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How Much Of A Discount Drives New Grocery Trial?

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New research from Kroger Precision Marketing powered by 84.51° finds that 60% of shoppers will switch to a new salty snack (same size and weight) if that product’s price is only 5% lower than the regular price with the figure jumping to 77 percent for a 10 percent discount.

At a 20 percent discount, a similar 80 percent of Kroger grocery shoppers surveyed indicated they were encouraged to try the new salty snack.

“As a tactic to get consumers to try something new, steep discounts are undefeated,” said 84.51° in a blog entry. “However, the data says that you don’t need to go overboard: the difference between a 10% and 20% discount is negligible, indicating that even minor price reductions can be highly effective.”

The research found consumers are “open to innovation but may need a nudge to break from their usual purchase,” generally in the form of a discount or coupon.

84.51°’s survey found 76% are satisfied with the products that are currently available overall and 53% tend to just grab the same products each time without much thought. At the same time, 68% are open to trying innovative and unique products and 52% enjoy discovering new products even if they must deviate from their usual choices.

Point of purchase is key to trial as 80% of respondents said they make the decision to try something new in-store, with nearly an identical number (79%) saying they discover new items via in-store displays or promotions. Another 41% indicated they discovered new items through digital advertisements.

The research found that most households are more open to trying new items in certain categories: snacks, treats/desserts, frozen meals & sides, packaged pantry items, household essentials. On the other hand, they’re likely to stick to familiar products in categories such as deli/bakery, health & wellness, dairy, produce, fresh meat & seafood.

With high price also the biggest barrier preventing consumers from trying new products, 84.51°’s advice included leveraging “TDCs (targeted direct coupons), digital coupons, and strong promotional activity to get new products in the cart.”

Discussion Questions

Discussion questions: What’s your guidelines on how much of a discount should be offered to incentive grocery shoppers to try a new product?

Which categories require steeper discounts and why? Are in-store free samples or other methods underutilized in encouraging trial?

Poll

3 Comments
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Craig Sundstrom
Craig Sundstrom

Honestly I’m a little surprised by the results – i.e. they’re larger than I would have expected – and I wonder how they separate price effects from just novelty ones (not to mention the problem of people not doing what they claim)
Another issue that seems to be neglected is how long to offer the discount (who really cares what the percentage is if it’s only offerd for a weekend?)
So overall interesting, but perhaps as many questions as answers provided.

Last edited 2 hours ago by Craig Sundstrom
Neil Saunders

A lot of grocery shopping is habitual and routine. That makes driving switching behavior hard. What greases the switching wheels, so to speak, is the most important loyalty driver for the category – allowing the consumer to save money. The level of discount needed is inversely proportional to the relevance of the new product or service to the shopper and is proportional to the ease with which switching can be accomplished. 

Gary Sankary
Gary Sankary

The grocer in me knows, as Neil has pointed out, grocery shopping is an exercise in routine. Get in, find what you want, get out. For proof, ask your favorite grocer to move an item on the shelf and watch the comments pour in.

Switching a customer to a new flavor or a new item involves a bit of science, a bit of art, and a lot of marketing done well. And speaking as a shopper, I’m having a hard time rationalizing the 84.51° results. What I tend to see is that once a brand is locked into a shopper’s routine, price isn’t the first thing they consider anymore. Maybe inflation changes that.. but if the goal is resetablish a product relationship with a customer, you need more than one proposition.

So that puts the real work on in-store marketing: at the shelf and on the endcap. To be clear, in that environment, price is one important attribute among many that influences change. But that attribute is in addition to flavor, packaging, trend, celebrity tie-in, and a dozen other factors. A modest discount alone, I just don’t see it. It’s one lever in a pretty complicated consumer black box.

Lest we forget, as Walmart+ continues to take market share and online grocery grows, the ability to influence consumer behavior changes even more. A new platform brings different triggers, different marketing calculus. I’m not skeptical of the research exactly — but I’m not bought in either. Maybe I’ll just stick to my routine.

3 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Craig Sundstrom
Craig Sundstrom

Honestly I’m a little surprised by the results – i.e. they’re larger than I would have expected – and I wonder how they separate price effects from just novelty ones (not to mention the problem of people not doing what they claim)
Another issue that seems to be neglected is how long to offer the discount (who really cares what the percentage is if it’s only offerd for a weekend?)
So overall interesting, but perhaps as many questions as answers provided.

Last edited 2 hours ago by Craig Sundstrom
Neil Saunders

A lot of grocery shopping is habitual and routine. That makes driving switching behavior hard. What greases the switching wheels, so to speak, is the most important loyalty driver for the category – allowing the consumer to save money. The level of discount needed is inversely proportional to the relevance of the new product or service to the shopper and is proportional to the ease with which switching can be accomplished. 

Gary Sankary
Gary Sankary

The grocer in me knows, as Neil has pointed out, grocery shopping is an exercise in routine. Get in, find what you want, get out. For proof, ask your favorite grocer to move an item on the shelf and watch the comments pour in.

Switching a customer to a new flavor or a new item involves a bit of science, a bit of art, and a lot of marketing done well. And speaking as a shopper, I’m having a hard time rationalizing the 84.51° results. What I tend to see is that once a brand is locked into a shopper’s routine, price isn’t the first thing they consider anymore. Maybe inflation changes that.. but if the goal is resetablish a product relationship with a customer, you need more than one proposition.

So that puts the real work on in-store marketing: at the shelf and on the endcap. To be clear, in that environment, price is one important attribute among many that influences change. But that attribute is in addition to flavor, packaging, trend, celebrity tie-in, and a dozen other factors. A modest discount alone, I just don’t see it. It’s one lever in a pretty complicated consumer black box.

Lest we forget, as Walmart+ continues to take market share and online grocery grows, the ability to influence consumer behavior changes even more. A new platform brings different triggers, different marketing calculus. I’m not skeptical of the research exactly — but I’m not bought in either. Maybe I’ll just stick to my routine.

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