Among 32 Million Supermarket Shoppers, Every Household "Buyergraphic" Is Different

A new study by Catalina, Engaging the Selective Shopper, looks at the purchasing choices of American shoppers across available UPCs on supermarket store shelves. Across tens of millions of shoppers, no two consumers are the same based on their purchases. Over an entire year of shopping, a consumer buys on average less than 1% of the available UPCs in a store.

In a world in which every household’s “buyergraphics” are unique and shoppers purchase only a tiny fraction of available products, retailers and manufacturers are challenged to find new ways to identify and engage the right consumers, says the report. Driving new product trial and repeat purchase, retaining customer loyalty, and growing share of wallet demand both new relevant product choices as well as the ability for those products to find the relatively small number of consumers who care. As this report suggests, traditional one-size-fits-all marketing tactics are not resonating with today’s selective and unique shopper.

Ads Among Those Ignored The Most (% of US Adults 18+ (Multiple Response OK)

Ad Type

% of Population Ignoring Most Frequently

Online ads (net)

82%

Online banner

73

Online social media 

62

Online search engine

59

TV ads

37

Radio ads

36

Newspaper ads

35

Source: Goo Technologies, February 2014

Overall, the 65+ age group ignored the most, while the 35-44 age group ignored the least

In summary, the study finds that:

Like fingerprints, every consumer’s shopping basket profile is unique: 

   • Out of more than 32 million consistent shoppers, every one had a unique buyergraphic, in terms of the number and assortment of UPCs purchased.

At a time of unparalleled choice in the grocery store, consumers ignore all but a tiny fraction of available UPCs:

   • On average, during an entire year, consumers buy just one out of every 143 items (0.7% of available UPCs) 

   • Even top shoppers, who account for 80% of all store purchases, buy just 1% of UPCs.

The selectivity of shoppers holds true across every department in the grocery store, as well as across income and age segmentations:

   • An analysis of 7 major departments showed that the average department shopper buys just 1.7% of Dairy products and 0.2% of Health and Beauty Care products over an entire year.

One-Size-Fits-All promotions and advertising do not resonate with a majority of today’s selective shoppers: 

   • Examining a major retailer’s Memorial Day shopping circular, the study found that two-thirds of all shopping baskets didn’t include a single item among the 1,172 advertised 

   • Looking at the following week circular from the same retailer, 74% of shopping baskets did not include a single item

The 9,968 stores participating in the study averaged 35,372 UPCs on their shelves, but shoppers purchased an average of just 260 different items among all those choices over the year. On a quarterly basis, the average shopper bought only 83 different items, or just .23% of what was available. On a weekly basis, shoppers bought an average of only 0.04% of items. Even the top shoppers in the study, those who in aggregate accounted for 80% of all sales for retailers, purchased just 1% of available UPCs throughout the entire year.

Today’s Selective Shoppers buy only a tiny fraction of available UPCs. In fact, on a weekly basis they buy an average of less than one-half of 1%.

Average UPC Penetrations

  • Annually   260 UPCs   0.7%
  • Quarterly   83 UPCs               0.2%
  • Weekly   13UPCs   0.04%

The findings of the study  have significant implications for retailers and brands, says the report. Consumers are becoming increasingly adept at filtering out irrelevant offers and unwanted messages. They use their DVRs to skip past television advertising they don’t want to see. Similarly, they filter out thousands of brands as they pass through store aisles.

The report opines that “… if consumers are so particular, it’s no wonder that so few new products are truly successful in the marketplace. And if so much of what is being sold on store shelves is not relevant enough to the individual consumer to warrant even a single purchase over an entire year, brands and retailers need to consider more personalized approaches in the way they market and promote their products, and reward their buyers.”

According to this year’s IRI New Product Pacesetters report, 68% of the nearly 1,900 new CPG products launched in 2011-12 failed to generate more than $7.5 million in first year sales. 75% of non-food products failed to reach that mark.

In fact, average year-one sales have been trending down for years, in part because new products are becoming more granular in the consumer preferences they target, as in the case of Tide. When launched in 1949, it was a single product brand that promised consumers “oceans of suds” and cleaner clothes. Today, Tide is a master brand encompassing some 43 highly differentiated laundry product brands offering a wide range of consumer benefits and values.

The study findings suggest that the proliferation of targeted products has achieved the goal of meeting the more individualized preferences of today’s consumers. Brands need a broad assortment of offerings to address the meticulous desires of today’s consumers, but they also need a more personalized engagement to capture attention and retain loyalty in a cluttered and fragmented marketplace, says the report.

In both Frozen Foods and Salty Snacks/Carbonated Soft Drinks, for example, the average department shopper bought just 1.0% of available UPCs over a 52- week period. In the Center Store Grocery Section, they bought an average of only .9%. Dairy had the highest UPC penetration of all departments we tracked. Yet the average Dairy department shopper bought just 1.7% of available UPCs. For Health and Beauty Care, the average penetration was 0.2%.

Percent of UPCs Purchased per Department

Department

Average Consumer Purchase Annually

Dairy

1.7%

Cookies, Crackers, Bread

1.2%

Frozen

1.0%

Snacks & CSD

1.0%

Center Store-Grocery

.9%

Center Store-Non Food

.5%

HBC

.2%

Source

Traditional one-size-fits all promotions are relevant to only a tiny fraction of today’s consumers. While they may attract some shoppers who are highly attuned to getting the best deals and savings, they fail to reach the vast majority of buyers. 

Retailers and brands are increasingly embracing personalization based on an understanding of the consumer’s actions and preferences. Major retailers are expanding their loyalty programs to build deeper relationships and increased loyalty based on rewards, savings and engagement tailored to individual customers. Brands are seeking to leverage big data insights and engagement across multiple digital channels, both inside and outside of the store, to identify consumers who care and build greater intimacy with them over time.

97% of all consumers now use online media when researching products and services in their local area, according to one recent study says the report. About 80% of smartphone shoppers use their phone while shopping to research products and pricing, according to survey findings released by Google in June of 2013. And 90% of smartphone shoppers use their phone for preshopping activities.

The ability to find, engage and influence shoppers via these new digital channels based on purchasing behavior can be critical to winning the attention and loyalty of today’s selective shoppers, says the report. New data-driven, purchasing segmentation technology makes it possible for advertisers to target their most valuable consumers through display, video and mobile advertising, and then close the loop by measuring the impact of this advertising on in-store purchases by targeted buyers. 

Concluding, the report says that at a time of unrivaled choice and increasingly targeted brands, consumers dismiss all but a miniscule fraction of the products available on store shelves. The selectivity and unique buyergraphics of consumers make it more important than ever that marketers find the consumers that fit their products and then build relationships that grow recognition and loyalty over time. Reaching and engaging today’s selective shopper based on actual purchasing preferences needs to be an essential part of the way to grow and sustain brands and customer relationships. 

This study tracked the purchasing behavior of more than 32 million shoppers who spent over $55 billion across 9,968 U.S. grocery stores during a 52-week period ending June 30, 2013. All of this consumer data came from consistent shoppers who shopped at least twice in every eight-week period and bought more than six different UPCs during the 52 weeks analyzed. The average number of UPCs in each store was 35,372. The study also analyzed UPC penetrations in shopping baskets by week, quarter and full year by major departments, such as Dairy, Frozen, Center Store Grocery, Non-Grocery and others. In addition, the study analyzed UPC penetrations across five major consumer segmentations that Catalina tracks, including Organic, Weight Management, Heart Healthy, Digestive Health and Health & Fitness.

For more information from Catalina Marketing, please visit here.

 

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