Upload
dangduong
View
224
Download
3
Embed Size (px)
Citation preview
CAUTIONRISING PRICES
$ FORECLOSUREAUCTIONAHEAD
GAS
Shopping ListWinning Shoppers in Turbulent Times
A Unilever Trip Management Report
To Our Retail Customers:
Study MethodologyThe research underlying this report consists of three primary parts: 1) Focus groups were held to develop preliminary hypotheses and in-depth understanding. 2) A proprietary survey of 47,031 Nielsen households, conducted between March 14 and April 3, 2008, looked at shopping behavior in a worsening economy. Survey is demographically and geographically representative of U.S. households. 3) The Nielsen panel was used to measure what shoppers are doing, category by category, outlet by outlet. For Trip iNSighTS, we ANAlyzed A ToTAl oF 125,000 hoUSeholdS, who TogeTher Took A ToTAl oF 10.7 MillioN TripS.
Behind the headlines of the slumping economy, shoppers are being forced to make some hard choices every day. what
these choices are, how they affect your business, and, most importantly, what their choices will be if the economy were
to worsen, are the subject of this important report.
our new study, the latest in Unilever’s groundbreaking series on Trip Management, reveals for the first time the
different shopping tactics that different demographic groups employ to navigate this new economy. it tells you how
trip missions are shifting, what compromises shoppers are willing to make to stay within budget, and what could spur
even more change in shopping behavior.
The bottom line is, your shoppers are looking for the same retail experience that has brought them to your stores in
the past. with insights gained from this report, and with a little creativity and determination, you can maintain – and
even strengthen – your bond with shoppers in uncertain times.
Sincerely,
kevin havelock
president, Unilever United States
Winning Shoppers in Turbulent TimesA Unilever Trip Management Report4
While only recently it was consumer wealth and discretionary spend that led changes in retail, it’s now suddenly the shopping behavior of low and middle income groups that is most affecting the retail landscape.
Buffeted by today’s economic turbulence and very worried about the future, lower and middle
income shoppers are changing how and what they shop. Boomers, another key demographic
group in this study, are also fretful, even though they’ve seen it all before. Gallup says 46% of
Americans already feel the effect of higher food prices, which sting low income households more
than twice as much as middle and high income households, according to the poll.
Low and middle income shoppers have already committed to new survival strategies that will
quickly shake up the selling floor. Since they account for 61% of national retail spend, that’s a lot
of shake in every part of the store.
Fear motivates their new shopping approaches. An overlay of bad economic events – the housing
bubble, record debt levels, stock market volatility, pension takeaways, food and energy inflation
– prompted 43% of U.S. primary shoppers to tell Unilever researchers that they feel worse off
than a year ago. In response, more than 30% are eating at home more and eating out less.
An overwhelming 93% worry about rising food prices, and 79% about rising personal care
product prices. Of great importance to retailers, more than 7 households in 10 (72%) are ready to
reduce spending on household necessities (food and beverage, personal and home care items) if
economic conditions worsen.
They may have to: Warren Buffett believes the recession will be longer and deeper than most
people think. He’s unlikely to eat canned soup for dinner, but millions of other Americans could
soon be on recession diets.
CAUTIONRISING PRICES
$
CAUTIONRISING PRICES
$
CAUTIONRISING PRICES
$Will Reduce Spending
On Household Necessities
If Economy Worsens
Worry About
Rising Personal Care
Product Prices
Shoppers That
Worry About
Rising Food Prices
USE COUPONS
93%
79%72%
Anxiety Spurs Dramatic Change In Low And Middle Income Shopping
Source: Unilever 2008 Winning Shoppers in Turbulent Times study
5Winning Shoppers in Turbulent TimesA Unilever Trip Management Report
The Pinch Is On, Trips Are At StakeTo compensate for rising gas prices, half of consumers (49%) are reducing their retail spend, 70% combine shopping trips and errands, and 39% stay home more, according to Nielsen.
Trips are less secure in today’s environment. One consumer in four (24%) would shop for groceries in a less expensive store if food prices continue to rise. In the past year, that’s precisely what 12% have already done, according to a Citigroup Global Markets survey.
The CEO of an extreme-value retail chain cited a dramatic increase in new faces shopping his stores in recent months, which primarily serve low and middle income households.
And in a major West Coast chain, the CEO said sales of high-end items such as premium wines are down, and private label growth is four times higher than national brands (six times in center store) in the latest quarter.
Anxiety Spurs Dramatic Change In Low And Middle Income Shopping
More signs of the times:
• Wholesale clubs have had to limit rice and flour purchases to curb hoarding. A
new cookbook featuring dollar store foods is available, inspired by the BMWs and
Porsches its author saw in the parking lots, the Detroit News reported. No mirage:
Boomer trips to stock up at dollar stores are up 5% so far this year, according to
Nielsen.
