Their pursuit of value still allows room for specialty goods, but they learn how to save by taking advantage of in-store discounts
According to the study, super savers, planners and spectators — which, combined, account for about 80 percent of shoppers — have little intention of returning to their old shopping practices. They see the changes they’ve made as having led to emotional, as well as practical, rewards and they don’t believe they’ve made unacceptable trade-offs in the marketplace. Sacrificers, on the other hand, aren’t as pleased with the changes they’ve had to make, particularly when it comes to the adoption of store brands.
“The extent and duration of the recession has given people the motivation to learn and adapt new strategies,” said Dr. Jim Taylor, vice chairman and director of syndicated research at Waterbury, Conn.-based Harrison Group. “Consumers are using more discount strategies, such as coupons and store incentives, and are consulting with their families about which brands really matter to [their] sense of well-being and where family members will trade price for brands. It’s not disloyalty to brands per se; it’s loyalty to family need. As a result, people are shopping more stores, looking more carefully at the ingredients, cooking more from scratch and substituting store brands. Family gratification has replaced product satisfaction as the go-to goal for America’s shoppers.”
These new resourceful shoppers have an ever-evolving set of tools at their disposal and the insight to know how to use them effectively. They view their ability to mix coupons while leveraging multiple channels, discounts and store competitions as essential to getting the most value for their dollar.
The study also uncovered that loyalty cards are highly important to shoppers, with 84 percent reporting having at least one and 65 percent describing them as an important money-saving method. In addition, 44 percent of consumers surveyed are now using loyalty cards in grocery stores every time they shop.
According to consumers surveyed, coupons are another popular tool, with 67 percent of people increasing their coupon usage and finding them across a variety of media outlets, including newspapers (59 percent), mail (54 percent), stores (53 percent) and online (41 percent).
Watching store fliers has also become somewhat of an American pastime, as well as a key strategic approach for consumers to meeting their objective. There’s an increasing preference for shopping only for sale items, with nearly half (48 percent) putting off a purchase of a product they wanted because it wasn’t on sale.
Additionally, consumers are considering different brands. According to the survey, three out of four people are more open to trying private label and store brands than two years ago. Consumers surveyed don’t believe they’re sacrificing when buying store brands, with 85 percent saying they’ve found several brands that are just as good as national brands. In fact, 80 percent of those surveyed believe that most store brands are manufactured by the traditional national brands.
“This choice between brands heralds back to the consumer’s belief that the game is not necessarily about the savings itself, but about the hunt for the savings and what goes into it: resourcefulness, planning and precision,” said Conroy. “Consumers have become so skilled in executing their new approaches that most feel they have become smarter, more calculating shoppers. Moreover, these new badges of honor will not fade away. As a result, consumer products marketers shouldn’t expect to see a return to the carefree spending or impulsivity more reminiscent of the mid-2000s.”
The survey polled 2,077 U.S. household shoppers and food preparers during April 2010 and has a margin of error of plus or minus two percentage points. To download the study’s executive summary, visit www.deloitte.com/us/americanpantrystudy.