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In s i gh t s t oday f o r t omorrow’s dec i s i on s
S p r i n g 2 0 0 2
The Category Hit Parade
Using Panels to Understand the Consumer
Test Marketing Plugs into the Internet
Trend Watch—Relieving Pressure at the Front of the Store
The Future ofConsumer Spending
CI Q1 Spring 2002 4/1/02 9:03 AM Page c
CONSUMERINSIGHT:
For More Information
ACNielsen U.S.
150 North Martingale Road
Schaumburg, IL 60173
800.988.4ACN
http://acnielsen.com/ci
ACNielsen Canada
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Markham, Ontario
L3R 4B8, Canada
http://www.acnielsen.ca
CI Q1 Spring 2002 4/1/02 9:03 AM Page d
Knowledge
defined by
linking
consumer
attitudes
and
behavior.
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In every issue…
Volume 4, No. 1
Publisher
ACNielsen
Editors
Mark Chesney
Art Massa
Contributing Writers
Nick SorvilloSenior Vice PresidentACNielsen Homescan
Ken GreenbergVice President, Marketing ACNielsen Homescan
Jim MillerSenior Vice PresidentACNielsen BASES
Sheila LundyVice President, Field ServicesACNielsen BASES
Design & Layout
Kathy Zonyk
Editorial Board
Matthew Bell
Gary Binkoski
Joseph Bucherer
Margaret James
Kathy Mancini
Philip McGrath
Mark Puccetti
ACNielsen Global Creative Services
Laurel A. Kennedy Marketing/Communications
Slack Barshinger & Partners
Copyright © 2002 ACNielsen. Printed in USA. All rights reserved. ACNielsen, the ACNielsen logo, Category Masters, Homescan, KnowledgeWorks,MarketTrack and PineCone Research are trademarksor registered trademarks of A.C. Nielsen Company.Other brand, product or service names are trademarksor registered trademarks of their respective companies.
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Spring 2002, Volume 4, No. 1
4Executive Insight
6Cover Story: The Future of Consumer SpendingMany environmental and economic factors influence consumer
spending and shopping behavior. But understanding overall
consumer trends is just the beginning. At the heart of the matter
is pinpointing how—and how much—these trends influence the
way consumers spend.
11The Category Hit ParadeConsumers continue to be starved for time. And they look for
ways to save their personal time—including how they shop to
what they buy. The year’s fastest-growing categories speak to the
convenience trend, featuring products like one-dish entrées and
polish-saturated cleaning wipes.
16Using Panels to Understand the ConsumerThe consumer drives marketing plans. One of the most basic
building blocks to understand the consumer is panel information,
which unlike scanning data, can help explain the reasons behind
period-to-period volume changes.
20Test Marketing Plugs into the InternetThe advent of the Internet has helped simulated test marketing
replace mall intercept and phone feedback as a key way to garner
consumer response. And online test marketing presents an
affordable way to collect data on test markets.
25Trend Watch—Relieving Pressure at the Front of the StoreA recent survey reported one-third of shoppers said their
supermarket did not have enough cashiers on duty. Despite
many retailers’ best efforts, the consumer perception is that
there are not enough lanes open in the average store.
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In early January, we announced how ACNielsen can help you predict your consumers’
future shopping behavior through our Consumer Pre*View service. In this issue, we
share with you the latest results from our study, fielded December 2001/January 2002.
As you will recall, our study linked the renowned University of Michigan Consumer
Sentiment Index with the actual purchase behavior of our industry gold-standard
ACNielsen Homescan consumer panel households. We took a subset of the
questions from the Index and asked our panelists to respond with the intent of
matching consumer attitudes with the very purchase behavior that we track via
our Homescan panel.
ACNielsen found that consumers’ purchasing behavior was foreshadowed by their
surveyed attitudes and preferences. This represents a critical link we all have been
searching for—a predictive correlation between how consumers feel and what they
buy. More important, ACNielsen can now help you understand if this same relation-
ship holds true for your product portfolio and how your categories may be impacted
in the coming months.
It’s not hard to see the implications on a broad level. With fewer consumers indicating
a preference for dining out, restaurants will continue to be affected, with a subsequent
opportunity for CPG manufacturers and retailers to highlight enticing meals and meal
solutions for consumers who are staying at home. And with consumers also showing a
higher incidence of spending time with family, larger meal solutions may be an area of
opportunity for marketers.
The current focus on America and patriotism also remains high, suggesting a benefit
in highlighting American-made products where relevant—either with products that
are manufactured in America or that support and sponsor American themes.
