|
|
 |
|
August 9, 2004
|
|
Presentation Matters
Shoppers have a lot of issues on their minds every day, and for
retailers the challenge is getting a sense of what is and is not
driving behavior. However, a key challenge for any retailer looking
to shopper surveys for guidance is to understand how important it is
to word questions clearly.
Consider this: When it comes to food safety, what's in a name?
Obviously, a lot. This year FMI asked shoppers how they would react
to "a deli product that was labeled with the following statement:
'sprayed with a solution of
sodium lactate to prevent the growth of L.monocytogenes'?" A
resounding two in three said such a label would make them less likely
to purchase the product, and only 14 percent said it would encourage
them to purchase. The real question is how many of them understood
the question or the issue to begin with.
The industry has to be careful in how we communicate the benefits
and attributes of new technology, whether for food safety or even for
check-out ease, without scaring shoppers into a negative opinion.
Irradiation provides an excellent example. Although many more
shoppers know about this technology following its use to combat
anthrax attacks, many shoppers also remain completely in the dark:
Back in 1996, FMI's Consumer Trends survey included a
description of irradiation and then measured self-reported awareness.
About half of consumers said they had heard or read at least a little
about irradiation. Without any such description in the Trends 2004
survey, the same proportion said they had heard of irradiation.
(Again, these numbers might have been impacted by the anthrax scare
of 2001 and 2002.)
In 2004, we asked those who said they had heard of
irradiation if their primary grocery store offered irradiated beef.
More than four in ten (43 percent) admitted they did not know. Only
12 percent said yes; 45 percent said no.
The likelihood of purchasing a food product (not just beef)
if it had been irradiated "to kill germs and make it safer" has not
changed dramatically over the last seven years. An estimated 50 to 60
percent of shoppers express some likelihood of purchasing an
irradiated food
product.
Shoppers need and want reliable, credible sources to explain
these complex topics and help them see why they benefit. This might
explain why stores that have offered irradiated meat in recent years
- along with a healthy dose of education - have found a very
accepting marketplace.
General confidence in food safety at their grocery store has been
pretty steady for at least the last 10 years with a vast majority of
shoppers saying they are completely or mostly confident in the food
supply. To keep earning those high ratings we need good work, good
results and good communications.
|
|
New Rx Insights Coming Soon
Healthcare is one of the most complex and contentious issues in
the economic and legislative arenas, and a major part of it is the
rapidly escalating demand for prescription drugs.
The graying of America has boosted healthcare expenditures to
nearly $2 trillion, according to the Department of Health and Human
Services. In fact, gains in healthcare spending outpace the nation's
gross domestic product, a trend that is likely to continue. This
makes it all the more imperative for the industry to have in-depth
knowledge of how, where and why consumers are purchasing drugs.
Rx spending, accounting for ten percent of total healthcare
costs, hit unprecedented levels in 2003, with consumers filling 3.2
billion scripts. This lifted retail sales past the $200 billion mark
last year, according to the National Association of Chain Drug Stores
(NACDS).
Retail pharmacies capture the lion's share of volume. Chain drug
stores account for 42 percent of prescription drug sales. Independent
drug stores ring up 18.8 percent, mail order 17.2 percent,
supermarket pharmacies 12.3 percent and mass marketers 9.6 percent,
NACDS reports.
Although pharmaceutical manufacturers know what specific products
are being bought and where, research on patient psychographics,
attitudes and treatment behavior has been scarce. That's why
ACNielsen U.S. and Marketing Technology Solutions are launching
TheraScore, the most comprehensive patient information service ever
available to pharmaceutical manufacturers.
Using extensive consumer research and de-identified insurance
claim data from retail pharmacies, TheraScore offers insights across
the entire patient-treatment process, including what symptoms lead
patients to specific treatment options, how they learn about these
options and how they choose them.