• Some supermarkets offer 10 cents per gallon discounts on gasoline with $50
purchases in store. Others tack on 10% in shopping credits for people who bring
in their tax rebate and economic stimulus checks.
To succeed in the new economy means winning the new-style savings trips especially
of low and middle income shoppers, who individually spend less than the wealthy
but who collectively can determine retailer fortunes.
Winning Shoppers in Turbulent TimesA Unilever Trip Management Report6
Supercenters, Dollar And Drug Win Key TripsAt Expense Of Food, Mass And Club
Percent change in trips, first quarter 2008 versus year agoSource: Unilever 2008 Winning Shoppers in Turbulent Times study
ChAnnel QuICk TrIPS MAjOr STOCk-uP
Food (0.1%) (0.8%)
drug 3.8% 12.3%
Mass (8.1%) (4.9%)
Supercenters 4.1% 6.2%
Club (3.2%) (1.1%)
dollar 0.1% 7.4%
A decline in Quick Trips (typically the most profitable trips for retailers, since Quick Trip shoppers prefer to save time over money) and Intermediate Needs Trips for the three demographic groups studied suggests that shoppers are carefully planning their shopping.
If this trend accelerates with rising prices, retailers may have to compete more
directly with lower-cost channels for share of wallet.
This is already apparent. Low and middle income and boomer trips to food stores
for almost every mission slid so far this year. Instead, these three groups shopped
dollar stores more often on Major Stock-Up and Restock Needs Trips. Among low
income shoppers, Major Stock-Up Trips to dollar stores rose 7%, and Restock
Needs Trips grew 6%; among middle income shoppers, they climbed 4% and 2%
Simply speaking, shoppers take two types of trips: Quick Trips and Major Stock-Up Trips. Quick Trips are short trips aimed at buying items that are needed right away or in the very near future. Major Stock-Up Trips are all about replenishing the items needed to maintain the household for a long period of time. Need States help to explain why shoppers take each of their trips. Today, we recognize the six most important Need States as: 1) Restocking The Home, 2) Buying Something For Immediate Needs (or For Immediate Use), 3) Buying Something For Intermediate Needs (or For Use Today or Tomorrow), 4) To Take Advantage Of A Special Offer, 5) Shopping For A Special Occasion or Just To Have Fun, and 6) To Purchase Non-Food Items.
Quick Trips Decline Overall, And Are Down In Most Large Format Storesrespectively; among boomers, they were up 5% and 5%. Their trips to drug stores
and supercenters were also up, while mass merchants and club suffered along with
supermarkets.
Indeed, the economic tempest of 2007 has already led U.S. households to take 6
fewer shopping trips on average – compared with the five preceding years it took
for trips to fall by 11. Results of the harsh drop: 181 trips in 2001, 170 trips in 2006,
and 164 trips in 2007.
Hardest hit in trips were grocery stores, which fell from 72 in 2001 to 59 in
2007, and mass merchandisers, down from 24 to 15 in the same period, Nielsen
reported. By contrast, supercenters have leveraged their one-stop appeal to become
the biggest winners of trips, in both actual increases in trips and percentage
gains, according to Nielsen data. Their trips have risen in 2007 to 27 a year per
household—that’s more than twice a month—up from 20 in 2001,
a gain of 35%.
7Winning Shoppers in Turbulent TimesA Unilever Trip Management Report
Quick Trips Decline Overall, And Are Down In Most Large Format StoresWhile it’s interesting to note that drug stores attracted 12.3% more Major Stock-Up Trips in
Q1 2008 (see table p. 6), put in the right perspective, these trips were a minor portion of the
channel’s volume.
Baskets, too, are being affected: While food prices rose 6% in Q1 2008 vs. a year ago,
average baskets among all households increased less than 1% on Quick Trips and less than
3% on Major Stock-Up Trips, Nielsen said. Of note is that though the club channel may be
showing weakness in Quick Trips, it seems well-positioned to benefit from the new economy.
Indeed, shopper preferences for high-quality brands and large sizes, found in our survey, are
a club strength. Clubs are reporting considerable growth so far in 2008, a result of rising gas
prices (which they sell), more member sign-ups and high retention rates, all of which offset
lower household basket rings of UPC-coded products.
