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“As the creator economy’s importance continues to grow, brands and agencies need to go beyond just listening to where audiences exist, but also how content influences consumer purchasing decisions.” – Chrissy Werner, vice president of marketing at Tubular Labs
Restaurants, Grocery Stores Battle Over Consumers’ Stretched Dollars
Restaurants and supermarkets are ramping up competition for Americans’ mealtimes, as consumers gird for a souring economy while food bills continue to rise. Many restaurants are promoting deals aimed at giving consumers more value for their dollars, while raising menu prices. Supermarkets are stocking more low-price staples and offering specials on prepared food targeted toward shoppers who are rethinking how many times they eat out each week.
Eating at home generally remains cheaper than dining out, with the typical restaurant meal costing 3.4 times as much as meals made using groceries, according to market research firm NPD Group. Inflationary forces that this year have driven up the cost of food, fuel and other necessities have pushed up price tags on grocery-store shelves at a faster clip than those on restaurant menus.
Grocers said they are promoting prepared food as an affordable alternative to eating out, while trying to keep prices low on staples including bread and cereal. Meanwhile, executives said consumers are continuing to buy more store brands for everyday-type items, and some are buying fewer amounts of higher-priced products like seafood.
Consumers Want Deals More Than Experiences This Christmas
Personalized experiences have slipped below bargains on holiday shoppers’ lists this season. This shift represents a sharp reversal in customer preference amid record-high inflation that has impacted the rising cost of living. As recently as May, over 65% of shoppers were willing to pay premium prices for a tailored retail experience. This trend has temporarily reversed.
According to the most recently published PYMNTS and LendingClub collaboration, New Reality Check: The Paycheck-to-Paycheck Report, Holiday Shopping Edition, when asked about which factors determine their choice of retailers, only 5.4% of consumers cited a personalized experience. This paled in comparison to discounts or sales (60.4%) and free shipping (48.3%) and was also exceeded by buy now, pay later (11.4%) and digital wallet options (9.3%).
Consumers’ growing demand for cost-cutting measures isn’t surprising. Overall inflation has risen 7.7% year over year, according to the latest Consumer Price Index published by the Bureau of Labor Statistics. The increased costs of goods and services across nearly all categories have stretched most Americans’ wallets: 60% of surveyed consumers currently live paycheck to paycheck, including 43% of those earning over $100,000 annually. With nearly 20% of respondents struggling to pay their monthly bills, there isn’t room for extras in many holiday budgets this season.
Amazon is Betting on the Future of Social E-Commerce by Launching a Product That Looks a Lot Like Tiktok
Amazon has launched a TikTok-style service that will let shoppers buy merchandise from a curated feed of photos and video. The new feature, called Inspire, will roll out to select U.S. customers in early December and go national in the next few months.
“In just a few taps, customers can discover new products or get inspiration on what to buy, all tailored to their interests, and then shop for those items on Amazon,” said Oliver Messenger, director of Amazon Shopping.
Amazon, which has long used static product images and descriptions to create a uniform catalog, has been trying to make it easier for shoppers to discover products rather than simply search for specific items. Despite these efforts, most customers don’t linger on the sprawling online marketplace. More than one in four Amazon purchases take three minutes or less.
What These Latest Consumer Affinity Trends Tell Us About Marketing in 2023
Consumer affinity across social media can reveal some surprising insights about how people shop and engage if they watch certain videos. Video analytics firm Tubular Labs recently expanded its artificial intelligence and consumer insights tools to analyze video categories and social audience behaviors across some 1 million topics and 11 billion videos across YouTube, Facebook, Twitter, Instagram, Twitch and TikTok.
Subject material ranged from food consumed at Super Bowl watch parties to instructions for hair extensions and showed a potential correlation to consumers’ shopping habits across other sites. Tubular also expects the influencer market to keep expanding, with 2023 projected influencer viewership hitting some 10 trillion views per month across all platforms. In January 2022, this was around 5 trillion views per month.
The popularity of videos is showing that social is becoming the new place for search — just ask TikTok. When people are looking for answers, they tend to seek out videos more rather than text, which marketers should keep in mind when identifying new audiences. Based on Tubular analysis of popular keyword searches, for instance, those searching for recipes were 204 times more likely to look for Green Giant products on Amazon.
Indoor Farming Challenges Rise
As 2022 comes to a close, the vertical farming industry has been hit with a series of high-profile closures. This news came as a shock to many given that, just last year, investments into the industry reached $3.66 billion. While there continued to be an influx of investment in 2022, the challenges to indoor farming rose faster.
