INDUSTRY REPORT

A supplement to Shopper Marketing magazine

At Home With the Path to Purchase

EXECUTIVE SUMMARY• Historically, the path to purchase has been linear. At home, someone uses a product,

and then the primary shopper sees the need to restock, chooses a shopping destination and, once there, makes a brand decision.

• While a lot of work is done in-store to affect that decision, there are opportunities to influence shoppers before they get to the store.

• Research shows that 94% of primary grocery shoppers say they typically prepare shopping lists. And 67% say they never or only occasionally buy items not on the list.

• Getting on the list can be tricky. If marketers know what shoppers are doing at home, they’ll have a leg up on the competition.

• Moms are not the only ones contributing to the lists. Children and dads also have a say.

• Lists are not necessarily written and often are mental, requiring triggers to stimulate the thought process.

• Ultimately, making an impression before the shopper steps into the store elevates the brand and makes it more likely that the brand will get on the shopping list, whether written or mental.

PRESENTS:

Underwritten by

in collaboration with the Institute.

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The path to purchase can be straight, or long and winding. From home to store shelf and home again, the in� uencers are many, as are the moments of

truth. If the path to purchase doesn’t necessarily begin at home, it certainly revolves around it.

OPPORTUNITIES FOR INFLUENCE“If you look historically at how the path to purchase has been laid out, it’s been very linear,” says Terrie Wendricks, a consultant and formerly vice president of insights for Sara Lee/Hillshire Brands. In the home, someone uses a product, then mom (or the primary shopper) sees a need to restock, chooses a shopping destination and, once inside, makes a brand decision. “The industry has done a really good job of understanding product performance in the store,” she says, “but there’s been a big gap in truly understanding what happens right before the decision to go shopping. That really hasn’t been mapped out.”

“A lot of work is being done in-store, but we know that you can in� uence before you go to the store,” says Fiona Blades, president and chief experience o� cer, Mesh Planning. “And from what we’ve seen, those moments can be very powerful.”

“There’s a lot of talk about this idea of a ‘pre-shop,’” adds Christopher Brace, founder, Shopper Intelligence, “although it’s signi� cantly underutilized as a strategic planning tool.”

Messaging that reaches shoppers at home is largely traditional: TV advertising, newspapers and FSIs. These methods are tried and true, well researched and well funded, but there are stones only now being turned to discover new ways of reaching shoppers. Digital messaging, social media and even packaging are increasingly used as mediums to impart a brand or store message to shoppers.

Blades says that Mesh Planning studies the way shoppers pick up information, asking market research

subjects to alert her company whenever they come across anything to do with certain brands via a text-messaged code. There are four key points of interest: (1) which brand; (2) which touchpoint or occasion (a TV ad, mailer to the home, etc.); (3) how did the message make them feel; and (4) how likely is it that they would choose that brand the next time – was it a persuasive experience, in other words. Blades says that the shopper-subjects embellish their thoughts later on in an online diary: “We’ll see in the comments how, when perhaps they’d been thinking about what soft drinks to buy, they’d see a lea� et,” says Blades. “From what we’ve seen, it can be those moments that are very powerful.”

FreshSpace Media places ads and coupons on milk, bread, eggs, produce and fresh meats, using these staple items as a way to reach shoppers at home via multiple touch points. The company’s research shows that a gallon milk container is viewed multiple times by several family members at various points until it is emptied. “It’s like a billboard on the breakfast table,” says Geo� Jackson, president, marketing and business development, FreshSpace Media. “That’s how people absorb it: the ad impression is delivered multiple times over a seven-to-ten-day window in the refrigerator, on the kitchen counter, and on the kitchen table.”

The e� ect, he says, is measurable. FreshSpace ad campaigns run over four weeks, but a recent analysis of 30 campaigns showed that the ad had a greater reach. There was measurable lift for the featured brand during a 12-week period (the four-week ad run plus the eight weeks following). But that lift was sustained when extended to a 26-week period, bringing in new or lapsed buyers. In one example for an established frozen breakfast brand, among households exposed to FreshSpace milk advertising (as part of a national integrated campaign), dollar sales increased by 17.8% per 1,000 households in the test vs. a control group. That lift, Jackson says, was the result of increased levels of household penetration, driving a slightly increased buy-rate among existing buyers and attracting many lapsed and new buyers.

Obviously, making an impression inside the home is one important way of getting on the all-important shopping list.

Finding new ideas

Finding meals thatare quick to make

Using recipes once a week

Finding meals thatare good tasting

Like to try new foods

What are Consumers’ Biggest Meal-Planning Challenges?

