3 grocery trends in 2024 shaping the future of retail media
The landscape of Canadian grocery shopping is changing. Forces like persistent inflation and a desire to reduce advertising clutter are shaping retailer and consumer habits – and brands should be paying attention. As we close in on 2024, here are three industry trends to watch.
- Physical stores remain essential for retail transactions
Despite the rise of eCommerce, 94% of Canada's 2023 retail sales occurred in-store. To meet this ongoing demand, brands are diversifying their in-store advertising strategies, blending traditional methods with innovative digital elements like in-store audio and digital screens.
Digital audio ads, for example, are equally ubiquitous and non-invasive: they blanket entire locations without interrupting the shopping experience. Early adopters of these formats are poised to gain a competitive edge in 2024, especially as programmatic-first approaches become increasingly important.
- The clean shelf revolution has arrived
The retail landscape is shifting towards a less cluttered in-store experience. "Clean shelf” marketing not only reduces the environmental footprint associated with printing, but also offers significant cost savings.
These changes are being driven by digital ad mediums that eliminate the need for traditional printed materials, including shelf ads, coupons, and displays. What’s more, ad formats like in-store audio advertising provide the flexibility and responsiveness of digital media, allowing for real-time updates based on shopper behaviour and market trends.
- Continuous grocery inflation creates prudent habits
Exceeding its target, Canadian grocery inflation is at 5.8% year-over-year and forecasted to persist through 2024. These economic forces have 64.1% of Canadians significantly altering their shopping habits.
Among those new habits, 63.8% of Canadians are opting for generic brands, challenging national brands to prove their value in-store. They will need to convince shoppers that their premium is worth paying for, leveraging in-store interactions to reinforce their brand and cultivate a loyal customer base that will choose them every time – regardless of price.
When it comes to store visits, 41.2% of Canadians are shopping less frequently but more strategically, and 26.5% shop more often to capitalize on deals. As consumers get more precise with their purchases and cut down on spontaneous spending, brands need to remain top-of-mind as these decisions are being made.
With prices remaining high, we expect consumers to maintain these behaviours while developing new ways to spend wisely. Food brands must stay close to these changing habits, leveraging both new and existing in-store retail media to adapt.
Looking ahead
In 2024, brands will need to demonstrate their worth and relevance to budget-conscious consumers. In-store retail media is a powerful tool for brands that are looking to increase their reach, influence on-the-spot buying decisions, and communicate value that will make all the difference to sensitive buyers.