On a more specific level, our new capabilities can help you understand and predict
your consumers’ future shopping behavior by understanding their attitudes today—
within your categories and across channels. We can help determine the time lag
between your consumers’ attitudes and their planned behavior. And we can tell you
if those attitudes will have a major or minor influence on future behavior.
With Consumer Pre*View, ACNielsen can now help you answer questions such as:
• How will my categories be affected in the future by current consumer attitudes?
Will they be affected at all?
• Are my categories stable or do they have a higher chance of being affected by
consumer sentiment?
• Is now a good time to make changes in pricing, promotion or assortment?
• How can I show my vendor partners that consumers will be changing their
purchase behavior in my category?
We at ACNielsen look forward to continuing to offer you the best, most innovative
services to help you manage your business.
Tim CallahanPresidentACNielsen U.S.
Our new
capabilities can
help you
understand
and predict your
consumers’
future shopping
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When I spoke to one senior industry group last fall, my key messages were softness in the Canadian
economy and reduced consumer confidence. I am delighted, six months later, to report that these
trends appear to have been short-lived. In fact, while competition is as tough as ever, 2002
forecasts are pretty encouraging.
The U.S. Economy Is ReboundingCanada’s economic downturn has largely been the result of a modest American recession and
the resulting weaker demand for Canadian goods.
But indications are that key U.S. measures are now improving. Consumer confidence is up. Housing
starts remain healthy. Depleted inventories will need to be replenished. Low interest rates are forecasted
to contribute to GDP growth. And unemployment rates are expected to stay in the five to six percent
range, which should keep inflation steady.
Stronger Canadian PerformanceRelatively speaking, the Canadian economy has weathered 2001 in fairly good shape. Our GDP growth
has outperformed that of the U.S. each of the last three years. Whereas the U.S. lost one million jobs last year,
Canada created seventy-five thousand jobs. Business capital spending has held up. And housing starts have
been exceptionally strong due in large part to low lending rates. Continued low interest rate policy and the
stronger U.S. economy will no doubt foster GDP growth, which is forecasted to hit four per cent by fall.
Unemployment is expected to remain elevated at around seven percent, which should continue to keep inflation
below two percent. And if necessary, higher interest rates no doubt will be used to control inflation once the
recovery is well established.
The 62 Cent DollarOne remaining nagging issue is the strong U.S. dollar, which has diminished the value of the loonie to record
lows. This will continue to present a competitive disadvantage to any Canadian importer of U.S. goods and
raw materials. Increasingly, that includes many of us in the CPG industry.
Grocery and Drug Stores Fared BetterGrocery and drug store growth exceeded that of the Canadian economy, and retail sales generally, during 2001.
Grocery stores experienced steady real growth of four percent through the year. This was driven by Ontario in
particular, and categories such as frozen foods, health products, paper products and confectionery. Add to this
long overdue price advances in the two to three percent range. But the real success story was larger format
grocery stores with pharmacy sections, wherein drug-store style categories grew at 13% versus the year before.
Drug stores finished 2001 with flat real growth after two percent gains through the summer months. With price
inflation, however, year-end growth was between two and four percent, depending on the region.
2001 Price Advances Are OverThrough much of 2001, both the core and total Consumer Price Indices exceeded the XFET (excluding food,
energy and tax) index. This indicated increases in food prices consistent with the dollar growth noted above.
But as we head into 2002, this inflation is likely over. Fortunately, the industry has established a more
profitable base from which to discount. But real creativity and careful analysis will be needed to execute wisely.
Patrick DoddPresident
ACNielsen Canada
Continued on page 29.
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The Future of ConsumerSpendingNick Sorvillo
Senior Vice President
ACNielsen Homescan
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A Moving TargetThe history books will note 2001 as a year of great
change in the U.S. and the world. There was a new
president for the first time since 1992. Major acts of
terrorism took place on U.S. soil. The “dot-com era”
ended as quickly as it began. Recession was declared. In
the wake of all that has happened in the past 12 months,
many people have refocused their priorities and are
again learning to live one day at a time. While priorities
may have shifted, consumer perceptions continue to be a
moving target. But where are they moving? Clearly,
certain economic and political factors provide some
insight into the consumer psyche, but does that
translate into consumer spending patterns?
Since consumer spending accounts for two-thirds of
all economic activity, understanding how perceptions
influence behavior is critically important to manufactur-
ers, retailers and the government alike. Understanding
consumer behavior, however, is no easy task—especially
when you consider the many interconnected variables
that impact it.
