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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.
    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.
    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.
    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.
    Bring flavor, meal and ethnic innovations to market in your recipes during this holiday season.
  • Ensure you’re executing well at retail.
    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.
    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.
    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.

    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 cleanSara 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.

    A Preview of 2011’s Holiday Shopping Rituals

    Friday, September 30th, 2011

    It’s hard to believe another summer has passed and the holidays are upon us.  The past six months, mired with economic ups and downs, has taken consumers on an emotional roller coaster when it comes to their wallets.  Despite this, going into the holidays, I think shoppers will still employ a sense of optimism coupled with conservatism.  We’ll be able to take a closer look when we provide results from our upcoming annual Holiday Shopping Survey that will analyze shopper sentiment and trends going into the most popular shopping season of the year.

    In the meantime, from my conversations with a large number of retailer and manufacturer clients, I’ve gathered that they anticipate a 1 to 2 percent sales lift for the 2011 holiday season. Retailers are expecting shoppers to purchase gifts with a lens of scrutiny in which every purchase will be thought through before it’s bought.  Gone are the days of impulse purchases.

    Based on this year’s purchasing trends, I expect that shoppers will look at the holiday season through a lens of staged affordability where they will want to understand when they can buy and what to buy on a rhythmic basis.

    In an effort to attract shoppers, I recommend that retailers and manufacturers continue to advance and promote deals on a consistent basis, with the understanding that deals are not necessarily all about pricing.  It will be critical to highlight for shoppers the value being offered to them. Shoppers are now more interested in the quality received per dollar that is spent.  Retailers grouping products that create a complete experience into a single department is one new strategy for providing value.  Examples might be a department focused on the “Great American Thanksgiving Dinner” or “Preparing Your Home for the Holidays.”

    What may seem like a challenging time for manufacturers and retailers can easily be turned into an opportunistic time by understanding the fundamental shifts in buying behaviors and quickly adapting.

    State of the Industry: Growth in a Challenging Environment

    Friday, September 23rd, 2011

    Although CPG manufacturers all face the same market pressures, this difficult economy has proven that size does matter. Larger companies enjoy more power with major retailers, broader product lines across more localities, and stronger brands. Because of these differentiators, customers find it easier to deal with these companies, rather than turning to their smaller counterparts. On the other hand, smaller CPG manufacturers don’t have these advantages, and as a result, they are at very high risk during periods of economic downturn.

    New research we’ve recently released – Acclerating Growth in Uncertain Times –uncovers strategies food and beverage manufacturers and retailers are pursuing to help the shopper enjoy an improved experience.

    Out of this report we found that many of the pressures that these companies are facing stem from a changing consumer environment. For example:

    • Shoppers are keeping less in their pantries – SKUs are down from 511 to 467 between 2007 and today
    • Shoppers are making fewer trips – Trips are down in every category except for healthcare products
    • Shoppers earning $50,000+ are most motivated by promotions – whether online or in newspapers
    • Shoppers earning $25,000-$50,000 are most likely to base purchase decisions on low price – not lower-income shoppers

    Many of those points would seem to be counterintuitive. It’s hard to juxtapose images of couponers with jam-packed pantries with a consumer that keeps fewer items stored, and it’s hard to imagine a middle class consumer who cares about price more than a shopper with a lower income. However, that’s exactly what CPG companies are facing: an incongruous shopper landscape.

    While it might at first seem counterintuitive, one reason that lower income households might be less price conscious is when there is less to spend, they become increasingly loyal to retailers and brands they know because they feel that they cannot afford to make a mistake. As a result, shoppers return time and time again to retailers they trust to be low cost and brands perceived to be high value for less money.

    As budgets tighten, many shoppers are changing the rituals they have surrounding food consumption, decreasing activities like ordering take-out and hosting dinner parties, and increasing activities like buying private label groceries and preparing meals at home.

    These changes are not going unnoticed by successful retailers. Retailers are rethinking how they serve the shopper and who the shopper is.  Examples of these strategies include:

    • Organizing stores into departments – whole solutions grouped together, such as all the ingredients for an Italian meal, as opposed to forcing shoppers down one row for pasta, another for sauce, etc.
    • Creating “transparent retailing” through which the retailer tightly integrates Email and website based promotions with traditional circulars –  providing info to the shopper wherever he/she researches products and deals
    • Improving collaboration with manufacturers so that product information and promotions are better coordinated – resulting in better deals for the shopper

    Those retailers are seeing visible results from those efforts: those which have reorganized by department have seen as much as a 12-14 item increase in basket sizes, for example.

