Value / Variety / Convenience - Which is Winning?: Bringing Clarity to Channel Choice

March 19, 2008 - Source: Nielsen Insight

By: Todd Hale, SVP, Consumer & Shopper Insights, Nielsen Consumer Panel Services

How consumers shop
Time strapped, on-the-go and frazzled can sum up the sentiment of today's busy consumers – and is evidenced by the way in which they shop. For the vast majority of shopping trips, consumers just don't spend much time shopping, as almost 70% of all-outlet shopping trips are small or considered "immediate need" trips. These low-value trips average a basket ring of just $17.

Slightly less than one-fifth or 18% of all shopping trips are considered "fill-in", bringing in slightly higher-value baskets that average $64 per trip. Accounting for 10% of all shopping activity, high-value "routine" weekly shopping trips average $106 and extra large, "stock-up" trips comprise 4% of all trips and total an average of $256 per spend. Even though consumers are pressed for time, it is interesting to note that the heavy buyers of categories opt to purchase in multiple retail channels.

Value, variety and Convenience - so which is winning?
With so much choice available to meet the demands of the busy consumer, the question begs - how important are value, variety and convenience in the business model for both retailers and manufacturers? While it is clear that all three are essential to the marketing mix, understanding how retailers should compete when new formats move into trading areas or how manufacturers can provide solutions to help retailer partners grow through brands is critical. A detailed look at consumer behavior has the best potential of unlocking the secrets of success.

Retailers in a position to win will:
stay on top of key consumer trends; segment shoppers to uncover opportunities in and outside their store; expand products and services to capture a greater share of spending; understand what products and services can differentiate. Manufacturers in a position to win will:
align category segmentation schemes with the most important retail customers; capitalize on channel shopping diversity of top-spend category buyers through expanded distribution; expand through tailored product offerings that match with channel demographics – not through increased distribution of existing offerings. Success will come to retailers who define themselves by who they sell to and how they sell to them, rather than by what they sell. Likewise, for manufacturers who define themselves by who they sell to and the solutions they solve for their consumers and retail partners – not by what they sell.

For the complete article, please visit www.Nielsen.com Insights.