Baskets Grow Less Than Price Hikes
Total HouseholdsSource: Unilever 2008 Winning Shoppers in Turbulent Times study
TrIP TyPe Q1 2008 Q1 2007 DOllAr ChAnge
All Outlets Quick Trips $17.86 $17.75 $0.11 Major Stock-Up $55.20 $53.64 $1.56
Food Channel Quick Trips $14.60 $14.17 $0.43 Major Stock-Up $49.57 $48.11 $1.46
Drug Quick Trips $17.82 $17.67 $0.15 Major Stock-Up $66.77 $61.39 $5.38 Mass (excluding SC)
Quick Trips $19.83 $19.91 ($0.08) Major Stock-Up $52.10 $51.67 $0.43
Supercenter Quick Trips $20.61 $20.16 $0.45 Major Stock-Up $66.77 $64.13 $2.64 Club Quick Trips $30.87 $31.90 ($1.03) Major Stock-Up $88.73 $88.74 ($0.01) Dollar Quick Trips $7.34 $7.25 $0.09 Major Stock-Up $18.89 $19.50 ($0.61)
Percent change in trips, first quarter 2008 versus year agoSource: Unilever 2008 Winning Shoppers in Turbulent Times study
In Grocery, Most Trip Types Are Down or Stagnant
TrIP TyPe lOw MIDDle BOOMer InCOMe InCOMe
Quick Trips 0.2% (1.5%) (1.7%)
Major Stock-up (1.2%) 0.0% (3.2%)
restock Needs (2.5%) (1.8%) (4.4%)
immediate Needs 1.0% 0.3% (2.7%)
intermediate Needs (3.5%) (4.1%) (5.2%)
Special offer Needs (0.1%) (0.3%) 0.9%
Non-Food Needs (3.3%) (2.1%) (1.5%)
1.0% 3.1% (6.4%)Special occasion/ entertainment Needs
Winning Shoppers in Turbulent TimesA Unilever Trip Management Report8
Different Demographic Groups Use Different Shopping Strategies To Navigate A Troubled Economy
Low income shoppers are very smart shoppers. They do their research,
prioritize, and make trade-offs. They start their shopping trips around the kitchen table
in a near blizzard of coupons from newspapers, circulars, and direct mail offers. A new
sense of urgency pervades this activity. Before they get up from the kitchen table, LI
shoppers will have completed a detailed shopping list, matched to coupons and to
several menus they’ve planned for the week. Most importantly, they will have established
a budget, and they’ll take only that amount of cash with them when they shop.
LI shoppers will show up in the store on or near payday, budgeted cash in one hand and
calculator in the other. Down certain aisles they’ll go (some aisles will be skipped entirely)
looking for loyalty card discounts, and stocking up on essentials (food and personal care)
only if in-store deals make it possible. Snacks get purchased only on sale. They’ll use the
bag refund if offered – every little bit helps in times like these.
Middle income shoppers go through a similar, though looser, routine:
coupons for higher-ticket items; meal planning as a diversion rather than a budget-
driven necessity; and the comfort of some wiggle room for that impulse purchase. They
desire larger economy packs, but will continue to purchase familiar brands, especially in
personal care.
MI shoppers’ in-store behavior is also similar to LI shoppers’, just less pervasive. In-store
deals on essentials and on their favorite brands attract them, and there’s also some
couponing and specific meal budget calculating.
Boomers? This been-there-done-that demographic may collect a few coupons
but are likely as not to leave them at home. They’ll use a list, but just to remind, not to
constrain. Gas prices haven’t completely dissuaded them from shopping around a bit for
freshness and variety, or just to fit a schedule.
Boomers are much more likely to stockpile on quality sale items (good cuts of meat,
for example) and on their favorite brands. Since most people in this group are empty
nesters, decisions revolve around what they want, not the kids. To be sure, if there are
grandchildren involved in the trip, their “pester power” may change everything.
Shoppers can be forgiven if they feel beset by the tide of bad news. Price rises buffet them at every turn: Food. Gasoline. Housing. Healthcare.
Troubled times coupled with retailer inattention can snap the fragile bonds of
shopper trust. Or, savvy retailers can work harder at understanding shopper
attitudes in today’s economy and how these shoppers will behave if times get
worse.
Using Unilever Trip Management tools and Nielsen information, we took a deep
dive into three distinct shopper groups: Low income (LI) households, middle
income (MI) households, and boomers of all income levels. (Looking at the
answers to our proprietary Nielsen survey, we saw that the most interesting
groups, those that showed signs of being the most different from the average,
were low income, middle income and boomers. The high income group was
not noteworthy because shoppers in this group are somewhat insulated, but
boomers are a large group who skew both higher income and being worried
about the economy.)
What we found:
• LI households are feeling more financially insecure about jobs, savings and retirement.
• Seventy percent of LI households are very concerned with rising food prices.
• LI households are not likely to make a major purchase in the next six months.
And while all income groups plan to reduce discretionary spending –
entertainment, clothing and travel/vacations – only LI shoppers are more likely to
reduce spending on healthcare and transportation as well.