    Insights from the study uncovered a major shift in consumer behaviors. Based on these insights, here are some predictions for the future:

    • By 2015, 2 in every 5 products sold will be private label, up from 1 in 5 today.
    • Shoppers will continue to visit significantly fewer retailers per week, 2.3 today and going forward, versus close to 5 per week before the recession.
    • Online comparative shopping will surpass traditional comparative shopping as the primary method of learning about products in the next five years.
    • Four in 10 shoppers will continue to defer major purchases such as vacations, cars and electronics as they continue to feel the effects of the economic downturn.


    Myths and Misperceptions Continue to Exist About Childhood Obesity

    Wednesday, July 7th, 2010

    Contrary to what many people believe, in a  recent report SymphonyIRI found plenty of areas where the parents of healthy weight children and those of overweight/obese children share similar views. One of the similarities was in the area of child participation in shopping activities with parents. The study not only found that almost all families involve their children in purchase making decisions, but that among the five shopping-related activities queried, behavior of families with overweight/obese children very closely resembled those with no overweight/obese children.

    The below slideshow takes you through the five shopping-related activities:

    SymphonyIRI and FMI completed this research in April 2010. The study includes completed online surveys from 1,000 shoppers collected from an independent panel, reflecting a cross section of U.S. consumers. For more information, download the “Childhood Obesity: Crisis in America” Executive Perspective.

    Sweet Sweet Snack Stats…

    Monday, June 21st, 2010

    A person who doesn’t like candy is suspect. One might even think people like to talk about their candy shopping and purchasing habits almost as much as they enjoy eating it. Recent research gathered from various outlets (focus groups, surveys, interviews etc.) revealed enough compelling information to compile more than 75 pages of analysis. To some, that might not sound exciting, but would you be interested if I told you the report is almost solely focused on sweets and snacks?

    When it comes to products such as skin care and hair care, consumers won’t just clean their face with whatever brand is laying around, but apparently, people have a hard time saying no to candy. But, hopefully, they draw the line somewhere, such as when you find yourself chewing the gum stuck under the coffee table, you’ll know it’s time to upgrade to at least a Tootsie Roll.

    That said, it’s interesting that this recent study showed that shoppers have gotten much smarter about shopping in order to manage spending. How are they doing this? They’re making a shopping list. That simple. Thus, it becomes clear that the weekly shopping trip for sweets and snacks is grounded in “home decisions versus in-store decisions.”

    Can’t get enough Sweet Sweet Snack Stats? Indulge in the below slideshow for more.

    What a Difference a Year Makes…

    Friday, June 18th, 2010

    The shift in focus in one year has been dramatic. This time last year, the majority of us placed a significant amount of apprehension on H1N1 and were trying to understand the impact of the economy on our jobs and housing. Simply put, we were anxious about everything.

    This year has presented a new set of challenges that are just as significant and just as critical. While the economy is still center stage in the hearts and minds of the shopper, there is always the apprehension of a potential “double dip” recession. Many of our houses are under water, and the job front has only slightly improved. Regardless of what some optimists might want to believe, we continue to live in uncertain times. This is a fact that impacts every aspect of our day-to-day lives, including consumer shopping behavior and CPGs.

    Based on a recent SymphonyIRI focus group and interviews, we discovered that shoppers want to be educated, especially in health and wellness. Below is a slideshow detailing what these changes mean for the consumer and the retailer.

    Redefining Health and Beauty Care

    Friday, May 28th, 2010

    In a recent NACDS & SymphonyIRI Webinar, we revealed compelling data proving that the “Great Recession” continues to be the “Great Equalizer.” The Webinar, “Redefining Health and Beauty Care (HBC) for Untapped Profit Potential,” provides perspective on a variety of topics including:

    • SymphonyIRI’s perspective on the current mindset of the American shopper relative to the beauty, health and wellness landscape
    • A review of key criteria in connecting to the needs of these shoppers as well as how they view affordability in the HBC space
    • A special section on childhood obesity and the tradeoffs that consumers are making to develop healthy lifestyles for kids

    The New Black (Friday)

    Wednesday, November 25th, 2009

    As consumer confidence is slowly reinstated, more are willing to open their wallets wider, though selectively, than the 2008 holiday season. As we mentioned in the holiday retail survey results released in September, shoppers are taking a more strategic approach to shopping this year by heading into stores with shopping lists in hand and a budget in mind.