Environmental factors, economic conditions and the
geopolitical situation are some of the biggest influencers
that impact consumer spending and shopping behavior.
But understanding overall consumer trends is just the
beginning. The heart of the matter is pinpointing how—
and more important, how much—these trends influence
the way consumers spend their hard-earned dollars.
Finding the Missing LinkCan consumer attitudes be linked to consumer behavior
and used as a future indicator? To find out, ACNielsen
combined The University of Michigan’s Consumer
Sentiment Index, which is the most widely used
sentiment tracking index in the U.S. (and a tool that
has gauged consumer attitudes for more than 50 years),
with the ACNielsen Homescan consumer panel, which
tracks a representative sample of 61,500 households
and their CPG purchase behaviors.
The analysis showed an astounding result. To a
significant degree, the Consumer Sentiment Index
and the Homescan consumer panel were linked. Nine
months after consumers stated their attitudes and
opinions on various topics including environmental and
geopolitical factors, their purchasing behaviors showed
the effects. In other words, there is a predictive relation-
ship between the Consumer Sentiment Index and
Homescan purchasing behavior [See chart 1].
Predicting the FutureSo did we create a crystal ball? Well, that may be an
overstatement. But if key causal factors could be linked
to attitudes, and in turn future consumer behavior, then
manufacturers and retailers could further understand the
connection between consumer attitudes and behavior,
which would help gauge how consumers would shop
in the months to come.
With this promising research in hand, ACNielsen
developed Consumer Pre*View, a new Homescan
service that will give clients new insight and guidance
into consumers’ likely future purchasing behavior
in food, health and beauty care and non-food
product categories.
How it WorksEach Homescan panel household represents the
“Voice of the Consumer” on views of current events
and lifestyle trends. These views are tracked quarterly
through a Consumer Pre*View survey mailed to a
representative and projectable sample across the U.S.
Topics run the gamut and range from overall consumer
sentiment, the economy, travel and buying American to
security, bio-terrorism and lifestyle changes. ACNielsen
links the attitudes and perceptions of consumers with
their actual purchasing behavior.
Change in Index of Consumer Sentiment and Consumer GoodsConsumption
Food - Drug - Nonfood(1999.Q1–2001.Q2)
chart 1: The Result: A Significant Link
-0.150
-0.100
-0.050
0.000
0.050
0.100
0.150
0.200
1999.Q1 1999.Q2 1999.Q3 1999.Q4 2000.Q1 2000.Q2 2000.Q3 2000.Q4 2001.Q1 2001.Q2
Time
-4
-2
0
2
4
6
8
HBA (Drug) Products First Order Difference of Log (Dollar).
Food Products First Order Difference of Log (Dollar).
Non Food (General Merchandize) Products First Order Difference of Log (Dollar).
Lag 3Q Change in Index of Consumer Sentiment
% C
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Research has found a measurable correlation (adjusted for
a time lag of nine months) between changing consumer
attitudes reported by the Consumer Sentiment Index and
their manifestation in purchases of non-durable goods.
This “advance notice” has significant strategic implica-
tions, from setting marketing priorities and production
planning to acquisition analysis and more.
And the Survey Says…The findings from the first Consumer Pre*View
survey indicate there are reasons for optimism for the
consumer packaged goods industry.* Research suggests
that consumers are planning to cut back on restaurant
dining and are more likely to buy American-made
grocery products—findings that could translate into
increased sales of certain packaged goods later this year.
Twenty-seven percent of U.S. consumers plans to dine
out for dinner less often in the next three months [See
chart 2]. Additional analysis shows that younger and
lower income consumers are more likely than others
to reduce restaurant visits.
One in three consumers have shown an increased prefer-
ence for buying American grocery products [See chart 3].
chart 2: Do you plan to dine out for dinner more often, as often, or less often during the next three months as
compared to the same time a year ago?
chart 3: (Are you) more likely, as likely, or less likely to purchase American-made grocery products
now as compared to the same time a year ago?
* The Consumer Pre*View Survey identified 76% of households as responding that they were the same or better off financially as they werea year ago, while 24% responded that they were worse off.
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Additional analysis also revealed that although all
income groups show a propensity to buy American, it is
skewed by income, with lower income households more
likely than the average household to buy American.
The good news is that the majority of consumers plan
to continue to spend the same as they have in the past
during the next three months, suggesting a belief that
the slow time is only temporary [See chart 4].
