Americans sick of hunting for bottom-dollar grocery deals
The American public is tired of holding tight to its household food budgets, even though most continue to do so. Shoppers look back longingly on the days when their now-splurge items were enjoyed routinely, and they want some relief from the drain of deal-chasing, according to The Lempert Report, which was based on a finding in the National Grocers Association-SupermarketGuru 2011 Annual Consumer Survey Report that indicated a seven-point shift away from low prices as a primary determinant of where to shop for groceries.
The 2011 figures showed that just 44 percent of consumers think price is very important, down from 51 percent in each of the past two years. Indeed, the 2011 percentage reverts to the 2008 pre-recession sentiment level, which is significant because this shift away from low prices could be coming in advance of a full recovery.
Nearly half of those who say price is very important come from the three lowest income tiers - $25,001-$45,000 (20 percent), $45,001-$65,000 (17 percent) and $25,000 or less (12 percent). A year ago, their collective percentage was 56 percent.
More evidence of the low-price-chase fatigue: While 92 percent of respondents say that items on sale or money-saving specials are very/somewhat important factors in where they decide to buy food, the composition of this figure has changed. Very important downshifted to 55 percent from 60 percent a year ago, and somewhat important rose three points to 37 percent from 34 percent a year ago.
Also, less than one-fourth of consumers think a frequent shopper program or savings club is a very important differentiator. Perhaps if supermarkets ran more targeted promotions to their cardholders, these programs would be more in demand. As it is, this four-point dip from last year signals that people want their savings and deals in a clear manner, without having to give up personal information or follow many rules.
Discounts help assuage guilt over buying ‘vice’ foods
Next time you buy a pack of your favorite chocolate at a price discount, ask yourself a simple question: Would you have bought it if it was available at full price with a bonus quantity? The old-fashioned guilt that prevents one from buying so-called vice foods with bonus quantity may actually play a role in buying vice food with price discount, according to research from Arul and Himanshu Mishra at the David Eccles School of Business at the University of Utah, Salt Lake City. Consumers seem to want to avoid eating more of their favorite guilty pleasures but can forgive themselves the indulgence if it comes at a cheap price.
While bonus quantities on virtue foods increase a consumer’s likelihood to purchase, the pattern reverses for vice foods, which could impact how sales promotions are perceived by consumers and offered by retailers. In their paper The Influence of Price Discount versus Bonus Quantity on the Preference for Virtue and Vice Foods, the researchers explored the struggle to balance conscience and desire - in this case, how shoppers alter their purchasing choices between healthy and unhealthy foods when given varying sales promotion options such a price discount or a bonus quantity.
The researchers explored the vice-versus-virtue phenomenon in a series of studies that included customers at a local coffee shop and hundreds of students. Participants were offered a mix of varied virtue and vice foods, prices and amounts. In the preliminary study of 98 customers exiting a local coffee store, the researchers offered the choice of the store’s low-fat blueberry muffins or its rich chocolate chip cookies. Further, the cookies were offered in either a bonus quantity or at a reduced price, as were the muffins.
The results: 76.1 percent chose to buy the low-fat muffins when offered with a bonus quantity while 54.2 percent chose to buy them with a price discount. Conversely, 69.6 percent selected cookies when offered with a price discount, but only 47.9 percent chose cookies with the bonus quantity option. Subsequent laboratory studies found similar results for products ranging from identical chocolates, labeled as either healthy or tasty, to raisins, cake and fruit salad, all offered at either reduced prices or in bonus packaging promotions.
“Consumers cannot generate good justifications for buying [vice foods] with a bonus quantity since it would mean consuming more,” said the paper. “However, a price discount with a vice food can be justified as a money-saving purchase and hence it acts as a guilt-mitigating mechanism. For virtue foods, the absence of both anticipated post-consumption guilt and the resulting need to justify leads consumers to prefer bonus quantity over price discount.”
What causes consumers to unsubscribe, unfan or unfollow?
Over half of consumers expect that liking a Facebook brand will result in marketing communications from brands, but that doesn’t mean all messages are welcome. More than 90 percent of consumers have broken up with at least one brand on Facebook, e-mail or Twitter because of irrelevant, too frequent or boring marketing messages, according to The Social Break-Up, a study from Indianapolis marketing firm ExactTarget and its sister company CoTweet.
Online direct marketing, especially by means of social media, has become an increasingly popular way to reach consumers. But consumers are learning how to tune out the sponsored messages that flood their News Feeds, in-boxes and Twitter pages. Online mediums may give brands the power to reach their audiences en masse, but consumers also understand now more than ever that they are in control of marketers’ messages and will punish irrelevant, voluminous or boring messages by cutting off marketers’ means of direct communication.
The Social Break-Up study sought to determine the top motivations for unfanning, unfollowing and unsubscribing from marketing campaigns on Facebook, Twitter and e-mail. It found that consumers tread lightly when allowing companies to reach them via social media or e-mail. Eighty-one percent of consumers have either unliked or removed a company’s posts from their Facebook News Feed and 71 percent of consumers reported being more selective about liking a company on Facebook. Seventy-seven percent of consumers reported being more cautious about providing their e-mail address to companies versus last year and 41 percent have unfollowed a company on Twitter.