InCOMe: unDer $30k
Low Income Shoppers
9Winning Shoppers in Turbulent TimesA Unilever Trip Management Report
Pre-ShOP In-STOre
Current Strategies For The New Economy
• Coupons and sales flyers –
especially on higher-ticket
items
• Making a list off a meal
plan or menu
• Discount cards
• Bulk buying/stockpiling
• Switching between
quality brands
Pre-ShOP In-STOre
Current Strategies For The New Economy
• Coupons and sales flyers –
if they remember them
• A list only as a reminder
• Shopping around to fit
schedules
• Deals/specials, notably on branded goods
• Bundles (e.g. 4 for $7)
• Stockpiling on quality sale items
• Stockpiling on often-used healthy items
• Sampling to experiment, not to get a deal
InCOMe: $30k - $69.9k
Middle Income Shoppers
Age: 45-64
Boomer Shoppers
Average basket ring, Quick Trips: $17.70 Chg vs. yago: $0.31
Average basket ring, Major Stock-Up Trips: $54.73
Chg vs. yago: $1.72
Average basket ring, Quick Trips: $17.71 Chg vs. yago: $0.16 Average basket ring, Major Stock-Up Trips: $55.77
Chg vs. yago: $1.64
Pre-ShOP In-STOre
Current Strategies For The New Economy
• Monitor and compare prices
• Gather coupons from all sources
• Create list around coupons
• Plan meals around sales
• Set a firm budget
• Consider separate dollar store purchases
• Reduce shopping frequency
• Arrive with cash only, up to budget
• Stock up on essentials, preferably on deal
• Buy snacks only on deal
• Look out for sampling and attendant specials or deals
• Skip entire aisles• Switch sizes/package• Store brands• Dual purposing (Paper towels
for household cleaning and as napkins)
Average basket data for 3 shopper groups, all outlets, Q1 2008Source: Unilever 2008 Winning Shoppers in Turbulent Times study
Average basket ring, Quick Trips: $15.40 Chg vs. yago: $0.23
Average basket ring, Major Stock-Up Trips: $43.78 Chg vs. yago: $1.75
Winning Shoppers in Turbulent TimesA Unilever Trip Management Report10
More Shoppers Are Poised To Be More Engaged In Planning Their ShoppingPeople’s attitudes about shopping provide another lens through which to view shopper behavior in today’s economy.
Highly engaged, active shoppers behave differently than passive, reluctant shoppers – those for whom shopping is a necessary-but-stultifying chore. When we examine engagement, middle income shoppers and boomers tend to blend together attitudinally. So for our purposes, we’ll combine the two and call them “higher affluent.” Low income shoppers remain attitudinally distinct.
We identified the lower-affluence, active shoppers as “proactive planners.” They plan because they have to. It’s a matter of survival. Their trips and buys are very consistent and budget-constrained.
Active higher affluents are “experimenters.” They can afford to try new items and stay with trusted brands. They may well use price instability as an excuse to try new brands within categories to save a little money.
For their part, lower-affluence passive, reluctant shoppers – we identify them as “basics-only”– are very selective about the categories in which they buy brands.
Basics-only are completely price-driven and will cut out entire categories, never purchase off-deal and use dollar stores extensively for non-food.
Somewhat more relaxed about shopping are the higher-affluence passive, reluctant shoppers: they’re “comfort seekers.” This group looks for in-store deals on good brands, uses loyalty cards/offers, and tends towards very routine shops – same spends, same items.
What happens to our attitudinal groups if prices continue to rise? Drawing on extensive qualitative research, we believe both higher-affluence groups (comfort seekers and experimenters) will assume proactive planner characteristics. They’ll start to shop and plan meals around sales circulars, aggressively budget, and stick to lists. Those who start out as proactive planners become basics-only when times go sour. Price is the all-consuming driver here, and what used to be an anticipated activity – shopping – is now an exercise in survival. Smart retailers will concentrate on improving the shopping experience for proactive planners – potentially the largest shopper attitudinal type.
Dinner dishes shift to casseroles (141 index)• skillet dishes (132) • stew (126) • poultry (118)
To Stay On Budget, Shoppers Are Cooking Up New Meal Strategies
Adults overallSource: NPD Group, How Do Economically Challenging Times Affect Consumers’ In-Home Meal Strategies study, March 2008
More than 50% of the financially challenged use up leftovers,prepare/cook meals at home and stock up• Pizza is the most common leftover at lunch• Poultry and beef at dinner• Vegetables are the most common leftover side dish
11Winning Shoppers in Turbulent TimesA Unilever Trip Management Report
If The Economy Worsens, Coping Strategies Get Refined
What happens with the three distinct shopper groups – low and middle income households and boomers – if prices don’t let up?
The storm-tossed shopper ship becomes even more
unstable. Shoppers across income levels are really feeling
the squeeze in their world. Here’s what’s expected to
unfold:
In general, each group intensifies its familiar strategies.
But some new behaviors get mixed in as prices rise.
Low income (LI) shoppers will simply buy less.