Other industry issues and opportunities that TheraScore addresses
include:
Expanding markets by the understanding of consumers who have
an ailment but whose conditions have not yet been treated with Rx
medications
Improving patient compliance and involvement with
physician-prescribed treatments and lifestyle changes
Extending treatment persistency to achieve better clinical
outcomes and increased sales
Look for some of our key findings in
Facts, Figures, & the Future in the months ahead.
|
|
|
|
 |
|
Club Stores Pack 'em In
The Warehouse Club Store channel is one of the fastest growing retail
channels in the U.S., fueled by highly loyal consumers, many of whom
have turned into Club chain "evangelists," singing the praises of
this format to their relatives, friends, business associates, and
even complete strangers.
The 1,200-store channel generated about $85 billion in sales last
year. Annual revenue growth rates, same store sales, and store
counts all rose. Of the four largest retailers in this channel --
Costco, Sam's Club, BJ's and Smart & Final -- Costco drove higher
revenue with a much smaller store count versus Sam's Club, as it
drives more frequent shopping and larger basket rings.
The three major players are all fairly consistent in store size
and format. However, Smart & Final has a different business model
than the others with a much smaller store format and a strong focus
on food service.
Click on thumbnail to enlarge, or click here.
Speaking at a recent retailer conference, Bob Connolly,
Wal-Mart's EVP of Marketing and Consumer Communications, mentioned
that "simplicity seems to drive consumer acceptance and appeal within
the channel." Upper income consumers, faced with increasing time
pressures, can shop these large, limited-assortment, high-value
stores and know that they will always simplify their product choices
and deliver good value.
Given the cost of annual membership and the requirement to buy
large packages, heavy Warehouse Club channel shoppers tend to be
wealthy. According to the ACNielsen Homescan consumer panel, 83
percent of sales among Heavy Club shoppers are from households who
are affluent or living comfortably.
Click on thumbnail to enlarge, or click here.
Among affluent shoppers, there is more similarity between the
heavy Warehouse Club shopper and the heavy Grocery channel shopper.
As such, Grocery retailers need to be just as concerned with threats
and opportunities from Costco, BJ's and Sam's Club as they are from
Supercenter expansion.
We also know that Heavy Club channel shoppers still make a large
number of shopping trips to the Grocery channel. When we examine
differences in category spending rates within both channels (among
the heavy Club shoppers), the graphic below shows the categories that
exhibit the largest negative category spending rates versus the
Grocery channel - meaning that more dollars were spent on these
categories in the Grocery channel than in the Club channel.
Click on thumbnail to enlarge, or click here.
These findings provide opportunities for retailers in both
channels to gain competitive advantage. In the case of BJ's, their
wider assortment is driven in part by their focus on families and the
need to stock smaller packages than package sizes that appeal to the
business customers who frequent Costco or Sam's Club. Within the
Grocery channel, many retailers have been leveraging "club packs" to
provide their shoppers greater value and to drive larger basket rings
from their shoppers. However, don't forget to also leverage your
wider assortment and small packages in your merchandising activities.
For further information or to arrange a comprehensive
presentation on consumer shopping patterns, please contact Todd Hale
at thale@acnielsen.com or
859-905-4615. And for information about purchasing ACNielsen's new
Warehouse Club Store Consumer study,
click here.
|
|
|
You've Got the Scents, So Where are the Dollars?
Surprisingly, with all the dollars spent on high profile advertising,
sampling and endorsements, the Fragrance industry, especially Fine
Fragrance, operates with a remarkable absence of good quality
marketing information.
In a recent address to the World Perfumery Congress in Cannes,
ACNielsen presented findings based on the responses from more than
17,000 women from six countries (including the USA, United Kingdom,
France, Germany, Italy and Spain) on a key range of questions
relating to the worldwide Fine Fragrance market place.
When it comes to the wearing of Fine Fragrance, almost 75 percent
of all women in these countries are regular users. However, there
is a wide range from 86 percent usage in the UK, to only 66 percent
in the USA and just 57 percent in Italy. Indeed, 52 percent of UK
women wear fine fragrance every day, and a further 18 1/2
percent every week. By contrast, only 25 percent of women in
the USA and Italy are daily users.
As more Grocery and Drug channel outlets offer perfumes and other
scent-based products (such as candles, soaps and even scented paper
products), it is critical to understand the nuances of fragrances and
how shoppers may well react, or not, to these offerings.
