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EDITORIAL Fragmented shopper demographics challenge retailers as recession looms

Demographics aren't what they were as recession looms

As the cost-of-living crisis deepens and consumers, fresh from their Summer holidays, face up to rising prices and a tough Winter, new shopping habits are emerging – and they present retailers with a challenge.

News this month that Amazon is to halt expansion of its checkout-less Fresh stores in the UK after ‘lacklustre’ performance of its pilots in London could be seen as just teething troubles and that, in time, shoppers will get it. However, Tesco has also received a petition from more than 236,000 shoppers demanding that self-checkout areas be reduced, not expanded.

This, on the back of Bank Holiday data showing that consumers flocked to stores earlier this week, points to the rise of technology outstripping customer demand. In fact. Post-pandemic, shoppers are increasingly turning back to more traditional ways of shopping, with part of that being the human interaction seen by queuing up to pay a real person. Despite actual data showing that auto-checkout is more efficient and cuts waiting time, a large number of shoppers don’t seem to mind the wait, instead wanting to talk to real people.

For retailers this is a problem: automation offers them a chance to cut operating costs and increase throughput at a time when costs perhaps matter more than ever. Sadly, that isn’t what customers seem to want.

The issue for retailers is compounded by this being just one facet of rapidly changing shopping habits. Separate data this week indicates that how shoppers look to shop is increasingly fragmented among different demographics – and the picture it paints isn’t a simple landscape, more an abstract impressionist, disconnected range that is hard to easily sate.

For example, Gen Z and Millennials are increasingly turning away from marketplaces shopping, instead looking to international, cross-border, direct to consumer brand sites as they get better deals, a more personalised service and loyalty points. Older shoppers, meanwhile, are increasingly using marketplaces.

Separately, Gen Z and Baby Boomers are much more likely to respond to SMS marketing than other groups, both loving the immediacy of text and well versed in using it to communicate with their peers, as well as brands.

Perhaps Sainsbury’s has the answer: investing £65m in pegging prices across Autumn to help with the rising cost of food – and to match Aldi and so hold on to customers – as at the end of the day, as recession bites, prices are likely to be the only place in which retailers can compete with each other.

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