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10/01/2011

Pulse Report: Channel blurring

In a fiercely competitive environment, retailers can win market share by better addressing shoppers' and consumers' evolving needs.

Mark Parise,
president of IRI

Faced with budget constraints and higher food and fuel prices, many shoppers are trimming basket size to save money while making more frequent trips to nearby drug, dollar and grocery stores, according to new analysis from SymphonyIRI Group. In turn, drug and dollar retailers have boosted their food and beverage offerings, while many grocers are rounding out their personal care product lines.

"This increased channel blurring is the result of a highly competitive CPG marketplace," says Mark Parise, president of IRI, a business unit of SymphonyIRI. "CPG marketers understand that consumers are seeking low-cost solutions to everyday needs, and they are acting to capitalize on that opportunity."

In their quest for value, consumers increasingly are willing to shop at a variety of channels to find the products they want at prices they can afford. With 55 percent of consumers eating out less often than prior to the recession, grocery retailers have stepped up their merchandising of convenient prepared foods while updating store formats to attract more consumers. Across channels, two-thirds of CPG categories have enjoyed increased merchandising support during the past year.

At the same time, supercenters are enhancing their product assortments after attempts to scale back the number of SKUs resulted in some customers shopping elsewhere. "Winning in CPG today is about getting the right products to the right place at the right time," says Parise. "In other words, retailers must understand and deliver against the needs of key shoppers. A broad assortment, one-size-fits-all approach is simply not effective."


Number of Channels Shopped
Percent of Consumers 2011

Source: SymphonyIRI Consumer Network™, 52 weeks ended 6/5/11


Percent of Consumers Shopping Multiple Channels By Number of Channels Shopped
Quarterly Point Change vs. Year Ago, 2010-2011

Source: SymphonyIRI Consumer Network™

Percent of Households Buying by Channel
Channel
Penetration
Pt. Chg v 2010
Grocery
98.7%
+0.1
Supercenter
72.9%
+1.5
Mass Merchandise
76.4%
(1.4)
Club
52.5%
+0.9
Drug
78.8%
(0.3)
Dollar
63.7%
+0.3
Convenience
34.6%
+0.1

Source: SymphonyIRI Consumer Network™, Shopper Insights Advantage™ (SIA), 52 weeks ended 6/5/2011

Bright spot: Expanding healthcare merchandise

With more than one-third of consumers striving to reduce medical expenses through self-treatment, retailers are placing a strong merchandising emphasis on healthcare treatments and accessories. Drug retailers benefited the most from the trend with their share of dollar sales climbing in nine of 10 healthcare categories, while grocery retailers also added health-related products and gained dollar share in seven categories, SymphonyIRI Group reports.

Key Healthcare Categories:
Dollar Share Point Change 2011 vs. 2010
 
Grocery
Drug
Supercenter
Club
First Aid Accessories
(0.1)
+2.2
(0.8)
(0.5)
First Aid Treatment
0.0
+0.9
+0.1
(0.6)
Cold/Allergy/Sinus Tablets
(0.1)
+1.8
(1.1)
(0.6)
Gastrointestinal Liquids
+0.4
+1.9
(0.9)
(0.2)
Gastrointestinal Tablets
+0.7
+1.4
(0.6)
(0.9)
Internal Analgesics
+0.1
+2.3
(0.8)
(0.7)
Nasal Products
+0.9
+1.4
(0.6)
(0.1)
Vitamins
+0.6
+1.1
(0.7)
(0.2)
Weight Control/Nutrition Liquid/Powder
+1.5
+0.2
(0.2)
(1.1)
Home Healthcare Kits
+0.1
(1.1)
+1.3
+0.2
Source: SymphonyIRI Consumer Network™, Shopper Insights Advantage™ (SIA), 52 weeks ended 6/5/2011

Blurred merchandise assortments

Retailer efforts to cater to consumers' evolving needs are resulting in a blurring of merchandise assortments across channels. Drug and dollar stores are adding food and beverage items, while grocers and supercenters are elevating the profile of drug and personal care offerings with stepped-up merchandising support and broader private label assortments.


Top Shopping Shifts

Department

Channel

Dollar Share Point Change by Department, 2011 vs. 2010

Frozen

Grocery

+ 0.7

Beauty

Drug

+1.0

Health

Drug

+1.5

Source: SymphonyIRI Consumer Network™, Shopper Insights Advantage™ (SIA), 52 weeks ended 6/5/2011

TIP: Identify opportunities by tracking share shifts across categories and brands.

 


High gas prices impact shopping trip frequency

Gas prices that are 30 percent higher than a year ago have many consumers striving to cut back on the number of miles they drive, and that has spurred 55 percent of shoppers to make fewer, larger trips. At the same time, however, frequency within the drug channel climbed 6.7 percent from a year ago as shoppers stopped more often at close-to-home stores for need-it-now purchases.


76% Consumers who shop in 5 or more CPG channels

 


Data & Insight Provided By