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Customer data science company dunnhumby is out this morning with a new study "examining what trends will have the biggest potential impact on grocery retailers over the next three decades," and identifying a growing personal fiscal conservatism as a prime driver of shopper behavior.

dunnhumby identifies, in order, Lidl, Food 4 Less, Aldi, Costco, Fry’s, Amazon, BJ’s Wholesale, H-E-B, Shoprite, and WinCo as the food retailers "best positioned" to benefit from an increasing personal fiscal conservatism, while Harris Teeter, Wegman’s, Publix, and Sprouts Farmers Market are most "vulnerable to the fiscal conservatism trend over the next 30 years."

Some key passages from the study:

•  "Generation Y (born 1981-1996) and Generation Z (born 1997-2012), who came of age during the Great Recession of 2008-2010, began their work lives, started their families, and may have become caregivers before and during the pandemic, will be central to how the market evolves over the next three decades. More than any other age groups, Generation Y and Z have been scarred by both the Great Recession and the Pandemic and how those two periods framed their views on their personal finances."

•  "Fiscal Conservatism (concern about the economy as well as personal day-to-day and long-term finances) is the biggest source of stress for consumers and the most important over-arching trend that will continue to affect consumers over the next 30 years. Only when income exceeds $150,000 per year do finances even out with health and the environment as sources of stress for consumers. And the younger the consumers, the more they tend to be stressed with finances, both long-term and day-to-day."

•  "Health and Wellness (2), Data 3.0 (3), Values-Based Consumption (4), and Channel Proliferation, (5) follow Fiscal Conservatism as the second through fifth most important trends of the future. CVS topped all retailers for Health and Wellness followed by Amazon, H-E-B, Rite Aid, Walgreens, Costco, Walmart, Fry’s, Kroger, and Meijer. Amazon was the top store for Data 3.0, Values-Based Consumption, and Channel Proliferation."

•  "Health and Wellness and finances are opposing forces for many consumers. The struggle between buying healthy and affordability is real. While 80% of consumers aspire to choose healthier foods when shopping, price is a barrier for 60% of them. Consumers with higher incomes are more likely to regularly choose healthy foods when shopping. Younger customers care more about their mental health, whereas older customers care about their physical health."

•  "Data 3.0 (defined in the report as the adoption of new technology) is still nominal, but it greatly appeals to younger generations. That means that winning the hearts and wallets of future post millennial generations will happen not only via offering self-checkout lanes (used by four out of every five customers) but integrating new and holistic virtual tech into purchases and communications."

•  "Values-Based Consumption, based on values such as sustainability or on the welfare of store employees, remains aspirational and ranks last when customers are asked to trade off with other needs like finances and personal health. That’s because like Health and Wellness, consumer needs that are less personal and less immediate to the consumer take a back seat until the priorities are fulfilled (like one’s finances)."

You can access the study here.

KC's View:

It is a little sobering to think that we're going to have to live with fiscal worries for the next three decades, and probably even more so for the companies that have to compete with the 10 retailers identified as best positioned to cater to this dominant mindset.

But again, I'd like to make the point that part of the problem is that retailers focus way too much on price and not enough on value.  Only a certain number of retailers can claim legitimately to be dominant on price, and so the others have to find a different way into the conversation.

And the thing about value is, one can use that lane to create appeal on some of the other issues that concern shoppers.  

If I were a retailer, I'd be focused on value and values.  That'd be my core message, everywhere in the store, reflected in every product and category in which we competed.