Lupin 2024

Data-driven insights can fuel CPG sales gains

Print Friendly, PDF & Email

CHICAGO — Challenging conditions notwithstanding, advanced data science provides cause for optimism this year for consumer packaged goods marketers. That is the message of IRI’s latest Times & Trends report, “Taking Stock of CPG Past and Future: Gear Up Now for a Year of Growth.”

Walgreens aisles_overhead view“Advancing technology has really given retailers and manufacturers a distinct advantage during these times of rapid and widespread change,” says Susan Viamari, vice president of thought leadership at IRI. “By investing to understand how best to leverage new advances to really tap into the change, marketers throughout the CPG industry will identify exciting new ways to create real and lasting market advantages.”

Driving growth continued to be a challenge for the CPG industry in 2015. Manufacturers and retailers had to deal with the ebb and flow of the economy and its impact on consumer spending as well as increased demands of digital-savvy ­shoppers.

The industry has been searching for growth for several years in the face of a challenging economy along with conservative shopper spending. Last year was no exception. Unit sales continued to slide, and dollar volume growth was fed largely by inflation. When looking across channels, mass merchandisers and supercenters posted sharper-than-average declines, and the club channel showed some resilience. The grocery and drug channels held volume flat, outperforming the industry average of negative 1.7%.

cdr-filler-opinion-750Consumers will remain entrenched in their conservative purchase behaviors in 2016, IRI says, even though one-third of Americans feel their financial situation will improve this year. More than half (57%) will make their purchase decisions before they enter the store, so marketers must continue their efforts to engage shoppers early in the planning process.

One-third of shoppers will choose brands based on coupons they have at home, and 29% will base purchase decisions on shopper loyalty card discounts. They’ll leverage a number of Internet-based tools, such as smartphone apps and online advertising and promotions, to keep their grocery budgets in check in 2016.

Finding pockets of growth in 2016 presents its challenges, but it’s not impossible. IRI research and analyses uncovered 10 trends offering growth opportunities for 2016 and beyond:

• Omnichannel retailing is turning the industry on its ear. Companies must harness in-depth insights about how consumers travel online to understand the new path to purchase and drive in-store growth.
• Ethnic diversity and the explosion of nontraditional families are altering shopper attitudes and behaviors.
• Quality versus quantity in marketing is vital for cutting through the noise that is constantly barraging consumers.
• Consolidation is a route for CPGs looking for new revenue streams. They should consider specialized acquisitions to fill white space growth ­opportunities.
• Urbanization will drive the growth of smaller stores.
• Healthier lifestyles are being embraced by consumers.
• Demand for transparency and authenticity is sought by consumers across product ­categories.
• On-the-go lifestyles continue to impact behavior.
• Smart data is taking precedence over big data.
• Boosting productivity in existing stores trumps adding new outlets.

Three imperatives are more critical than others, says IRI. It calls for monitoring how consumers “travel” in the online and offline worlds, developing media programs that drive purchase behavior, and understanding similarities and differences across the Hispanic ­marketplace.

“In the past, CPG marketers have approached the Hispanic segment as a homogeneous group of consumers,” says the IRI report. “This has been an ineffective strategy, and the strategy is becoming even more ineffective as the Hispanic population grows and becomes increasingly diverse.

“To fully capitalize on Hispanic opportunities, CPG marketers must embrace the diversity of the market and demonstrate a forensic understanding of each group’s demographics and cultural norms, overlaid with segmentation by level.”

By developing a detailed understanding of shopping patterns for Hispanics compared to others, CPG marketers can identify opportunities at the region, brand and customer level and adjust strategies to compete more effectively, the report says.


ECRM_06-01-22


Comments are closed.

PP_1170x120_10-25-21