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Top 4 consumer trends leading into the holidays

Circana™, formerly IRI and The NPD Group, has released its latest Outlook report ‘The Future of Retail’ revealing that whilst shoppers are focused on value, they still seek shopping experiences, and the physical store remains central to a successful omnichannel strategy.

With heightened inflation, petrol prices peaking and household costs continuing to soar, Australians are responding to these challenges with clear changes in their shopper habits. Circana’s Head of Media, Insights and Analytics for Asia Pacific, Alistair Leathwood said “As Australia continues to navigate the ongoing effects of inflation and the cost-of-living crisis, Aussies are shopping to find the best value for themselves, while retail is being reimagined, notably through technological advances.”

Circana’s latest research shows

  • There’s a significant shift towards value and bulk buying, as households adjust to financial conditions
  • Amidst these economic challenges, loyalty cards and apps are becoming more crucial
  • Stores are playing an increasingly vital role, not just in direct sales but also in supporting online shopping through strategies like buy online, pick up in-store
  • Australian consumers are demanding richer, more integrated shopping experiences across both digital and physical realms
  • Retailers who master this omnichannel approach will lead the market
  • Retailers are now expected to provide interactive services like live stream shopping, online lessons, and virtual consultations. By leveraging tech-driven solutions,retailers can transform shopping into an entertainment opportunity, further solidifying consumer loyalty

Value becomes the overwhelming priority in spending habits

Value is driving the decisions of shoppers to change brands and be more selective in their shopping as cost-of-living pressures force household spending to plummet to levels not seen since the global financial crisis.  Despite inflation easing across some parts of the economy, cost of living pressures is still biting into household budgets.

Leathwood: “Shoppers believe that supermarkets having good specials and promotions were more influential when deciding at which supermarket to shop at. Supermarkets also saw a leap in the purchase of units sold on promotion jump 36.1 percent in the quarter ending in April 2023, over the previous year’s reported 3.6 percent.   This demonstrates that value and bulk buying is being embraced by shoppers to meet their household needs.”

Loyalty cards and apps drive stronger engagement for shoppers and targeting

Despite promotions being the key driver for shopper value currently, many Aussie shoppers have increased their usage of shopper loyalty and rewards programs since the rise in cost of living. It has become an important component of retailer loyalty schemes with Australian retailers Coles and Woolies dialing up their member-first benefits instore and online.


Leathwood: “Keeping shoppers close and engaged through membership schemes that offer pricing advantages is now a key frontier for retailers. The data allows retailers to help manage inventory, pricing and create more personalised experiences for their shoppers instore and online. These apps drive stronger engagement and loyalty, it also allows more precise targeting.  Just these alone have hugely improved the front-end customer experience and the ones doing it well are winning.”

Physical stores play a more complex and valuable role 

The clear rise to buy online and pickup in-store is telling that physical stores remain vital for NPD trade support. Winning in e-commerce extends far beyond the actual value of online sales. Online factors influence offline sales and vice versa, so it’s important to track the relationship between the two.

Leathwood: “We don’t expect the vast majority of FMCG sales to be digital anytime soon, so omnichannel and omnicategory leadership is key. Winners will recognise both online and in-store retail as very different environments yet will take a consistent and long-term approach to nurturing both.”

Shoppers up their digital media usage

The trend towards a multi-faceted shopping experience continues. Experiences and moments are the new currency for the new generation of Australian shoppers. E-commerce success now requires more speed and less spend, but not only this, Aussies also want it to come with a holistic focus on delivering memorable experiences and moments through every available channel.

Consumers are now moving away from simple straightforward online purchases to online shopping experiences. There is an urgent need for brands to optimise the use of technology to translate the shopping experience into an entertainment opportunity. These also provide scope to immerse shoppers into the brandverse where they can become part of the loyalty program ecosystem as a member rather than through traditional signup methods.

Leathwood: “Retailers are stepping up their game to deliver more than just product displays, there is now an expectation that retailers encompass shopping experiences like video personal shopping, live stream shopping, online lessons, virtual appointments and video consultations.”


Also read: Hidden epidemic: financial abuse in small and family businesses


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