- Consumers were jolted by the speed and severity with which the recession struck. They overcompensated with draconian strategies to cut CPG spending to the bone - even to the point of planting gardens to grow their own food. While the majority of shoppers have at least partly reverted to their “normal” shopping patterns, many will continue at least some of the frugal habits they acquired long after the recession passes.
- The return of energy prices, including gasoline, to more normal levels enabled shoppers to recover sufficient income to travel within a wider geographic area to find the best deals. In 2009, trip behavior rebounded from a multi-year slide. Today, more than half of consumers are shopping ten or more retailers to maximize the return on their CPG investment.
- More than 40 of the top 100 CPG categories experienced significant price increases in 2009, a trend that may continue in 2010. While these increases are driven by a variety of market factors, most consumers still define value based firstly on price, and it remains to be seen if CPG and retail companies will be able to make these increases stick.
- The recession saw a return to “self help.” From more meals prepared at home to more beauty treatments and home health care, consumers took into their own hands a wide range of services they previously purchased. IRI anticipates that shoppers will only hesitantly revert to old habits. They have discovered, for example, that home prepared meals taste better and are better for them. They have also realized that for a wide range of services, such as home hair coloring, they can achieve 90 percent of the quality for 20 percent of the cost.
- The share gains of private brand products have become too significant to ignore. To dismiss the popularity of private brands as a low price play is dangerous. Many retailers have carved out unique value propositions for private brands that include quality and convenience as well as price. CPG companies need to devise strategies that assume private brands will continue to gain in popularity.
“The year 2010 is one of opportunity,” says IRI Shopper Marketing and Innovation President Thom Blischok. “With ongoing economic uncertainty, consumers are turning to the packaged goods industry to satisfy a growing number of daily needs. CPG marketers with the ability to understand, or even anticipate, these evolving needs will forge relationships that will outlast the recessionary environment.
