The consumer definition of value is a moving target. The widespread acceptance of online, mobile and social media marketing has gone a long way to shape the impressions of shoppers before they enter the store. Has this made traditional methods of at-retail merchandising obsolete? The January issue of Times & Trends by SymphonyIRI takes a look at current and emerging trends being embraced by CPG marketers in the ongoing battle to meet consumer needs.
This report defines merchandising activity as those employing feature ads, feature plus display, display only and price only tactics. According to the report, more than one-third of volume is sold with merchandising support across 39 percent of categories. Here are some other key findings:
-The pace of merchandising activity has been mixed during the past year, with 53 percent of categories seeing increased support. Within the drug channel, merchandising activity declined across 60 percent of categories, but support across key health and beauty care categories has risen more quickly versus the grocery channel.
-Growth in display only and price-only tactics has escalated, while combined feature/display activity has slowed.
-Merchandising activity is intensifying across many meal ingredient and meal component categories, particularly in frozen foods and fresh/perishable categories.
-In general, private brands receive less merchandising support versus their name-brand competitors.
-Merchandising programs that begin to impact the shopper in the home are having a powerful impact on sales lift.
-CPG marketers are adopting new strategies aimed at capitalizing on new technologies and building more targeted, impactful relationships with consumers.
Certainly, the merchandising tactics employed by CPG manufacturers and retailers have a direct effect on the members of the at-retail merchandising and marketing service industry who often act as their outsourced execution arm in stores. Times & Trends dives much more deeply into these trends than we can share here, so you should download your copy here.
Staying on top of trends that shape the industry is an important mission of NARMS. This commitment will be on full display at The 2013 Retail Merchandising and Marketing Conference (RMMC) to be held on April 27-30 in Scottsdale, Arizona. Visit the official conference website for more information and to register.
CPG manufacturers in all categories and channels are always looking for ways to differentiate their products to gain additional sales and market share. There was a time when this drive to draw attention lead many to concentrate their promotional activity to the perimeter of the store. The center store was seen as a place to stack it high and let it fly, but not a place to truly innovate. But according to the latest issue of Times & Trends by SymphonyIRI, there is a new emphasis on promoting center store categories.
According to Times & Trends, center store has outperformed industry averages for two years garnering two-thirds of CPG spending and 70 percent of unit sales. In spite of this fact, promotional activity is declining in 58 percent of center store categories and 6 of the top 10.
The report says that center store has rebounded due to changing consumer rituals like preparing meals at home and using home based health and beauty products. The center store is the focal point for trip missions and the basis for popular shopper loyalty programs. Advanced analytics and shopper marketing data have made it possible to promote and differentiate in the center store. It all revolves around understanding the needs of key shopper groups and merchandising to meet those needs.
SymphonyIRI suggests three courses of action for trading partners: Continue to assess new growth opportunities and threats. Explore the feasibility of collaborative marketing and merchandising plans. Closely measure and monitor strategy execution.
The members of the at-retail merchandising and marketing service industry provide services that directly support these strategies. NARMS members can quickly execute shelf-level initiatives that support shopper needs such as new product cut-ins, category resets, store remodels, product sampling and demo programs and mystery shopping/audit services.
For a deeper understanding of the SymphonyIRI Times & Trends report, download your free copy by clicking here. Another opportunity for deeper understanding and insight is coming up on April 27-30 at The 2013 Retail Merchandising and Marketing Conference (RMMC) presented by NARMS. Click here to find out more and register today.
OK, it is a pretty good bet that we have not seen the end of the iconic brands produced by Hostess, even though the baker is closing its doors and liquidating its assets. Food companies are bound to aggressively bid to bring Twinkies, Ding Dongs, Wonder Bread and Ho Hos back to store shelves soon. It is a cautionary tale that no CPG brand is completely insulated from outside economic forces and inside management decisions. For the members of NARMS, helping your customers to enhance sales and grow market share, even incrementally, can make the difference between success and failure.