Overall, Americans continue to be optimistic about the
future. More than one-third predict they will be better
off financially a year from now, and over one-fifth
believe the U.S. economy is in for at least some good
times in the coming year [See charts 5 and 6].
Plans for the FutureLinking consumers’ current perceptions to future
purchasing is an exciting start. And it enables new
opportunities for manufacturers and retailers. Consumer
Pre*View capabilities can help answer the following
questions: How will my categories be affected in the
future? Are my categories stable to consumer sentiment?
How can I show my trading partners that consumers will
be changing their purchase behavior in my category?
Does this merger/acquisition address consumer demands
more effectively?
For the first time, a true “Voice of the Consumer”
is realized and the marketing implications, both
regionally and demographically, are far-reaching.
chart 4: In general, do you plan to spend more, about the same, or less money during the next three months as compared to the same time a year ago?
chart 5: Do you think that a year from now you and your household will be better off, worse off, or just about
the same as now financially?
chart 6: Do you think that during the next 12 months we will financially have…?
CI Q1 Spring 2002 4/1/02 9:03 AM Page 9
Consumer Pre*View will help you understand your
consumers’ future shopping behavior by understanding
their attitudes today. Consumer Pre*View provides a
focused review of the American consumer—their attitu-
dinal changes, the impact these sentiments have on
our economy and their ultimate effects on your busi-
ness environment.
By tying the University of Michigan’s Consumer
Sentiment Index with the gold standard ACNielsen
Homescan consumer panel, ACNielsen has established
the first-ever predictive link between consumer
attitudes and purchase behavior that holds true across
channels. And with additional custom capabilities and
modeling, you can understand consumer sentiment
and their potential behavioral impact on a category
and channel level. Consumer Pre*View gives you the
foresight necessary to positively affect your
consumers—and your bottom line. Contact your
ACNielsen representative for more information.
Who knew she would buy this?You did.
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The Category Hit Parade
Convenience. Health. Innovation. Those three
attributes characterize the fastest-growing cate-
gories of 2001 in the United States and Canada.
Todd Hale, Senior Vice President, ACNielsen Homescan,
noted, “Time-starved consumers continually look for
ways to carve out personal time during the day—from
how they shop to what they buy.” This year’s fastest-
growing categories speak to the trend, featuring products
like one-dish entrées and polish-saturated cleaning wipes.
CI Q1 Spring 2002 4/1/02 9:04 AM Page 11
Consumers looking for a buzz could either grab one of
the innovative malternative beverages driving alcoholic
cooler category growth, or enjoy a gum-numbing tingle
generated by one of the popular electric toothbrushes
from the oral hygiene appliance and accessory category.
Time-starved consumers hungry for a few free moments
grabbed up quick-fixing, shelf stable one-dish entrée
offerings. Events like September 11 underscored the
importance of family, giving mealtime a new dimension,
where baked goods like frozen biscuits, rolls and
muffins enhanced the comfort of hearth and home.
Inspired by the world-class athletes preparing for
Olympic competition, consumers made health-based
food choices ranging from refrigerated soy milk to
frozen shrimp to nutrition and energy bars. Once
the inside of the body was nourished, attention turned
to cosmetic issues, accelerating the sales of teeth
whitening strips (dental accessories category) and
depilatory products.
Consumers took a shine to one-step polishing
cloths that cut prep time and minimize product
storage requirements for the convenience-minded
[See chart 1].
Malternatives Brew Up SalesMalternative beverages with names like Wild Pink
Lemonade and Hooper’s Hooch barreled ahead in 2001,
leading all category velocity with a year-to-year dollar
sales increase of 133.4 percent in the cooler category.
Effervescent sales moved from $118.9 million in 2000
to an even more impressive $277.4 million in 2001.
Targeting entry level drinkers in the 21–29 year-old
segment, malternatives cornered about two percent of
the 200 million barrel beer industry according to Beer
Marketer’s Insights. Although two brands (Smirnoff Ice
and Mike’s Hard Lemonade) dominated the category
with two-thirds of sales, the competitive field is about
to get more crowded. Anheuser-Busch takes its Bacardi
Silver brand national in 2002 backed by a $60 million
campaign. Miller Brewing follows suit later this spring
with a Skyy Blue launch resourced to the tune of roughly
$40 million.
