The current shifts in shopper behaviour due to the cost of living crisis will be as significant as changes seen through the COVID lockdown. Those of us with long enough memories will remember the 2008 recession and the impact on the food industry. Below explores the similarities and differences, challenges and advances between now and then.
Completely new concepts
Some of the innovations we take for granted today came about from the last recession. M&S launched its Dine in for Two deal in 2008. A response to out of home occasions moving into home. It’s something we have seen evolve across all retailers since its inception. This case study for targeted innovation in times of significant behaviour shift shows the right concept and proposition introduced at a time of change can stand the test of time.
Access to Data
In 2008 access to data was harder. You had to get up from your desk and go out into stores frequently to know what was going on in the market. You weren’t always able to buy information as quickly as you needed it. Some retailers didn’t have an online presence. For those that did the information and product coverage was patchy. There was a point where I had to monitor the whole pork market on a monthly basis. I had to do most of it with store visits and I got to a point where I just knew the prices of the different cuts.
Today sees the opposite end of the spectrum with the possibility of having too much data with price monitoring services offering to send you an email to alert you to a price change in the market. Whilst this might be useful to some, it’s still the same things that remain important. What is happening to Value, Volume and Average prices in your category? How is this changing overtime? Pairing this with remaining close to what’s going on in your retail customer(s).
Changes in Behaviour
We can predict what happens in retail at times of change where disposable income is squeezed. Trading down tiers, switching out of home occasions into retail, switching from brands to private label and the “lipstick effect” of affordable treats.
The 2008 recession was often referred to as the Credit Crunch where access to credit became hugely limited when banks lost confidence to lend to each other. This time the challenges consumers are dealing with are coming from multiple angles. Inflation driven by multiple factors, energy price increases and now on the horizon there’s jumps in interest rates pushing up mortgage payments. In 2008 payday loans came to the forefront. Not as a new concept but a facility that suddenly grew through technology in the climate. Today we have other forms of credit being offered with buy now pay later. There was much discussion last week about Deliveroo offering buy now pay later option to their app
Ultimately marketing of credit in difficult times aiming to aid consumers maintain spend rather than reduce remains in place.
Retailer Meetings
Another technology-based change vs 2008 is how we have meetings. Online meetings have led to increased frequency and fuller diaries (happy to be p
roved wrong but this is my experience and what I see elsewhere). In 2008 to go and see a customer you might have had hours of travel time there and back to prepare and reflect. If you were having meetings involving multiple team members you would have sat together before the meeting and discussed and prepped for the meeting in person. Prep would be happening now but it’s a completely different landscape to the back-to-back meetings potentially happening now and the possibility to speak to multiple retailers across the country in the same day. Ultimately this is what retailers will be dealing with in reverse. It’s a different way of working with less space to reflect, plan and act.
Losing sight of the bigger picture
Plans in place for coming years maybe ripped up and not started due to the focus on cost. HFSS, a policy designed to help people was mooted for change by the government. Sustainability and Climate Action should be top of the agenda. Whilst it’s a vast topic making changes to the way we grow, manage and consume food; joining the dots, evolving in this space can only help with costs in the future.
If you want to improve the knowledge and skills of your teams about sustainability and Net Zero get in touch to register for free lunch and learn – Understanding Net Zero and what it means for the Future of Category Management.
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