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Insight of the Day: Omnichannel 2024: Consumers shop around, while boosting volume becomes urgent

Key Trends

  • Inflation-Driven Price Sensitivity: Consumers are "shopping around" to find the best deals, driving higher trip frequency and increased spending per trip.  This necessitates a strong focus on value.

  • The Rise of Discounters: Discounters' market share is increasing at 10.5% due to both their price points and other factors (we'll get into the "why" below).

  • Ecommerce Surge: Ecommerce's growth has doubled in one year, now at 12.8% of value share, making an optimized online presence essential.

  • Private Label Growth:  Private labels outperform branded products, though there's some suggestion this trend may be reaching its limit.

Implications for FMCG Businesses

  1. Pricing Matters Most:  Competitive pricing across channels is paramount. This includes reconsidering promotional strategies, potentially offering smaller pack sizes, and clearly communicating value propositions.

  2. Discounters are Evolving:  The success of discounters isn't just about price. Businesses need to analyze what else draws consumers: assortment, convenience, in-store experience, etc., and either compete on those fronts or find other differentiators.

  3. Omnichannel is Not Optional: A robust, seamless presence across online and offline channels is crucial to reach consumers effectively where they choose to shop. This goes beyond sales and includes customer support, marketing, and consistent messaging.

  4. Rethink Brand vs. Private Label: Businesses must balance strategies for branded offerings alongside exploring private label partnerships to reach price-sensitive segments. Data-driven insights on where their brand has an unassailable advantage is crucial.

The Need for Volume

As inflation's impact wanes, boosting sales volume becomes the key driver of growth.  This means:

  • Penetration Strategies: Focus on attracting new customers and expanding your customer base, as opposed to relying solely on existing customer loyalty.

  • Innovation that Meets Needs: Product innovation should be tied to solving genuine consumer pain points or offering compelling experiences at the right price points.

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