Hostess is placing most of the blame on a nationwide strike by its largest labor union. Labor cost has been an ongoing battle. The company filed for bankruptcy last January and had already gone through reorganization driven by bankruptcy proceedings in 2004.
Although national bakeries like Hostess usually rely on a direct store delivery model for their sales and merchandising services, the example is still relevant. All manufacturers and their retail partners are being pinched by thin margins, high material costs and difficulty managing production costs.
As members of the at-retail merchandising and marketing service community, it is up to us to demonstrate to our trading partner customers that flawless, seamless execution of store and shelf level sales, marketing and distribution initiatives can be just the means to find the margin in sales and market share. Many manufacturers and retailers have found that partnering with a member of NARMS has helped them to enhance the efficiency of their go-to-market system and protect the marketing and product development investment, while still seeing a nice return.
These and many more retail issues and industry trends will be discussed at The Retail Merchandising and Marketing Conference (RMMC) presented by NARMS. The event is scheduled for April 27-30 at the Scottsdale Plaza resort. Visit the conference website for more information and to register. And who knows, maybe we can even figure out a way to save Twinkie the Kid.
We all know that the recession and a slow economic recovery have given rise to a strengthened effort on the part of private label merchandise and store brands. In the November issue of Times & Trends, SymphonyIRI revisits how the private label explosion is playing out, and how national brands are digging in and protecting their turf. There are strong at-retail merchandising and marketing implications on both sides of this battle for market share.
The overall finding is that the lines are solidifying. Both sides are finding areas to score some impressive gains, but it is not a winner take all contest. SymphonyIRI says that national brands and private labels must complement each other and put the needs of the consumer first. There is room for both to succeed in-store around the globe. Here are some key findings from Times & Trends:
-Although dollar share continues to grow, private label unit share of CPG products has slipped. Meanwhile, national brands are gaining volume share in 40 of the top 100 CPG categories.
-Consumers are continuing to see value in terms of cost and benefits of store brands. There is growing feeling of acceptance helped by innovation and improved quality.
-Private label continues to score big points in the grocery sector in terms of growing share. However, share has slipped within the important drug and c-store sectors over the last year.
-In spite of the impressive gains, even the most ardent private label buyer only spends one out of every four CPG dollars on store brands.
-Store brands receive below-average levels of merchandising support and there is evidence to suggest that the level of support has been declining during the past several years.
As is the case with every issue of Times & Trends, there is way more valuable information than can be represented in this column and you should visit SymphonyIRI and download your free copy today.
Keeping you up to speed on the trends shaping the retail marketplace is an important function and value of your trade association. That commitment will be on full display at The Retail Merchandising and Marketing Conference (RMMC) presented by NARMS. The event is scheduled for April 27-30 at the Scottsdale Plaza resort. Visit the conference website for more information and to register.
Much has been said and written about the baby boomer generation as a key shopper group. In the new issue of Times & Trends, SymphonyIRI calls this group of over 80 million the most studied shopper group in market research history. The report, Baby Boomers: Riding the Wave of Diversity, takes a close look at spending patterns and buying power of boomers, further studies and breaks down sub-segments of the group, and prescribes potential action items for CPG manufacturers and retailers to better service baby boomer market needs. As always, there is a strong correlation between the action items and at-retail merchandising and marketing activities.
Here are a few highlights of the SymphonyIRI findings: Spending for the group fell during 2010 and younger boomers continue to outspend older boomers and seniors for the past few years. The club and dollar channels have gained in market share for the group, while grocery and drug channels have witnessed a decline over the past year. Health concerns drive spending that increases with age for healthcare products, but decreases for beauty and personal care items. Boomers are similar to the average shopper when it comes to private label spending, but a disproportionate amount is directed toward the drug and dollar channels. Internet, social media and mobile technology use is much lower among older shoppers, but that is expected to change very shortly.