Shaking Up Refrigerated DrinksSay Soy! The big surge in the refrigerated drinks and
shakes category (up 92.4 percent, from $98.9 million in
More Retailersand Manufacturers
Sign on for Category Business
PlannerThe list of retailers and manufacturers using the web-
based Category Business Planner continues to grow.
Recent additions include Ahold, CVS, Hannaford/Kash N’
Karry, Long’s, Target, Wakefern and Walgreen’s, meaning
that this revolutionary solution for collaborative category
planning is now being used for over 33% U.S. ACV. And
the manufacturer list is growing as well.
Category Business Planner is the “one-number” system for
organizing category information. Our unique approach
supports collaboration among retailers and manufacturers,
improves efficiency and enables both client groups to
focus on growth initiatives.
If you conduct category planning with these or any of the
other retailers already using Category Business Planner,
then contact your ACNielsen representative today or visit
our website at http://acnielsen.com/CBP to see how
Category Business Planner can help you work collabora-
tively with your trading partners.
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2000 to $190.3 million in 2001) flows from two factors:
consumer health concerns and the much-improved taste
of refrigerated soy milk.
Soy drink sales overflowed in the wake of The New
England Journal of Medicine article touting the
cholesterol-lowering effects of soy. Also tuned in to
the new wave of soy drinks are the 30 to 50 million
Americans that the National Digestive Diseases
Information Clearinghouse believe are unable to
digest lactose, the primary sugar in dairy milk.
The innovative White Wave company made the bold
move of packaging soy milk in cartons and selling a
refrigerated vs. shelf-stable product when it launched the
first-ever refrigerated soy milk, Silk, in 1996. They also
managed to eliminate the “beany” taste and feature
sweeteners and flavorings. In fact, popular flavors like
eggnog have enabled White Wave Silk to capture 68
percent of category sales.
Stocking Up on Shelf Stable EntréesBetween the ongoing recession and the war on terrorism,
families are turning inward for comfort and compatibility.
Shelf stable entrées represent the perfect compromise
between a home-cooked meal and the convenience of
takeout or dining out.
This one-dish, quick-fixing meal category expanded
by more than 83 percent in 2001, with sales of $140.8
million vs. year 2000 performance of $76.8 million.
Many of the entrées feature comfort goods like lasagna
or chicken and dumplings and, like category leader
Banquet Homestyle Bakes, require approximately five
minutes to prepare and 35 minutes or so to bake.
Dental Accessories a Bright SpotInventive teeth whitening products like Crest Whitestrips
and whitening toothpastes like Colgate’s Fresh
Confidence are giving retailers something to smile
about. Once the exclusive domain of dentists, the
consumer packaged goods industry has taken a $253
million bite out of the teeth whitening market.
Category sales velocity is dazzling, approaching 80
percent with no deceleration in sight, as Baby Boomers
look to lighten aging teeth. For those interested in a
double benefit, Rembrandt Plus Whitening mouth rinse
claims to whiten teeth by as much as 27 percent while
reducing the growth of bacteria in the mouth for up
to two hours. Drug stores have been the primary benefi-
ciary of the toothsome trend, outselling food formats by
three to one in the dental accessory category.
Frozen Bakery Gets CookingThe Pillsbury Dough Boy grabbed a parka and skated
from the refrigerator to the freezer section, arriving with
Home Baked Classics like biscuits, sweet rolls, cookies
and dinner rolls in hand. Frozen bakery sales are heating
up, rising to $149.4 million in 2001, a 58.6 percent
increase over prior year sales of $94.2 million.
Until now, refrigerated bakery manufacturers had given
the frozen section the cold shoulder. However, the
perceived quality edge of frozen baked goods, and the
convenience of resealable bags that let consumers make
as few or as many treats as they want, has caused a
thaw in that outlook.
Oral Hygiene Category Cleans UpPower toothbrushes are having an electrifying impact
on the oral hygiene category, which posted double-digit
growth (47.5 percent) for the second year running in the
U.S. Canada gave the toothbrushes a whirl as well in
2001, to the tune of CDN$68 million, for a 71 percent
growth rate. The Crest Spin Brush dominates a $244.5
million category bristling with potential.
source: ACNielsen Strategic PlannerTotal U.S.—food, drug and mass, excluding Wal-Mart.Based on dollar sales >$100 million, 52 weeks ending December 29, 2001.