Power is one of the biggest costs associated with running any kind of business, and it’s no secret that indoor farming has an energy problem. To produce year-round, vertical farms rely on artificial lighting and humidity control systems which consume energy at high rates. Even before the recent volatility in the energy market, the energy demand of these systems made the sustainability and viability of vertical farming extremely difficult.
However, industry experts still believe vertical farming has a place in the food system, can be more sustainable than it is today, and can be profitable when planned and operated responsibly. Getting the entire industry to rise to the occasion and reach its objectives will require much collaboration, benchmarking, and elevation of successful suppliers and business models.
Fresh is One of the Top Grocery Trends in 2022
Grocery Business highlighted many trends of 2022. One is the resurgence of foodservice as part of an overall comeback by the fresh departments—produce, meat/seafood, deli, bakery and floral. During the thick of the pandemic, supermarkets were compelled to shift some of their focus away from the main money-making store areas to the center store grocery sections as they battled supply shortages.
With much of that headache now subsided, supermarkets are again investing to enhance the perimeter—and with good reason. According to Kroger Chief Merchant Stuart Aitken, fresh is the top determinant of store choice, as 70% of customers base their preferred shopping venue on fresh offerings.
Online Sales of Health, Personal Care Categories Are Growing
Health and personal care will be the third-fastest-growing e-commerce sales category this year, growing 22.1% year over year, according to eMarketer’s forecast. Though only about a quarter (26%) of consumers said they cut back their spending on personal care items due to rising prices, according to CivicScience, almost as many (23%) said they began purchasing more private label items to keep costs down, per First Insight.
While there are signs of inflation easing, according to the Adobe Digital Price Index, digital prices of personal care products were still up 2.6% year-over-year in September, so it’s as important as ever to cater to deal-seeking shoppers.
This year, Amazon’s e-commerce sales of health, personal care, and beauty products will grow faster than any other category, rising 20.0% year over year to reach $32.59 billion. This represents 8.2% of Amazon’s total retail e-commerce sales. Additionally, eMarketer predicts retail health and personal care e-commerce sales will reach $114.49 billion this year, representing nearly 11% of total e-commerce sales. Next year, that will increase to 11.7% to total $135.59 billion.
Spray-On Packaging and Vapor Stickers: How the Fight to Curb Food Wastage is Turning to Science
Restaurants, grocers, farmers and food companies are increasingly turning to chemistry and physics to tackle the problem of food waste. Some are testing spray-on peels or chemically-enhanced sachets that can slow the ripening process in fruit. Others are developing digital sensors that can tell — more precisely than a label — when meat is safe to consume. And, packets affixed to the top of a takeout box use thermodynamics to keep fries crispy.
Experts say growing awareness of food waste and its incredible cost — both in dollars and in environmental impact — has led to an uptick in efforts to mitigate it. U.S. food waste startups raised $300 billion in 2021, double the amount raised in 2020, according to ReFed, a group that studies food waste.
“This has suddenly become a big interest,” said Elizabeth Mitchum, director of the Postharvest Technology Center at the University of California, Davis, who has worked in the field for three decades. “Even companies that have been around for a while are now talking about what they do through that lens.”
In 2019, around 35% of the 229 million tons of food available in the U.S. — worth around $418 billion — went unsold or uneaten, according to ReFed. Food waste is the largest category of material placed in municipal landfills, according to the U.S. Environmental Protection Agency, which says rotting food releases methane, a problematic greenhouse gas.
Americans Waste Close to One-Third of All Food Purchases—the Equivalent of 1,250 Calories a Day. Here’s a Breakdown of How Bad it is.
U.S. consumers waste a lot of food year-round – about one-third of all purchased food. That’s equivalent to 1,250 calories per person per day, or $1,500 worth of groceries for a four-person household each year, an estimate that doesn’t include recent food price inflation. And when food goes bad, the land, labor, water, chemicals, and energy that went into producing, processing, transporting, storing and preparing it are wasted too.
Where does all that unwanted food go? Mainly underground. Food waste occupies almost 25% of landfill space nationwide. Once buried, it breaks down, generating methane, a potent greenhouse gas that contributes to climate change. Recognizing those impacts, the U.S. government has set a goal of cutting food waste in half by 2030.
There is no single solution to this problem. Not all consumers will seek out or encounter opportunities to improve their food-handling skills. Meal kits introduce logistical issues of their own and could be too expensive for some households. And few U.S. cities may be willing or able to develop systems for tracking and taxing wasted food.