Food and consumer packaged goods (CPG) retailers and manufacturers are constantly searching for new ways to achieve growth in a rapidly evolving shopping landscape. The best way to anticipate and adapt is to use today’s shopper behavior to predict tomorrow’s sales performance, according to a new IRI Point of View, Unspoken Shopper Behavior Predicts the Path to Growth.
“Today’s customer journeys are fragmented across digital and physical touchpoints, making it difficult for CPG companies and retailers to understand how to influence purchase decisions,” says Fernando Salido, EVP of IRI Shopper Analytics. “Fortunately, just as technology has enabled new shopping experiences, it has also enabled new analytical opportunities for marketers and retailers. Data can be one of the most effective tools to drive growth, as long as the right data are used in the right way.”
In the report, IRI researchers identified two key indicators of future sales performance:
- Share of Wallet: Share of wallet is the ultimate growth performance indicator in a competitive marketplace, and predicts dollar market share 13 weeks in advance of actual results. Identifying and monitoring the drivers of share of wallet with the greatest impact by category allows marketers to make on-the-fly adjustments that strengthen current and future market performance.
- Digital Consumer Sentiment: Insights from social media activity can be used to understand consumer mindset and influence future buying behaviors. Product mentions in blogs can lead to e-commerce sales growth and microblogs, and social media platforms, which are generally consumed on a mobile device, can drive brick-and-mortar activity.
“Modern marketers and retailers are armed with data that can uncover what, when, where and why shoppers are buying, and even how these purchases make them feel,” says Sridhar Pankanti, principal of IRI Shopper Analytics. “The key to using this data to gain a lasting competitive advantage is finding actionable insights and taking a proactive approach.”
IRI offers a three-part, insights-based strategy for CPG manufacturers and retailers to develop marketing strategies that drive sustained marketplace growth:
- Understand which shopper behaviors are predictors of market performance: Shopper behavior matters. Retailers must invest to identify the behaviors and sentiments that activate their most important customers. These could be common behavioral measures, such as penetration and trips, or unique attitudinal measures, like consumer sentiments that are shared online.
- Monitor trends in shopper measures and associated shifts in retailer market performance: Invest in new technologies and platforms that enable rapid collection, cleaning and synthesizing of the vast and disparate data that is readily available. Constantly measure and monitor trends to identify emerging opportunities and threats. Understand how your banner is performing and keep a close eye on competitor performance. Taking your eye off the ball for even a moment may mean losing a multimillion-dollar opportunity to drive sales. Monitor leakage across brick-and-mortar and online outlets.
- Activate against the most effective shopper measures to drive market performance: Fight to protect and grow share of mind and share of wallet, particularly in categories that drive traffic and/or categories and attributes that appeal to the market’s highest-value customers. Develop strategies to influence buy moments, by tapping into the power of blogs and microblogs, personalizing offers and rewarding brand loyalty.
To learn more, download the report here.