Changing shopper journey
How shopper missions are impacting retail
Shopping habits in Latam markets have continued to evolve since the end of the pandemic and life returns to a different kind of normal.
With a wider choice of retail channels accessible to consumers, shopper missions are changing as they look for value for money across different channels. In the last two years, the number of channels visited by Latam shoppers has increased by 17%, together with a 2% improvement in purchase frequency. This correlation is stronger in some Latam markets than others. These include Brazil, Mexico and Peru, due to greater mobility in each country and the number of channels available for different budgets. At the end of the day, the fact that more money is circulating through retail channels is positive news for the region’s economy and for FMCG retailers overall.
But in this increasingly fragmented shopping environment, retailers will need to understand how people are using different retail formats for different missions in order to capture a bigger share of this diversified spending.
Smaller shopping missions grow
The adage of ‘little and often’ is becoming more popular in the region with consumers prioritising smaller shopping missions over bigger trips. They may be visiting more channels more frequently, but basket sizes in Latam are falling for the first time.
Stock-up missions are most impacted by this, losing shopper participation. This is still the most important mission for the total Latam market, however, and even more so for supermarkets and hypermarkets. Shopper are rejecting the idea of the ‘big weekly shop’ in favour of smaller, but more frequent shopping missions. Now that they are smaller, the size of basket for this type of mission is down 14%, while total missions have also decreased, but only by 4%.
Down the trade retail, which offers the benefits of proximity and value for money, has benefitted most from this fragmentation, becoming one of the most visited channels for stock-up, up 12% compared to 2021. For retailers, the important question is how to take advantage of these new shopper missions.
In what seems to be a reversal of fortune, modern trade, discounters and wholesalers saw strong growth last year in the number of smaller shopper missions. More shoppers, from different profiles, are now visiting these channels, which are still dealing with the loss of purchasing power.
Different channels offer different drivers for growth
Each mission plays an important role and provides retailers with opportunities for growth depending on how and where shoppers make buying decisions. Private labels and promotions are becoming more important for bigger missions, for example, because consumers can save money and it makes the trip worthwhile. Last year, shoppers were also more likely to buy new categories in smaller shopping missions than in bigger missions.
Size, it seems, is also important to savvy Latam consumers, with shoppers increasingly using smaller shopping missions to buy bigger sizes, and bigger missions to stock-up on smaller size items. What is important here is that shoppers prefer to use trips to discounters, wholesalers, and supermarkets to fill their baskets with smaller items across more categories. While larger stores offer choice and a wider range of categories, volume is not the most important consideration. Shoppers will take the opportunity to try out new products.