Spending on extravagances such as bacon, steak, ice
cream, candy, and snacks will grind to a halt. No more
treats, barely a cookie. Very resourceful shoppers, they’ll
also look for dual-purposing opportunities: Paper napkins
or paper towels, but not both. In certain categories, they’ll
slide down to value brands and store brands (notably in
OTC drugs).
LI shoppers will carefully weigh what they need and
what they can do without. In non-food categories, only
personal care and laundry detergent seem “safe.” Even
then, these shoppers may size down or seek out dollar
stores for the brands they trust. Among foods, only
condiments and butter/margarine survive the trade-down.
Middle income (MI) shoppers also will look
at value and store brands for savings in select categories.
Cheaper snacks and non-essentials get explored. Buys
of prepared foods (for example packaged salads), ice
and bottled water all get reduced. Impulse purchasing is
reined in. Slightly more willing to drive, MI shoppers also
might switch to a lower-price store.
MI shoppers will be less likely to shy away from entire
categories than LI shoppers, our research shows. If
convinced of the quality of store brands, they’d shift to
them. They too have their sacred categories: condiments,
butter/margarine but also coffee/tea and boxed meals.
They’d rather save elsewhere in the shop than desert the
preferred brands they’ve spent considerable time finding.
Boomers, for their part, are acutely aware of the
boom-and-bust nature of the American economy and
know what to do in the trough. Still, they’re worried, and
as the economy worsens, they will start behaving a bit
like their LI and MI brethren: searching for familiar brands
on sale, using a list, couponing a bit. But there will also
be that “I’ll buy it anyway” free-spiritedness lurking near
the surface, waiting to re-emerge.
In this economic scenario, boomers are even more brand-
attached than MI shoppers. They’re extremely loyal to
their personal care and household cleaner standbys.
They’ve spent years (and dollars) trying out different
brands and identifying a favorite. They’ll cut back on
other areas of the shop – or non-shopping expenditures
– before they’ll abandon an old and trusted friend.
Winning Shoppers in Turbulent TimesA Unilever Trip Management Report12
Savings Tactics Will Differ By CategoryAs prices rise, shoppers use eight different tactics to save throughout the store, Unilever research shows.The tactics vary more by category than income group. But importantly, the timing when
the tactics will be deployed will depend on the socioeconomic status of shoppers.
Note that low income shoppers already show much more involved pre-store and in-
store shopping behavior than the other shopper groups.
The big insight: The savings tactics that will be used will vary significantly from category
to category.
The crux of each category savings tactic: Does the primary household shopper perceive
the category as essential or peripheral to household needs? How strong are brand
loyalties? Is the category item perishable or can it last a long time in the home? Are
there easy substitutes?
The point of change to specific category savings tactics happens later for middle
income shoppers, but how they change is similar among all shopper groups. The
three groups’ behavior clusters suggest economic pressures are pushing people from
all corners of the nation toward similar conclusions about category relevancy to their
families’ well-being. Hence, they affect retailers in every kind of urban, suburban and
rural market. By delivering targeted ‘value’ solutions in specific categories, retailers
can help retain trips, motivate repeat visits, and help ease shopper price anxiety.
Source: Unilever 2008 Winning Shoppers in Turbulent Times study
Shoppers Will Implement Eight Savings Tactics By Category
• Only buy it when it’s on sale
• Use coupons whenever I buy this
product
SeCOnDAry TACTICS – wIll VAry wITh CATegOry
PrIMAry TACTICS –heAVIly eMPlOyeD
• Stock up more when purchasing
• Switch to a less expensive name brand
• Switch to generic or private label
• Buy product less often
• Switch stores to search for savings
• Stop buying this product
I Will Not Change How I Shop For This
Product
44% 45% 46%
16% 16% 18% 20%18%
<1%<1%<1%
20%
17%
31% 32% 33%
28% 27%
14% 15% 15%
29%
3% 3%5%
16%18%
14% 15%
13%
7% 7% 8%
19%
17%
15% 16%
11%
15%
13%
29% 29%32%
43%42%
10% 10% 11%
45%
36%37% 38%
16%16%
Stock Up More When Purchasing
Switch To Generic Or Store Brand
Switch To A Less Expensive Name Brand
Stop Buying This Product
Buy This Product
Less Often
Use Coupons Whenever I Buy
This Product
Only Buy It When It's On Sale
Switch Stores To Search
For Savings
I Will Not Change How I Shop For This
Product
Stock Up More When Purchasing
