CPG Shopping Habits Reduced To Four Kinds of Trips

by , Dec 29, 2011, 9:20 AM
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Trip mix has shifted during the course of the economic downturn, but pantry stock-up and quick trips together still account for about two-thirds of CPG trips and dollar sales.

According to SymphonyRI, in a recent study “the CPG Basket, Fostering Growth in a Time of Conservation,” consumers are very discerning about the money they spend today. They are carefully choosing what they will buy, when they will buy it, and where they will buy it. They are choosing to eliminate and/or postpone some purchases in the name of keeping their budgets manageable.

During the past few years, for many getting by has meant embracing frugal and well-thought-out purchase strategies. This report provides insight into evolving economic conditions and consumer response to those conditions vis-à-vis the consumer mindset during the predominant CPG trip missions.

During the past year, CPG prices have been on a northward march. The U.S. Department of Agriculture is currently placing the all-food Consumer Price Index at 3.5%-4.5% for 2011. In 2012, the rate is expected to moderate only slightly, to 2.5-3.5%1. Escalating food and fuel prices and increased budgetary pressures are having a significant impact on the way consumers approach their grocery-related tasks.

Trip mix has shifted during the course of the economic downturn, but pantry stock-up and quick trips together still account for about two-thirds of CPG trips and dollar sales.

Trip Missions Overview

 

Trip Type

Overview

Quick Trip

Special Purpose

Fill-In

Pantry Stock-Up

Mindset

Need it now, have to make a trip

Buying for a specific event (not routine)

Routine fill-in an heavy use categories

Prepare for the coming week

# Items

1-5

2-10

5-15

15+

All Outlet Average $ Spent

<$40

$20-$50

$30-$80

$50+

% of All Outlet Trips

56%

16%

14%

13%

% of All Outlet CPG $

24%

18%

19%

39%

Source: SymphonyIRI Trip Typology, SymphonyIRI Consumer Network™ 52 Weeks Ended 8/21/2011

Understanding trip missions among key consumer segments will enable retailers to optimize product mix and store layout. It will also empower retailers to create powerful cross-promotion and merchandising campaigns to reinforce or realign primary trip mix, says the report.

Increases in average basket size, evidenced most predominantly across pantry stock-up and fill-in trips, are reflective of inflationary CPG pricing trends. Average basket ring, across and within trip missions, has been a moving target during the course of the past two years. Basket ring is being influenced by changing consumer rituals as well as vacillating pricing trends.

In the first few months of 2011, average per trip spending began to climb across all trip missions, except special purpose. These increases coincided with an escalating pace of inflation. Baskets within these missions have been growing at an increasing rate throughout much of 2011, yet, the rate of increase remains below the level of inflation.

Average Basket Ring (% Change vs. Prior Year 13 Week Period)

 

% Change vs. YA

Period Ending

% Avg. Price/Unit

% Unit Sales

May 2010

+0.8

(1.4)

Aug 2010

(1.7)

(2.2)

Nov 2010

+0.4

+0.2

Feb 2011

+1.1

(1.2)

May 2011

+1.8

+0.1

Aug 2011

+4.0

(0.2)

Source: SymphonyIRI Consumer Network, 13 Weeks Ended 8/21/2011 and preceding 13 Week periods

Within grocery, mass/supercenter and club channels, the predominant trip mission is the pantry stock-up mission. This mission accounts for one-half of sales in grocery, and one-third of sales in each the mass/supercenter and club channels. In all of these channels, pantry stock-ups account for 15%-20% of trips.

Quick trips are a strength of the drug and dollar channels. Within these channels, it is these “need it now” purchases that drive a majority of dollar sales and trips.

Purchase and consumption habits are shifting in a way that is favorable to these retailers. Their “nearby” locales make it convenient to swing by for a few quick items without a significant time or gas outlay.

During these missions, consumers are eliminating purchases deemed “non- essential” and they are changing the timing of purchases to accommodate cash flow. Today’s consumers are focused more on needs versus wants and they are buying closer to the point of consumption.

Trip Mission as Percent of Trips, 2011

 

Mission

Channel

Stock-Up

Fill-In

Special Purpose

Quick trip

Grocery

18.6%

18.1

13.3

49.9

Mass/Super

15.1

16.7

22.7

45.5

Club

15.3

18.3

21.1

45.3

Drug

-

4.8

16.6

78.3

Dollar

1.7

6.9

17.8

74.0

Source: SymphonyIRI Consumer Network™ 52 Weeks Ended 8/21/2011; U.S. Department of Energy

 

Trip Mission as Percent of Channel $ Sales, 2011

 

Mission

Channel

Stock-Up

Fill-In

Special Purpose

Quick trip

Grocery

49.8%

19.2

12.3

18.7

Mass/Super

39.1

22.3

20.7

16.9

Club

35.6

22.8

21.8

19.8

Drug

1.1

16.7

29.5

52.7

Dollar

6.4

18.3

26.9

48.5

Source: SymphonyIRI Consumer Network™ 13 Weeks Ended 8/21/2011 and preceding 13 Week periods

For CPG marketers, the difficulty is that no “one size fits all” budgetary ritual exists, says the report. Rather, strategies vary by channel, category, brand, and market. Indeed, strategies often vary at the individual household level.

The report concludes by suggesting that an intimate understanding of current and emerging trends within these trip missions will enable manufacturers and retailers to develop and execute strategies that align with overall corporate goals while simultaneously addressing the complex and changing needs of U.S. shoppers in a turbulent economic environment.

For considerably more detail, including charts and graphs, please visit SymphonyRI here to down the PDF report file.

 

 

 

 

 

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