subject: The Evolution Of Promotional And Pricing Incentives In Consumer Packaged Goods [print this page] This report focuses on how consumers are becoming more value conscious when grocery shopping, and are turning to promotions to save money. It looks at how promotional and pricing incentives can be adapted to further enhance appeal. As consumers become more value conscious they are modifying their shopping habits, and this means that promotional and pricing incentives are more important than ever for retailers in the grocery sector. Retailers need to have a firm understanding of modern day consumer attitudes and behaviors and adjust strategies around this to maximize sales potential.
Scope of this research
Enhance the effectiveness of promotional and pricing incentives through gaining a better insight into consumer attitudes and behaviors
Maximize sales potential through encouraging consumers to continue spending in certain product categories and increase expenditure elsewhere
Develop alternative promotional techniques to engage consumers and raise awareness of new product launches
Research and analysis highlights
52% of consumers say they are cutting back spend on groceries deemed non-essential, with attitudes suggesting this has particularly implications for product categories such as processed food and snacking items. However, despite their best intentions, consumers continue to make non-essential, impulse buys if they believe a bargain is to be obtained.
When determining if a product offers value for money, consumers are more influenced by promotional incentives than the lowest price. While competitive pricing is important, this shows that shoppers are more attracted by incentives on preferred brands than simply opting for the cheapest product, which may compromise levels of enjoyment.
41% of global consumers are regularly taking advantage of promotional offers such as BOGOF promotions, with Italian consumers the most likely to be doing so. The popularity of this incentive comes despite consumers making greater attempts to reduce food waste, and is something retailers can further capitalize on.
Key reasons to purchase this research
What are the key factors that influence perceptions of value when shopping?
To what extent does the popularity of major promotional techniques differ in popularity from country-to-country?
How can promotional techniques be modified to target current consumer attitudes and behaviors?
Table of Contents :
OVERVIEW
o Catalyst
o Summary
EXECUTIVE SUMMARY
o Promotions and discounted prices are key factors influencing perceptions of value as consumers scrutinize their grocery purchases more closely
o Traditional promotional strategies remain as important as ever in the retail sector, even if key attributes are misaligned with consumer attitude and behavioral traits
o Modern twists can be applied to traditional promotional techniques to target consumer attitudes and behavioral traits
STRATEGIC CONTEXT
o Insight: promotions and discounted prices are a factor influencing shopping patterns as value-conscious consumers seek out bargains
Consumers are increasingly questioning whether the products they buy offer good value for money
Retailers need to recognize the difference between consumers being value-conscious and being price-conscious
The importance of obtaining value is reflected by the fact that quality remains the key factor influencing grocery shopping decisions
Lower prices and promotions on favored brands can enhance perceptions of value
Promotional and pricing incentives will increase in importance in the retail sector because of prevailing consumer attitudes
o Insight: consumers remain unconfident about their financial situation and will continue to monitor spending closely, meaning that promotions are needed to prompt impulse-buying
o Insight: consumers are particularly attentive to grocery costs and expect further price rises
Attentiveness to changing grocery prices can be attributed to the fact that consumers are struggling with day-to-day living costs
o Insight: shopping around for a better price is becoming embedded in consumer behavior
Consumers are opting to shop around for the best price within the same shop
The tendency to shop around within the same retail store further increases the opportunity for private label offerings
Branded manufacturers need to recognize that consumers will not necessarily switch back from private label offerings once levels of financial wellbeing improve
o Insight: promotional and pricing incentives can be used to respond to the threat of discounters
o Insight: reducing spending on non-essential grocery items remains a priority for consumers
The desire to reduce spending on non-essentials is reflected in the product categories where shoppers are most actively trying to cut back
o Insight: new promotional techniques are needed to capture the attention of shoppers that are becoming less responsive to new product launches
