Better Understand and Connect With Today's CPG Shoppers Across Channels

By Jennifer Pelino, EVP Omnichannel Media, IRI

It's an understatement to say that shopping for traditional CPG products has changed dramatically over the last year, especially with the acceleration in channel shifting and retail media programs.

But one of the most interesting outcomes was that the pandemic prompted marketers to be more flexible and modify their programs faster than ever. In this new world, one that is even more digitally based than before, brands must be able to take a sophisticated, performance-driven approach to their digital media to reach consumers where they are searching, streaming and shopping. Some recent channel-shifting data and trend research helps show how marketers can connect with shoppers across channels.

The Current Consumer Environment

Commuting-to-work trips in the U.S. remain 30%-40% below pre-pandemic levels. This will continue to stay lower for now, since the acceptance of work-from-home has grown during the past year. With this reduced consumer mobility and the shift to remote working, coupled with online school, streaming/virtual entertainment has grown as well – streaming services saw a 37% increase in 2020. At the same time, home fitness equipment and athleisure skyrocketed, growing more than 40% and 31%, respectively.

With these major life and behavioral shifts, consumers also moved their CPG dollars around. E-commerce, club, grocery and dollar emerged as the clear CPG channel winners, while drug and convenience were negatively impacted due to the lack of foot traffic and consumers' stronger desire for one-stop-shopping.

The pandemic reintroduced consumers to their kitchens, and they liked it – IRI research shows 53% of adults say they'll continue to create meals from scratch post-pandemic. Meal-making was popular with consumers across demographics, and this was reflected in the products that were purchased in different channels. Club saw more growth in shelf-stable food categories and other home needs than other channels, while convenience shifted to late-night food purchases and grew smaller nonedible categories.

Source: IRI POS, Panel and E-Market Insights. Channels filtered on largest categories in 98% of channel sales; IRI Consulting analysis.

With consumers spending less time in physical stores and more time online, both in research and discovery of new products, CPGs have needed to develop strong and unique ways to help consumers convert. It's vitally important to continue advertising to reach consumers, especially because consumers are still speeding up their in-store shopping time (IRI research shows 42% less time is being spent in the store compared to pre-pandemic) and are still making fewer trips to the store. If you are introducing new products, this can be particularly challenging as consumers still appear less interested in new product discovery.

When looking at behaviors during shoppers' last online shopping experience, IRI research found that 59% of consumers used the search tool to type in the name of a specific item. Access to a list of pre-purchased items and the ability to reorder from that list is important to consumers, but only 12% looked for new products online.

Shopping behaviors during the last online shopping experience; those who have shopped for groceries online in the past two months:

59% Used the search tool to type in the name of a specific item
35% Used the category menus to browse for options within a category
32% Accessed list of pre-purchased items and reordered form that list
29% Checked for sale items before making a purchase decision
12% Looked for new items to try

Source: IRI Consumer Network Panel Survey representing Total U.S. Primary Grocery Shoppers – 5/22/2020 – 5/24/2020

In response to the massive shifts in consumer behavior, brands are adapting their marketing strategies and leaning more into retail media to reach shoppers with relevant ads on the sites and apps of their trusted retail partners.

What's Next?

Consumers will continue to shop online – many were forced to try it during lockdowns, and they realized they liked it. Stricter hygiene regimens will also remain in place for consumers and retailers for the foreseeable future, even when the majority of people are vaccinated.

We will also be seeing new consumer trends in taste exploration, indulgence and wellness as consumers focus on treating themselves while also trying to take off pandemic pounds and protect themselves against any health issues that could be exacerbated by COVID-19 or other viruses.

New behaviors during holiday gatherings will stick around for some time, at least until the majority of the U.S. is vaccinated, such as fewer family-style or buffet-type meals. This will include individually packaged foods and to-go meals that help avoid the sharing of food items and potential germ-spreading.

Retailers and manufacturers will continue to invest in e-commerce, working to provide a new kind of customer experience that's focused on both safety and interactivity. They'll also continue to focus on keeping items in stock and preparing for the ways we'll be celebrating holidays and other special occasions. Sidenote: We're still seeing out of stocks across the industry, so there is some work to be done here.

Retailers will also concentrate on bringing more customers to their stores and on in-store marketing. They will continue to reinvent store layouts, invest in e-commerce fulfillment to provide efficient and convenient contactless shopping, and continue to stretch out holiday seasons to gain/maintain share.


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