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Value shopper

Value in FMCG


Due to the current inflationary environment many in FMCG are stating shoppers want ‘value’. As an industry how can we deliver value? Step 1 is to clearly understand what shoppers mean by ‘value’. 

Psychographics is a term that tries to capture psychological factors that may influence a shoppers’ buying behaviour. There are numerous factors including activities, attitudes, behaviours, interests, lifestyle, opinions, personality and values that could be part of psychographic market segmentation. Obviously not all factors are important in all purchases.

A simple example of psychographics is that Nike sells sports shoes to people with an interest in sport. For the FMCG industry vegans could be described as shoppers with values where they don’t want to buy any product derived from animals.

Importantly psychographics help explain what shoppers value.

Why psychographics?

Psychographics is not a new concept. According to Wikipedia psychographic segmentation has been used in market research since the 1970’s. A major factor increasing the importance of psychographic segmentation in FMCG is the increasing power of shoppers. As explained in my blog, Who has the power?, due to disruption in the FMCG industry there has been a power shift from larger businesses (manufacturers and supermarkets) to shoppers and smaller businesses.  

‘So now power (ability to influence) is not due to the sales or share of a business in a category or industry. Today power is about understanding shoppers demands, embracing change and developing new ways of doing business to meet the ever-changing demands of shoppers.’

Who has the power?

Tim Bowen


‘Seventy-six percent of consumers told us they will discontinue relations with companies that treat employees, communities and the environment poorly’

PWC Consumer Intelligence Series June, 2021

An example of the increasing power of shoppers is modern shoppers demands for businesses to embrace ESG. Simply put shoppers expect manufacturers and supermarkets to have a positive impact on the environment, society and operate ethically (corporate governance). My blog, ESG in FMCG, provides more details.

ESG is an example of shoppers purchase decisions being influenced by psychological factors. Shoppers are not buying products due to the physical characteristics or price of the product. Shoppers are buying products from manufacturers and supermarkets that have similar values to them.

ESG Example

A recent example of ESG in FMCG was vegan shoppers criticising Bega for launching plant-based cheeses. (, Vegan shoppers tell Bega to ‘stay out’ of plant-based cheese market , March 23). The vegan shoppers did not criticise the product but rather criticised Bega for launching a vegan product. Simply put some vegan shoppers did not want to buy products from a business that sells other products derived from animals.

ESG Market Size

‘Purpose-driven consumers, who choose products and brands based on how well they align to their values, now represent the largest segment (44%) of consumers.’

IBM, Consumers want it all, Jan 2022

IBM global research of 19,000 respondents across 28 countries (fieldwork Sept 21) highlights the importance of focusing on shopper psychographics. The largest group of shoppers is now purchasing from businesses with similar values. This is why many businesses are now focusing on being ‘value based’, highlighting their ESG credentials etc.   

Does the modern ESG shopper want low prices?

‘Price is recognised as the key consumption predictor within the unhealthy product marketing mix, particularly for low-income consumers, and the issue is widespread.’

Professor Greenland, ABC News, Rising prices could push more supermarket shoppers to make unhealthy choices, March 23

As highlighted in my blog,  Will Australia introduce a sugar tax? , worldwide obesity has tripled since 1975 (WHO). Now over 50 countries have a SSB (sugar-sweetened beverage tax). The UK has taken the next step and now has a HFSS (high in fat, salt or sugar tax). Obviously, governments around the world are implementing these policies to minimise the risk of obesity. Generally speaking, voters are supporting these policies as they understand the risks associated with obesity.

Looking forward I believe the importance of ESG in FMCG shall increase. Shoppers will expect the industry to implement changes to have a positive impact on society. Just like other categories, e.g. alcohol and tobacco, this may include limiting any marketing, including aggressive price promotions, on numerous categories that have products that are high in fat, salt or sugar. So, do modern ESG shoppers want low prices on products that may harm people?


Firstly, in my blog RIP personalisation , I highlight my concerns with manufacturers and supermarkets attempting to implement personalised ranges. Others in the industry are more supportive of the concept.

Personalisation is another example of increasing shoppers demands. For the supermarket industry personalisation is when manufacturers and supermarkets tailor the shopping experience, including the products offered, to the shoppers’ individual requirements. The goal is to maximise shopper loyalty by tailoring the overall shopping experience to their individual demands.

our core objective is to generate a genuine one-to-one relationship with every single member in a program.’

