Channels of Distribution
RETAIL HEARTBEAT
Pulse Report: Channel blurring
In a fiercely competitive environment, retailers can win market share by better addressing shoppers’ and consumers’ evolving needs.
Faced with budget constraints and higher food and fuel prices, many shoppers are trimming basket size to save money while making more frequent trips to nearby drug, dollar and grocery stores, according to new analysis from SymphonyIRI Group. In turn, drug and dollar retailers have boosted their food and beverage offerings, while many grocers are rounding out their personal care product lines. “This increased channel blurring is the result of a highly competitive CPG marketplace,” says Mark Mark Parise, president of IRI Parise, president of IRI, a business unit of SymphonyIRI. “CPG marketers understand that consumers are seeking low-cost solutions to everyday needs, and they are acting to capitalize on that opportunity.” In their quest for value, consumers increasingly are willing to shop at a variety of channels to find the products they want at prices they can afford. With 55 percent of consumers eating out less often than prior to the recession, grocery retailers have stepped up their merchandising of convenient prepared foods while updating store formats to attract more consumers. Across channels, two-thirds of CPG categories have enjoyed increased merchandising support during the past year. At the same time, supercenters are enhancing their product assortments after attempts to scale back the number of SKUs resulted in some customers shopping elsewhere. “Winning in CPG today is about getting the right products to the right place at the right time,” says Parise. “In other words, retailers must understand and deliver against the needs of key shoppers. A broad assortment, one-size-fits-all approach is simply not effective.”
the pulse of the marketplace
NUMBER OF CHANNELS SHOPPED
Percent of Consumers 2011
5% 1% 19%
2%
Channels shopped
7% 14%
28% 24%
SOURCE:
Pulse Report: Channel blurring
In a fiercely competitive environment, retailers can win market share by better addressing shoppers’ and consumers’ evolving needs.
Faced with budget constraints and higher food and fuel prices, many shoppers are trimming basket size to save money while making more frequent trips to nearby drug, dollar and grocery stores, according to new analysis from SymphonyIRI Group. In turn, drug and dollar retailers have boosted their food and beverage offerings, while many grocers are rounding out their personal care product lines. “This increased channel blurring is the result of a highly competitive CPG marketplace,” says Mark Mark Parise, president of IRI Parise, president of IRI, a business unit of SymphonyIRI. “CPG marketers understand that consumers are seeking low-cost solutions to everyday needs, and they are acting to capitalize on that opportunity.” In their quest for value, consumers increasingly are willing to shop at a variety of channels to find the products they want at prices they can afford. With 55 percent of consumers eating out less often than prior to the recession, grocery retailers have stepped up their merchandising of convenient prepared foods while updating store formats to attract more consumers. Across channels, two-thirds of CPG categories have enjoyed increased merchandising support during the past year. At the same time, supercenters are enhancing their product assortments after attempts to scale back the number of SKUs resulted in some customers shopping elsewhere. “Winning in CPG today is about getting the right products to the right place at the right time,” says Parise. “In other words, retailers must understand and deliver against the needs of key shoppers. A broad assortment, one-size-fits-all approach is simply not effective.”
the pulse of the marketplace
NUMBER OF CHANNELS SHOPPED
Percent of Consumers 2011
5% 1% 19%
2%
Channels shopped
7% 14%
28% 24%
SOURCE: