As part of the Catalyst research program partner Glow investigated consumer response to out of stock issues.
Never has the volatility of global supply chains been more apparent than it is right now. With the impact of the pandemic and a string of climate-related incidents still taking its toll on industries across the globe, the Russia-Ukraine situation has only exacerbated supply chain issues that were already causing unprecedented delays and inflation rates. With everything from corn, barley, wheat and fertiliser to semiconductor chips suddenly being in short supply, it’s no surprise that consumers are feeling the repercussions.
But which consumers specifically? What generations are feeling the greatest impact, and in which countries? Are low-income earners suffering from supply chain issues more than high-income earners, and how are consumers responding to seeing the “out of stock” sign on shelves?
This piece of analysis using data from the Catalyst research program, investigated how supply chain issues have affected consumer behaviour across three key markets.
Supply shortages hit Australians harder
Australian consumers have been most impacted by shortages in grocery products, with at least 2 in 3 experiencing out of stock issues in the three months fromDecember 2021 to February 2022.
In Australia the key categories impacted were toilet paper, fresh meat, frozen foods, fresh produce, rice, facial tissues and dried pasta. The great toilet paper shortage appears to have been an Australian phenomena, with two-thirds of Aussie consumers claiming to be affected by shortages versus 1 in 2 Americans and only 1 in 4 UK consumers.
Fresh meat was also in short supply in Australia (49% of consumers) and the US (40%) but these shortages appear to have been less prevalent in the UK (17%)
How did consumers respond to shortages?
When faced with empty shelves, the most common response across all markets was to simply wait for products to come back into stock. The next most common response for Australian and UK consumers was to shop multiple stores to find what they were after, whereas Americans were quicker to switch products. Overall, more than 1 in 5 consumers switched products when faced with a shortage.
Across all markets, supply shortages encouraged consumers to increase their online purchases, but UK and US consumers were more likely than Australians to do so. This is likely related to the greater maturity of grocery ecommerce in those markets.
Which generations felt most impacted by supply chain issues?
The research also shows that Australian and UK Millennials felt more impacted by a shortage of the top 10 product lines than Americans did. In the US, Baby Boomers clearly felt the most impacted – this isn’t due to Boomers being less inclined to shop online either, as recent studies reveal that Baby Boomers were quick to embrace ecommerce to avoid high-risk COVID environments.
What are the implications for brands?
In Australia, switching brands and/or shopping around are key consumer responses to lack of supply. But what are the triggers for consumers switching brands in particular, and how can you prevent your customers from jumping ship to another brand? For instance, how strong is your distribution – strong enough to keep all retailers well-stocked with your product? What about ecommerce – do you have a strategy in place to ensure that if customers can’t get your product in a brick-and-mortar store, they can purchase it online and receive it to their front door in an efficient timeframe?
Whether your FMCG are being sold online or in-store (or both), the trick is to get ahead of the curve, and identify upcoming stock issues and consumer triggers before they occur. More effective communications and messaging is just one tool at your disposal for retaining more customers and strengthening brand loyalty in the wake of supply chain issues and (consequently) changing consumer behavior.
Market insights case in point: The Stable
Discover how commerce agency The Stable were able to help their client – a major vitamins and supplements brand – understand and respond to supply chain issues and use that insight to strengthen their retailer relationships.
“Glow allowed us to quickly collect and analyse quality data, which enabled us to effectively address one of the most pressing business issues for one of our biggest clients in a timely manner,” said Senior Insights Analyst at The Stable, Daniel Goldman. Read the case study.
The data used in this analysis comes from Catalyst, an open-source research program investigating social and environmental issues. Access the data free by signing up to the email alerts here.
Data source: Catalyst research program Dec-February 2022 n=4415 AU n=1211, UK n=1203, USA n=2001
The Catalyst program would not be possible without the support of our partners. Special thanks to Cint for providing the sample on which the research is based and to our other partner brands including:
Glow is a proud partner and research technology provider to the Catalyst program. Glow provides market and consumer insights for consumer brands, market research agencies, advisory and consultancy firms and advertising and media agencies. To access more supply chain insights or to discover how Glow can help your business use insights to grow faster, Book an intro with our research experts today.