Ingrid Maes, Director Loyalty, Data and Digital Media, Woolworths supermarkets Australia

Mumbrellas Marketing Retail Summit Australia, 2017

It is widely thought that personalisation in FMCG is based on the shopping experience Amazon offers. Around 2000, Amazon developed technology to recommend products based on a shoppers’ browsing and buying behaviour. Overtime Amazon has developed this technology to further improve the personalised experience for their shoppers. Today shoppers expect this level of service from manufacturers / supermarkets.

Personalisation is an example of shoppers purchase decisions being influenced by psychological factors. Shoppers are not buying products due to price. Shoppers are buying products from manufacturers and supermarkets to suit their behaviours / lifestyle / personality.

Personalisation example

An example of personalisation in FMCG was the Share a Coke campaign. This campaign was first launched in Australia in 2011. Simply put Coca Cola Australia offered labels with ‘Share a Coke with’ then 150 different first names. This campaign was successful because shoppers were then able to have shared moments of happiness (Coca Cola) . The ‘Share a Coke with’ campaign highlights brands can build better relationships with shoppers without focusing exclusively on price.    

What is value?

Due to numerous factors the cost of living in Australia and other countries has increased. This has led many in the FMCG industry to state that shoppers want ‘value’. The obvious question is then what is value as determined by shoppers.

Firstly, there is not a shopper. What a shopper perceives as value could be different to another shopper. So, making generic statements like ‘the shopper wants value’ does not clearly explain the different demands from different shoppers. Today value can be described as a shoppers’ perception of the overall shopping experience for a brand or basket of goods vs alternatives.

For example, some shoppers may perceive Woolworths offering better value than Aldi because they offer click and collect / direct to boot. These shoppers, probably time poor, believe this service delivers a better overall shopping experience. Other shoppers may value the ESG and / or personalisation of the product / service more importantly than the physical product or price.

Supermarket value

Historically ‘value’ for supermarkets could have been shoppers comparing the overall basket cost of similar products between supermarket A and B. However, shopper demands have changed and they now focus on the overall experience. Customer research by McKinsey, in 10 EU countries, highlights the top 4 drivers of ‘good value-for-money’ grocers:

Offers lowest prices

Offers a large variety of cheap products

The price for my total basket is low

Has best prices during promotions

McKinsey, Value for money perception must go beyond price for European grocers, Jan 21

This research highlights that value is no longer only about comparing the price of similar products in supermarket A vs B. It is shoppers comparing the overall shopping experience between supermarkets including range and promotional pricing.

For the Australian market it means Coles and Woolworths can offer ‘value’ vs Aldi by increased ranging of cheap products and aggressive price promotions. IMHO (in my humble opinion) they are currently doing this. This analysis also supports hard discounters, such as Aldi, up-ranging from <1,000 SKUs in the 1990s to 2 – 2,500 SKUs today. Up-ranging would have increased Aldi’s CODB (cost of doing business) but it still delivered value to shoppers i.e. offers a large variety of cheap products.

Do shoppers know the price of products?

‘past studies have suggested that about 50% of shoppers knew the exact price of items they have purchased’

The Price Knowledge and Search of Supermarket Shoppers

Dickson, Sawyer, Journal of Marketing, Vol 54, No 3, Jul 1990

Research has highlighted that shoppers do not know the exact price of many items they buy in supermarkets. This is logical as a local supermarket, e.g. Woolworths, may sell over 20,000 different SKUs. This is another reason why value is how shoppers perceive the overall shopping experience, not an objective price comparison excercise.

Some may suggest this research is dated (pre-internet). More recent research (table 1 below) also highlights a small % of shoppers are able to remember the actual price in a physical and VR supermarket.

Shopping in Reality or Virtuality? A Validation Study of Consumers’ Price Memory in a Virtual vs. Physical Supermarket, Jacobsen, Krogsgaard and Peschel, July 22


Shoppers wanting ‘value’ is not a new concept to FMCG. What has changed is how shoppers determine value. Historically value may have been about ‘having the best product at the best price’. Overtime shopper demands have changed and now they focus on the overall shopping experience when determining value.

Different factors are important to shoppers when purchasing a brand / supermarket. Psychographics is a useful tool to understand these factors. Modern shoppers may support businesses that aligns with their values or purchase products / services that are personalised for the shopper. Price is becoming less important in the overall value equation.

The obvious question for brands / supermarkets is how does your product / service deliver value to shoppers?

 The information provided in this blog post was general in nature. If you require more information I offer a free initial consultation. Contact Details .