It’s safe to say that everything is unpredictable right now. But with knowledge comes understanding, and for CPG brands, it’s important to know how consumers are shopping right now.
To that end, Epsilon surveyed consumers on their shopping habits and behaviors during the COVID-19 pandemic to understand: How are they really responding during this unprecedented time? The findings, detailed in our recent report, “Consumer Sentiment During COVID-19,” are indicative of the current consumer mindset and sales patterns, but also trends that will likely continue into Q3 (and beyond).
Here, we share the key findings for CPG brands from the research, as well as some recommendations to use those consumer insights—illustrated through brand examples. Read on for how to adapt your CPG marketing strategy for the next normal.
Although most consumers are still purchasing in-store at grocers, curbside pick-up and home delivery have become increasingly leveraged channels, with over 50% of Gen Z and millennials indicating they plan to continue shopping via these channels. What’s more, over 40% of consumers across generations are planning to use online channels to re-order. They’ve experienced an “ease of use” in their recent experiences and are happy with the time from order to delivery.
However, there’s a generational distinction: Younger cohorts like Gen Z, millennials and Gen X are most likely to order online with an app for pick-up, and Gen Z and millennials are also more likely to order online with an app for delivery.
Recommendation: Now more than ever before, CPG brands need to engage the right audiences at the right time via the right channels. Spray-and-pray marketing isn’t the solution when every ad dollar is on the line. Instead. With people spending so much time online, the key is to build digital marketing programs that stand out and encourage the consumer to engage or purchase.
A great example is Camden Town Brewery, a London-based craft brewer owned by Anheuser-Busch InBev. The consumer goods company recently created a Twitter campaign in which consumers bid for a single pint of beer via tweet.
This auction concept acknowledged the current situation (not being able to visit a bar or pub for a true pint of beer), and the engagement led to valuable multichannel visibility. In a show of sensitivity from the company, the proceeds from the auction were donated to “Hospitality Action,” a fundraising program to help stabilize the industry.
Eighty-four percent of consumers across generations are purchasing groceries at grocery stores. They view grocery stores as a one-stop shop where they can purchase the majority of their necessary items (both grocery and non-grocery items) and limit multiple trips to specialty stores.
However, consumers shared they continue to shop at the stores that “make them feel safe.” The survey findings show that people prefer stores that clean each cart and basket in between uses, implement “one-way traffic” through the aisles and section off areas within the store to limit customers (produce, meat and fish counters, etc.).
Recommendation: Shift your messaging to highlight food and non-food products at grocery stores and provide assurance your brands are available and in-stock. If your brand is not present at those stores, then focus on driving to e-commerce. Safety-focused customers today want a one-stop-shop experience, so the more you can accommodate that preference, the better.
Suave, for example, highlighted the simplicity of in-store or e-commerce purchasing in a recent email about a new hand sanitizer product:
This email not only offers highly relevant product information, but also helps customers find where the product is in stock online or in-store near them. What’s more, this allows consumers to see the many retail buying options for a single product, so even if they don’t convert through the email, they can pick up the product the next time they’re at Target.
This email not only offers highly relevant product information, but also helps customers find where the product is in stock online or in-store near them. What’s more, this allows consumers to see the many retail buying options for a single product, so even if they don’t convert through the email, they can pick up the product the next time they’re at Target.
Consumers aren’t brand loyal right now. Our data shows that 85% of consumers across generations are not able to always find the grocery item they’re looking for. Looking at that stat across age groups, older populations (the Silent Generation) are most likely to find what they need at stores; however, their choices appear to be more mainstream and flexible. According to our survey, paper products, fresh produce and canned and dry goods remain the top three categories that are most difficult to find.
Recommendation: Focus on aligning and activating retailer and first-party data so you can know what people are purchasing. That will help you understand purchase behavior for those that are already buying from you and whether they are straying to other more readily available brands; use that information as a model for new customers to message or to take necessary steps to retain existing buyers.
And since a lot of people are changing their behavior and buying from new consumer goods companies right now (i.e., buying whatever is available on the shelf), it’s never been more crucial to individually identify purchasers from the past 60 days through identity-based marketing. If someone bought something from your brand in a panic, that product could just be collecting dust in the back of their pantry. How do you make sure they use and experience it?
Distribute communications that highlight the value of your products and show people using them—don’t simply encourage people to purchase the item.
For instance, Idahoan has a highly shelf-stable product. They saw increased sales at the start of the COVID-19 pandemic and wanted to ensure people used and experienced their product. To do this, they created digital ads highlighting recipes that use instant mashed potatoes, shifting to a “use now” versus a “buy now” mentality in their advertising. These communications were sent to people who recently purchased from Idahoan, encouraging them to use the product they just bought (and hopefully buy more in the future):
And, these communications are that much more effective through a personalized lens. By fully aligning consumer data with retail and first- and third-party sources, you can offer recipes (or how-tos, DIY videos, etc.) that appeal to families, singles and everyone in between. A bachelor, for instance, may not derive value from a family-sized mashed potato casserole recipe—but a parent of five? A much more effective match.
It may come as no surprise that the consumption of snacks and pasta has increased the most overall. Twenty-eight percent of consumers said they’re eating more salty and sweet snacks in quarantine, and 24% said they’re eating more pasta.
Next on the list is “better for you” snacks at 22%, canned soups at 20%, and soda as the least increased consumption at 17%. Though it’s important to note that millennials and Gen X have both increased consumption of soda by 10% more than the other generations.
The larger point is that shelf-stable products are up as consumers look for items that can last them a while as they make fewer trips to the store overall. How can your brand ensure they’re getting your product and not settling for a competitor?
Recommendation: Take a cue from PepsiCo’s Frito-Lay. Killing two birds with one stone (boosting digital + meeting customers’ preference for more snacking), the company just launched two direct-to-consumer websites where customers can purchase food and snack items. The websites are aptly named Snacks.com and PantryShop.com, and most orders are guaranteed a two-day shipping turnaround.
PepsiCo going DTC is a big shift. As much as customers were forgoing brand loyalty at the start of the COVID-19 pandemic, if DTC options like these become more prevalent, the chances of customers making multiple online orders to get their favorite products go up, especially in expansion categories like snacks.
What’s more, DTC buying presents a new opportunity for CPG brands: owning direct relationships with consumers. If Snacks.com and PantryShop.com take off with its core audiences, PepsiCo could bolster its omnichannel strategy with new insights from e-commerce consumer behavior.
Consumers used to be able to get everything they love at their retail or grocery store, but based on the above consumer insights, that could become a thing of the past. Will other big brands follow in PepsiCo’s footsteps? Will this affect brick-and-mortar retailers? Time will certainly tell.
Get all the CPG data in the full report: Consumer sentiment during COVID-19. And see more CPG trends, recommendations and examples of recent communications in our recent episode of Business (Un)Usual, which chronicles ongoing brand shifts during the COVID-19 pandemic.
