While shoppers are focused on value, they still seek shopping experiences, and the physical store remains central to a successful omnichannel strategy, according to the latest report from Circana, formerly IRI and The NPD Group. Australians are responding to economic challenges with clear changes in shopping habits.
Circana head of media, insights and analytics for Asia Pacific, Alistair Leathwood said, “As Australia continues to navigate the ongoing effects of inflation and the cost-of-living crisis, Australians are shopping to find the best value for themselves, while retail is being reimagined, notably through technological advances.”
Value is driving the decisions of shoppers to change brands and be more selective in their shopping. Despite inflation easing across some parts of the economy, cost of living pressures is still biting into household budgets.
“Shoppers believe that supermarkets having good specials and promotions were more influential when deciding at which supermarket to shop at. Supermarkets also saw a leap in the purchase of units sold on promotion jump 36.1% in the quarter ending in April 2023, over the previous year’s reported 3.6%. This demonstrates that value and bulk buying is being embraced by shoppers to meet their household needs,” Leathwood said.
Loyalty cards and apps drive stronger engagement and targeting
Despite promotions being the key driver for shopper value, many shoppers have increased their usage of shopper loyalty and rewards programs. It has become an important component of retail loyalty schemes with Coles and Woolworths dialing up member-first benefits in-store and online.
“Keeping shoppers close and engaged through membership schemes that offer pricing advantages is now a key frontier for retailers. The data allows retailers to help manage inventory, pricing and create more personalised experiences for their shoppers. These apps drive stronger engagement and loyalty, it also allows more precise targeting. Just these alone have hugely improved the front-end customer experience and the ones doing it well are winning,” Leathwood said.
Physical stores play a more complex and valuable role
The clear rise to buy online and pickup in-store is telling that physical stores remain vital for NPD trade support. Winning in e-commerce extends far beyond the value of online sales. Online factors influence offline sales and vice versa, so it’s important to track the relationship between the two.
“We don’t expect the vast majority of FMCG sales to be digital anytime soon, so omnichannel and omnicategory leadership is key. Winners will recognise both online and in-store retail as very different environments yet will take a consistent and long-term approach to nurturing both.”
Omnichannel shopping continues to diversify
The trend towards a multi-faceted shopping experience continues. Experiences and moments are the new currency for the new generation of Australian shoppers. E-commerce success now requires more speed and less spend. Australians also want a holistic focus on delivering memorable experiences through every available channel.
“Retailers are stepping up their game to deliver more than just product displays, there is now an expectation that retailers encompass shopping experiences like video personal shopping, live stream shopping, online lessons, virtual appointments and video consultations,” Leathwood said.