October « 2011 « SymphonyIRI Group CPG Blog

Archive for October, 2011

Ready…get set…SHOP!

Monday, October 31st, 2011

With Halloween upon us, shoppers have already started their holiday preparations. If you are a retailer or manufacturer, you must also be prepared for the onslaught of shoppers looking to buy more for less this year.

As we talked with numbers of retailers across the country, we’ve heard from many about their number one concern this holiday shopping season: When will shoppers open up their wallets? With anxiety and anticipation setting in, we are seeing the re-emergence of layaway and discounting programs as retailers do everything they can to bring shoppers in stores.

Believe it or not, shoppers are in more control than ever before. This means retailers and manufacturers must keep in mind the purchasing strategies shoppers will employ this holiday season in order to be successful:

Keyboards will be burning up as shoppers search for deals.
Tip: Ensure that whatever promotions you offer as a manufacturer are fully linked at the retailer level, such as through Web sites and the consumer shopping level (i.e. groupon, etc.)

Play to the shoppers’ regimen and rituals.
Tip: When promoting, understand regimens and rituals, such as how weekends are primary baking days for consumers. Understand that warm soothing meals for kids are important during this time of year and that entertaining becomes a critical part of family celebration which we expect to grow this year.

Don’t over promote.
Tip: 61 percent of Americans are survivalists, so many can’t stock-up and buy three of something. Ensure that you are tuning your promotions to your audience.

Provide interesting and exciting uses of your products.
Tip: Bring flavor, meal and ethnic innovations to market in your recipes during this holiday season.

Ensure you’re executing well at retail.
Tip: During this holiday season, it’s all about shopper expectations of being able to buy products when they want to buy it. “Out of Stock” is big a no-no.

Consider bundling.
Tip: Bundle not only meal options, but dessert and snacking. Experiment with shoppers to delight them and not just sell them products.

Store brands will be on shopping lists.
Tip: Expect store brands to be part of meal components and position products accordingly with value based offerings and not just price.

The choices are simple. Retailers and manufacturers must either understand what will meet the needs of this year’s holiday shopper or have a lackluster holiday season.

Tags: Holiday Season
Posted in Holiday Season | 2 Comments »

Consumers Still Feel Wary of Economic Future Heading Into the Holidays

Tuesday, October 25th, 2011

We’ve had a busy week here at SymphonyIRI with the release of our Holiday Shopping 2011 survey results and Point of View, “Gray Skies: Consumers with negative views of government’s handling of the economy have hunkered down and reined in spending—for the long haul.” Both uncovered similar trends and while it is no surprise consumers are still feeling wary about the economic future, attitude toward spending is directly reflected upon their shopping behavior.

The Holiday Shopping 2011 survey that looked at shopping attitudes of 2,000 consumers (a nationally representative sample) found that this holiday season 81 percent will be turning to the Internet for the best deals and shopping online this year. While consumers expressed a desire to have a holiday season consistent with those experienced prior to the economic downturn, they are being extra conscious about exactly how and what they are spending their money on this year. A few examples of money saving strategies during the holiday season include:

79 percent of consumers will be making their grocery purchase decisions before entering the store
26 percent plan to spend less on holiday gifts with most budgets (74 percent) topping out at $800 for gifts
48 percent of consumers will take advantage more often of promotions learned online versus 50 percent, who will leverage online promotions with the same frequency as last year

While the holiday survey took a thorough look at holiday spending trends, many similarities with regard to shopper outlook was uncovered in the ”Gray Skies” Point of View that indicated 82 percent of shopper behavior is being impacted by negative feelings towards government spending, resulting in uncertainty that will undoubtedly impact holiday budgets.

This tightening of the belts has caused consumers to continue being creative with their saving and spending habits. And, thanks to the Internet and new technology, efforts to save money often are quick and easy, even literally at consumers’ fingertips on smartphones and other devices.

Between the Holiday Shopping 2011 research and the “Gray Skies” Point of View, it’s clear that the common and familiar theme among consumers of being conscious of personal finances, planning for the future and getting creative with savings and purchase decisions is here to stay. As the uncertainty of the economic future remains, it’s clear that the mindful spending habits of consumers will also continue creating an opportunity for manufacturers and retailers to capitalize on money saving promotions, strategies and programs.

Tags: budget, cpg, economy, Frugal, gifts, grocery, Holiday Shopping, online shopping, personal finance, Retail Solutions, sales, shopping behavior
Posted in Economy | 2 Comments »

Check It Out

Tuesday, October 25th, 2011

As shoppers, we’ve all seen self-checkout stations pop up in stores nationwide. Some stores now only provide the self-checkout option.