Remaining Coolers 133.4 277,431,947Remaining Ref Drinks & Shakes 92.4 190,291,037Shelf Stable Entrées 83.4 140,748,021Dental Accessories 78.9 252,996,121Frozen Biscuits/Rolls/Muffins 58.6 149,365,791Oral Hygiene Appliance & Accessory 47.5 244,485,249
Polishing/Cleaning Cloth 47.1 227,686,566Energy Bars 40.5 405,020,281Women’s Depilatories 38.2 139,279,942Unbreaded Frozen Shrimp 35.9 481,272,511
2001 2001Dollar Sales Dollar Sales
Growth
chart 1: U.S. Top 10 Fastest Growing Categories
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While consumers have always known that power brushes
do a better job cleaning, the $80+ price points were
daunting. Technology breakthroughs have changed that
paradigm, and inexpensive electric toothbrushes like the
Colgate Actibrush or the Johnson & Johnson Reach
Power toothbrush can be purchased for less than $20. A
maturing population faced with impending periodontal
disease is sweeping the power toothbrush shelves clean.
Cleaning Wipes Grab MomentumThe days of the rag bag and greasy bottles of oil and
polish are gone. Enter the all-in-one replacement prod-
ucts with names like P&G’s Swiffer and S.C. Johnson’s
Pledge Grab-It, Pledge Wipes and Old English Wipes.
Polishing cloth wipes mopped up last year, nearing the
50 percent growth mark with dollar sales of $227.7 million.
Consumers were floored when Swiffer made its debut—a
disposable cloth that looked like a dryer sheet and acted
like a dust magnet. Next in line were the all-in-one
mops, Swiffer Wet Jet and Clorox Ready Mop. The idea
is catching on and shifting position in the home, from
floor to furniture to window and mirror wipes.
“You’ll find successful consumer products at the inter-
section of convenience and innovation, with rapid
consumer take-up of new technologies that simplify
their lives,” added Hale.
Healthy Sales for Nutrition BarsSnack bars have energized the health bar category,
fueling 2001 sales of $405 million, a 40.5 percent
annual increase. Functional foods like energy bars and
beverages have worked out in the Canadian marketplace
as well, where offerings by Adams, Gatorade, Kraft and
Nestlé accounted for 38% category expansion to
CDN$25.8 million.
Celebrity endorsements, a la the PowerBar/Lance
Armstrong relationship, continue to invigorate the
market, resonating with consumer values like health,
energy and well-being. The Carb Solutions snack bar is
taking a bite out of Power Bar’s category lead, gaining
slipstream momentum.
Smooth Sailing for DepilatoriesFans of infomercials are familiar with the entrepreneurial
tale of Sue Ismiel, creator of the translucent green goo
known as Aussie Nad’s depilatory for women. Once the
exclusive province of expensive salons, thanks to Nad’s,
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Nair, Sally Hansen and Epil-Stop, the bladeless hair
removal category has relocated to the homefront.
Lower cost treatments have conquered longstanding barri-
ers to use such as unpleasant odors and chemical and heat-
related burns, igniting category sales to unprecedented levels
at $139.3 million with an incendiary growth rate of 38.2
percent. Watch for additional expansion when new prod-
ucts based on the first-ever leave-on NAC Depilatory
Technology developed by Procter & Gamble hit the market.
Jumbo Sales for ShrimpThere’s nothing small about the 35.9 percent annual
increase in unbreaded frozen shrimp sales. Awash in
shrimp from Far East markets like Vietnam, the average
price per pound dropped by $0.54 in 2001, leaving in
its wake inflated category sales of $481.3 million.
Canadian WinnersSo close geographically, and yet so far apart in tastes and
trends. Canada’s Top 10 fastest-growing category list for
2001 shares just two entries with the U.S. version—elec-
tric toothbrushes and energy bars. Potential reasons for
the variances may be chalked up to different economic
conditions and consumer preferences [See chart 2].
What did hold true for both countries were the predomi-
nant themes of convenience, health and innovation.
Spot removers left their mark as the fastest growing
CI Q1 Spring 2002 4/1/02 9:04 AM Page 14
(89 percent) category of the year at CDN$16.6 million.
Electric toothbrushes spun into second place at CDN$68
million, a 71 percent per annum rate. Diet meal replace-
ments and dietary aids, a CDN$46.3 million category, fat-
tened up 63 percent by shrinking client waistlines.
Prepackaged frozen meat like lamb and chicken legs
(CDN$31.4 million) shared the number four spot with
razors (CDN$26.9 million), icing out other categories with
a 43 percent annual expansion figure. Energy bars and
drinks, the second of two categories common to the U.S.
and Canadian fastest-growing category lists, ranked fifth
along with disposable cutlery, which carved out respective
dollar sales of CDN$25.8 million and CDN$11.1 million.
