It’s safe to say that brands and retailers haven’t been dealt the best cards when it comes to navigating the complexities of our current climate. With various economic pressures and a shift in consumer behaviour, both brands and retailers have been met with a new challenge of driving sales back into their stores. Alongside this, they are expected to navigate new market trends, uncover profitable opportunities, and embrace new technology advances – exhausting much?!
Due to the cost-of-living crisis, many shoppers have shifted into a pattern of shopping less but spending more. Long gone are the days when consumers would pop into their local supermarket retailer daily to get their essentials for the evening. These days, more consumers are carrying out bigger basket spending in the hope that it will last them for a while.
Many retailers have been met with the challenge of retaining consumers due to the competitive retail landscape. Because today’s shopper has even more choice than ever, retailers have no choice but to adopt more innovative, personalised, and seamless experiences to keep their shoppers engaged and loyal.
In this blog, we chat with our Commercial Director James Lamplugh, who gives his insight into the change in consumer shopping habits, the strategies retailers are adopting to increase footfall, and how brands can utilise potential opportunities to help them stay ahead of the curve!
Q: What do you think drives the shift towards less frequent but larger purchases?
James: “Due to the rising cost of food and beverages, consumers will make fewer shopping trips in order to better manage their weekly and monthly budgets. Many may choose to buy in bulk or purchase larger quantities to take advantage of cost savings and discounts, reducing the frequency of their shopping trips.
“It could be that consumer behaviour has shifted due to a more sustainably conscious mindset. Some may be more aware of their carbon footprint, consequently shopping less frequently to decrease the number of trips made and reduce packaging waste.
“Lastly, thanks to loyalty card schemes, shoppers may only shop at specific times when they receive certain offers and discounts through their desired loyalty card schemes. Some loyalty programs may also reward consumers for bigger shops, so they may defer shopping trips because of this”.
Q: How are consumer shopping habits reshaping the retail landscape?
James: “With consumers shopping less frequently (but spending more per visit), retailers have made significant adjustments in the way they target the average shopper. Now, more than ever, they see the importance in creating more engaging and value-driven shopping experiences to keep them coming back.
“Many retailers are tackling this shift by offering more enhanced in-store shopping experiences with the aim to increase customer engagement. This could be through offering consumers exclusive in-store events, product demonstrations, and even personalised services.
“Additionally, to help meet the consumer shift of shopping less and spending more, many retailers are now turning towards a data-centric approach to help optimise their supply chain and stock management practices. By doing this, they can reduce the likelihood of stock shortages and overstocking from occurring.
“You can expect to see a rise in the amount of convenience stores in your local area too! Most of your favourite retailers will be investing more in their local convenience chains, boasting ease and versatility for their shoppers. Within these stores, retailers can offer a curated selection of products, enhancing the shopping experience while maintaining efficiency.
“Finally, creating personalised shopping experiences will still be important amongst retailers. Many will see the importance of leveraging their consumer data to create personalised marketing campaigns that speak directly to consumer preferences and spending habits, specifically through the use of their loyalty schemes”.
Personalisation is key
Supporting James’ observations, we’ve seen an increase in retailers adopting new strategies to create an in-depth, personalised shopping experience. More recently, Tesco has leveraged the use of AI to help enhance its popular loyalty card scheme.
In a bid to make shopping more enjoyable, Tesco launched its Clubcard Challenges, rewarding customers with extra Clubcard points when they complete a unique challenge. These challenges could include spending a specific amount on a new food range in a certain amount of time. Customers can complete up to 10 challenges, with a total of £50 worth of Clubcard points up for grabs during a six-week campaign.
Additionally, the increase in the amount of convenience stores is prevalent. This rise could be due to the fact that consumers are now desiring to shop locally to consolidate tasks to minimise shopping trips. Convenience stores have the benefit of streamlining the customer journey, giving consumers quicker and easier access to a variety of products and services, all under one roof. Many retailers have also partnered with local helpful services like the Post Office and even coffee shops, to provide consumers with a one-stop shopping experience that benefits their busy lifestyles.
Supporting this approach, Sainsbury’s has recently committed to opening around 75 new Sainsbury’s Local convenience stores over the next three years, aiming to allocate more space for their ‘food on the move’ ranges. Late last year, the retailer was also reported to have doubled the amount of own-label products offered in their convenience stores, providing more affordable products for their consumers.