    Putting last year’s dismal holiday sales results behind them, retailers are also being more strategic this year and have put a new twist into the traditional “Black Friday” kick-off to holiday shopping.  In an effort to attract more shoppers, retailers have rolled out what’s looking more like “Black November” with deals being announced as early as the beginning of November as opposed to Thanksgiving weekend – a major shift in strategy when compared to years past. Retailers are offering deals that consumers cannot refuse – from $59 GPS products to $249 flat screen TVs – hoping to grab a piece of the market as consumers start to emerge from the caves of recession.

    How have your strategies shifted this year as compared to last year while preparing and targeting consumers for the “busiest shopping day of the year?” What are your expectations for this year’s holiday shopping season?

    Some retailers are advertising Black Friday deals even before products are in stock while others have limited stock of each item, resulting from the cutback of production by manufacturers which may leave a shortage of products on store shelves.  It’ll be interesting to see if this strategy shift will stick around for years to come or if this is a reactive decision to help retailers salvage their profits for 2009.

    This year’s holiday shopping season will be drastically different from previous years and we’d love to hear your insights and observations about how your businesses have been impacted.

    Thom Blischok, President, IRI Shopper Marketing and Innovation

    And the candies that consumers are screaming for are…

    Friday, October 30th, 2009

    Halloween is here and nothing says Halloween more than costumes, pumpkins, and candy! IRI research conducted after last Halloween (the eight-week period ending November 9, 2008) from supermarkets, drugstores, and mass merchandise outlets (excluding Walmart) revealed that out of the 20 different popular choices of chocolate candies we monitored, Hershey’s® and Reese’s® Peanut Butter Cups® were the top sellers while Regular M&M’s® and Snickers® were extremely close for third place. At the same time, consumers aren’t putting all their chocolate eggs into the same basket as we have been noticing a growing popularity in variety bags as well.

    In the non-chocolate candy basket last year, Brach’s® were the most popular candies, while Tootsie Rolls® and Twizzlers® were next in line. Private label candies also realized considerable growth in sales during the Halloween 2008 timeframe. With the current economic situation, it’s safe to say that pricing is a key factor with candy sales this year. We wouldn’t be surprised to see these less expensive, but still popular candies, make headway this year as parents try to keep their wallets in their pockets while keeping trick-or-treaters happy.

    IRI continuously monitors this type of data to help CPG retailers, manufacturers and marketers anticipate the sugary desires of their key customers, candy-inspired ghouls and goblins! On the other hand, perspective into the consumer shopping experience also ensures that retailers and manufacturers are able to monetize their inventory, reducing the amount of products that never end up leaving the shelf.

    We’re currently analyzing similar data for 2009 and are eager to see and compare the new findings to last year’s data. We’ll see if this year’s Halloween brings retailers and manufacturers more tricks or more treats. Stay tuned!

    Thom Blischok

    (Note: Chocolate candy included in the research: Hershey’s® Milk Chocolate, Reese’s® Peanut Butter Cups, M&M’s® Regular, Snickers®, M&M’s Peanut®, Kit Kat®, Milky Way®, Butterfinger®, 3 Musketeers®, Hershey’s® Kisses, Mars®, Twix®, Hershey’s® Almonds, Dove®, Crunch®, Almond Joy®, Baby Ruth®, York® Peppermint Pattie, Hershey’s® Special Dark, and Raisenettes®. Non-chocolate candy included in the research: Brach’s®, Tootsie Roll® Child’s Play®, Twizzler®, Skittles®, Toosie Roll®, Starburst®, Wonka® Mix Ups, Tic Tac®, T Marzetti®, Sour Patch®, Altoids®, LifeSavers® Gummies®, Mike & Ike®, Ice Breakers®, LifeSavers®, Tootsie Roll® Pops®, Dum Dum Pops®.)