Concerns regarding municipal water sources, spurred by
highly publicized e-coli deaths in Walkerton, contributed to
bottled still water sales of CDN$230 million, for a 36 per-
cent growth rate.
Aromatherapy as child’s play characterizes the CDN$11.4
million children’s bath additives category, which gently
eased into the number seven slot at a 35 percent pace.
Self-rising crusts like Kraft Delissio Rising Crust inflated
the frozen and refrigerated pizza category by 32 percent,
with total sales of CDN$291 million.
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In other top categories, creative breath freshening strips
(Listerine Cool Mint Pocket Pack Strips) spelled sweet suc-
cess for the mini-mint category, capturing CDN$28.4 mil-
lion in sales. Beef jerky paced that increase at 31 percent,
with revenues of CDN$21.4 million.
Completing the list on a healthy note, creaking joints got
some relief from glucosamine sales of CDN$43.6 million.
The herbal arthritis pain remedy eased joint pain for
weekend warriors and contributed to some very robust
bottom lines.
The lesson for marketers: consumers are quick to adopt
new products, even those that break new ground or deploy
radical technologies, if the products contribute to their
emotional and physical well-being and deliver on the
promised benefit.
Business Tools forConsumer Behavior
Understanding the liquor category purchaser
The Homescan consumer panel in Canada has expanded category coverage to deliver insights to the liquor industry.
As retailer and manufacturer sophistication has grown in thisindustry, the implementation of category management practiceshas driven the need for fact-based consumer information.ACNielsen is now able to fulfill this need by providing insightinto Canadians’ liquor cabinets through such analyses as:
• Consumer purchasing behaviour• Consumer loyalty and cross purchasing of brands or segments• Demographic characteristics of brand and segment consumers• Identifying key consumer groups based on volume purchased
or brand loyalty.
Beyond liquor category marketers, this information will alsoallow cross category analyses within traditional packagedgoods beverage categories such as juices and drinks andflavoured soft drinks to help further understand household purchase drivers.
For more information contact Sharon Skurnac atsharon.skurnac@acnielsen.ca
Available in Canada only
http://acnielsen.com/ci or call 1.800.988.4ACN
chart 2: Canada Top 10 Fastest Growing Categories
Category 2001 Dollar 2001 Dollar Similar to Growth Sales Growth Sales U.S. Findings Driver
Spot Removers +89 $16,548,444 No InnovationElectric Toothbrush +71 $68,048,364 Yes InnovationDiet Meal Replacements/DietaryAids
+63 $46,346,379 No Health/Innovation
Remaining Frozen Meat +43 $31,357,215 No ConvenienceRazors +43 $26,889,354 No InnovationEnergy Bars & Drinks +38 $25,750,809 Yes HealthDisposable Cutlery +38 $11,141,117 No ConvenienceBottled Still Water +36 $230,565,909 No HealthChildren’s Bath Additives +35 $11,465,828 No Health/InnovationFrozen &
+32 $290,710,327 NoInnovation/
Refrigerated Pizza Convenience
Home Dry -60 $4,810,005 – –Cleaning Systems*
Source: ACNielsen Canada, MarketTrack.National—All Channel (total grocery, drug, mass, warehouse club and general merchandiser).Based on dollar sales >CDN$10 million, 52 Weeks to December 29, 2001.
*This was one of the fastest growing products in 2000. The category has dropped dramatically in 2001.
CI Q1 Spring 2002 4/1/02 9:04 AM Page 15
Using Panels to Understand the Consumer Ken Greenberg, Vice President, Marketing, ACNielsen Homescan
The Consumer Is KingUnderstanding consumers and what drives their purchasing behavior is one of the most basic building blocks for
developing a successful marketing strategy. The diagnostic tool that provides this powerful information is house-
hold panel data. Panel information, unlike scanning data, is used to explain the reasons behind period-to-period
volume changes.
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This overview of how consumer panel information can
be used in a marketing plan is intended to help you use
panel data to the fullest potential. This article will
address: the definition of household panel data; the dif-
ferences between scanning data and panel data; the key
components of panel data that allow you to analyze and
understand volumetric data; and the basic behavioral
measures that consumer panel data delivers.
What Is a Household Panel?Household panel data is collected after each panelist
shopping trip. Members of the panel record their
purchases, capturing not only what is
purchased, but also where the purchase
was made (store or channel), and
whether the purchases were the
results of a promotional deal. This
purchase information is then tied
back to the general demographics of
the household.
