Price Increases - The disruption opportunity

“You wouldn’t believe how much bread was this week”. said my wife as she was unpacking some groceries yesterday. It’s a statement that has been repeated (albeit talking about different categories and different brands) by shoppers around the world in recent months. As inflation hits, the price of stuff has become a hot topic of conversation. We all know the dangers that inflation brings to our economies. We know the risks that it brings to our brands too. But this heightened focus on price brings a opportunities too - if you are prepared. To learn more about the upside of price increases, read on.

Shoppers are much more conscious of price increases than before

In our household, it’s not just my wife that has been noticing the prices of the items we buy in the supermarket. I’ve started noticing prices on products too – not all of them, mind. But on each shopping trip, I find myself noticing prices more, being aware of the price of items that perhaps I’d not worried about before.

Price increases affect shopper behavior in obvious ways

And how does this impact my shopping behavior? Sometimes I buy the brand I was going to buy. Perhaps with a shrug. Perhaps with a bit of a grimace that I’m having to pay 20% more for the same product I bought last week. But sometimes I go ahead and buy exactly the same thing.

Sometimes, of course, I buy something different. The value equation of my preferred brand has changed, so I check out some of the alternatives, and pick up one of those instead. Sometimes I might decide to wait and check another store or make a mental note to keep an eye out for future promotions on my preferred brand.

There are many potential different outcomes from the shifts in prices shoppers are experiencing at the shelf. But in all cases, there is a really important change in shopping behaviour – even on the occasions when I end up buying what I planned to buy.

Price increases impact shopper behavior in a more subtle way too

I made a conscious evaluation of a decision that was, previously, typically subconscious

When we shop, a lot of our decisions and processing happen at a subconscious level. Driven by neural routines, we bypass much of the stimulus that a store throws at us. Stores are complicated places, full of noise, tens of thousands of products, messages, signs, and promotions. Our brains filter out much of this information – deselecting things that are deemed not relevant. Sometimes referred to as System One thinking, it’s a way for our brains to cope with complexity.

Shoppers don’t always consciously process all the information we present to them

And it is this processing that means that a lot of the time the shopper doesn’t notice many of the products on the shelf. Doesn’t necessarily notice the price. And therefore doesn’t always evaluate all of the options. We grab a brand that we know we like, and walk on, without really noticing much of the detail of the other brands on the shelf. In many studies we’ve seen that shoppers aren’t really clear on the price they’ve paid for a specific item.

Price increases disrupt subconscious shopper processing and decision making

But today, as prices rise significantly, shopping is becoming a more conscious process. We’re checking prices. We’re noticing prices. And that disrupts our subconscious processing. It creates an opportunity!

The shopper that was buying your competitor habitually is now given pause for thought, there at the shelf. For a moment there is uncertainty. For a moment, the once-loyal shopper might consider an alternative.

Price increases mean that the shopper is more open to influence

And this new decision won’t necessarily be all about price. For a short time, the shopper is open to influence.

Of course this also works in reverse. If we’ve increased our prices, then the same thing is happening to our loyal shoppers. So what should we do?

As prices increase we need (even more than usual!) to give shoppers are clear, concise reason to buy

In all cases, we need to give the shoppers a really good reason to buy us. We have a moment in which there is an opportunity. For the shopper that usually buys us, we need to remind them why our brand is perfect for them. For the shopper that usually buys the competitor, we need to give them a really good reason to buy us.

Shopper messaging isn’t the same as consumer messaging

We need to think like a shopper. We need to understand what they are looking for. And we need to communicate it in a way that a shopper, giving perhaps only a few seconds of consideration to this purchase, will understand. We need excellent shopper communication that gets across the benefits of our brand, right there at the shelf.

How to take advantage of the opportunities that price increases bring

If you want to take advantage of this opportunity, and also defend against the threat that it represents, here’s what you need to do:

-         Make sure you know which shoppers you are targeting. Which shoppers are at risk of leaving you? Which might consider leaving the competition?

-         Understand what they do right now – what do they buy, where do they go in-store?

-         Understand what consumption occasions and needs they are buying for.

-         Understand what drives them as a shopper. What stops them buying you right now, and what is the main benefit you can bring them?

-         Consider where they go, where they look, when they are shopping. For example, if you are targeting the shoppers of a current competitor, you know that shoppers will be going to that part of the shelf. Can you get your product, or your message, there?

-         Deliver that message at the point of sale. Use point of sale, of course, but also, as a must-do – check your packaging. Does it shout out this benefit? If it doesn’t, it really isn’t working hard enough.

Invest in learning how to communicate with shoppers now

Shoppers around the world are changing their behaviour in many ways, but this subtle shift is possibly the most profound of all. Shoppers are engaging at the shelf more than ever before, because something important (price) has changed. This change creates a threat and an opportunity – and if we understand how to do shopper marketing effectively, we can win at the shelf more than at any other time.

If you’d like to learn more about how to connect with shoppers at the shelf, and how to create shopper marketing plans that drive real long-term growth, check out our training programs or get in touch