Report: Consumers still frugal; shopping less channels
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.
Macy’s CEO takes stand in Macy’s-Martha Stewart case
New York — Terry Lundgren, CEO of Macy’s, took the stand on Monday to testify in the trial of two Macy’s lawsuits regarding the deal between J.C. Penney Co. and Martha Stewart Living Omnimedia Inc. The long-awaited trial began last Wednesday, in New York Supreme Court.
The trial is about whether Macy’s has the exclusive right to sell Martha Stewart branded cookware, bedding and certain other products.
Testifying, Lundgren said he was shocked when Martha Stewart, who at the time he considered a friend, called to tell him about her arrangement with J.C. Penney.
"I was completely shocked and blown away," Lundgren said. "I was literally sick to my stomach."
Under oath, Lundgren said Macy’s had built the Martha Stewart brand to be the biggest in its home business. He noted that the department store company has spent 40% of its overall marketing on the Martha Stewart brand even though the home category represents 17% of sales.
"This is an extremely important brand and we are going to continue to highlight the brand in our stores," Lundgren said on the stand.
Lundgren said J.C. Penney having access to the brand will not be good for the business and will confuse shoppers.
Macy’s sued Martha Stewart Living in January 2011, when the company signed a deal with Penney, which took a 17% in the brand. Macy’s alleges Martha Stewart Living breached a long-standing contract in entering into the J.C. Penney deal.
In a separate lawsuit, Macy’s sued Penney. Macy’s argued that the chain had no regard for the Macy’s contract and that CEO Ron Johnson had set out to steal the business. The two suits were consolidated for the current trial.
According to the AP, the crux of the issue apparently lies in a provision with Martha Stewart Living’s agreement with Macy’s that allows Martha Stewart to sell goods in categories like bedding in Martha Stewart Living’s own stores. Since the Macy’s agreement doesn’t say the goods can be sold "only in "stand-alone" stores, according to Martha Stewart Living, the branded Martha Stewart in-store shops in J.C. Penney stores do not fall under the exclusive agreement.
But as outlined in documents, Macy’s attorneys claim that it later found that J.C. Penney "knowingly and purposely demanded and received confidential information" from Martha Stewart Living about the contract of Macy’s and crafted a deal that was more lucrative than the Macy’s agreement.
J.C. Penney CEO Ron Johnson is scheduled to take the stand on Friday.
No comments found
Overstock.com names co-presidents
Salt Lake City — Overstock.com said Friday it has named Stormy Simon and David Nielsen as co-presidents of the company.
Simon was previously SVP over customer and partner care and, with the promotion, will add oversight of warehouse logistics, press relations, social media and strategic marketing.
Nielsen, promoted from SVP merchandising and supply chain, will add oversight of international sales, talent management and information technology.
Earlier this month, Overstock.com announced that current CEO Patrick Byrne would be taking medical leave and that president Jonathan Johnson would become acting CEO at the time of Byrne’s departure. The company said Friday that Johnson will not retain the president position, as of the two promotions, and will remain acting CEO.
Other management changes announced Friday include: Robert Hughes has been promoted to SVP finance and risk management from VP finance and accounting. Saum Noursalehi was appointed SVP marketing; he was previously VP OLabs, the research and development arm of Overstock.com.
No comments found