A culture of finding value
The pursuit of value – or the emergence of the ‘Save Me Economy’1 – is having a clear impact on people across the globe. In the face of tightening credit, weakening job prospects, troubled national economies and a general sense of economic ‘malaise’, consumers are pushing themselves to adopt a more sophisticated approach to saving that doesn’t just help their finances.
How is this manifesting itself in terms of consumer behavior?
We have identified four ways this new value equation is reflected in consumer behavior.
TECHONOLOGY – Digital’s influence on grocery shopping is on the rise. Globally, shoppers are increasingly using devices with online connections (computers, mobile phones and tablets) to aid or even complete their household grocery shopping – and to find the best deals (note the phenomenal success of sites like Groupon).2
SHOPPING BEHAVIOR – Consumers are increasingly ‘shopping around’, and in markets like the UK and US, consumers are moving away from big weekly trips to out-of-town stores and instead using local stores to help manage their strict budgets.3
PSYCHOLOGY – Consumers are adjusting their mindsets, and the things that influence purchase considerations are changing. Value is taking on a much wider definition beyond price, with quality, durability, reliability and convenience all coming into play.
BRAND CHOICE – The pursuit of value is changing how consumers choose brands. Though empowered consumers in still-strong economies like India, Brazil and China are ‘trading up’ brands to affirm their new social status,4 the appeal of own-labels is also increasing as recession-weary consumers start to question why they should pay full price. They’ll also delay their purchase as they chase the most advantageous promotions.5
VALUE LIFE-CYCLE – Value spans a number of areas in consumers’ minds. It’s all about getting more for the same amount of money: from the cost of travelling to your desired product (petrol, time), to the purchase price, to the cost of service (post-purchase), to the outlay for usage (energy, water costs). All of this needs to be part of the new value equation.
How are detergent manufacturers rising to this challenge?
Own-label and brand manufacturers are well placed to meet these consumer needs, especially as 39% of US shoppers say they have increased their purchase of store-brands in recent years as a result of the tough economic times.6
Branded-goods manufacturers have a diverse portfolio of products and are well positioned to adapt to this shift in demand, though there is consensus that discounting and aggressive price promotions can dent brand equity in the long run.
Manufacturers are innovating in a number of areas, like how they make, package and distribute goods – with the introduction of lower cost goods and smaller pack sizes available through certain discount retailers – whilst still launching higher end products for those audiences and markets where there is demand. To meet changing consumer behaviors, they are developing new product claims, formats and sizes, and are innovating in how they respond to new methods of shopping. Finally, detergents that meet performance levels whilst using less water and/or energy demonstrate valued, tangible savings to consumers.
All in all, consumers are fragmenting in terms of how they play the value game: some are prepared to buy in bulk to save in the long term, but others just want to pay less now, and detergents manufacturers are offering a variety of products, pack formats and price points to cater to this fragmentation. Categorization of the new ‘recession hit’ consumer highlights three types: Cash-Strapped (looking to spend as little as possible), Smart-Shopper (looking for the best price per portion) and the Bargain-Hunter (looking for the best promotional deal).
Continue at: http://fhc.biosciences.dupont.com/consumer-trends/value/
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