Maintaining shopper footfall
Despite the ease and convenience provided to consumers when they shop online, many still prefer the experience of actually visiting a store in person. Brick-and-mortar stores still hold a massive significance to shoppers of all ages – because of this retailers have the challenge and responsibility of ensuring that they are coming up with innovative strategies to keep their shoppers coming back. A recent report curated by Retail Week unveiled that only 28% of 1,000 shoppers reported doing their shopping online. This correlates with the latest ONS data, showing the proportion of UK online sales continues to fall, down from 26.9% in September 2023 to 26.6% in October 2023.
In an attempt to enhance the customer journey throughout their stores, Sainsbury’s recently doubled the amount of digital screens featured in stores. Partnering with Nectar360 and Clear Channel, these screens will generate a range of customer interactions including QR codes and relevant offers, as well as build brand and product awareness.
More recently, Tesco has introduced their online marketplace, in an attempt to make their site a one-stop shop that provides customers with everything they need. In a sense, they are incentivising convenience and appear to be providing a helpful service that saves shoppers much needed time and money. Instead of going to other retailers, customers will want to shop for everything under one roof.
Additionally, by shopping in their marketplace, Tesco will reward customers with Clubcard points on all purchases. This is a great example of how a retailer can adapt to shopper habits and demands, taking their offer into people’s homes through innovation and differentiation.
Leveraging the use of technical innovation is a smart move, but what else can we expect to see from our favourite retailers in the near future?
Let’s find out what James has to say!
Q: How are brands fighting to captivate consumers in-store?
James: “Nowadays, the focus for retailers seems to be on creating memorable shopping experiences, enhancing product visibility, and boosting sales.
“I expect to see a rise in the use of technical advancements to show their customers that they are both more innovative and modern than their competitors. A great example of this is in the use of digital screens, electronic shelves, and AR experiences in stores.
“Additionally, to gain maximum visibility on their products, retailers will strategically place products with innovative promotional advertisements in areas of high footfall. This will be done to hopefully gain a maximum level of engagement for their items.
“Also, we can expect to see the continuous rise in loyalty card schemes, helping to foster a sense of brand loyalty and community amongst shoppers. By utilising shopper data, retailers can offer lucrative rewards and personalised discounts for their shoppers.
“Finally, thanks to the ‘age of the influencer’, I’m expecting to see an increase in partnerships between brands and retailers to help promote products in-store. Influencers can host events or provide live demonstrations to draw their followers into stores”.
A great example of this is Poundland’s recent collaboration with ex-Love Islander Demi Jones for a new and exclusive range of makeup products.
But what’s in it for me?
These days, it’s safe to say that the average shopper expects a lot from both brands and retailers. As the retail landscape is so competitive, it seems that they’re in a position where they know the value of their presence – in return, consumers expect a reward or incentive to encourage them to return. Brands and retailers both benefit from the amount of sales that consumers provide, but they also gain other valuable resources for them, like data.
It was recently reported that 75% of consumers say they are likely to make another purchase after receiving an incentive. This highlights the importance of brands finding the right ways to ‘give back’ to their consumers. This could be through the use of more traditional methods like exclusive offers and competitions, or they may deploy other tactics and channels to help them stand out….
Q: What marketing tactics are brands leveraging to differentiate themselves in the aisle?
James: “As mentioned previously, innovation has become a huge focus for retailers and brands. In order to stand out against their competitors, they have to find a new USP exclusive to them. Because of this, we can expect to see an increase in brands using innovative designs in order to stand out on the shelves. Additionally, some brands will also aim to offer lucrative incentives like competitions or prize giveaways.
“Expect to see a rise in interactive digital displays that engage customers through technology or sensory experiences. This can include touch screens, product demos, and augmented reality experiences, allowing customers to interact with products in real time.
“Additionally, brands will work with retailers to ensure that they are offering lucrative offers and discounts for shoppers. Many may deploy the use of Limited-time promotions to create a sense of urgency which can drive immediate sales”.
Q: How are brands using various media channels to amplify their message and drive sales?
James: “There are various types of media outlets that brands and retailers will utilise to help them reach and engage their existing and potential customers. This will include a mix of traditional and new innovative methods.