There is much more to this issue of Times & Trends than we have time or space to share. You will want to follow the link and download your own free copy. To wrap up the message in one neat package, the report advices manufacturers and retailers to continue to invest and understand this key demographic for their wants and needs at the market/store level. The next step is to deliver personal and customized in-store programs and direct-to-consumer marketing programs that speak to those needs. The members of NARMS can help on both counts.
To truly understand the trends that occur at retail, it is always a good idea to understand what is going on with the ultimate customer: the shopper. Everything trickles down from there, not the other way around. Recently, Progressive Grocer reported on Valassis and its RedPlum Purse String Study. The report finds an increasingly frugal consumer who has become much more determined and proficient at saving money.
The story and study show that 62 percent of consumers spend two hours per week to find savings of $30. Eighteen percent only spent about an hour to find the same savings. The take away is that deal seeking is now second nature to consumers and that they are getting better at it in terms of time and money saved.
They are also becoming more social about their activities. Eighty-three percent share coupons and deals with friends in person and on social media. This sharing behavior pays off. Those who share deals save $31 more per week than those who say they do not.
These shoppers cross between traditional and digital sources to find their deals. Sixty-one percent, up 10 percent from 2011, reported planning their trip mission based on circulars and coupons. Consumers use their smartphones to access coupons, download promotional apps or send text messages to receive a savings reward.
Based on the amount of consumers who say they seek deals and based on the behavior that they exhibit, it is an understatement to say that in-store execution of promotions and reduction of out-of-stocks is vital. Savvy consumers will move on to the competing product quickly if they do not find a product on the shelf. They will use their phone to find another offer costing the manufacturer and retailer brand and market share. They will share this disappointment with family friends and total strangers who will also move on to the next product, regardless of what they find in their outlet.
It is a safe bet that CPG manufacturers and retailers are going to want to take steps to greet these forever frugal deal seekers with in-store and shelf conditions that match the price promotions.
The GMA Executive Conference has produced an interesting study which zeroes in on some best-practices by leading companies who are winning the battle at retail. Progressive Grocer points out that the study was a joint effort between GMA, McKinsey & Company and Nielsen. They contacted almost 220 CPG executives from household names in food, beverage, and personal/home-care categories.
The study identified four key areas in which successful companies tend to outperform the competition. The winners are three times more likely to invest in growth areas such as the Hispanic market. They use analytics for price optimization and promotion 50 percent more than their competitors. They place much more importance on strategic retailer relationships. And finally, they double the effort to develop talent and strategic planning.
The study singled out shelf performance as an area where CPG companies can gain market share, specifically in the area of assortment optimization. Many companies struggle to make this critical balance. Strategic investments in tools, relationships and training are seen as table stakes to be in a position to perform at the shelf level.
The members of the at-retail merchandising and marketing service industry help CPG manufacturers with these key areas in-store, everyday. NARMS members are entrusted with the awesome responsibility of enhancing the retailer relationship by executing sales and share building activities in the store. Their ability to bring a consistent approach to multiple locations in a short period of time contributes the kind of vital shelf-level information that can fuel advanced analytics.
The members of NARMS have invested in their own table stakes in technology, reporting systems and training to act as the conduit between manufacturer and retailer as they investigate and venture into growth areas.
The August 2012 edition of Times & Trends from SymphonyIRI takes a detailed look at the changing dynamics in the CPG marketplace and the opportunities for both manufacturers and retailers that have resulted. The double edged sword of high costs on the supply side and constantly changing buyer behavior on the demand side is causing a shift and making success at retail a moving target. Here are a few of the key findings found within the report:
Three quarters of consumers shop in five or more channels. This finding suggests that consumer are refining their shopping strategies to the channels they feel offer the greatest value.
The battle for grocery spending is being hotly contested and is seeing a high degree of channel migration. Supercenters and dollar stores have made great gains in winning heavy grocery shoppers away from other channels.
