Values with value

For many European food and grocery companies the post-recession market has been dominated by the theme of providing value to shoppers – communication of prices, promotions and product performance shouts from retailers’ aisles and manufacturers’ advertising campaigns.
While ‘value’ has been the constant undercurrent of recent years, IGD research has shown that a collection of ethical and environmental sustainability themes also resonate with shoppers. Therefore ’values’ offer a second strategic lever for food and groceries companies – a potential beacon creating opportunities for companies to differentiate their offer and create value for their businesses.
In our recent conversations with shoppers across Europe, however, the desire to find value in their values has become stronger than ever. For example, in our latest consumer report Shopper-led Product and Range Innovation, we discovered that three in ten shoppers are looking for improved product values as the key factor that attracts them to try a new product. Of these shoppers, three quarters are also motivated by strong value perceptions.

Shoppers sharpen their ethical focus

Interest in ethical and environmentally sustainable products and issues continues to grow among European grocery shoppers. Our latest European shopper report Ethical and Sustainable Shopping found that 86% of shoppers in France, Germany, Great Britain and Spain are now interested in at least one aspect of ethical shopping – an increase from 81% in 2008. Although headline interest is growing, shoppers however are limiting their ethical focus. In our latest findings we have again segmented shoppers into five ethical segments and found that in 2010 the proportion Ethical Evangelists, the most ethically engaged shoppers, has declined in all European countries in our research.

We have, though, seen the proportion of Aspiring Activists and Blinkered Believers grow. These are shoppers who actively engage with one ethical issue only, or are interested in more ethical issues than they actively buy groceries to support. Rather than dropping their ethical standards following the recession, many shoppers have therefore focussed their ethical consumption on the single ethical issue that concerns them most.
This shift, from broad engagement to narrower focus, reflects the difficult trade-offs many shoppers are currently making when seeking value while shopping for groceries. It does, though, represent an opportunity for producers and retailers of ethical products. There is still strong interest in ethical issues that may again translate into purchase action with a return to a more stable economic situation.

Five ethical shopper segments

• Ethical Evangelists are interested in, and actively look to buy, a range of ethical issues
• Focussed Followers have made several steps into ethical shopping, but pick and choose their areas of interest
• Aspiring Activists have aspirations and interests which outstrip their current ethical shopping behaviour
• Blinkered Believers buy into only one ethical dimension
• Conscience Casuals do not actively shop ethically, and show little or no interest in doing so

In all four markets surveyed, the proportion of Conscience Casuals, our least ethically engaged segment, has dropped. These shoppers, though, do still provide an opportunity for manufacturers and retailers of ethical products. In our discussions with them, it was clear they do have some interest in ethical issues and were often reasonably well informed, it was just something they did not consider when grocery shopping.

An ethical carrot rather than a sustainability stick

We asked British shoppers how they felt grocery retailers and manufactures could help them to make choices that would be most effective in protecting the environment The feedback was clear, shoppers would much rather be encouraged with an ethical carrot than forced into specific behaviours with a sustainability stick.

The most popular tactic that shoppers requested to help them make environmental choices was the provision of incentives. Overall, just under half of shoppers mentioned this, with one in four identifying it as the most appealing tactic. This compares to just one in ten shoppers who suggested penalties for people buying the most environmentally damaging products.

Hence, through seeking promotions, long-term price savings or loyalty mechanic benefits, shoppers are again asking for value for their values. This appetite creates the opportunity for manufacturers and retailers to positively encourage or incentivise shoppers to change behaviour in favour of ethical products. Some such activity is already underway – for example, in Britain Procter & Gamble has recently worked with Ocado to promote environmentally friendly lines, offering a 30% discount through its Future Friendly initiative.

Balancing the twin levers of ‘value’ and ‘values’ continues to create opportunities for the food and grocery industry – and the current feedback is clear, shoppers expect values with value.

About the Author

Ben Miller, Head of Shopper Insight, IGD

Ben leads IGD’s Shopper Insight team. The team undertakes primary shopper and consumer research on the key trends in our industry, and specialises in pulling out the insights and implications for grocery businesses.

IGD’s shopper and consumer research provides a landscape perspective on shopper behaviour, to help you get above your category and understand the macro-drivers – from store, channel and product motivators to ethical attitudes. In bespoke projects, we also get under the skin to help you understand what this means for your category. Ben leads all this research, and can work with you to develop sustainable business strategies based on the full breadth of our robust shopper insight.

Ben started his career in the market research team at UK retailer Safeway, before undertaking roles in competitor analysis, promotions management and finally Investor Relations, working on the Morrisons/Safeway activity.

Ben joined IGD in early 2004, firstly as international retail analyst, before managing the research on IGD’s subscription website Retail Analysis. He has finally gone full circle back to market research to undertake his current role.

Ben is a very experienced presenter, regularly delivering our shopper and retail insight across Europe, from bespoke boardroom briefings to large conferences. You can use his breadth of skills and first-hand experience to help you with a bespoke project, a training brief or to add value to an internal event or conference.