When it comes to loyalty to a particular fragrance, it is the
French and Spanish women who stick to just one or two favorite
fragrance brands, while in Germany and to a lesser extent the UK,
women will vary their usage, rotating between three, four or even
five or more fine fragrances.
What motivates a fragrance decision? In the UK, USA and Germany
it is primarily the occasion or how women feel; whereas in places
like Italy and Spain the decision is driven much more by the time of
the day, with 25 percent or more of women citing this as the most
important factor in these two countries.
Click on thumbnail to enlarge, or click here.
The outlets where women do their fragrance shopping differ across
USA, France & UK:
In the USA, 75 percent do their shopping primarily in a
department store.
In France, they prefer a self-service perfumery in 68 percent
of cases, as do shoppers in Germany, Italy and Spain but to a lesser
degree.
In the UK, they shop "other stores" (42 percent) e.g., Duty
Free.
Click on thumbnail to enlarge, or click here.
American women claim that their fine fragrance was most often a
self-purchase; whereas in Italy, the UK and Spain, the fragrance they
wear is most likely one received as a gift.
So what are the prime motivations for selecting a particular Fine
Fragrance?
It could be the advertising, the brand name, the image, the
overall experience or some form of promotion. The answer, however, in
five of these six countries is an overwhelming choice - it's the
fragrance itself that dominates the purchase decision. (France is the
only exception to this rule, where the brand name and the overall
experience are also important factors). In the USA, more than
one-quarter wear perfumes that will please everyone, whilst the
overwhelming majority of Italian women wear fragrances that
they like first and foremost.
For retailers in all channels who sell fragrances, this research
is a validation for sampling and underscores the fact that while the
primary user of fragrance is the ultimate purchaser, especially in
the US, this shopper seeks acknowledgment and consensus of their
selection, which can be best delivered by a peer (rather than sales
clerk) staffing the department. It is a model that has worked well
for the Department Store channel and should be evolved for the Mass,
Drug and Grocery channels.
|
|
|
LabelTrends: Lactose Free Products
The average package sitting on a supermarket shelf has about 1/32nd
of a second to actually attract a passing shopper's attention.
Package designers and marketers have long understood the power of the
package and how highlighting a particular product's benefit can
change the odds and convince a shopper to purchase a particular
product. One of the challenges for marketers has been to learn just
how impactful these claims are and to quantify the results.
LabelTrends is a new marketing research service from ACNielsen,
which tracks the sales of food products based on their package front
"claims", including calcium, calories, carbs, fat, flax or hemp,
types of grains, organic, soy, sweetener, trans fat, lactose,
functional or nutraceutical, and consumer segment positioning.
This month, F3 takes a look at the LabelTrend-defined category of
Lactose Free and Lactose Reduced.
Click on thumbnail to enlarge, or click here.
Lactose is the predominant sugar found in milk products. An
enzyme, lactase, is naturally produced in the body in the small
intestine and breaks down the lactose enabling it to be absorbed into
the bloodstream. Lactose intolerance simply means the inability to
digest significant amounts of lactose, which is due to the body's
deficiencies in producing the lactase enzyme. Estimates are that up
to 20 percent of all Americans are lactose intolerant; with an even
higher incidence among the Latin (50 percent), African American (80
percent) and Asian populations (90 percent).
Interestingly enough, as the body ages, regardless of ethnic
heritage, lactose intolerance may develop naturally, underscoring the
need to understand this condition and the product opportunities that
stem from it as the 76 million baby boomers continue their move into
old age.
Sales of Lactose Free far outweigh those of Lactose Reduced, and
based on the steep declines of this segment over the past four years;
it is questionable how long this claim and segment may exist. It is
fair to speculate that as food technology is evolving, brands are
able to produce Lactose Free products without the sacrifice of taste,
thereby reducing the need for a mid-lactose product.
Click on thumbnail to enlarge, or click here.
One of the most important discoveries from the analysis is
finding the depth and breadth of the products that use the Lactose
Free/Reduced claim; highlighting the increased opportunity throughout
the supermarket. LabelTrends is tracking 96 individual product
categories which contain the Lactose Free or Reduced claim including
dairy, bakery, cookies, frozen entrees, desserts, beverages, meats,
snacks, pasta sauces, grains and vegetables.
