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European shoppers seek values with value

Ben Miller, Head of Shopper Insight IGD

For many European food and grocery companies the post-recession market has been dominated by the theme of providing value to shoppers — communication of prices, promotions and product performance shouts from retailers’ aisles, and manufacturers’ advertising campaigns.

While ‘value’ has been the constant undercurrent of recent years, IGD research has shown that a collection of ethical and environmental sustainability themes also resonates with shoppers. ’Values’, therefore, offer a second strategic lever for food and groceries companies — a potential beacon creating opportunities for companies to differentiate their offer and create value for their businesses.

“Three in ten shoppers look for improved values as the key factor in trying a new product”


Choosing products according to values
In our recent conversations with shoppers across Europe, however, the desire to find value in their values has become stronger than ever. For example, recent IGD research discovered that three in ten shoppers are looking for improved product values as the key factor that attracts them to try a new product. Of these shoppers, three quarters are also motivated by strong value perceptions.

Shoppers sharpen their ethical focus
Interest in ethical and environmentally sustainable products and issues continues to grow among European grocery shoppers. Our latest European shopper report Ethical and Sustainable Shopping, found that 86% of shoppers in France, Germany, Great Britain and Spain are now interested in at least one aspect of ethical shopping — an increase from 81% in 2008. Although headline interest is growing, shoppers however are limiting their ethical focus.

Three quarters of shoppers are motivated by strong value perceptions.

Ethical shopper segments - 2008 to 2010

Ethical Shopper Segments

Source: IGD 2010

Five ethical shopper segments:

Ethical Evangelists are interested in a range of ethical issues, and actively look to buy according to them. 
Focussed Followers have made several steps into ethical shopping, but pick and choose their areas of interest
Aspiring Activists have aspirations and interests which outstrip their current ethical shopping behaviour.
Blinkered Believers buy into only one ethical dimension.
Conscience Casuals do not actively shop ethically, and show little or no interest in doing so.

In our latest findings we have again segmented shoppers into five ethical segments and found that in 2010 the proportion of Ethical Evangelists, the most ethically engaged shoppers, has declined in all European countries in our research.

We have, though, seen the proportion of Aspiring Activists and Blinkered Believers grow. These are shoppers who actively engage with one ethical issue only, or are interested in more ethical issues than they actively buy groceries to support. Rather than dropping their ethical standards following the recession, many shoppers have therefore focussed their ethical consumption on the single ethical issue that concerns them most.

This shift, from broad engagement to narrower focus, reflects the difficult trade-offs many shoppers are currently making when seeking value while shopping for groceries. It does, though, represent an opportunity for producers and retailers of ethical products. There is still strong interest in ethical issues that may again translate into purchase action with a return to a more stable economic situation.

The feedback is clear — shoppers expect values with value.

In all four markets surveyed, the proportion of Conscience Casuals, our least ethically engaged segment, has dropped. These shoppers, though, do still provide an opportunity for manufacturers and retailers of ethical products. In our discussions with them, it was clear they do have some interest in ethical issues and were often reasonably well informed, it was just something they did not consider when grocery shopping.

An ethical carrot rather than a sustainability stick

We asked British shoppers how they felt grocery retailers and manufactures could help them to make choices that would be most effective in protecting the environment The feedback was clear: shoppers would much rather be encouraged with an ethical carrot than forced into specific behaviours with a sustainability stick.

The most popular tactic that shoppers requested to help them make environmental choices was the provision of incentives. Overall, just under half of shoppers mentioned this, with one in four identifying it as the most appealing tactic. This compares to just one in ten shoppers who suggested penalties for people buying the most environmentally damaging products.

Hence, through seeking promotions, long-term price savings or loyalty mechanic benefits, shoppers are again asking for value for their values. This appetite creates the opportunity for manufacturers and retailers to positively encourage or incentivise shoppers to change behaviour in favour of ethical products. Some such activity is already underway — for example, in Britain, P&G has recently worked with Ocado to promote environmentally friendly lines, offering a 30% discount through its Future Friendly initiative.

Balancing the twin levers of value and values continues to create opportunities for the food and grocery industry, and the current feedback is clear — shoppers expect values with value.

Contributed by Ben Miller, Head of Shopper Insight IGD ( IGD are the UK's food and grocery experts and its team is dedicated to the development of the food and grocery industry and committed to the needs of its consumers.

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