Rising Price Sensitivity and E-Commerce Growth are Reshaping Retail: Circana

Circana’s Sally Lyons Wyatt shared details about ongoing consumer behavior changes.

The CPG and retail landscapes are in constant flux as companies look to keep up with swiftly changing consumer demands. 

Sally Lyons Wyatt, global EVP and chief advisor for consumer goods and food service insights at Circana, recently shared details during a CGT virtual event about ongoing consumer behavior changes (with a focus on food sales) and how shoppers are being influenced by changing economic pressures, technological advancements, and a heightened focus on value and convenience. 

In order to maintain a competitive edge, manufacturers and retailers will need to understand these shifts and respond with agile strategies around pricing, product assortment, and marketing.

Painting a Picture of Today’s Consumer

Overall, consumers’ views on value have changed. Today’s shoppers are much more price-sensitive, said Lyons Wyatt, as they shift toward private label and lower-priced options. Private label is outpacing national brands, especially in food, where it has grown 3% over last year while national brands declined by 1%.

Lyons Wyatt warned companies to look out for “unscripted” consumer behavior as well. Here there’s an increased frequency in shopping trips (up 8.9%) with smaller baskets (as much as 11% fewer items) — beneficial for categories with perimeter products like meat and produce. 

“I am always asked, ‘Well, have you seen all these behaviors before?’ The answer is independently, I have seen almost everything they’re doing, but collectively this has not been seen in the totality of what’s happening,” she said.

Also read: Consumer Behavior Snapshops From WK Kellogg, Molson Coors, Kraft Heinz

These quick trips indicate consumers prioritize convenience and “the necessities.” That definition has changed, however, with items that were traditionally deemed necessary now seen as discretionary purchases.

“Volume is increasing, but how they’re getting to the volume has changed with more trips and less per trip,” said Lyons Wyatt. “It also puts pressure depending on where you are in the store, whether you’re part of that quick trip or not.”