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SymphonyIRI Channel Migration Report Finds Shopper Shifts Continuing to Shape Retail

During the beginning of the economic downturn, shoppers flocked to value retailers, particularly supercenters and mass merchandisers, demonstrating a willingness to drive the extra distance in a desperate effort to save money. Today, grocery, drug, dollar and club stores are enjoying increased shopper visits, at the expense of supercenter and mass stores. Share trends reflect these shifts in shopper behavior.

"Channel shifting will continue, and channels will continue to blur," said John McIndoe, senior vice president, Marketing, SymphonyIRI. "The blurring is the result of consumer changes, and also of changing CPG manufacturer and retailer strategies. New products, new marketing programs and new store formats are what keep CPG interesting and also what makes the job of CPG marketers so difficult."

Across CPG channels, purchase frequency increased 2 percent during the past year, with grocery, dollar and club channel trends closely mirroring industry average. Across other channels, though, trends vary significantly. For example, frequency within the drug channel accelerated sharply within the last year, increasing by 6.7 percent. This growth is being driven by a number of factors, including shifting trip mission trends.

Quick trips, small "need-it-now" excursions with an average basket size of less than $40, have become more common as consumers look to minimize large one-time outlays of cash. With a broad assortment of health and wellness solutions and a growing assortment of food and beverage offerings, close-to-home drug stores are a logical destination for shoppers looking to quickly pick up needed items with only minimal gas and time investment. Dollar stores also are benefitting from this trend due to generally convenient locations and broader, expanded assortments. These efforts are clearly paying off, with dollar channel frequency increasing by 2.6 percent during the past year.

"When thinking about channel migration trends, CPG and retail leaders must consider changes in the channels themselves and how those changes will impact shoppers," said Susan Viamari, editor, Times & Trends, SymphonyIRI. "For instance, as 'big box' retailers open smaller format stores, such as Target opening CityTarget, closer to downtowns, will shoppers continue driving to traditional value formats that tend to be located in more out-of-the-way locations?"

CPG manufacturers and retailers seeking to capture new growth opportunities and minimize risks associated with channel and consumption migration trends should consider the following action items:

• Identify new growth opportunities and risks through ongoing category and brand channel migration tracking: Manufacturers should closely monitor the evolving competitive set at the channel and retailer level to understand channel share shifts across key categories and brands, including competitor brands, as well as existing and emerging product distribution strategies. Retailers should invest to understand core consumer segments while closely monitoring high-potential targets and their evolving channel, banner and brand selection processes.
• Align distribution, marketing and merchandising strategies with channel migration patterns: Manufacturers should isolate their most important shoppers and ensure distribution strategies cater to their preferred trip types, channel preferences and store locations. Retailers should cross reference their key shoppers against key consumer segments across key manufacturer partners to find common ground for co-marketing programs.
• Protect and grow share among top shoppers: Manufacturers should drive satisfaction, trip and basket size with specially-targeted promotional programs that entice and reward top shopper segments. Retailers need to maintain a deep understanding of emerging shopper patterns and competitive threats among key shopper and target segments.

About the Report

This month's Times & Trends Report, "Channel Migration: A Quest for Affordability," is a free report available from SymphonyIRI, the world's leading innovation partner that enables CPG, retail and healthcare companies to create and maximize new opportunities. The findings of this report were compiled based on information from SymphonyIRI MarketInsight , SymphonyIRI Consumer Network , and SymphonyIRI Shopper Insights Advantage. To download the report, visit: http://www.symphonyiri.com/Insights/Publications/TimesTrends/tabid/106/Default.aspx.

About SymphonyIRI Group, Inc.

SymphonyIRI Group, formerly named Information Resources, Inc. ("IRI" ), is the global leader in innovative solutions and services for driving revenue and profit growth in CPG, retail and healthcare companies. SymphonyIRI offers two families of solutions: Core IRI solutions for market measurement and Symphony Advantage solutions for enabling new growth opportunities in marketing, sales, shopper marketing and category management. SymphonyIRI solutions uniquely combine content, analytics and technology to deliver maximum impact. SymphonyIRI helps companies create, plan and execute forward-looking, shopper-centric strategies across every level of the organization. For more information, visit http://www.SymphonyIRI.com.

SymphonyIRI Group Contact:
Shelley Hughes, (312) 474-3675
Shelley.Hughes@SymphonyIRI.com