McCourt looked at what that "new norm" can mean in terms of insights and opportunities for convenience store retailers.
One insight was that that 38% of all consumer packaged goods (CPG) purchases are made on deal, but that 2% point increase costs retailers about $2 billion in revenues. "We've actually created a shopper now that's looking for a deal, and that's [image-nocss] a hard thing to walk away from.... Consumers, if they start seeing prices go up, could be a little bit retaliatory toward retailers and manufacturers if they feel they're being 'price gouged'."
McCourt (pictured) also pointed out 55% of shoppers are shopping at 10 or more retailers to stretch their dollars. "This is a new loyalty to value," he said, suggesting that rewiring loyalty programs and working with suppliers to create a value proposition can help obtain a greater piece of that loyalty.
As one example, he pointed to the snack category. The convenience channel is up 1.7% in dollar growth in snacksbut mass retailers are up 11%. That's because SymphonyIRI research has found 42% of consumers are cutting back on money spent on snacks, 31% are snacking less frequently, 26% are trying to make household snacks last longer and 22% are eliminating unplanned snack purchases. "These new norms are really impacting our channel," he said, emphasizing the need to offer a value proposition.
Other key retailer strategies suggested by McCourt included:
Develop new shopper intelligence capability, by looking at what really gets them to come into your stores. Market to the home, as that's where 86% of CPG decisions are made. Implement influence-based marketing. Accelerate assortment redesign efforts by working with manufacturer and supplier partners in providing what makes sense for you. Rewire loyalty programs, thinking about how you want to continue bringing consumers into the store. Implement shopper-centric collaborations with manufacturers and suppliers. Chicago-based SymphonyIRI has been providing market solutions for CPG manufacturers and retailers for more than 30 years. Data presented at the NACS State of the Industry Summit was preliminary and derived from company submissions as of March 31. Final industry data will appear in the NACS State of the Industry 2009 Data Report, which can be ordered directly from NACS at www.nacsonline.com.
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