Following the Brexit vote, retailers will be keen to attempt to fathom how shoppers might behave in the short term.
While it’s not strictly comparable, we can look back to the credit crunch in 2008, and how that impacted as a possible benchmark.
That was also a shock to the system, and it had a huge effect on shopping patterns:
- Shoppers were forced to rethink their spending, either because their household budgets were slashed by a job loss, or because they wanted to be able to cope with the recession that then followed;
- Discounters suddenly became somewhere that shoppers were proud to say they used, and their carparks were full of 4x4s and high-end cars;
- Own-label campaigns were run persuading shoppers to try equivalents of well-known brands, and had quite a lot of success as a result; and
- Solution-based campaigns such as ‘Dine in for £10’ and ‘Feed your family for a Fiver’ helped shoppers feel like retailers were on their side, and understood how things were changing for them.
What was interesting was that the biggest shift in shopper psyche was from ‘I want it all now’ to ‘so I actually need it?’, and the emergence of prudent shopper behaviour that was about avoiding waste.
This was the start of the decline in multi-buys, the shift from large shops to smaller, more frequent shops, and the rise of the savvy shopper.
So, with an even bigger storm breaking over UK shoppers, I wonder if they will simply dig deep and take the same pragmatic approach.
After all, they still have as much choice available, that can support a tightening of belts.
In fact, since 2008 the discounters have increased their reach, the big four grocers have worked hard at getting their pricing closer to the discounters, own-label ranges continue to be a core part of the ranges in-store, and solution-based campaigns are better utilised.
If this is the case then brands and retailers need to be ready to put the effort in to proactively sell to shoppers.
Don’t assume they need you – assume you have to pull out all the stops to persuade them to buy.
We are going to go through tough times, but if we learn from past behaviour, and monitor changes in shopper behaviour going forward so that we can quickly respond, then we should be OK.
It’s not going to be easy, but in a dynamic retail environment like the UK, it has to be possible.
- Danielle Pinnington is managing director of Shoppercentric