When the Brexit news broke we were asked if we had any thoughts on the likely impact on shoppers. To be perfectly honest I was in such a state of shock that I couldn’t begin to marshall my thoughts. I voted to remain, so I’ve spent the weekend churning events over in my mind and with friends and colleagues. It hasn’t changed the result, but the more I think about it the more I know we have to grasp the nettle and get on. Which means we do need to attempt to fathom how shoppers might behave in the short term.
Look back to the credit crunch in 2008 for example (not strictly the same situation per se but…) and how that impacted as a possible benchmark. That was also a shock to the system, and it had a huge effect on shopping patterns:
- Shoppers had to rethink their spending, either because their household budgets were slashed by a job loss, or because they wanted to be able to cope with the recession that then followed
- Discounters became somewhere that shoppers were proud to say they used, and their carparks were full of 4x4s and high end cars
- Solution-based campaigns such as ‘Dine in for £10’ and ‘Feed your family for a Fiver’ helped shoppers feel like retailers were on their side, and understood how things were changing for them
- Own labels ran campaigns persuading shoppers to try their versions of well known brands, and had quite a lot of success as a result
Interestingly, the largest change in shopper psyche was from ‘I want it all now’ to ‘Do I actually need it’, and the emergence of prudent shopper behaviour that was about avoiding waste. This was the start of the decline in multi-buys, the shift from large shops to smaller more frequent shops, and the rise of the savvy shopper.
Brexit then – an even bigger storm breaking over UK shoppers, makes me wonder if shoppers will simply dig deep and take the same pragmatic approach. After all, they still have as much choice available that can support a tightening of belts. In fact, since 2008 the discounters have increased their reach, the big 4 have worked hard at getting their pricing closer to the discounters, own label ranges continue to be a core part of the ranges in store, and solution-based campaigns are better utilised.
Should this be the case, brands and retailers need to be ready to put the effort in to pro-actively sell to shoppers. Don’t assume shoppers need you – assume you have to pull out all the stops to persuade them to buy. We are going to go through tough times, but if we learn from past behaviour, and monitor changes in shopper behavior going forward so that we can quickly respond them, we should be ok!
A final word – it’s not going to be easy, but in a dynamic retail environment like the UK, it must be possible.