The consumer trip mission is still evolving as data suggests that trip frequency is declining, while basket size is increasing per trip.
The drug, dollar and club channels are capturing market share across several CPG departments at the expense of grocery, supercenter and mass. These changes are not huge, but the trend is hard to ignore. There has been a huge market share gain in the health and beauty care departments in the drug channel.
The Internet is a big factor in CPG purchase behavior and is a force to be reckoned with. According to Times & Trends, online sales of CPG products grew 10-14 percent during the first quarter of 2012.
What does all this mean for the members of NARMS? As consumers migrate across channels and as brands seek to find the action, trading partners will have to reset categories, cut-in new products, experiment with new formats and remodel existing stores. The August edition of Times & Trends is another great resource for at-retail merchandising and marketing service professionals to download and have at their finger tips as they contemplate how to best serve their manufacturer and retailer clientele.
It is an understatement to say that a primary success factor for retailers and CPG manufacturers is to understand key buying groups and shopper behavior. The latest Times & Trends report from SymphonyIRI takes a look at Millennial Shoppers using data derived from their quarterly Market Pulse survey. Millennial Shoppers are defined in this report as those between the ages of 18 and 34. In reading through the report, some opportunities to reach this challenging segment come shining through.
SymphonyIRI research shows that the Millennial segment is more cautious and frugal than the generation of 35 to 54 year olds. They are much more likely to use at home beauty treatments or spend time cooking meals that, in the past, would have been reserved for restaurants. They are also 200 times more likely to be influenced by smart phone apps and depend greatly on the opinions of others and social media when making buying decisions.
The report urges trading partners to determine and understand group shopping patterns, such as preferred channels, retailers and trip missions. It also stresses the importance of exploring the potential of new products and extensions within existing lines.
There is not enough space here to share all of the key findings and we invite you to download the free report and read it for yourself. For members of the at-retail merchandising and marketing community, there is a chance to positively impact retailer and manufacturer efforts in multiple areas of the go-to-market process.
Mystery shopping services can greatly enhance trading partner understanding of key demographics. New products need to be rolled out and cut-in to existing plan-o-grams quickly and efficiently to bring return on product development dollars sooner. Reducing out-of-stocks through regular coverage calls can not only increase sales, but it can build brand image by not allowing a bad customer experience to go viral. The members of NARMS are uniquely qualified to help trading partners reach and keep the Millennial shopping segment.
Both the National Retail Federation (NRF) and the U.S. Department of Commerce came out with May retail sales figures this week. The results are not overwhelmingly positive, but according to a story in DSN Retailing Today, it all depends on how you look at it. As the story points out, retail is the first industry that truly experiences how consumers are feeling about the economy and there seems to be signs of hope.
At first blush, it seems consumers have slowed their spending. The NRF reports that May retail sales have dropped 0.3 percent seasonally adjusted from April. However, they have increased 4.8 percent unadjusted year-over-year making 23 months of consecutive growth. The Commerce Department tells the same story reporting May retail sales down 0.2 percent adjusted compared to April, but up 7.1 percent unadjusted year-over year. The NRF number excludes automobile, gas and restaurants while the Commerce numbers include these things.
The NRF says that they are encouraged by the numbers and that consumers are taking a breather from strong first quarter spending. They expect retailers to be cautious with inventory and promotions ushering in a huge back to school season. Back to school is traditionally the second biggest time of the year for retail.
Here are some others highlights from these economic reports. Clothing and clothing accessories sales increased 7.3 percent year-over-year. Electronics and appliance sales increased 1.2 percent. Furniture and home furnishing sales increased 11.4 percent. Health and personal care sales increased 3.1 percent.
It is always helpful for members of the at-retail merchandising and marketing industry to keep our fingers on the pulse of economy as our customers, retailers and CPG manufacturers, are on the front line and feel the impact first. It is the best way to anticipate and plan for their ongoing service needs. You can read the DSN Retailing Today story by clicking here.