This idea was initially implemented to save retailers labor costs by eliminating the need for cashiers at all times that the store is open. However, it hasn’t necessarily provided the cost benefit that some expected.

It’s arguable that a store with all self-checkout stations may be too much, as it eliminates shopper contact with the cashier whose role can serve as the face of the retailer. At the same time, a store with no self-checkout stations might also be a disservice to consumers who prefer less face-to-face interaction or are buying a last minute item and want to get in and out quickly. It seems a good compromise would be to have a few self-checkout stations in any given retail outlet in addition to express and regular checkout lanes serviced by a cashier.

Think of it this way:

From the consumer side – Offering a few self-service checkout stands enables those who only have an item or two or who are really efficient at self-checkout to quickly complete their purchases.
From the retailer standpoint – It also allows for face-to-face interaction with cashiers, creating opportunities to build relationships and establish brand loyalty.
From an economical perspective – The retailer is being responsible by opening up more workable hours and creating job positions in the current dire job market.

On one hand, this is completely a personal choice where each consumer has a preference as to how they pay; face-to-face or self-checkout. Through trial and error, retailers will figure out what method best suits their stores and their shoppers’ needs. As all shoppers are unique, addressing the needs of different customers by offering regular and express checkout lines in addition to self-checkout stations seems to be the most well rounded option. As a consumer, which do you prefer? As a retailer, what has worked best for you and your customers?

Tags: cpg, grocery, retailer, self-checkout, shopping
Posted in Self Checkout | 5 Comments »

Happy Halloween – Trick or Treat?

Monday, October 24th, 2011

With Halloween only a week away, the countdown to this spooky day is rapidly winding down. As job losses and falling home values continue to compel consumers to reduce spending on non-essentials, a majority of consumers are planning to trim back their spending this holiday season. Interestingly, though, the economy has not spooked Americans to spend less on Halloween. This year, more Americans are dressing up, throwing parties and decorating their homes and front lawns as the urge to splurge overshadows broader economic troubles.

According to the National Retail Federation, Americans will spend $6.9 billion on Halloween this year, with an average of $72.31 per person spent on decorations, costumes and candy. That’s up from the $3.3 billion they planned to spend on the scary holiday in 2005. Spending is expected to go up across the board with more consumers dressing up, throwing or attending parties or visiting a haunted house this year.

Temporary and pop-up stores dedicated to Halloween merchandise are also increasing by an estimated 8 percent when compared to 2010, according to IBISWorld Inc. Halloween pop-up stores continue to spread across the country, taking up dead space vacated by defunct retailers, such as Borders and Circuit City. Halloween merchandise began appearing online as well as in stores like Walmart, Sears and Kmart before the school year began.

Ironically, even though the numbers say consumers are spending more, consumers want to think they’re spending less— the NRF reports that 32.1 percent say the economy has them scared, and of those, 87.1 percent are trying to spend less on Halloween. Consumers are exploring various interesting alternatives to save money without compromising on Halloween celebrations, such as renting their costume from a Web site or a local costume rental store rather than purchasing it new, borrowing a friend’s costume from prior years, making homemade costumes or exploring thrift stores.

As a non-gift holiday, even people on the strictest budget can enjoy themselves this Halloween. This is definitely a great opportunity for retailers and manufacturers to spike up their sales. Though most of consumers’ spending is captured by seasonal specialty stores, such as Spirit Halloween, all retailers try to get a share in their own unique ways. Creating Halloween displays by highlighting anything orange or black and products with ghost or monster themes attracts more foot traffic and thus sales. Many retailers start to stock products suitable for use as Halloween decorations, costumes, or foodstuffs. Some retailers are drumming up business by inviting customers to a costume party a few days before the big night and sponsoring a costume contest with one of their highest-valued products as the prize. Passing out candy in custom goodie bags branded with the store’s name, address, and Web site is an easy way for brand advertisement.

With a less-than-thrilling holiday shopping season on the horizon, retailers are pinning their hopes on a booming Halloween. It’s a light-hearted holiday and with all the stress and bad stuff going on in the world, it is a great way to forget your troubles and pretend to be someone else for a day. The spooky holiday is expected to generate record sales this year as consumers look for an escape from the gloomy financial news.

Tags: Halloween
Posted in Halloween | 2 Comments »

Times & Trends: Private Label

Thursday, October 20th, 2011

Brand Positioning in the New World Order

It was once considered embarrassing to be seen with a private label product, but today nearly all shoppers buy private label products stigma free. Private label products bring to market an important alternative to national brands. In a time where consumers are still reluctant to open their wallets, private label products are no longer simply similar to national brands at a lower price point, but often offer their own unique value propositions. Private label has become an important strategic component to help shoppers get through difficult times.

