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DSNTV: New General Market consumer insights Part 2 — Who are they? How do they think?

BY DSN STAFF

CPG companies know that there is a new general market consumer out there, but before they can market to them, they must ask themselves who is included in that segment — and the answer is everyone.
“For us the reason that the new general market is an important way to think about the marketplace is because there’s a shift that’s happened as we all can see, and traditionally when that shift happens, somebody gets left behind and somebody [else] gets focused on,” Sundial Brands CEO Rich Dennis said. “Our concern is that everybody comes along. … We need to think about everybody’s needs in a holistic way and deliver it, because at the end of the day everybody wants to live better.”
In the second part of our series of insights from the New General Market Leadership platform, co-produced by Drug Store News and Mack Elevation Forum, a panel of thought-leading executives from leading supplier companies discuss what they’ve learned about the new general market consumer, who they are, how they think and why it matters.
To watch the first part of our New General Market insights series, click here. To watch part three, click here.

 

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FSIs advertising up across grocery, drug but down overall

BY Michael Johnsen

ST. LOUIS — Grocers tracked within the Tactician Media Business Intelligence Transaction Database increased their spending on FSIs by 7% over the first two quarters of 2015. The changes come from a larger mix of grocers utilizing newspapers to deliver their message to consumers and the growth in the number of frequency and volume of the major grocers.
 
Growth in the grocery vertical was driven by increases from Winn Dixie, Publix, Supervalu, Kroger, Cub Foods, Aldi and many others. Many of the top national grocers had double-digit spending increases for the first half of 2015 compared to the same period of 2014. FSI spending by Albertsons, Ingles, Tops, Raley’s and others was lower to a smaller extent. In addition, spending by single market independent grocers increased as their use of newspaper FSIs was over 27% higher in 2015 compared to 2014. Some of the increase came from a heavier focus on “print and deliver” programs sold by local newspapers. These higher CPM programs provide smaller grocers with the ability to compete side by side with larger national retailers in targeted distribution areas.
 
Pharmacy retailer FSI advertising expenditure was up 2% in 2015 as compared to the first six months of 2014. Rite Aid and CVS drove the majority of increases in both revenue and volume while Walgreens was down slightly on the revenue side even though their quantity distributed had a lower decrease from 2014.
 
Newspapers also saw growth with a number of consumer package goods and healthcare providers. Preprint advertising is often placed by brokers or directly by the advertisers themselves to drive merchandise revenue into grocers and large discounters. These Third Party advertisers comprised around 8% of all FSI newspaper advertising revenue in 2015. The Third Party vertical has also seen increases by non-CPG companies such as healthcare providers, insurance and banking. FSIs can provide a very effective cost savings over direct mail, a traditional advertising vehicle for these types of companies. While Procter and Gamble pulled back their use of FSIs in the first half of 2015, Colgate Palmolive, United Healthcare, Unilever and Geico had substantial increases for the first half in 2015 compared to the same period in 2014. 
 
Overall, spending on newspaper FSIs was down about 7% while the distributed volume was down only 4% for the first half of 2015 compared to the same period of 2014. Some national retailers have struggled with increasing same store sales. Select retailers have retracted their print programs by cutting the number of pages and overall distribution volume. Newspapers are also feeling the effects of rate pressure from agencies and large national placement firms. 
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Study: Online marketplace central to digital shopping

BY Dan Berthiaume

SEATTLE — Consumers are partial to online marketplaces when it comes to choosing a starting point for digital shopping journeys. According to a new research study from Amazon.com and Pymnts.com titled “Innovation and the Digital Shopper,” 64% of respondents begin their shopping journey on online marketplaces.
 
In comparison, 48% of respondents begin their online shopping journey on merchant websites, 40% on search and 25% on social media. Respondents ranked trust as the number one factor on whether they chose to complete an online purchase
 
Furthermore, respondents are two times more comfortable using a new payment product online or on mobile from Amazon than from Apple. They are also 2.5 times more comfortable with a new digital payment product from Amazon than from Google and 10 times more than from Facebook and Pinterest.
 
“The number one determining factor on whether a consumer chose to make a purchase online was trust, not selection or price, but trust,” said Patrick Gauthier, VP of Amazon payments. “Trust is paramount to digital shoppers and it’s evident at every stage of the shopping journey.”
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