Commentary

Supercenters And Ecommerce Dominate 2015 CPG Forecast

According to the new Nielsen Retail 2015 forecast mass supercenters and e-commerce will be the big winners by dollar share gains, growing by a combined 5 share points between 2009 and 2015.  

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Nielsen forecasts that supermarkets will continue to lose share, but at a declining rate.  While both high-end and low-end niche grocers will grow share, overall share positions will remain fairly low given lower per-store sales compared to larger formats.  Other key CPG channels, including drug stores, mass merchandisers and convenience stores, will grow dollar sales but will suffer share losses.

Mass supercenters & e-commerce forecast to be big winners:

Channel Dollar Share: Mass Supercenters and ECommerce

 

2001

2009

2015 forecast

Total $ Share

11

23

29

   Club (+)

7

8

8

   E-commerce (+)

2.5

6

10

   Mass Supercenters (+)

2.5

10

11

Source: The Nielsen Company, June 2010 (Extrapolated segment share rounded)

Supermarkets Will Lose Share, but at Declining Rate; Other Channels will Suffer Share Losses:

Channel Dollar Share: Mass Merchandisers, Supermarkets

  

2001

2009

2015 forecast

Total $ Share

77

67

61

   Mass Merch (-)

14

8

7

   Conv/Gas (-)

8

9

8

   Home Improvement (-)

8

9

9

   Drug (-)

11

11

10

   Supermarkets (-)

37

29

28

Source: The Nielsen Company, June 2010 (Extrapolated segment share rounded

Mixed performance for remaining retail channels:

Dollar Share: Additional Retail Channels

  

2001

2009

2015 forecast

Total

12

10

10

   Toy (-)

1

.5

.3

   Books (-)

.7

.6

.5

   Pet (+)

.3

.3

.4

   Office (same)

2

1.5

1.5

   Dollar (+)

1.5

2

2.1

   Liquor (-)

3.5

2.5

2.4

Consumer Electronics (+)

3

2.6

2.8

Source: The Nielsen Company, June 2010 (Extrapolated segment share rounded

Todd Hale, senior vice president, Consumer & Shopper Insights, The Nielsen Company says that Q4 2009 sales were solid and interest from both CPG manufacturers and retailers to provide online buying options has never been stronger... Generation X and Millennials  (are) growing in importance in both numbers and spending power... (to support) online searching and buying." 

Nielsen expects to see further CPG retail consolidation as retailers look for scale and opportunities to expand their footprint into existing and new areas.  Retail consolidation will be most active within the supermarket and convenience channels in the race for scale.  

"Industry change will grow faster and more intense in the next five years, requiring advanced, future-focused, change management skills among CPG professionals." said Hale

One of the biggest CPG shifts Nielsen sees by 2015 is already underway: the use of smart phones to engage consumers and help them make better shopping choices.  According to Nielsen, smart phone ownership nearly doubled between 2008 and 2009 and increased their share of the mobile phone market from 47 to 59%.   Nielsen predicts that by 2015, smart phones will be the primary enabler of consumer shopping engagements and new technology innovations will generate additional opportunities for retailers and manufacturers.

Driving the rapid adoption of smart phones is the endless variety of apps, which take full advantage of the smart phone's geographic location and interactive capabilities.  Retailers are using smart phones as a replacement for frequent shopper cards, sending store coupons and deals directly to a shopper's phone. 

Nielsen expects CPG companies to further leverage the smart phone's location tracking abilities to target communications and promotions to shoppers both in and out of stores, and up sell consumers on other items based on prior purchases.  In addition, consumers will have the ability to locate the best available price for a given item and access real-time product reviews and promotions

 "... we're at the beginning of a whole new world when it comes to consumer online and social marketing... " adds Hale

According to Nielsen, CPG retailers and manufacturers consider these initiatives to position their businesses for future success:

  •  Develop or buy online/digital/social marketing expertise. 
  •  Plan for diminishing returns from traditional media.
  •  Nurture your retailer/supplier relationships.
  • Develop future format planning for next one to three generations  
  • Demand forecasting by category and consumer segment.
  • Expand via regional or global opportunities outside traditional geographies
  • Make future management a company strength... a core competency
  • Understand generational and multi-cultural consumers. 

Hale concludes that "...the future will be owned by those companies that harness technology to the make the consumer shopping experience easy, efficient and fun."

For additional information, please visit Nielsen here, and proceed to PDF version for more charts and data.

1 comment about "Supercenters And Ecommerce Dominate 2015 CPG Forecast".
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  1. Bruce Christensen from PartyWeDo, July 9, 2010 at 7:05 p.m.

    With so much attention on building engagement into everything, I was happy to see that Mr. Hale included FUN in his comments about the shopping experience.

    Here are some additional thoughts on making shopping fun for consumers in the Ecommerce channel: http://bit.ly/cgctvU

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