Switch To Generic Or Store Brand
Switch To A Less Expensive Name Brand
Stop Buying This Product
Buy This Product
Less Often
Use Coupons Whenever I Buy
This Product
Only Buy It When It's On Sale
Switch Stores To Search
For Savings
Low Income
Middle Income
Boomer
13Winning Shoppers in Turbulent TimesA Unilever Trip Management Report
I Will Not Change How I Shop For This
Product
44% 45% 46%
16% 16% 18% 20%18%
<1%<1%<1%
20%
17%
31% 32% 33%
28% 27%
14% 15% 15%
29%
3% 3%5%
16%18%
14% 15%
13%
7% 7% 8%
19%
17%
15% 16%
11%
15%
13%
29% 29%32%
43%42%
10% 10% 11%
45%
36%37% 38%
16%16%
Stock Up More When Purchasing
Switch To Generic Or Store Brand
Switch To A Less Expensive Name Brand
Stop Buying This Product
Buy This Product
Less Often
Use Coupons Whenever I Buy
This Product
Only Buy It When It's On Sale
Switch Stores To Search
For Savings
I Will Not Change How I Shop For This
Product
Stock Up More When Purchasing
Switch To Generic Or Store Brand
Switch To A Less Expensive Name Brand
Stop Buying This Product
Buy This Product
Less Often
Use Coupons Whenever I Buy
This Product
Only Buy It When It's On Sale
Switch Stores To Search
For Savings
Low Income
Middle Income
Boomer
Two Different Worlds, An Aisle Apart
Pet Food*
Cookies*
Source: Unilever 2008 Winning Shoppers in Turbulent Times study
Sharp contrasts in the tactics shoppers will use to save in different categories
Note key differences in the use of savings tactics by Pet Food shoppers and Cookies shoppers. About triple the percentage of Pet Food shoppers (vs. Cookies shoppers) will buy the category same as always, 2X as many will stock up more when purchasing, and 1.5X will switch stores for savings. Cookies shoppers will be more than 10X willing (vs. Pet Food shoppers) to stop buying the category, and 9X as many will buy less often.
I Will Not Change How I Shop For This
Product
44% 45% 46%
16% 16% 18% 20%18%
<1%<1%<1%
20%
17%
31% 32% 33%
28% 27%
14% 15% 15%
29%
3% 3%5%
16%18%
14% 15%
13%
7% 7% 8%
19%
17%
15% 16%
11%
15%
13%
29% 29%32%
43%42%
10% 10% 11%
45%
36%37% 38%
16%16%
Stock Up More When Purchasing
Switch To Generic Or Store Brand
Switch To A Less Expensive Name Brand
Stop Buying This Product
Buy This Product
Less Often
Use Coupons Whenever I Buy
This Product
Only Buy It When It's On Sale
Switch Stores To Search
For Savings
I Will Not Change How I Shop For This
Product
Stock Up More When Purchasing
Switch To Generic Or Store Brand
Switch To A Less Expensive Name Brand
Stop Buying This Product
Buy This Product
Less Often
Use Coupons Whenever I Buy
This Product
Only Buy It When It's On Sale
Switch Stores To Search
For Savings
Low Income
Middle Income
Boomer
*These are just two of the 36 deep-dive categories that Unilever analyzed.
Winning Shoppers in Turbulent TimesA Unilever Trip Management Report14
Category Loyalty: All Bets Are Off
17%
78%
76%
73%
70%
69%
15%
77%
76%
72%
71%
66%
13%
12%
11%Soda/Pop
Frozen Dinners
Beer/Wine
Cookies
Air Fresheners
Top 5 Categories Shoppers Will Stop Buying
Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
Meat
Beverages
Household Cleaning And Paper Products
Deli
Health And Beauty Care
Low Income Households
Middle Income Households Boomers
MargarineCanned VegetablesFresh Meat And Seafood
Pain Relievers And Cold MedicinesBatteries
Household Cleanser
Personal Wash
Anti-Perspirant And Deodorant
Hair Care Pet Food
Laundry Detergents
Tissues And Toilet Paper
Top Dozen Categories Shoppers Won't AbandonAll are above the 98% category loyalty level
80%
79%
74%
72%
68%Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
Source: Unilever 2008 Winning Shoppers in Turbulent Times study
17%
78%
76%
73%
70%
69%
15%
77%
76%
72%
71%
66%
13%
12%
11%Soda/Pop
Frozen Dinners
Beer/Wine
Cookies
Air Fresheners
Top 5 Categories Shoppers Will Stop Buying
Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
Meat
Beverages
Household Cleaning And Paper Products
Deli
Health And Beauty Care
Low Income Households
Middle Income Households Boomers
MargarineCanned VegetablesFresh Meat And Seafood
Pain Relievers And Cold MedicinesBatteries
Household Cleanser
Personal Wash
Anti-Perspirant And Deodorant
Hair Care Pet Food
Laundry Detergents
Tissues And Toilet Paper
Top Dozen Categories Shoppers Won't AbandonAll are above the 98% category loyalty level
80%
79%
74%
72%
68%Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
Source: Unilever 2008 Winning Shoppers in Turbulent Times study
Source: Unilever 2008 Winning Shoppers in Turbulent Times study
% of households who say they’ll reduce spending “a little/a lot” Top 5 Store Departments Shoppers will reduce Spending On
Strapped shoppers classify categories in their minds, and buy them differently in tough times. Small indulgences lose, wellness wins.And not just human wellness. Pet food inspires almost universal shopper loyalty.
