Chicago -- Shoppers will reduce the number of channels they visit and remain intensely focused on value in 2013, according to the latest research from SymphonyIRI Group.
According to Symphony’s “2012 CPG Year in Review: Finding the New Normal,” consumers are still attempting to ease budgetary strains and are embracing a wide variety of money-saving strategies.
“For 2012, we forecasted that shoppers would continue to define value largely based on price, manufacturers and retailers would pass ongoing commodity price increases on to the shopper, and private label sales would continue in their current ranges,” said Piyush Chaudhari, president of the Americas, SymphonyIRI. “These predictions largely came to pass, and we expect 2013 to resemble these same trends in many ways.”
SymphonyIRI predicts shoppers will remain frugal in 2013, even though there will be continuing signs of economic recovery and strengthening. In addition, the following trends identified in 2012 will continue in 2013:
- Shoppers will reduce the number of channels they visit. Share of consumers shopping at fewer than five channels grew three percentage points between first quarter and fourth quarter 2012, and SymphonyIRI believes this will continue as shoppers limit spending to channels that are perceived as offering the best value.
- While an increasing number of positive economic signs are emerging, count on shoppers to remain intensely focused on value. Millennials are becoming the new baby boomers. They are a 50-million-strong-shopping group now forming habits and loyalties. Tailoring offerings to this group and providing outstanding service will pay dividends for decades to come, both literally and figuratively.
- “New” media is rapidly becoming traditional media. The trend of shoppers leveraging the Internet for information and deals is growing and will continue to gain momentum, as millennials age and a new generation that is even more tech savvy than the millennial generation enters the market.
To effectively compete in 2013, CPG manufacturers and retailers should consider the following action items:
- Identify opportunities and risks: Retailers should use value-oriented pricing and promotion programs to protect and grow share, particularly across categories that are most closely aligned with the needs and wants of key shoppers. Manufacturers should closely track the evolving competitive set at the channel and retail level, including traditional brick-and-mortar as well as the online arena, to ensure appropriate alignment of distribution strategies.
- Evaluate pricing and promotional strategies: Retailers should adopt everyday pricing strategies that underscore their value proposition and rely on promotional pricing to address short-term tactical opportunities. Manufacturers should continually re-assess and adjust pricing to maintain optimal price gap between private label and name brand offerings.
- Enhance new product development initiatives: Retailers should explore opportunities to partner with manufacturers to develop complementary national and private label assortments across categories. Manufacturers should constantly evaluate product development opportunities at the value and premium ends of the spectrum, including those that address key consumer trends.