Consumers have become increasingly price sensitive in recent years, leading retailers to adjust their messaging to address economic concerns. Companies like Kroger, Giant Food, and Amazon Fresh have prominently displayed signs promoting low prices in their stores. Meanwhile, c-store chain TXB has revamped its loyalty program to offer more rewards to members. Even retailers not known for competitive pricing, such as Wegmans, have emphasized their value through in-store messaging.
Retailers believe these strategies resonate with customers. However, according to research from the Kearney Consumer Institute (KCI), shoppers feel that retailers may be overemphasizing low prices. Katie Thomas, who heads the institute, suggests that brands don’t need to aggressively market low prices as consumers are savvy enough to understand value without explicit messaging.
KCI’s “stress index” report reveals that while consumers are mindful of their spending and seek out discounts, they also prioritize taste and quality in their purchases. The report, based on a survey of 24,000 consumers across 12 countries, indicates that most participants prioritize product quality over price. While some consumers solely seek the lowest-priced products, many are willing to pay more for a balance of quality and affordability.
Consumers have grown weary of the constant focus on low prices by retailers. They are looking for more engaging shopping experiences and are interested in discovering new and exciting products. Retailers need to move away from solely promoting discounts and instead focus on offering unique and innovative products that capture consumer interest.
Providing ‘small wins’ for shoppers
According to Thomas, grocers should cater to consumers’ desire for affordable luxuries and small indulgences throughout their day. This presents an opportunity for retailers to highlight eye-catching snacks, beverages, and other treats that can uplift the shopping experience.
To win over consumers, grocers may need to rethink their approach. While convenience stores excel at limited-time offers and showcasing new products, traditional grocers often rely on routine promotions and shelf layouts that fail to excite shoppers. Additionally, the abundance of product choices in grocery stores can overwhelm consumers, leading to decision paralysis and a tendency to stick with familiar items.
Promoting product discovery requires retailers to streamline their selections and focus on introducing innovative products. Retailers like Aldi and Costco have succeeded in simplifying the shopping experience by offering a curated selection of products that make decision-making easier for consumers.
Food retailers that prioritize discovery and stay attuned to consumer trends, including through social media platforms like TikTok, stand to gain greater customer loyalty. Some retailers, such as EG America and Sprouts Farmers Market, have already implemented strategies to promote discovery, including personalized offers and innovative product showcases in-store.
Embracing innovation and consistently introducing new products can enhance the shopping experience and drive customer engagement. Retailers that can adapt to changing consumer preferences and offer unique, exciting products are likely to thrive in an increasingly competitive market.