Two-thirds of adults overall, and more than 7 out of 10 who feel financially challenged, say health drives their food selections, according
to NPD Group research on shoppers’ in-home meal strategies. That’s why, Nielsen data show, dairy and fresh produce top the surveyed
shoppers’ list of food categories on which they won’t reduce spending.
17%
78%
76%
73%
70%
69%
15%
77%
76%
72%
71%
66%
13%
12%
11%Soda/Pop
Frozen Dinners
Beer/Wine
Cookies
Air Fresheners
Top 5 Categories Shoppers Will Stop Buying
Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
Meat
Beverages
Household Cleaning And Paper Products
Deli
Health And Beauty Care
Low Income Households
Middle Income Households Boomers
MargarineCanned VegetablesFresh Meat And Seafood
Pain Relievers And Cold MedicinesBatteries
Household Cleanser
Personal Wash
Anti-Perspirant And Deodorant
Hair Care Pet Food
Laundry Detergents
Tissues And Toilet Paper
Top Dozen Categories Shoppers Won't AbandonAll are above the 98% category loyalty level
80%
79%
74%
72%
68%Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
17%
78%
76%
73%
70%
69%
15%
77%
76%
72%
71%
66%
13%
12%
11%Soda/Pop
Frozen Dinners
Beer/Wine
Cookies
Air Fresheners
Top 5 Categories Shoppers Will Stop Buying
Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
Meat
Beverages
Household Cleaning And Paper Products
Deli
Health And Beauty Care
Low Income Households
Middle Income Households Boomers
MargarineCanned VegetablesFresh Meat And Seafood
Pain Relievers And Cold MedicinesBatteries
Household Cleanser
Personal Wash
Anti-Perspirant And Deodorant
Hair Care Pet Food
Laundry Detergents
Tissues And Toilet Paper
Top Dozen Categories Shoppers Won't AbandonAll are above the 98% category loyalty level
80%
79%
74%
72%
68%Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
17%
78%
76%
73%
70%
69%
15%
77%
76%
72%
71%
66%
13%
12%
11%Soda/Pop
Frozen Dinners
Beer/Wine
Cookies
Air Fresheners
Top 5 Categories Shoppers Will Stop Buying
Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
Meat
Beverages
Household Cleaning And Paper Products
Deli
Health And Beauty Care
Low Income Households
Middle Income Households Boomers
MargarineCanned VegetablesFresh Meat And Seafood
Pain Relievers And Cold MedicinesBatteries
Household Cleanser
Personal Wash
Anti-Perspirant And Deodorant
Hair Care Pet Food
Laundry Detergents
Tissues And Toilet Paper
Top Dozen Categories Shoppers Won't AbandonAll are above the 98% category loyalty level
80%
79%
74%
72%
68%Meat
Beverages
Household Cleaning And Paper Products
Health And Beauty Care
Deli
All are above the 98% category loyalty levelTop Dozen Categories Shoppers won’t Abandon
15Winning Shoppers in Turbulent TimesA Unilever Trip Management Report
Even As They’re Squeezed, Shoppers Don’t Want To Give Up On Product Quality…
Shoppers are not ready to compromise on the quality of food and personal care products even if the economy were to get worse.
They’d rather see some creativity from manufacturers and retailers – in product packaging and
sales approaches – to help them sustain their lifestyles. Their preferences include: Offer them
larger pack sizes with a lower price per unit, introduce smaller pack sizes at lower prices, offer
same number of sales but reduce savings, modestly reduce package size but keep same price.
The least preferred option: produce slightly lower quality but keep the price the same.
Shoppers’ reluctance to switch away from brands approaches 100% in some pivotal categories. At least two-thirds of shoppers will not consider brand switching, even in the most susceptible categories, our research shows. The takeaway for retailers: keep brands prominent, even if they’re the highest priced in their category. People perceive value and will pay for it.
Middle income shoppers, for example, resist switching away from their preferred brands to private label in personal care, household products and foods including margarine, coffee and tea, condiments and boxed meals. They’re emotionally invested in the brands they buy, which have stood the test of time. Rather than forgoing brands – especially those perceptually connected with family health – they’ll cut spending on movie tickets or travel.
These shoppers are also less likely to cut back or opt out of categories than low income shoppers. When pushed by economic circumstance, though, they’d consider switching to a store brand of comparable quality.
Some trade-down is inevitable, most often in nonfoods. For example: In household cleansers 34% of low income shoppers would switch, as would 33% of middle income and 30% of boomers. In hair care, 29% of low income shoppers would move to a value brand, as would 28% of middle income and 29% of boomers.