Source: The NPD Group’s National Eating Trends® surveys, Feb. 2012.

55%

52%

42%

37%

67%

“ There’s a lot of talk about this idea of a pre-shop. It’s significantly underutilized as a strategic planning tool.”

Christopher Brace, founder, Shopper Intelligence

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THE SHOPPING LISTThe vast majority of households’ primary grocery shoppers say they make a shopping list – 94% according to data from The NPD Group. Sticking to that list may be an even more important element of the story, with 67% of shoppers saying they never or only occasionally buy items that aren’t on their list.

Granted, the realities of self-reported behavior and post-shop basket audits sometimes paint di� erent stories. “One of the things we know about shoppers is that everyone thinks they’re a planner,” says Lily Lev-Glick, founder of Shopper Sense. “But we do know that at least four in 10 shoppers really do use some kind of list, whether written down or on their phone, so pushing

messages based on pre-store planning is probably a very valuable strategy.”

Darren Seifer, food and beverage industry analyst, The NPD Group, says: “Quite a lot of people prepare some kind of list, so getting on the list is certainly very important. We’re not trying to say that decisions aren’t made in the store, but it requires a full understanding of the entire cycle.”

That cycle begins at home. “A lot of the big in� uencers occur in the home,” Seifer says. “Shoppers, after all, don’t just end up at a grocery store by mistake and decide to hang out there. They’re driven by some need.”

Trend: A Shopping List Is Now a Critical Tool

Source: The NPD Group/NET Shopper Insights 2012

(% of in-home & away-from-home meals, by occasion)

of primary grocery shoppers say they typically prepare a shopping list prior to grocery shopping.

of shoppers never or only occasionally buy items not on the list.

94%67%

The Rise of Snacking

In 2012, snacking grew to 53% of all eating occasions, up from 49% in 2010, according to The Hartman Group’s OBM Eating Compass survey. The NPD

Group estimates that children under 18 are eating nearly 17 billion snack meals, and that one-in-� ve meal occasions is now a snack.

Snacking has changed substantially in the past 20 years, according to The Hartman Group. Snacking is no longer “special,” infrequent, just for children or con� ned to only a small number of product categories. Meanwhile, the snacks themselves have evolved far beyond conventional categories to include fresh items and higher-quality products (38% of adult snacking is savoring), and involve both food and beverage items (56% of occasions involve both, 30% involve just food, and 13% involve just a beverage).

According to Technomic’s “Snacking Occasions” Consumer Trend Report, 55% of consumers snack once a day, 21% say they are now snacking more frequently than they were two years ago, and 77% say they usually snack while watching television.

Hartman’s Shelley Balanko, senior vice president of business development, calls this “a departure from a culture of cooking to one of eating.” Why is this signi� cant? “It widens the target market,” she says. “The way we eat has fundamentally changed. There’s a lot more snacking and culturally, we are becoming less and less grounded by our meals.”

Trend: Snacking Now Represents 20% of All Meal Occasions

Source: The NPD Group NET and CREST services, year ending February 2012. Does not include skipped meals.

(% of in-home & away-from-home meals, by occasion)

Snacks20%

Breakfast28%

Lunch25%

Dinner27%

“ There’s a big gap in truly understanding what happens right before the decision to go shopping. That really hasn’t been mapped out.”

Terrie Wendricks, industry consultant

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Whether or not they physically make a list, 49% of shoppers report “taking stock” of what they might need before going to the store, according to The Hartman Group’s “Shopping Topography 2012” study. Almost every shopper believes they have a well-planned method for a successful shopping list. They check the refrigerator, pantry and medicine cabinets; they ask other household members; they check out circulars and look for coupons. Jackson says that intercepting shoppers at these “moments of need” – standing in front of an open refrigerator, taking inventory – can have a huge impact during this pre-shop phase.

Getting onto the list can be tricky, however. Not only are there many interruptions and messages competing for attention, there can be di� erent human in� uencers along the way, each with di� erent habits and interests.

“The main shopper is going to be listening to other members of the household in terms of what they might need, or dislike, or may be asking for,” says Blades. “And certainly, if somebody requests something, it’s going to directly in� uence the main shopper.”

“ Four in 10 shoppers use some kind of list… pushing messages based on pre-store planning is probably a very valuable strategy.”

