New Strategies Needed to Win in Turbulent Times

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New Strategies Needed to Win in Turbulent Times

By Don Longo

PHOENIX -- The difficult economic conditions, especially rising prices, are already having an impact on consumer shopping behavior and are likely to continue to change shopping patterns for the foreseeable future, according to a new study by Unilever called "Winning Shoppers in Turbulent Times."

The study was unveiled at Nielsen's Consumer 360 Conference currently underway in Phoenix.

"More people will eat at home and be more proactive in planning their shopping trips," said Lisa Klauser, vice president, Consumer and Customer Solutions, for Unilever North America. In her address to more than 1,600 retailer and supplier representatives attending the Nielsen event, Klauser also pointed out these key takeaways:

-- The number and types of shopping trips are changing. People are combining errands to make fewer trips and they are buying more on each trip.
-- People are already employing savings strategies, such as clipping coupons, as they seek both quality and value.
-- However, these strategies differ by category. Retailers and suppliers need to understand "the category code" for each category.
-- Quality brands continue to be key in certain categories.
-- Retailer-specific solutions are required to win in these turbulent times.

Other suggestions that came out of the research, which is based on customer focus groups conducted by Unilever and an exclusive survey to 47,000 Nielsen Homescan households conducted in March, included a reminder to concentrate on lower income consumers, leverage the eating at home trend, and allow consumers to earn back some of the fun and entertainment they are currently foregoing.

In the study, 43 percent of consumers said they were worse off financially than a year ago and 87 percent said they were aware of rising prices (93 percent said they were concerned about rising food prices). Almost a third of consumers said they have already changed their eating habits by eating out less often, and said they were most willing to give up luxuries like spending on entertainment, vacation and new clothing.

Klauser also said one of the results of these trends is that "we are seeing an increase in quick trips to drug stores" as shopping combine errands.

An example of how customer strategies change depending on category can be found in comparing pet food and cookies. Shoppers said they were must less willing to trade down in quality on pet food than in purchasing cookies.

Shoppers said they would be most willing to reduce spending in health & beauty care (78 percent), deli (77 percent), cleaning and paper goods (73 percent), beverages (71 percent) and meat (66 percent).

However, Klauser cautioned that consumers do not want to compromise on quality. Premium brands actually showed sales gains compared to a year ago in more than half the categories studied.

Nielsen's Consumer 360 continues through Thursday. CSNews Online and Convenience Store News are divisions of The Nielsen Co.