As the Australian grocery retail landscape evolves, understanding new shopper behavior remains critical for success. In 2024, Australian retailers face a unique set of challenges and opportunities, driven by shifting shopper expectations and economic pressures. Leveraging insights into these trends can empower retailers and their supplier partners to refine strategies, boost conversion rates, and enhance customer satisfaction.
Here are three key shopper trends shaping Australian grocery retail in 2024 and beyond…
- Increasing Dwell Times and Weakening Conversion Rates
Shoppers increasingly have a particular product, price or mission they are shopping for. This is led by cost of living pressure (only buy if needed or on special). However, insights reveal a paradox: while shoppers want to get what they want quickly, they’re spending more time navigating shelves in major Australian supermarkets like Coles and Woolworths.
This increase in dwell times—the average time spent in a product category—has not translated into better sales. Instead, conversion rates (shoppers moving from seeing to purchasing) are declining, leading to smaller basket sizes.
What’s driving this trend?
- More pre-determined product choices pre-store, so more critical to “find what I want” at the right price
- Cluttered layouts and a lack of intuitive organization
- Challenging signage and insufficient product information, making browsing frustrating.
Solutions:
- Simplify the shelf: Streamline layouts to minimize decision fatigue
- Enhance signage and information: Clear labeling helps shoppers quickly identify what they need
- Add ‘theatre’ to shelves: For categories where browsing is desirable (e.g., cosmetics or fresh produce), create engaging displays to enhance the shopping experience.
- Declining Price Awareness Amid Rising Budgeting Concerns
Amid increasing cost-of-living pressures, shoppers are more budget-conscious than ever. Yet, data shows a decline in price awareness—shoppers are less familiar with the standard prices of products they regularly purchase. This knowledge gap can hinder their ability to assess value, impacting their trust in retailers and brands.
What’s the challenge?
- Price knowledge has eroded, creating confusion about what constitutes a “good deal”
- Shoppers now prioritize value identification—clarity on why a product is worth its price—over simple price reductions.
Strategies to Address This Trend:
- Communicate Price clearly: E.g. unit price, digital tools, at shelf and pre-store. Make it clear what the shopper is buying and how much of a deal it really is without eroding trust or credibility
- Communicate value effectively: Highlight unique selling points like quality, sustainability, or health benefits
- Invest in value-focused categories: Staples like dairy, bakery, and fresh produce are critical areas where shoppers demand clarity.
- Younger Shoppers Are the Least Satisfied
Historically, younger shoppers (18–34 years) were among the most satisfied retail demographics. However, satisfaction levels have plummeted, with economic strains disproportionately affecting this group. Younger shoppers now report feeling let down by the basics—understanding value, layout, range, and product accessibility.
Key Drivers:
- Younger shoppers are let down on the basics: poor understanding of value, poor satisfaction of layout, range, availability
- Younger shoppers expect more engaging, personalized experiences
- They value innovation, sustainability, and health-conscious options but feel these aren’t delivered effectively.
How Retailers and Brands Can Win Them Back:
- Explain value better and more credibly
- Optimize shelf layout and product location to make navigation effortless
- Emphasize sustainable and authentic options, appealing to their ethical values
- Focus on health-conscious and innovative products to meet their evolving needs
- Create visually appealing displays to rekindle the joy of shopping.
Ready to transform your retail strategy?
Talk to the industry experts at Shopper Intelligence to explore how these insights apply to your specific categories and drive growth in 2024.
View the 2024 State of the Nation Trends PDF here.