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Nielsen: Retail opportunities for 2013 in big data, omnichannel and fresh

BY Michael Johnsen

CHICAGO — Growth in 2013 will be slow-going in the first half of 2013 but will pick up at the end, suggested James Russo, SVP global consumer insights for Nielsen, during a webinar Wednesday afternoon. "The consumer remains in maintenance mode," he said. "Consumers are being pragmatic in their spending. Uncertainty dominates."

Nielsen advised participants of its "What’s In Store 2013" webinar that the biggest bang for retailers and consumer packaged goods manufacturers will come out of thinking small. And to be really successful, companies will need to think at a granular level utilizing big data analytics.

Thanks to a still-anemic economy, the average size of an American household has dropped to 2.58 in 2011 from 2.62 in 2000, and the average number of annual shopping trips has dropped to 151 in the 2010-2011 time frame as compared with 176 average annual trips per shopper in the 2002-2007 time frame, or prior to the recession.

And as many as 74% of consumers claim the American economy isn’t recovering at all but still in a recession. 

To capture a greater share of dollar out of smaller households and fewer shopping trips, retailers and their partners will need to make the shopping experience more personal, Russo suggested, through insights derived from social media outlets and shopping data — big data.

Another area of opportunity for 2013 will be fresh, Russo said. In an outlet where fresh makes up 13% of the selling space, it can drive as much as 30% of the growth. Basketsizes in stores with fresh are between 1.5 and 2.1 times larger versus similar stores without fresh, and there has been a 5% increase in consumer interest around health and natural foods. "This is a global dynamic as well," Russo noted. 

Retailers also will need to reach their shopper where she’s actually shopping. "Last year there was a significant increase in virtual stores," he said, citing Peapod as an example. Peapod is an online grocer that presents virtual planograms — on the walls of a subway, for example — where commuters waiting for their train can scan a product with their smartphone and have it delivered to their home.

Consumers aren’t just shopping during their commute, however. "About half of consumers who are using their tablets and watching TV are shopping. So when you think of the connection between traditional media and new media, it’s [very] important." 

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Report: Shoppers want more buy-America options and Walmart aims to give it to them

BY Michael Johnsen

TYSONS CORNER, Va. — More than 80% of Americans are willing to pay more for Made in the USA products, according to a USA Today report published online late Monday night. 

Out of those shoppers actively seeking to buy all things American, 93% reported that they wanted to keep jobs in the U.S. as their primary reason for doing so, the report noted, citing a survey released in November by Boston Consulting Group.

The movement has even captured the hearts and minds of retailers. In conjunction with the National Retail Federation, Walmart U.S. president and CEO Bill Simon recently identified a three-prong strategy to help grow America’s economy — employ Americans, employ American soldiers especially and buy from American producers. Right now, 2-out-of-3 products sourced by Walmart come from domestic suppliers. Simon pledged that Walmart would spend $50 billion on U.S. products over the next 10 years .

 

 

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Club retailers to see higher growth over next three years, Deloitte study finds

BY Alaric DeArment

NEW YORK — Club retailers could be in for a good time over the next three years, according to a new study.

The study, by Deloitte, found that consumer products executives expect growth through warehouse club retailers to outpace those of other retail channels, including mass merchandise, supermarkets and online retail.

According to the study, for which Deloitte polled 79 consumer packaged goods manufacturers and 53 retailers between Oct. 30 and Nov. 6, 2012, 89% of consumer packaged good executives expect their company’s sales through warehouse retailers to increase during the next three years, while 49% expect to see such an increase in grocery channel sales, and 18% expect to see sales in the grocery channel decline.

"Consumer products companies are responding to the increased sales and branding opportunities in the warehouse club channel, particularly in expanding segments traditionally dominated by grocery and mass merchandise channels," Deloitte vice chairman and consumer products leader Pat Conroy said. "Club retailers have been remodeling existing stores, including allocating more space for food, particularly organic, healthy and fresh offerings, and personal care products. These retailers also continue to provide a variety of services and benefits to members, whether it is for personal consumption or for the members’ business."

Seventy-nine percent of those surveyed expected warehouse clubs to increase the number of food, household goods and personal care product SKUs, while 75% expect them to increase their geographic presence and add space allocated to health and wellness products. In addition, many executives said club stores were increasing their appeal to a wider array of consumers, with 77% saying members make more trips, 78% saying they spend more and 63% saying consumers find the stores more appealing than three years ago. The stores are most frequented by affluent and high-income consumers, with 46% of respondents saying they themselves shopped at the stores, and 71% of those making more than $100,000 in household income saying the same.

"Unlike past recessions, where consumers eventually returned to their previous shopping habits, this recession left a scar, not a bruise, and consumers remain hesitant to break from their cost-conscious routines," Conroy said. "Economic uncertainty and consumers’ focus on value has made club stores a more important channel for many consumers, including those who are at the higher end of the income scale and represent a more lucrative target customer for retail and consumer products brands."

Seventy-one percent of surveyed executives said pricing differences between warehouse club products would increase conflicts with traditional supermarkets and mass merchandisers, while 53% of consumer packaged goods executives said they viewed sales to the warehouse club channel completely or primarily as a shift from other channels like grocery and mass merchandisers.

 

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