Lily Lev-Glick, founder of Shopper Sense

Millennial Moms

If there’s a generation capable of rede� ning the path to purchase, it’s the “Millennials,” that tech-savvy group that is on the cusp of having children

and experiencing all the pangs of new motherhood. The “Millennial Mom” is still learning how to feed her family, is interested in good nutrition – although not as focused on healthy eating as older moms – and is cost conscious.

This is a demographic that came of age during a recession. Even in her teens and 20s, she was aware of food prices and the economy of dining at home whether it was alone, with family or while entertaining friends. Millennials also aren’t going to restaurants as much as people their same age did 10 years ago, says

Darren Seifer, food and beverage industry analyst, The NPD Group. “They’d been brought up with the mindset that maybe this behavior should be delayed,” he says. “Then they become parents.”

Millennial moms are new to providing for a family and are more in need of advice than older moms, according to The NPD Group’s “Generation Moms” report. It’s not just a matter of in� uence; these moms are looking for recipes and advice about what to buy and cook for their families. They are also more engaged with and in� uenced by social media. This is where CPGs can best make an impact.

Millennial moms are also more likely to turn to outside sources for meal advice. The Internet and

social media are nearly as important as friends and family. But more than half of these moms say they aren’t seeking any help on matters of meal planning, nutrition or food choices. Reaching this group presents a challenge, at least for the moment.

“We see a lot of old-fashioned, old-school shopping behavior with Millennials,” says Julie Quick, vice president of shopper marketing, Project: WorldWide. Coupons, shared deals and a focus on the shopping list all rank high with this group. “But it’s more about the fact that they are new shoppers still honing their skills and tend to be a little bit over-involved in those activities. As they get older, those behaviors will go away.”

Friends/Relatives

Internet/Websites

Magazine/Newspaper

Medical Professional

Pinterest

Social Media

Smartphone/Apps

None of these

Question: Which of these Sources of Information Have a Strong In�uence on Meal Decision-Making?

Source: The NPD Group/Moms Custom Survey, October 2012

(% agreement among moms, aged 22-56 years)

AllMillennial

MomsGen XMoms

YoungBoomerMoms

25% 30% 23% 17%

18% 25% 14% 13%

14% 14% 16% 12%

13% 18% 10% 7%

13% 20% 10% 2%

5% 8% 4% 1%

4% 7% 2% n/a

57% 47% 62% 69%

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“Not every American eats the same way” says NPD’s Seifer, “But if you know what they’re doing at home all the time, then you have a leg up on understanding what they’re eating and what they are doing so marketers can get on that list.”

THE INFLUENCERSWhile “Shopper Mom” is the FMCPG industry’s archetype for consumer behavior in-store, “Mom” is far from the only person contributing to the list. In nearly half of all households, someone other than the primary shopper contributes, according to The NPD Group. In households with kids, non-mom contributions increase: 60% of these

households have spouses that contribute, and in 43% of these homes, children add items to the shopping list.

As of 2010, there are more than 83 million children in the U.S., according to census data. This includes biological, adopted, step- and grandchildren – all living in a variety of households. Children now exert an enormous amount of in� uence on shopping behavior and consumption.

What’s more, kids’ annual meals per capita increased from 710 to 753 while those eaten away from home declined. Americans in general are eating more meals at home, a trend begun in 2008 as the recession deepened. It’s one with some staying power. The economic recovery has been slow and consumers are either still reluctant or unable to spend on dinners out they way they once had.

More dining at home means more shopping trips. According to census data, households with children present are spending about twice as much annually on groceries: $8,684 for households with children present vs. $3,951 for those without. Snacking is also on the rise for both adults and children.

Kids have a good deal of in� uence over what they eat for nearly every occasion, except dinner. Kids between the ages of 2-17 have the most decision-maker power over snacks (46%) and breakfast (31%), followed by lunch (34%) and � nally dinner (3%).

64.1%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

63.8%

62.4%

63.4%

64.5%63.9%

62.6%

64.0% 63.6% 63.7%64.2%

64.6%65.3%

65.9%

64.1%

66.8%67.4%

Trend: More Meals are being Prepared & Consumed In-Home (% share of all meal opportunities, including skipped meals)

Source: The NPD Group calculation based on National Eating Trends® and CREST® databases.

Breakfast

Lunch

Dinner

Between-Meal Snack

Question: How Often Do the Children(age 2-17) Choose What They’ll Eatat In-Home Meal Occasions?

Source: The NPD Group/Moms Custom Survey, October 2012

31%

24%

3%

46%

“ A lot of the big influencers occur in the home. Shoppers, after all, don’t just end up at a grocery store by mistake – they’re driven by some need.”