As Bakery segment sales have declined, one of the opportunities
has been created in Lactose Free products where Lactose Free Fresh
Breakfast Cakes/Sweet Rolls have increased volume by 128.7 percent
(as compared to the total category decline of -1.8 percent) and
Lactose Free Frozen Biscuit Rolls & Muffins that have increased by
79.4 percent vs. the -4.8 percent overall category decline.
Expect more Americans to become Lactose Intolerant and more
products to be reformulated in order to satisfy the demand.
For more information about LabelTrends, please contact your
ACNielsen representative or call 1-800-988-4ACN.
|
|
|
Trend Watch: The Metrosexuals Go Shopping
There is no doubt about who are the latest highly coveted
psychographic shoppers showing up on marketers' radar screens; the
"metrosexuals" word that describes them has already become part of
the mainstream marketing lexicon, and these young male shoppers are
ringing up sales.
"Metrosexual" is a term coined by Mark Simpson, a British writer,
who, in an article in the on-line magazine Salon, identified
this group as "young men with money to spend, living in or within
easy reach of a metropolis (because that's where all the best shops,
clubs, gyms and hairdressers are). He might be officially gay,
straight or bisexual, but this is utterly immaterial because he has
clearly taken himself as his own love object and pleasure as his
sexual preference."
Bottom line for marketers and retailers is that this group seems
to have an insatiable appetite for gourmet foods, kitchen gadgets,
spa treatments, personal products...and the best news is that they
appear to have wallets that can keep up with their desires.
Their worldwide impact has already been measured in the Health
and Beauty Aid aisles.
A brand new ACNielsen study,
What's Hot Around the Globe: Insights on Growth in Personal Care
- analyzed retail purchases in 56 countries across nearly 60
categories and found many examples of this trend. For instance, the
sales value of Shower Gels, one of the fastest growing personal care
categories worldwide, grew by seven percent in 2003 primarily on the
strength of sales in male-oriented products.
Jane Perrin, ACNielsen Managing Director of Global Services and
sponsor of the study, reports that "women are not the only ones
focused on personal grooming," pointing out that the sales of
male-oriented personal products grew twice as fast as those of
female-oriented products.
Click on thumbnail to enlarge, or click here.
Major brands have already begun to capitalize on the burgeoning
"metrosexual" market. Procter & Gamble announced in March an
exclusive licensing agreement with OT OverTime to market a line of
Personal Care products developed for tweens and teenage boys.
Unilever's male-focused brand Axe, now available in more than 58
countries, saw its product line expand from a body spray to a roll-on
deodorant, a shower gel, a pre-shave and post-shave product and a
hair gel. Gillette's recent introduction of the M3 Power system is
taking the idea of a disposable throw away razor, that sells for
about a buck, to a battery operated technological innovation
retailing for about $15.
Look for continued product development and positioning aimed
towards these consumers, but equally important to these shoppers is
the communication designed to attract them. As the metrosexuals
prides themselves on being kind, caring and emotional, so must be the
marketing that is being developed to attract them.
|
|
|
Waste Not...Want Not
Each week, according to the latest FMI Trends 2004 report, the
average shopper makes two visits to supermarkets and grocery stores;
and when asked to rank what are the top factors they use in selecting
their primary store, "high quality fruits and vegetables" and "high
quality meats" rank number two and three respectfully, after a
"clean, neat store". So it's important when we discover a consumer
concern that may put the growth of these fresh food categories at
risk.
A June 2004 SupermarketGuru.com Consumer Panel nationwide survey
of 1,149 people gives a fresh look at what may be a serious and
costly problem which may lead to a consumer backlash: the waste of
fresh foods. Forty-nine percent of those surveyed reported that they
waste between 25 and 75 percent of their fresh foods because of
spoilage.
Click on thumbnail to enlarge, or click here.
Eighty-seven percent of the Consumer Panel said they would
increase their consumption of fruits and vegetables to 5 or more
servings each day, as is recommended by nutritionists and doctors, if
they were able to keep produce fresher longer. In fact, 69 percent
reported that their fruits and vegetables go "bad too soon"; ranking
as the number one reason deterring them from eating more.
Click on thumbnail to enlarge, or click here.
