When It Comes to Inflationary Spending, Time Is on the Consumer's Side

Customers are choosier than ever.

Inflationary pressure, concerns over a looming recession, and a turbulent news cycle are giving consumers pause at the shelf. And that increased deliberation is causing attrition of some brand loyal shoppers.

Increased at-shelf decisions are causing shoppers to switch to other brands or private labels, or trade down to other substitute products, according to VideoMining Grocery Shopper Insights, GSI Tracker. VideoMining, State College, Pa., uses anonymous sensing and AI technology in stores to help retailers and CPG manufacturers learn more about the shopping experience and consumer habits.

For example, frozen single-serving meals are up 17.3% in price, while the category is up 14.2% in overall shopping time. Dry pasta is seeing a 15% price increase, while the average shopping time for the category went up by 9.6%.

And there is good reason.

Grocery shopping looks different. In 2021, a typical U.S. grocery store category got exposed to 14% of the total store traffic. It attracted 42% of the passing traffic to stop and engage with it. Of those who engaged, 55% ended up buying from the category, according to VideoMining's Grocery Shopper Insights Tracker, which uses behavioral data from 1.2 billion store trips in 2021.

Many shoppers aren’t making quick trips to the store. Instead, they are taking their time comparing products, and looking for what’s on sale. Out-of-stock products, and the lack of items on their shopping list makes for a challenging shopping experience.

These factors are also a challenge for retailers, and put them at risk for “leakage,” when consumers browse and then walk away without purchasing.

Price perception is just one component of a negative shopping experience that drives customers to take their business elsewhere, says VideoMining. Other contributing components are large sections of empty shelves and poor signage.

For CPG brands, VideoMining uses behavioral metrics—brand stability quotient, and at-shelf win rate—to determine if a shopper makes a purchase decision at-shelf (while at the grocery store), or pre-shelf (before heading to the grocery store). Knowing a product’s “brand strength” and brand performance compared to other brands, can increase brand sales, positively impact consumer decisions, and “defend/grow” brand position.

VideoMining also cautions brand marketers about the impact of price hikes during inflation, and how this may have an impact on a shopper while at the shelf making a decision as to which product to choose. Specific targeted promotions, competitive positioning at the shelf, as well as packaging also have great impacts on which brand a consumer will choose.