Many retailers have successfully leveraged private label to enhance banner loyalty in an era of increased channel shifting. They have launched products at different price and quality points, developed attractive packaging and created aggressive merchandising and promotion strategies. Marketers at national brands haven’t sat on their hands. They have developed innovative strategies to co-exist with private label brands and highlighted the unique attributes of their offerings.

Last week’s webinar, based on SymphonyIRI Group’s latest Times & Trends report, explored current and emerging trends around private label, as well as national brand efforts to protect and grow their position in the CPG marketplace.

Additionally, the webinar discussed:

The latest private label channel, category, and price-related trends and how those translate into new opportunities.
A new understanding of shifting consumer attitudes and behaviors across key departments/categories and the drivers of those behaviors.
How to effectively identify and deliver against critical shopper needs to win share of wallet and shopper loyalty.

It’s not too late to watch the webinar, visit our online webinar archives.

Tags: Private Label
Posted in Private Label | No Comments »

The New Shopping Standard: Deliberate Spending

Wednesday, October 19th, 2011

The past 18 months has been a whirlwind of economic uncertainties…we’ve all heard it before. But, take a closer look and despite some of the upticks in spending during holiday periods, like Easter and Christmas, and you’ll see that the general consumer purchasing patterns has not changed. We don’t predict any change happening in the near future and, surprisingly, today’s savvy consumers aren’t too fazed by it.

There are four things driving this spending stagnation. The first is fairly obvious. Consumer angst with the current economy and its stability is driving consumers to spend more deliberately and less frivolously. Making matters worse is the continued negative news on lack of available jobs. This has led to shoppers pausing before they purchase. These shoppers have learned a new series of shopping rituals and regimens to achieve better value for the dollar their spending. Most have learned to live with less and are happy about it.

This new behavior suggests that a new shopper norm has arrived. What this means for retailers over the next 18 months is that there will need to be a refocus on redesigning the shopper experience given this slower pace of shopping. It will be critical to demonstrate better value and put in place better programs to show consumers that retailers understand their plight. Retailers like HEB, Publix and Redmans provide examples of how to better service shoppers by bundling cost-efficient meal solutions, for instance.

For manufacturers, the new shopper value equation where quality is received for every dollar spent, means the need to reposition products around value. As such, private label is developing in the shoppers’ minds as a “better value” equation. Manufacturers must consider details, such as the type of information highlighted on labels, and make the case for the quality benefits of products. Platforms like “better for you” will help justify value for today’s choosy consumer. Some manufacturers have already begun to address this, such as Clorox who highlights the importance of home essentials and how shoppers can use their products to easily keep their home healthy and clean. Sara Lee provides options to simplify breakfasts and Campbell Soup offers meal options such as their Quick & Easy $4 Dinner Ideas.

Despite this new shopping standard, there is still room for success in CPG. It’s just a matter of flexibility in strategy and understanding of the shopper’s plight.

Tags: Clorox, coupons, cpg, economy, Frugal, HEB, Private Label, Publix, Quick & Easy, Redmans, Sara Lee, shopper experience, shopping
Posted in Deliberate Spending | 1 Comment »

An Alternative to “Paper or Plastic”

Wednesday, October 5th, 2011

It is no secret that people are attempting to become more eco-friendly for one reason or another these days. Whether it is as simple as composting or as complex as putting solar panels onto their houses, people are trying new ways to help the environment. One sustainable trend that’s taken hold is the usage of re-usable bags. A great alternative to the “paper or plastic” option re-usable bags help reduce the influx of non-compostable items into the land fills.

While the hope is for all shoppers to choose to use re-usable bags on their own accord, new alternatives to the ever-prevalent “paper or plastic” are beginning to pop up.

Here is a look at a few of these alternatives:

Banning of Bags: Regions have passed city ordinances outlawing the distribution of plastic bags within certain retailers. It began with San Francisco, who issued a city-wide ban on plastic bags in 2007, and has spread to other cities like the recent Santa Cruz.

Charging for Bags: To deter people from loading groceries into paper and plastic bags, entire regions have passed laws that will charge people for bags. In Los Angeles County, grocers must charge customers 10 cents per bag and in Washington, D.C., five cents per bag. These regions are hoping that by charging people for bags, people will be disinclined to use them.

