Pulse report: Keeping pace with evolving shopper behavior

Still wary of a faltering economy, shoppers are changing where and how often they purchase their household goods.

Larry Levin,
executive vice president/general manager, consumer insights

In "Channel Migration: Charting a Course on the Voyage for Value," SymphonyIRI Group shares granular insights on the constantly changing profile of today's "frugal" shopper and what trends are driving her decision-making processes.

Research found that while trip frequency is slowing, it's not uncommon for consumers to shop as many as seven CPG channels in pursuit of the best value for their money. But, these trips are not without purpose–shoppers are limiting spending to channels offering the greatest value. Less frequent trips are reflective of an ongoing shift in trip missions. For example, trips to grocery, supercenter and mass merchandise stores declined, due to a decline in pantry stocking. Trips to dollar stores increased, however, reflecting an increase in shoppers on a value mission.

Trip spending, on the other hand, has increased slightly over the prior year, research shows. A year-over-year comparison shows basket size up 0.4 percent with fill-in and pantry stocking trips seeing the strongest, most consistent growth.

The grocery channel, with 47.9 percent of grocery sales, has lost dollar share during the past year but continues to fight for share of food and beverage sales against nontraditional channels.

Drug, dollar and club channels are gaining their share of CPG spending, with more than half of consumers shopping in each of these channels during the past year. Not only are these channels adding outlets, but they are also building out their food, beverage, health and home care assortments and going head-to-head with "traditional" grocery channels for share of routine shopping trips.

The specialty channel, which includes the Internet, close-out stores and office, beauty and health food stores, accounts for 6.7 percent of CPG sales. While share is rather small, the growth of Internet-based CPG commerce is already helping the channel make waves across a number of key CPG categories. E-commerce is estimated at $14.4 billion in 2010 and is expected to reach $25 billion by 2015.

There is no doubt that the past several years have been challenging for the grocery industry but opportunity still exists. To win, CPGs and retailers must be adept and agile–anticipating changes in consumer attitudes and rituals, and answering the unwavering need for affordability.

The Omnichannel Shopper

Lower gas prices during the past year have been one contributor to the common practice of shopping across five or more CPG channels. Consumers seem to be limiting their shopping to those channels that offer the greatest perceived value.

Number of CPG Channels Shopped
Source: SymphonyIRI Consumer Network™, 52 weeks ending 4/15/2012

A Strong Value Proposition

Supercenter and dollar store channels have experienced share gains and are acquiring value-seeking shoppers from across competing retail channels. Consumers' quest for value is not expected to subside in the near future.

CPG Shopping Trends
% Households Buying by Channel
Source: SymphonyIRI Consumer Network™
Consumer & Shopper Insights Advantage™ (CSIA), 52 weeks ending 4/15/2012

Fewer Trips, But Bigger Baskets

While CPG trip frequency has slowly declined during the past year, trip spending has steadily inched upward. The trend reflects a shift in trip missions, with strong growth occurring in hard-hit pantry stocking missions.

Average Purchase Occasions per Household & Average Dollars per Purchase Occasion
All Outlet % Change vs Prior Year
Source: SymphonyIRI Consumer Network™ Consumer & Shopper Insights Advantage™ (CSIA), 52 weeks ending 4/15/2012

The Online Shopper

Online sales of CPG products are growing at an aggressive rate, accounting for two of the top five spots of products purchased online. This trend shows no sign of slowing down.

What People Are Buying Online
% of Shoppers Who Bought the Product – Among Those Who Have Shopped Online in the Past 6 Months
Source: Etailing Solutions, survey of 1,098 consumers

of consumers believe they've made significant changes in the past six months to save money.

TIP: Consumers have more choices than ever when it comes to where to shop, and they are savvy in their shopping approach. Be sure your value proposition is clearly stated and communicated.

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