Darren Seifer, food and beverage industry analyst, The NPD Group

At least one other household member

Spouse/partner Children

Question: Prior to Shopping, Who Contributes to Your Household’s Written List?

Source: The NPD Group/NET Shopper Insights 2012

52%45%

14%

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Get on the List? Get into the Kitchen

I n an age when multiple marketing messages are constantly � ghting for attention in the store, at home, and on the go, here’s one more to consider:

the milk carton. Milk is not only ubiquitous in American homes, it’s especially popular with a hard-to-reach demographic – teens.

Research by FreshSpace Media shows that 61% of teens consume milk frequently, 27% do so two to three times each day. Approximately 98% pour their own milk while 31% leave the container out on the breakfast table or kitchen counter. Nearly 45% recall seeing advertising on the milk container.

“If you want to connect with your shopper when they’re at home, the question is not ‘How do I push an ad in front of them,’ it’s ‘How do we place our brand message at the moment it’s most relevant to the shopper,’” says Christopher Brace, founder, Shopper Intelligence. “So we don’t have to push the message, they invite it in.”

FreshSpace places ads on gallons of milk to serve “as a billboard on the breakfast table,” says Geo� Jackson, president, marketing and business development. FreshSpace data suggests that 90% of households with kids consume milk at least once a

day, and milk is consumed throughout the day. The key is visibility to the 49% of shoppers who report that they “take stock” of what they might need before going to the store, according to The Hartman Group’s “Shopping Topography” study.

Jackson, who was director of integrated and shopper marketing at Campbell’s Soup prior to joining FreshSpace, says that when a consumer is taking an in-home inventory prior to a shopping trip, the � rst place they go is the refrigerator, and the number one thing they check is the milk. “Giving brands the opportunity to deliver an impression at that critical moment is truly a point of di� erence for us versus almost any other marketing tool available today,” he says.

That same milk carton lends itself to digital and social engagement as well, he says. “Smartphones are ubiquitous and they are at the kitchen table with us,” says Jackson. A digital pilot, with Campbell’s, prompted consumers to take online quizzes, view videos and access recipe content. Engagement was considered high as consumers engaged with an average of 10 digital challenges. Approximately 70% signed up for a weekly meal mail, 39% were new “likes” on Facebook, and 15% followed the brand on Twitter.

A pilot program with the Blippar Augmented Reality app enables consumers to access additional content and download coupons from the FreshSpace on-carton message. “These digital partnerships allow us to add a level of interactivity and a deeper engagement with the brand to our ad units” says Jackson. “We have a relatively static o� ine medium, but we’re pretty unique in that we sit on the kitchen table.”

• 91% of teens eat breakfast at home.

• Gallon milk is most prevalent in the household:

• 61% have only gallon milk

• 33% have gallons and half-gallons

• 6% have only half-gallons

• Milk is consumed frequently

• 61% consume it daily

• 27% consume it 2-3 times per week

• 98% of teens pour their own milk

• 31% of teens leave milk out on the breakfast table or kitchen cabinet

• 45% of teens recall seeing advertising on their milk container

Daily Milk Consumption Patterns Among Teens(Sample = 50% male, 50% female; 37% = 13-15, 63% = 16-19)

Source: Qualtrics study of milk consumption, interaction, and ad interest among teens.

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Dinner is where mom has the ultimate control and, ironically, the least amount of time to plan. Brands in this meal category will bene� t from having more direct in� uence with this key decision-maker.

Men are shopping more than they used to, or so researchers would have us believe. According to The Hartman Group’s Shopping Topography 2012 report, men are � lling store aisles as frequently as women across all channels. In fact, 47% of primary shoppers are male and 57% of Hispanic primary shoppers are male, found the report.

However, dads may not be doing their fair share of the grocery shopping. According to NPD’s “Generation Mom” report, just 19% of dads are grocery shopping, although fathers married to Millennial moms tend to be doing more around the house when it comes to grocery shopping, meal decisions and helping out with the kids.

Still, the prevailing wisdom is that dads are more involved in household and family activities and marketers are responding.

“Dad is becoming more like mom,” says Art Sebastian, director of sales strategy and customer development, Kraft Foods. “She used to handle a lot of the planning, but given the complexity of life, everyone is starting to have more in� uence.” That in� uence extends to kids these days, especially in the growing snack categories.

When FreshSpace studied its prime marketing vehicle – the gallon of milk – and its interaction with all members of the household, it learned that 98% of teens pour their own milk, and a large number leave the container on the kitchen table while they eat. “There’s a lot of opportunity to drive requests from dads and kids,” says Jackson.

