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Shan Xifaras
Associate Director
ACNielsen Australia
Broadening distribution channels has long been seen as a way to increase the sales of categories and brands. This is particularly true in categories that rely heavily on impulse purchases – if you can range in additional channels, you increase your chances of converting that store’s traffic into buyers of your brand.
But how does a manufacturer go about maximising these sales? Is it sufficient merely to translate a brand plan based on scanning and consumer data into plans for the convenience trade?
A Case Study
Let’s take a look at an example from an actual (heavily disguised) study in which we look at a major brand that sells primarily multi-packs in traditional supermarkets and single packs within convenience outlets. Here we have substituted the original category with confectionery and disguised the brand names.
By comparing the purchasing behaviour within supermarkets using ACNielsen | Homescan™ against the purchasing behaviour of individuals within convenience outlets (petrol stations, corner stores/newsagents), using ACNielsen | I-Scan™ Impulse, we can demonstrate the need for channel-specific implementation of brand and category plans.
Multi-Pack Take Home Confectionery
(Source: ACNielsen | Homescan™)
 
The manufacturer of Galaxy has aggressive growth targets for the brand to achieve in the in home consumption sector. To achieve this growth the brand must both attract more buyers and increase the amount they buy if it is to compete effectively against Venus.
In comparison, Venus is a star performer, attracting a high proportion of category buyers who buy large quantities of the brand.
Looking at how Galaxy buyers allocate their category purchases reveals that they buy almost as much Venus as they do Galaxy, this should form a core element of the brand growth strategy, namely to encourage buyers to switch away from Venus.
The demographics of the Venus buyers shows that this activity should primarily be aimed at the 45-54 year old primary shoppers.
Additionally, to improve the reach of the brand, Galaxy will need to generate interest among the under 35’s, currently a major area of underperformance for Galaxy.
Key recommendations for Galaxy in multi pack take home sector: Target 45-54’s to encourage switching away from Venus and focus on generating trial among under 35’s.
Single Pack Impulse Confectionery
(Source:ACNielsen I-Scan™)
 
Within I-Scan the situation within the Impulse sector for Galaxy is very different. Here Galaxy single packs hold the star position with comparatively strong reach and adoption.
To effect growth within the convenience channel, Galaxy must protect its strong position and capitalise on this in trade negotiations for preferential positioning and shelf allocation.
Additionally, Galaxy needs to encourage existing customers to purchase more often. However, given that Impulse Galaxy buyers are already very loyal to the brand, the initiatives to encourage existing customers to buy more frequently need to be aimed at increasing out of home consumption of the category as a whole rather than merely switching consumption from the competitive set as is the case in Supermarkets.
This key imperative to increase frequency for Galaxy really applies across all age groups with the exception of the over 55’s, who have a lower propensity to buy impulse confectionery.
In store marketing initiatives and broader advertising focussing on maximising the frequency of the impulse buy are deemed necessary for Galaxy to achieve the required growth.
Key recommendations for Galaxy in single pack impulse sector: Negotiate with trade for preferential positioning and shelf allocation, utilise in-store marketing initiatives and broader advertising to increase the level of impulse consumption.
As the case study illustrates, the consumer dynamics driving sales within Supermarkets can differ markedly from those driving sales within other channels.
With ACNielsen | I-Scan™ Impulse, providing critical insight into what and who drives impulse purchasing, channel specific category and brand plans can be completed to effectively initiate the required consumer behavioural change to maximise sales.
ACNielsen | i-sights and ‘Integrity’
To further leverage our integrated offering, ACNielsen will shortly be rolling out ACNielsen | i sights software for Consumer Panels across the region. Client response to the introduction of ACNielsen | i-sights in Australia has already been very enthusiastic.
ACNielsen | i-sights provides consumer panel information in a graphic, navigational format that allows fast access to market highlights and highlights trends and threats. And for Asia, the ’Integrity’ component of the software provides access to integrated Consumer Panel and Retail Measurement information – a unique capability no other research supplier can provide.
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