Michael Taylor, COO of Retail Services at Advantage Solutions, oversees Daymon, a global Private Brand agency.
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Let’s face it: consumers are more educated than ever, and with price comparison at their fingertips, they’re also savvier than ever, heightening their expectations to get exactly what they want—and at the best price available.
This fact, combined with inflation, has led to consumer perception of steep retail prices, driving consumers to seek more for less. I’ve noticed that while shoppers are certainly deal-seeking and switching to find better overall value, like with private brands, they’re also looking for premium products at affordable price points.
Throughout retail, products are typically positioned to assist shoppers in understanding product quality options. The blurring of a traditional tiering “good, better, best” strategy on-shelf is now becoming increasingly commonplace. What used to be premium product attributes, typically sold for a higher price, are now being activated across tiers, particularly in mainstream and lifestyle tier items.
With consumers' desire for more premium product attributes without premium budgets, we’re seeing retailers and brands execute to better meet consumer demand, often leveraging their own private brands as an avenue of innovation and opportunity to deliver the overall value and accessibility shoppers seek.
As consumers look for higher quality offerings on stricter budgets, I think it's important to ensure the retail ecosystem is investing in strategically meeting shopper expectations with bold and dynamic assortments and leveraging better form, design and function from product to packaging.
Invest in bold, dynamic assortments.
A massive reason behind this shift is the changing consumer base. Younger generations are the most racially diverse ever and often celebrate distinct cultural influences and global cuisine. Aiding this expansion of palates are social media networks like TikTok and Instagram that are fanning the flames of more premium culinary interests, spurring unique flavor development that ties into premium expectations, and inspiring and helping consumers with meal ideas and step-by-step cooking instructions to help those who “can’t cook.”
One way I’m seeing more premium attributes come to life is through bold, distinct and often multi-culturally inspired flavors. Younger Millennials and Gen-Z, in particular, are pursuing unique and differentiated sensory experiences—catapulting trends such as global heat. This flavor trend is in part inspired by the growth of diverse world cuisines but also addresses consumer desire to find different levels of heat, from flavorful to numbing, and even knock-your-socks off spice across all eating occasions. Some unique flavors that are on the upswing are chili crisp and Calabrian pepper.
A flavor profile within global heat with ample adoption and runway is “swicy,” which is a combination of sweet and spicy. An example is how hot honey is being used to elevate the flavor and premium products, from cheese to entrees or even spiced honey candles in home goods. Brands can help inspire adoption with how-to content around how to incorporate and cook these new flavors with a low risk of failure while saving money while cooking at home.
These pairings drive consumer enthusiasm across categories and departments. By combining two flavors or scents, you’ve created a “dynamic pairing,” making something new and unique out of two familiar profiles. This can also be done with more rare ingredients, such as pairing an outside-of-the-box flavor like ube (a sweet purple yam) with a classic like strawberry—introducing a flavor combination that is both interesting and elevated, yet familiar enough to help consumers make the leap to trial.
As consumers shift overall expectations, retailers and brands that lean into bold and dynamic flavor assortments excite shoppers with newness, drive seasonality or limited-time offerings and spark trial and impulsivity. This is also a way for the industry to infuse more premium flavors and loyalty-inducing exclusivity.
Leverage better design, form and function.
Shoppers are asking more from the products they purchase, and balancing premium expectations with budget-friendly consumers is increasingly important. Consumers expect the design, trends, functionality and shareability of the products they purchase to be in line with their lifestyles and heightened expectations.
Consumers are inherently drawn in by color, typography and striking packaging. Many products within each category often opt for a similar look that consumers come to expect. Design that departs from that usual look creates contrast on shelf, adding value and interest for the consumer.
It is also valuable to consider the influence of pop culture and trends that stretch across generational groups, from products to store experience. With people more connected than ever digitally, they want to feel that they’re part of the cultural pulse as well. This can be anything from including popular colors, like the Barbie movie explosion of pink in 2023, to addressing unique lifestyle diet needs like keto and gluten-free.
The extension of more premium form and function across tiers shows no signs of slowing down. Shoppers expect their products to feature functionality that both justifies the spend, satisfies their day-to-day needs and assists in easier and even more aesthetically pleasing product experiences. Incorporating premium functionality is expressed in many ways, including mix-and-match ready-to-cook meals that help with easy weekday meal prep, elevated premium cookware at an affordable price, or even using previously “premium” textiles and materials like bamboo in mainstream baby items and apparel.
Premium consumer demand drives strategic growth initiatives.
As the rate of inflation has continued to cool and stabilize, I think the shopper sentiment and squeeze on everyday living is likely to persist. The retail market is uniquely positioned to further innovate and satisfy consumer appeal for premium attributes across all product touchpoints—yet still delivering on overall value.
The marketplace is optimizing assortments to cater to premium consumer demand from food service to exclusive private brands—and across categories from food to apparel, toys and general merchandise. The continued focus on meeting consumer expectations for more can be a strategic path for growth. I anticipate we will continue seeing this trend of premiumization, with retailers democratizing premium attributes and increasing accessibility of products and store experiences.
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