Not everyone makes a list, but those who do are more likely to stick to it, spend less time in stores and have less fun or positive engagement with brands and retail banners than those who don’t. Getting the attention of these shoppers before the store therefore is imperative.

O� -list in� uences matter, too. “It’s a great objective to lock into the list because those who make lists tend to follow through,” says Julie Quick, vice president of shopper marketing, Project: WorldWide. “But on the � ipside, if you’re only focused on getting onto a list, you’re probably not capturing the full opportunity. I want to be part of her trip mission and trip plan. I want to be the top-of-mind category and brand as she’s going to the store.”

Shoppers say they make lists, but often those lists are mental, not written, leaving a lot of room for deviation. Even list makers more often than not include a product category, not a brand. For CPGs, conquering this part of the pre-shop stage is especially challenging. “It’s about understanding how people pre-shop any given category,” says Brace. “What are the touch points they use, both

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“ We may be providing the last moment to get on the shopping list while mom is standing there in front of the refrigerator.”

Geoff Jackson, president, marketing and business development, FreshSpace Media

“ Dad is becoming more like mom. She used to handle a lot of the planning, but given the complexity of life, everyone is starting to have more influence.”Art Sebastian, director of sales strategy and

customer development, Kraft Foods

Moms who work full-time

Moms who work part-time

All moms

Stay at home moms

Moms who work full-time

All moms

Moms who work part-time

Stay at home moms

Moms who work full-time

All moms

Moms who work part-time

Stay at home moms

Attitudes Toward Meal PreparationAmong Working Moms

Source: The NPD Group/National Eating Trends, 2 years ending May 2012.

(Index of agreement with each statement; “All Moms” = 100)

“I bring home the brands kids request.”

“Convenience is most important in foods.”

“Price is not an issue in foods.”

121

108

100

98

124

100

98

77

110

100

93

78

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FreshSpace works with some of the biggest brands in the world to deliver media impressions to consumers while they are in their homes, preparing/consuming meals and planning to go back to the store. The company o� ers a range of products and services including advertisements on a perishable, high-penetration, high-velocity perim-eter item: GALLON MILK. The FreshSpace network reaches the top 200 DMAs, is distributed in over 50,000 stores from coast to coast, and has penetration into more than 60MM households per month. CPG marketers can target shoppers and consumers in a number of ways including: geography based on dairy footprint; retailer via private label network; demographic via select partners; or the half-gallon network to reach boomers and smaller house-holds. Nearly 100 analytic studies across multiple categories have show signi� cant sales lifts and strong ROIs.Contact: FreshSpace Media LLC, 317 Madison Ave, Suite 1700, New York, NY 10038 212.206.9000 ext. 124, info@freshspace.com, www.freshspace.com

The Path to Purchase Institute is a global association serving the needs of retailers, brands and the entire eco-system of solution providers along the path to purchase. Through a variety of platforms, the Institute engages, informs and empowers its members and the industry at large while fostering best practices and a deeper under-standing of all marketing e� orts and touch-points that in� uence and culminate in purchase decisions at retail.

digital and non-digital? What is the information they seek from those touch points? If you know what those are, the brand can connect in.”

“And it can happen at any moment in time,” says Sebastian. “There is a handful of what we call ‘trigger categories’ that stimulate the thought processes of shoppers.” One of these categories, he says, is cheese along with fruit, vegetables, fresh meat, carbonated soft drinks, cereal, bottled water, co� ee and frozen pizza.

Fundamentally, the retailer is in control of the in-store experience, brand presentation and “First Moment of Truth” at the shelf. “Obviously, if impulse buying didn’t happen, we wouldn’t be spending on trade promotions,” says Jackson. But making an impression before the shopper steps into the store not only elevates a brand, but makes it more likely that the brand gets onto any lists that are imprinted in that shopper’s mind.

When in doubt, says Sebastian, try to be everywhere the consumer is. Kraft’s shopper marketing campaign for the Fresh Take line of seasoned breadcrumbs and cheese

coatings for proteins did just that. It � rst reached shoppers at home with traditional messaging, then staged events in store parking lots with food trucks, sampling the product to reach them just before entering the store. POS signage and displays gave a � nal nudge. The campaign is ongoing, he says, “But as we measure success, not only did we sell more of our product but we were able to drive the entire category for the retailer.” ■

“It’s a great objective to lock into the list. Those who make lists tend to follow through.”

Julie Quick, vice president of shopper marketing, Project: WorldWide

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