“To help them reach a broader audience, the use of TV adverts and print media will be highly successful in gaining engagement. Brands could target their advertisements to specific channels or media sources to help them gain attention from their desired audience. Additionally, brands could also utilise billboard advertisements in high-traffic areas to reinforce their brand message. These ads grab attention quickly with bold images and clear messages, strengthening the brand’s presence in the physical world.
“In terms of more digital, innovative methods of marketing – thanks to platforms like Facebook, Instagram, Twitter, and TikTok, brands and retailers have direct interaction with consumers. Through social media, they can collaborate with influencers to reach engaged communities through trusted voices. Additionally, brands can create a series of short-form content pieces to instantly connect to potential consumers. Additionally, social media can be used alongside field marketing tactics to help to foster the likelihood of influencer collaboration and user-generated content.
“Email marketing will also be another useful tool to utilise, thanks to the ability to personalise content to specific groups of people. Brands and retailers can maintain customer relationships with personalised offers and updates. Additionally, regular email communication keeps the brand top-of-mind and encourages repeat purchases.”
Using data-driven insights to disrupt the industry
By adopting a data-driven approach, brands and retailers gain valuable insights into consumer behaviour and preferences. This, in turn, allows them to utilise this information to help them meet the growing consumer demand for personalisation and better customer experiences. By keeping a close eye on data, inventory and pricing strategies can be easily maintained, ensuring products are less likely to go out of stock and items are kept at optimal and competitive price points.
Supporting this data-focused shift, Sainsbury’s recently announced their partnership with Microsoft. The partnership will see Sainsbury’s data assets combined with Microsoft’s 365 collaboration tools to help them drive returns through Sainsbury’s ‘Save and invest to win’ programme. Overall, the partnership aims to transform their retail operations, drive better decision-making, and run a more efficient business.
Q: How can brands utilise Reapp’s data to gain valuable insights and optimise their marketing campaigns?
James: “As we like to say, great business decisions are built on great data. And great data is sourced by Reapp. By utilising our cutting-edge software, brands and retailers can benefit from access to real-time data and analytics, offering them comprehensive insights into consumer behaviour, market trends, and the competitive retail landscape.
“Our tools deliver valuable insights into consumer behaviour by curating data that unveils consumer preferences and purchase patterns. Through these insights, Reapp provides information about what consumers are searching for, purchasing, and reviewing. They can also analyse purchase frequency, average spends, and purchase timing, which will help them to tailor their marketing efforts to align with consumer buying cycles.
“Additionally, brands can benefit from competitor insight as Reapp’s software enables users to monitor competitors’ performance, product launches, and pricing strategies. This allows brands to differentiate themselves and strategically position their products ahead of the curve.
“Another great benefit from Reapp is that it also offers insight into performance metrics: Reapp data provides real-time feedback on campaign performance, including click-through rates, conversion rates, and ROI. This means that brands can quickly identify what’s working and what’s not”.
Q: What does the future hold for brands in an increasingly dynamic retail environment?
James: “Overall, the future for brands and retailers looks bright and full of opportunity, specifically for those focused on both innovation and differentiation. As consumer behaviour continues to evolve, brands must adapt by embracing emerging trends and new technologies.
“With the rising demand for personalisation, brands can adapt their strategies by applying a data-led approach that utilises AI to offer recommendations and targeted promotions.
“Additionally, brands should look to provide consumers with a seamless omnichannel experience by integrating their online and offline channels. This unified approach ensures that stock visibility and promotions are synchronised across all platforms, offering a consistent and cohesive shopping experience”.
So, what’s next?
With consumers shopping less frequently but spending more per visit, it’s crucial to create personalised and seamless experiences that keep shoppers coming back. The role that data plays in curating a successful strategy is significant, and it’s clear that it is a useful tool for gaining insights, optimising internal processes, and enhancing in-store experiences.
A focus on innovation should also be maintained, especially because the market for brands and retailers is so saturated! This could be achieved by creating engaging displays and unique in-store experiences that capture the attention of the consumer. Moreover, by enhancing customer support both offline and online (with the use of chatbots and AI for instant assistance), brands can stand out against their competitors by curating a sense of support and loyalty.
By staying open and innovative, brands can navigate the dynamic retail environment and drive sustained success.
If you’re a brand or retailer looking to tap into a treasure trove of retail and customer data to help optimise your strategy, talk to us today!
Let us show you how you can integrate data analytics into your business and prime you for ultimate success!