Conventional wisdom was based on a shopper making out their
shopping list, and with few exceptions (usually driven by sale
pricing or impulse display) they stuck to it, filling their cupboards
and refrigerator with the foods that most of their family members
enjoyed, and all ate. But now the paradigm of buying has shifted, and
with it may be one explanation for all this excess waste. Shoppers
have strayed beyond their local supermarket and now visit two, three,
four or even five different channels each week - and with this shift,
it appears that the shopping list is a relic of a bygone era.
Unsure of what they bought on their last food shopping excursion,
and coupled with the desire for their family to eat the freshest and
healthiest foods possible, shopping carts are filled with extra
fruits and vegetables. After all, "if they are in the house...we will
eat them"; apparently not.
Look for consumer demand to include smaller size packaging that
is both re-sealable and has "stay fresh" benefits using the latest
breathable materials; as well as insightful retailers promoting the
use of refrigerator thermometers to maximize shelf life.
|
|
|
Back to School: What Sells and When
It appears that the beginning of the Back-to-School buying season
begins the last week in August and for the following six weeks
specific categories will sell significantly more product than they do
on an everyday basis. Based on 2003 sales in the combined
Food/Drug/Mass Merchandiser (excluding Wal-Mart) channel, we have
indexed against the average weekly sales the leading categories for
Back-to-School over this six-week period.
Click on thumbnail to enlarge, or click here.
The Leading Categories in Back-to-School include food stuffs as
well as the expected school supplies. It is interesting to note that
the Grocery Channel outperforms the Drug and Mass Merchandise
(excluding Wal-Mart) channels with 90 percent or more of sales in
Breakfast Bars, Snacks, Crackers and does relatively well in the
sales of Food Storage Containers (64 percent) and Paper Lunch Bags
(83 percent).
However, in all the other categories, Grocery captures just 15-30
percent of sales, highlighting a huge opportunity to capture
incremental sales through Back-to-School promotions and displays. End
caps which feature Breakfast Bars, Variety Snack Packs and Crackers
should be supplemented with the underperforming (in Grocery) Colored
and Regular Pencils and Pens, Markers and Personal Planners and
Folders. Conversely, other non-grocery channels have the opportunity
for cross merchandising and sampling for the food category products
in their stores.
|
|
|
COUNTRY-TO-COUNTRY: Fastest Growing Frozen Foods Categories in the Canadian Grocery Channel
The Frozen Foods department accounts for just over $27 billion in US
Food Store annual sales, but it is important to note that the overall
department's sales remain flat, with some key categories showing a
declining trend. This downward sales trend, which includes
traditional staples like Frozen Juices/Drinks (down 14.5 percent) and
Frozen Vegetables (down 2.5 percent), underscores the consumers'
misperception of product quality and value as compared with their
fresh and more expensively priced counterparts.
Click on thumbnails to enlarge
Use this link if you've received the text version
for graph one (
http://www.factsfiguresfuture.com/enlarged/Aug04C2C1.jpg) and this
link for graph two (
http://www.factsfiguresfuture.com/enlarged/Aug04C2C2.jpg)
In Canadian stores, Frozen Food dollar sales have increased four
percent over the previous year, with Frozen Fruit (up 27 percent)
leading the top ten. While the obvious reason for the Canadian
acceptance of frozen fruit and vegetables has much to do with cost of
transportation and availability, it may be worthwhile to analyze
their promotion and advertising strategies to see what learnings can
be translated to the US marketplace.
|
|
 |
ACNielsen estimates that Baby Food sales topped $5.3 billion dollars
across all retail channels in 2003. The following slides indicate
the percentage of households who buy each type of baby food, a
sampling of higher indexing household types who buy baby food, and
channel share of baby food dollar sales.
|
|
Click on thumbnail to enlarge, or click here.
|
|
Click on thumbnail to enlarge, or click here.
|
|
Click on thumbnail to enlarge, or click here.
|
|
|
|
|
Facts, Figures and the Future is copyrighted and may not be
reproduced without prior permission. For more information about the
publication, please contact Phil Lempert at 323-860-3070 or via
e-mail at
PLempert@FactsFiguresFuture.com
|
|
|
