Pulse Report: Channel Migration: The Road to Growth Has Many Lanes

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Pulse Report: Channel Migration: The Road to Growth Has Many Lanes

01/01/2015

In today's retail landscape, the consumer, armed with knowledge like never before, calls the shots, according to "Channel Migration: The Road to Growth Has Many Lanes", a granular analysis of consumers' evolving path to purchase and its impact on existing and emerging channel trends.

Robert I. Tomei,
President, Consumer & Shopper Marketing

To succeed, retailers and CPGs must possess an adept ability to harness and transform vast amounts of consumer and shopper data into insights–insights that must be the foundation for carefully targeted marketing programs that demonstrate a concrete understanding of channel usage patterns of marketers' most valuable shoppers.

A Framework to Win

In this new environment where consumer engagement has drastically changed, CPG marketers absolutely must adopt a strong multi-channel relevance–including a strong and seamless digital presence.

We offer these key strategies for future success for CPG marketers and retailers:

1. Retain current shoppers and consumers by delivering against each shoppers'/consumers' most pressing needs and wants. Drive purchase frequency and share with a narrow assortment of high-demand, value-oriented categories.

2. Align assortment and distribution strategies against consumers' preferences and channel behaviors to get the right product to the right place at the right time. Consider the preferred trip types, channel preferences and store locations of key consumers.

3. Optimize marketing mix against unique characteristics and considerations at the channel level. Tailor packaging, pricing and promotional programs to account for shopper mix down to the store level.

4. Create demand-based products and packages. Invest to determine where and how to strengthen collaboration between retailers and manufacturers to clear potential hurdles before they occur.


PENETRATION BY CHANNEL AND POINT Change VERSUS 2011


Note: Mass/Super and Grocery do not include Walmart.
Source: IRI CSIA&trade 52 weeks ended 8/10/2014 and same period 2011.

Grocery holds nearly 100 percent penetration, but Internet and dollar retailers are making considerable inroads.


CHANGE IN NUMBER OF CHANNELS SHOPPED 2014 VERSUS 2011


Source: IRI Consumer Network&trade 52 weeks ended 5/18/2014 and same period prior years.

Increasingly, consumers are confining their shopping to fewer channels–the channels they perceive to offer the best value.


22% of shoppers interacted digitally in some way prior to shopping

4% of shoppers used a digital device during the shopping process

75% But...nearly 75% say they plan to use their smartphone/ tablet more during the shopping process in the future

Though the CPG industry has been relatively untouched by digital's influence on the path to purchase up until now, the future looks quite different, with digital exerting influence up and down the purchase path.

Source: : IRI Path to Purchase Study, April, 2014.


A SNACK BRAND'S PRICE POINTS VERSUS VALUE AND PACK STRATEGY


Price must reflect pack strategy and value requirements for each individual CPG channel.

Source: IRI ILD POS database; L52 WE 06/16/13, MULO+C.


TIP

Offer price points and associated pack formats that appeal to different need states to increase frequency and penetration and support sales growth.


Data & Insight Provided By