Agility – it’s arguably the most important quality one can have in business today.
Technology, innovation, consumer behavior – they’re all changing faster than ever before. If brands can’t keep up with the pace of change, they’re existing on borrowed time.
The fact that food prices are up more than 30% since before the pandemic further compounds the need for brands to be relevant and possess a high level of value in the eyes of as many consumers as possible.
The desire to be more responsive to consumer needs is likely what’s driving the breakup of companies that market established legacy brands, says RDSolutions CEO Jacob Blondin. Recent moves by companies like Kellogg’s and Kraft Heinz aim to make them more agile like smaller, start-up brands that are “creating energy with consumers,” Blondin asserts.
Additionally, consumers have grown far more agnostic as they seek better values amid economic pressures. “There’s not the same brand allegiances there once were,” says RDSolutions CCO Lee Kallman, further noting an accelerated growth in private label products. “Big brands are getting hit from multiple angles and it’s almost like they didn’t see it coming.”
It’s what Kallman describes as “complacency” among legacy brands that consumers have been buying for generations but are more often turning to alternatives: “Consumers see just as much value in private labels.”
This transformation of brand attitudes set the stage for “Holidays on the Horizon: What Back-to-School & Brand Moves Say About Retail’s Next 90 Days,” RDSolutions’ recent webinar, during which Blondin, Kallman and Supermarket Guru Phil Lempert explored what’s in store for the coming months in retail, and what trends in back-to-school shopping this year heralds for the upcoming holiday selling season.
In short, shoppers can expect deals galore, as price continues to be paramount.
“You’re going to see it everywhere – everyone’s looking for a deal, they’re struggling,” Blondin says.
According to RDSolutions data, the price of typical back-to-school baskets this year varied as much as 7x depending on the retailer, Lempert observed.
Shoppers have been making purchases sooner to capture good deals before prices rise because of uncertainty in the economy, Kallman says, especially inflation and tariffs.
The idea of back-to-school shopping “has become so much broader,” he notes, with some retailers launching their displays as early as June.
So, how can retailers keep their promotional displays fresh when they’re up for several months, so consumers don’t stop paying attention?
Customers expect good inventory, Blondin says, so quality of presentation is important to customers: “It’s the image of how well run a retailer is. It can’t be empty.”
To that end, RDSolutions employs a national in-store execution team to maintain inventory, make sure it’s correct and in stock, and work with retailers and distributors to order more as needed to drive sales velocity.
“You’re always in one of those seasons,” Blondin says, noting that since many special selling periods overlap each other, consumers will strategically purchase needs throughout a long window of opportunity.
“It’s more of a long-term game with the customer,” he says. “Price is the central concern for every customer. You have to have good prices for a long period to maximize the value for the season.”
What should retailers and brand marketers take away from this year’s back-to-school trends as a prelude to how the rest of the year will unfold?
Blondin said pricing must be accurate, regardless of retail format: “The price needs to feel good.” All demographics are exhibiting price consciousness, he observes, along with an interest in health-focused products, particularly protein.
As for the holidays, Kallman says while shoppers will still see “ridiculously low-price turkeys to get you in the door,” there will also be more packaged meals – bundle deals consisting of a protein, sides and dessert that “create a great perception of value.”
Blondin says there’s “still a lot of angst in the market … people are not spending frivolously.” He describes consumers as being “tentatively optimistic but not exuberant about tomorrow.”
So, beyond price, what’s their advice?
“Listen to the customer about what they want,” Blondin says. “Manage assortments and respond with urgency. Complacency is a huge risk.”
Consumers want healthy options, meaningful brands and flavor variants. “Price is the baseline but assortment is how you get your uniqueness and maintain the customer,” he says.
For brands, Kallman says, “Think more broadly about what the customer is looking for.” And with private label nipping at their heels, brands should be “broadening who you think your competitors might be.”
Emerging brands are not playing by the same rules as legacy brands, he says, and they’re “taking shelf space from the big guys.”
Want to view the complete webinar? Click here: https://rdsolutions.io/event/holidays-on-the-horizon-what-back-to-school-brand-moves-say-about-retails-next-90-days/
