In fact, consumers are still attempting to ease budgetary strains and are embracing a wide variety of money-saving strategies, noted the global market research firm.
“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. The research firm says that some trends from 2012 will continue. For example, shoppers will reduce the number of channels they visit. The share of consumers shopping at fewer than five channels grew three percentage points between Q1 and Q4 2012. Shoppers will continue to limit spending to channels that are perceived as offering the best value.
According to SymphonyIRI, there is enough negative news about the federal budget deficit and costs of the new healthcare law, for example, to reinforce shoppers’ frugal behaviors left over from the last recession.
To effectively compete, CPG manufacturers should:
- Identify opportunities and risks: 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: Continually re-assess and adjust pricing to maintain optimal price gap between private label and name brand offerings.
- Enhance new product development initiatives: Constantly evaluate product development opportunities at the value and premium ends of the spectrum, including those that address key consumer trends.