Retaining spend whilst navigating post lockdown
22nd May 2020
A roadmap has been revealed and the prospect of an end to the strict quarantine period is now in sight. Food and beverage businesses should be planning how they will negotiate the post lockdown and the recessionary impact phases that will follow, as we expect that consumers will increase price-checking behaviours, scratch cooking and cut down on discretionary spending. These behaviours benefit in-home-focused businesses, with growth of in-home occasions expected as a result of risk aversion and greater budgeting. Businesses must look to channel lost out of home spending to retain some of the increased levels of volume seen throughout the lockdown period.
One behaviour that has developed during the quarantine is the switch from in-store grocery to online grocery delivery, particularly with older consumers - from a lower base pre-coronavirus (HIM MCA Recovery Report 2020). Delivery has been pivotal throughout the lockdown period, giving a lifeline to retailers, suppliers and wholesalers. As FOGO (fear of going out) ascends on the nation, consumers are seeking out ever-more convenient ways to get their favourite products from the comfort of their own home.
A less established route to market, but with strong convenience credentials is to order directly from the brand. Increasingly, huge household names including Heinz, Cadbury’s and PepsiCo, are offering consumers the option to order directly from their websites. Selling directly to consumers means that companies can control the entire consumer journey and increase engagement with creative and immersive brand stories. Companies can showcase entire ranges as well as NPD, without competing against other brands or retailer’s promotional offers or needing to fight for space on shelf.
Crisps and snacks, fresh fruit and vegetables, chilled dairy and alcoholic drinks come out on top as the categories that consumers would be most interested in ordering directly from a brand. Playing into both the routine and treat occasions will be key as consumers reach for a sense of aspirational normality amidst the oncoming recession.
Our research has found that this service is most relevant to younger consumers, with one in four 18-35 year olds having already used a direct to consumer service. It is important to target younger consumers given interest peaks at around 18-35, with the majority of 55+ consumers not interested. As we enter a recession and spending inevitably suffers, retaining engagement will be key for brands to ensure that consumers continue to purchase their favourites and refrain from trading down.
UK Recovery Report 2020
Understand the true impact of the coronavirus pandemic on the UK food and drink industry. Develop a post-pandemic strategy using robust forecasts and scenarios based on the attitudes and behaviours of UK shoppers and consumers.