CPG brands face "generational shift" in buying habits | WARC | The Feed
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CPG brands face "generational shift" in buying habits
Pricing strategy Strategy
Consumer packaged goods (CPG) brands should adapt pricing strategies both for inflation and in response to a “generational shift” in buying habits, a study by research firm Catalina has argued.
The state of play
- Catalina monitored ten CPG verticals to assess price rises in the first quarter of 2022, and reported an aggregate increase of 9.8% versus the same period 12 months ago.
- The biggest spikes were for cereal (+12.8%), then frozen prepared food (12.3%), soft drinks/water (also 12.3%) and soaps/detergents (12.2%).
- Frozen vegetables (+3.7%) logged the smallest expansion on this metric, followed by hand and bath soaps (+6.2%).
Consumers are “value-seeking”
- Most consumers are now engaged in “value-seeking behaviour”, Catalina noted, even if they were previously loyal to a brand.
- Private label goods have thus benefitted from this trend, according to analysis of the period from February to June 2022.
- Their share hit 14.3% in March, an increase of 1.3 percentage points year on year, and this figure has largely trended above last year’s share for 2022 to date.
- For June, Catalina pegged private label’s share at 12.8%, largely equivalent with the total from mid-2021, when anxiety around COVID-19 was more pronounced.
How brands can respond
- Personalized communications and discounts are a vital strategy to drive the maximum impact from limited budgets, the company’s study asserted.
- Data-driven, responsive marketing will have a critical role in keeping pace with consumers’ evolving needs.
- Catalina recommended focusing on shoppers who were previously brand loyal, as well as “switchers”, with an emphasis on the granular price concerns of each group.
- Recipes, product usage suggestions and brand-led messages can still be used for engaging segments that are less anxious about price.
A “generational shift”
- The inflation crunch, following the challenges of COVID, may cause a “generational shift” in buying habits, warned Sean Murphy, Catalina’s chief data and analytics officer.
- As such, marketers need to take a longer-term approach to their pricing and portfolio strategies, rather than simply trying to ride out the current period of financial stress.
- “CPG marketers need to think beyond this quarter and create a new, long-term loyalty playbook with next-generation marketing support,” Murphy said.
Sourced from Catalina
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