Reward for Bags: On the flip side of charging people for bags, some retailers like Target and CVS have taken the forward step by actually paying people for bringing their own bags. This incentive will hopefully make people more prone to bringing in their bags and less prone to using bags at the stores.

Ridding of Bags: Supercenters like Costco and Sam’s Club have completely eliminated bags from the equation and made it so customers don’t have a bag option. Instead, these supercenters offer their customers boxes that the store products come in, as a form of packaging for the customer but also to reduce dump costs for the stores.

For now, these alternatives are available to help rid the environment of plastic bags and until they are banned altogether, a reminder to shoppers of the benefits of using re-usable bags and having re-usable bags available for purchase at check out is a step in the right direction.

Tags: cpg, eco-friendly, Re-usable bags, Recycle, Sustainable, SymphonyIRI
Posted in Re-usable bags | 5 Comments »

Is Healthy Eating Really Healthy or Just a Fanciful Myth?

Tuesday, October 4th, 2011

We’ve all witnessed the large, deliberate shift to healthy living options. Whether it be the promotion of exercise, the push of fitness clubs and magazines or eating a more plentiful diet, the buzz about healthy living is certainly being felt. This trend has taken the CPG and retail industry by storm. Almost every product being offered today has a low-fat or non-fat option, and it’s almost standard for packaging now to include natural, organic or allergen-free labels. While this all seems like a positive trend and move toward the right direction, it has created some concern amongst consumers.

While various product packaging may state an all natural or low-fat option, it sometimes comes in exchange for high amounts of sugar or fatty ingredients that aren’t even entirely natural. Just because a product is low-fat doesn’t necessarily mean it is sugar free. This has resulted in consumer confusion and disappointment with many feeling misinformed by manufacturers. Some consumers are left disheartened by the premise that in order to see what is truly in a product the label is not enough. This recent dilemma has become a rather precarious topic within the CPG industry.

Seeing the Big Picture

In a time where consumers are being conscious of their spending, creating and maintaining brand loyalty is more critical than ever. CPG manufacturers have the opportunity to be a part of this health food trend by being fully transparent with the ingredient list, therefore establishing themselves as a brand worthy of consumers’ trust.

As is, brands are already seeing this health and wellness trend as a competitive advantage and some are providing full disclosure when it comes to health food information, including non-GMO ingredients, specifying the percentage of organic and natural ingredients and listing the allergen-related ingredients a particular product contains. Some retailers have also started healthy lifestyle groups within their community for shoppers interested in learning more about healthy eating strategies. Ultimately, transparency fosters customer trust and loyalty. As this health food trend continues to unfold, it seems safe to assume that CPG companies will have to get on board with full ingredient disclosure, as some already have, per consumers’ request.

Tags: cpg, Health Food, SymphonyIRI
Posted in Eating Habits | 4 Comments »

The Consumer Cost of Food Allergies

Monday, October 3rd, 2011

Take a look down your grocery and drug store aisles and you’ll agree that food-allergen awareness has increased ten-fold in the last couple years. Everywhere you look, whether in magazines, store signage, or on TV, people are talking about different allergens, ways to cook without certain foods, and the importance of retailers providing allergen-free products.

While many retailers have started carrying allergen-free foods, including gluten-free, dairy-free, soy-free, and nut-free, the cost and availability of these products are still proving to be a burden to consumers.

As a whole, the costs of allergen-free products are normally almost double the cost of regular products. Take for example the King Arthur gluten-free cake mix. While very delicious, this cake mix cost $6.95 compared to normal mixes that average below $3. Consumers with allergens have no option but to purchase these pricier foods. However, doing so puts a strain on the pocketbook.

Despite the increased awareness, these foods are still not as available as normal products. Not all retailers have a large selection of allergen-free products which leaves consumers traveling to multiple stores or shopping in other towns. Whole Foods is one such retailer that has a very wide selection of allergen-free products, but unlike larger, less specialized chains, there are limited locations. This leaves consumers driving farther and spending more money on gas, again increasing the costs.

Many consumers have turned to purchasing online because of lack of availability and higher costs of allergen-free food. Sites like Amazon or Gluten-free.com offer a wide variety of allergen-free products as well as free delivery. This cuts down on travel for consumers which in the end, saves them money.

There’s no doubt that the demand for allergen-free products is only going to increase. Brick and mortar retailers should take note of this demand now in order to remain competitive with their online counterparts by addressing cost and availability concerns from consumers.

Tags: dairy-free, food-allergen, food-allergy, Gluten-free, soy-free, SymphonyIRI, Whole Foods
Posted in Food Allergies | 2 Comments »

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