catching up with FMCG Prof. Gino Van Ossel 17th September 2009 trends in shopping behaviour Retail & Trade Marketing Research Centre Reep 1 - 9000 Gent - Belgium tel ++32/9/210.98.67 fax ++32/9/210.98.75 e-mail Gino.VanOssel@vlerick.be www.vlerick.be/rtmrc

agenda if you want loyalty… shopping for FMCG from private label to retailer brands multiformat retailing & store banners conclusion

if you want loyalty…

shopping for FMCG

from private label to retailer brands

multiformat retailing & store banners

conclusion

agenda if you want loyalty… shopping for FMCG from private label to retailer brands multiformat retailing & store banners conclusion

if you want loyalty…

shopping for FMCG

from private label to retailer brands

multiformat retailing & store banners

conclusion

if you want loyalty…

if you want loyalty… brand awareness brand preference brand loyalty !

if you want loyalty… relevant brand loyalty ? brand market share (%) X consumers with strong brand preference (%) = % of dissatisfied shoppers

relevant brand loyalty ?

if you want loyalty…

De Standaard 11 Feb 09

if you want loyalty… relevant brand loyalty ? brand market share (%) X product basket penetration (%) X truly loyal consumers (%) = % of missed shopping trips (baskets)

relevant brand loyalty ?

if you want loyalty…

agenda if you want loyalty… shopping for FMCG from private label to retailer brands multiformat retailing & store banners conclusion

if you want loyalty…

shopping for FMCG

from private label to retailer brands

multiformat retailing & store banners

conclusion

shopping for FMCG

shopping for FMCG decision to buy a product (“need or desire creation”) at home (planned) in store (impulsive) brand choice in store (impulsive) my favourite (loyalty) adapted from Synovate planned brand hunter unplanned brand finder planned product hunter unplanned product finder

shopping for FMCG intrinsic loyalty conquesting power giants artisans misers fighters low high high Dekimpe, M.G., Steenkamp, J.B.E.M., Mellens, M. & Vanden Abeele P., “Decline & Variability in Brand Loyalty,” in: International Journal of Research in Marketing, 1997, 14, p. 405-420

shopping for FMCG jam in a ‘gourmet’ supermarket free tasting

shopping for FMCG setting A: 24 flavours

shopping for FMCG setting B: 6 flavours

shopping for FMCG # visitors stopping power # flavours tasted conversion tasters conversion visitors source: Sheena S. Iyengar & Mark R. Lepper, “When Choice is Demotivating: Can One Desire Too Much of a Good Thing?,” in: Journal of Personality and Social Psychology, 2000, Vol. 79, No. 6, 995-1006 242 260 60% (145) 40% (104) 3% 30% <2% (4) 12% (31) 1.50 1.38

shopping for FMCG how much ketchup does a store need ?

shopping for FMCG the retailer’s perspective margin low high high low volume revenue builders profit builders mega- loosers goldmines

the retailer’s perspective

agenda if you want loyalty… shopping for FMCG from private label to retailer brands multiformat retailing & store banners conclusion

if you want loyalty…

shopping for FMCG

from private label to retailer brands

multiformat retailing & store banners

conclusion

from private label to retailer branding the traditional view: market leader is the benchmark generic basic quality, lowest price copycat same quality, lower price

the traditional view:

market leader is the benchmark

generic

basic quality, lowest price

copycat

same quality, lower price

from private label to retailer branding increasing sophistication: market leader is the benchmark, if available generic basic quality, lowest price copycat same quality, lower price

increasing sophistication:

market leader is the benchmark, if available

generic

basic quality, lowest price

copycat

same quality, lower price

from private label to retailer branding

from private label to retailer branding

from private label to retailer branding increasing sophistication: market leader is the benchmark, if available generic basic quality, lowest price, turf defending with hard discount as benchmark copycat same quality, lower price,

increasing sophistication:

market leader is the benchmark, if available

generic

basic quality, lowest price, turf defending with hard discount as benchmark

copycat

same quality, lower price,

from private label to retailer branding

from private label to retailer branding increasing sophistication: market leader is the benchmark, if available generic basic quality, lowest price, turf defending with hard discount as benchmark copycat same quality, lower price, different packaging

increasing sophistication:

market leader is the benchmark, if available

generic

basic quality, lowest price, turf defending with hard discount as benchmark

copycat

same quality, lower price, different packaging

from private label to retailer branding yesterday: “ me too” today

from private label to retailer branding

from private label to retailer branding increasing sophistication: market leader is the benchmark, if available generic basic quality, lowest price, turf defending with hard discount as benchmark copycat same quality, lower price, different packaging premium higher quality, lower or higher price

increasing sophistication:

market leader is the benchmark, if available

generic

basic quality, lowest price, turf defending with hard discount as benchmark

copycat

same quality, lower price, different packaging

premium

higher quality, lower or higher price

from private label to retailer branding

from private label to retailer branding

from private label to retailer branding increasing sophistication: market leader is the benchmark, if available generic basic quality, lowest price, turf defending with hard discount as benchmark copycat same quality, lower price, different packaging premium higher quality, lower or higher price co-branding

increasing sophistication:

market leader is the benchmark, if available

generic

basic quality, lowest price, turf defending with hard discount as benchmark

copycat

same quality, lower price, different packaging

premium

higher quality, lower or higher price

co-branding

from private label to retailer branding

from private label to retailer branding increasing sophistication: market leader is the benchmark, if available generic basic quality, lowest price, turf defending with hard discount as benchmark copycat same quality, lower price, different packaging premium higher quality, lower or higher price co-branding actively promoting private label

increasing sophistication:

market leader is the benchmark, if available

generic

basic quality, lowest price, turf defending with hard discount as benchmark

copycat

same quality, lower price, different packaging

premium

higher quality, lower or higher price

co-branding

actively promoting private label

from private label to retailer branding

from private label to retailer branding value share private label Belgium (Nielsen)

from private label to retailer branding

from private label to retailer branding Delhaize City, Delhaize Shop ‘n Go, Delhaize Superette, Delhaize Proxy, GB Express, GB Contact, Deli Traiteur, Delfood, Louis Delhaize Super, Okay, Prima, Smatch, Spar, Shop 24, Petrol stations. source: GfK Panelservices Benelux

from private label to retailer branding value share volume share growth Colruyt growth hard discount growth convenience price increase (11.1% vs. 6.3%) growth generics

from private label to retailer branding value share private label Belgium (Nielsen)

agenda if you want loyalty… shopping for FMCG from private label to retailer brands multiformat retailing & store banners conclusion

if you want loyalty…

shopping for FMCG

from private label to retailer brands

multiformat retailing & store banners

conclusion

multiformat retailing & store banners situational segmentation

situational segmentation

multiformat retailing & store banners Source: GfK - MAT 06 2006 - spend fair share (index 100): well off families with kids – major (7.2% of the groceries spend in Belgium)

multiformat retailing & store banners fair share (index 100): well off families with kids – mainstream (5.1% of groceries spend in Belgium) Source: GfK - MAT 06 2006 - spend

multiformat retailing & store banners source: GfK Panelservices Benelux

multiformat retailing & store banners

multiformat retailing & store banners

multiformat retailing & store banners if you want loyalty…

multiformat retailing & store banners monthly spent share of sales share of customers 45% 58% 47% 37% 8% 5%

agenda if you want loyalty… shopping for FMCG from private label to retailer brands multiformat retailing & store banners conclusion

if you want loyalty…

shopping for FMCG

from private label to retailer brands

multiformat retailing & store banners

conclusion

conclusion

eat more chi- cken

conclusion

conclusion involvement in decision making perceived difference between brands high low significant few complex buying behaviour dissonance-reducing buying behaviour variety-seeking buying behaviour habitual buying behaviour

conclusion “ Between 1996 and 2003, (food) retailers (in the US) gained five share points of the combined manufacturer and retailer profit pool. source: Private Label: Threat for Manufacturers, Opportunity for Retailers, Boston Consulting Group, 2003

conclusion “ Between 1996 and 2003, (food) retailers (in the US) gained five share points of the combined manufacturer and retailer profit pool. Despite intense competition in their industry, retailers have captured over 50% of the system profit growth. source: Private Label: Threat for Manufacturers, Opportunity for Retailers, Boston Consulting Group, 2003

conclusion “ Between 1996 and 2003, (food) retailers (in the US) gained five share points of the combined manufacturer and retailer profit pool. Despite intense competition in their industry, retailers have captured over 50% of the system profit growth. During the same time, manufacturer’s total market capitalization grew only 4 percent, well below the 19 percent growth in S&P 500.” source: Private Label: Threat for Manufacturers, Opportunity for Retailers, Boston Consulting Group, 2003

conclusion learn more Retail & Trade Marketing 4 Thursdays as of Nov 12 Belgian Consumer Goods Conference 27th October Brand Management 4 Tuesdays as of Nov 17 Vlerick Retail Platform 4 afternoon seminars as of Oct

learn more

Retail & Trade Marketing

4 Thursdays as of Nov 12

Belgian Consumer Goods Conference

27th October

Brand Management

4 Tuesdays as of Nov 17

Vlerick Retail Platform

4 afternoon seminars as of Oct

conclusion if you think you’ve got everything under control… … then maybe you’re not going fast enough !

if you think you’ve got everything under control…

contacteer ons Retail & Trade Marketing Research Centre opleiding workshops entertrainment onderzoek advies www.vlerick.be/marketing [email_address]

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