Brands will Continue To hold Strong Appeal Across All key Categories Studied% of shoppers who won’t switch to private label
Source: Unilever 2008 Winning Shoppers in Turbulent Times study
Beer/Wine, Fresh Meat/Seafood
Frozen Dinners, Baby Food, Soda/Pop
Anti-Perspirant/Deodorant, Pet Food, Air Fresheners, Coffee, Ice Cream,Cookies, Facial Care, Mayonnaise, Salty Snacks, Yogurt, Tea Bags
Peanut Butter, Diapers, Batteries, Canned Soup, Pasta Sauce, Hand And Body Lotion, Salad Dressing, Olive Oil, Personal Wash, Laundry Detergents, Vitamins/Supplements, Margarine, Hair Care, Disposable Razors
Dry Sides, Cold Cereal, Tissues And Toilet Paper
Household Cleansers, Canned Vegetables,Pain Relievers/Cold Medicine
80% - 85%
65% - 69%
70% - 74%
75% - 79%
86% - 90%
91% - 100%
On the “Pain Meter,” Shoppers Prefer:
0 10 20 30 40 50 60 70 80
Produce Slightly Lower Quality Products, But Keep Price The Same
Raise Prices Of Existing Items Proportionately
Offer Fewer Sales
Modestly Reduce Package Size, Keep Same Price
Offer Same Number Of Sales But Reduce Savings
Introduce Smaller Pack Sizes At Lower Prices
Offer Larger Sizes With Lower Price Per Unit 77%
54%
44%
39%
36%
34%
16%
... And They’ll Continue To Search Out Trusted Brands Across The Store
10 Promotional Strategies To Connect To How Shoppers Are Shopping
Circular tactics built around whole meals will resonate with the growing number of shoppers carefully budgeting and planning their menus.
Sales across multiple quality levels within a category help maintain your store appeal with both brand loyalists and shoppers now more willing to trade down.
Increased sampling of product across the store can encourage shoppers – especially low income – to make a purchase they had not intended.
Shoppers are already skipping aisles and may do so even more – tempt them to shop all aisles with featured super-low prices on attractive items in every aisle.
With savings-minded shoppers increasingly buying big or small, let them know about the different product sizes you offer.
As shoppers of all types become more proactive in their planning, attract them with complementary product sales – buy a bagged salad, save on your favorite dressing.
Cross-promote right at the shelf to stimulate sales in categories consumers are ready to abandon in tough times – for example, coupons for cookies in the milk section.
With bulk buying for sharing on the rise, showcase “friends and family” specials of your economy sizes.
Tag products that have a high wellness quotient – two-thirds of adults say health drives their food selections.
Position yourself as a complete one-stop shop for essential categories to draw shoppers cutting back on trips due to high gas prices.
1234
56
89
10
7
Winning Shoppers in Turbulent TimesA Unilever Trip Management Report16
From smart circulars to sampling to complementary product sales, these tried and true techniques are even more critical now.
17Winning Shoppers in Turbulent TimesA Unilever Trip Management Report
Are Your Stores Positioned To Win Shoppers In Turbulent Times?
Shoppers Want Value & Savings• Are savings consistently offered in key categories?
• does your value proposition go beyond dollars and cents?
• is value communicated at every contact point with the shopper?
Shoppers Want Wellness• when shoppers are thinking of good-for-you food, are they
thinking of you?
• when they think good-for-you beyond food, is your store on their radar?
• do you offer special services or events that can stretch their wellness dollar?
Shoppers Want A Little Extra Help• do you have the personnel and programs to help shoppers make
smart shopping decisions?
• do you merchandise meal and home solutions that de-stress and simplify their shop?
• do you help them save money or make it convenient traveling to and from your store?
Shoppers Want Some Fun• do your stores have a “personality” that helps them forget their
daily challenges while they shop?
• do you encourage her to treat and take care of herself while she’s thinking of others as she walks the aisles?
• do you offer the occasional surprise reward for her big basket?
Collaborate with Unilever to create custom solutions for your shoppers.
Keeping The Shopping Experience Good For Everyone: Unilever’s Commitment To You
As a global leader, Unilever has a world of experience and resources to help
you and your shoppers successfully navigate the new economy. Unilever
delivers for you. With the brands and quality that instill high consumer
confidence. With product value tiers and packaging that are right for any
pocketbook. With the promotional savvy and merchandising expertise that
help your stores connect with today’s shopper.
Our research for this report has yielded great knowledge on how key shoppers
shop categories across your store in today’s economy. For the study, Unilever
looked at categories throughout the store, with a deep dive on 36 strategic
categories. This gives us a unique total store perspective that can drive
winning solutions.
We’re ready to share our insight with you.
Sustaining market leadership and success in the new economy requires working together and fresh thinking. Let’s start today.