Household panel data allows
marketers to measure the ongoing
purchase habits and practices of
household and demographic groups.
Tracking and analyzing this
information over time can
reveal the dynamics of
consumer purchasing—such as who is
buying your product, how often they buy, the
competitive products your buyers are also purchasing,
and whether buyers are deal sensitive. Panel data quanti-
fies the composition of category or brand volume, which
can then be used to identify the appropriate marketing
strategies to drive growth or defend against competitive
actions. Key issues such as consumer purchase behavior,
shopping habits, demographics, attitudes and opinions
are critical elements the panel can deliver.
Panel data quantifies thecomposition of category
or brand volume.
The ACNielsen Homescan consumer panel of 61,500
households collects consumer shopping and purchase
data from all outlet channels, including grocery, drug,
mass and convenience stores. The panel is geographically
dispersed and is demographically balanced so the sample
profile matches the U.S. population as closely as
possible. The panel data is also projected to U.S.-based
Census estimates that are updated regularly to reflect
population changes. The Homescan panel is considered
by some as the industry gold standard due to its long-
standing reputation in the marketplace and its utilization
of revolutionary hand-held technology that changed the
face of household panel data collection.
Each household in the Homescan panel collects purchase
information on each shopping trip. For each shopping
trip, the following data is recorded:
• Date of purchase
• Age and sex of primary and
secondary shopper
• Store name
• Usage of frequent shopper cards
• Complete item description through
UPC dictionary
• For each UPC, the number of units,
price paid, and deals used
• Dealing—specified by the panelist as
manufacturer coupon, store coupon,
store sale, or other
• Source of the coupon—at home, at
the register, elsewhere in the store
• Total shopping trip purchase amount
• Method of payment—cash, check, credit card, or
debit card
What Is the Difference Between Panel Dataand Scan Data?Scan data is collected at the store point of sale and is the
most accurate source of volumetric and or share infor-
mation. It addresses the “what happened in the store”
questions such as sales volume and share, price, and
retail trade support.
Panel data is used to understand the reasons behind
volume/share levels and trends. It answers such key
questions as:
• Who are your buyers?
• How often do they buy?
• Where do they shop?
• Are they loyal to your brand?
• How do they respond to your marketing efforts?
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Sometimes, marketers question the quality of household
panel data when they try to reconcile it with store-scan-
ning data. There is the perception that the volumetric
data from each source should be the same. However,
panel data and store data are not always equal because
measurement methodologies differ. Store-level data
records millions of shopping transactions while panel
data records a specific group of shoppers. In addition,
panel data only represents household-based purchases,
so there are no small businesses or civic organizations
included in the panel.
The bottom line is that both types of information have
their uses, and by combining the two, marketers have
been able to quantify the composition of volume,
understand the reasons behind volume changes, reveal
the dynamics of consumer purchasing, and identify
appropriate sales and marketing strategies.
Store-level scanning data can tell you that your sales
were down in 2001. Panel data will provide you with
information telling you whether you lost volume due to
fewer buyers or if your buyers purchased less. Panel data
also gives you information on which competitors you
lost volume to.
The Key Measures There are a number of basic terms that are used in
household panel data—penetration, buying rate, pur-
chase frequency, and purchase size. Brand or category
volume is a function of the number of households which
make a purchase (penetration) and the quantity that they
purchase (buying rate). Buying rate is a function of pur-
chase frequency (occasions per buying household) and
purchase size (quantity per occasion).
Volume = # of Buying Households x Quantity Purchased(% Penetration) (Buying Rate)
Buying Rate = # of Purchase Occasions x Quantity per Occasion(Purchase Frequency) (Purchase Size)
Continued on page 28.
Scan Data Panel Data
What happened Who and why it in store happened
Sales Volume Shopping Frequency
Share Buyer Demographics
Price Store Type Shopped
“sales were down “volume was lost in 2001” due to fewer buyers
age 18–34”
New Wal-Mart ChannelReceiving Broad ClientAcceptanceReleased in October of 2001, ACNielsen’s new Wal-Mart Channel offering is now accepted by the majorityof our top manufacturer clients. Retailers are alsoembracing the data and finding significant value in thenew service with robust availability of their key com-petitor’s data never available to them before.
With the granularity of information provided, such asfull category views and private label detail, and ease ofdata use through custom Wal-Mart channel templates,both manufacturer and retailer excitement has grownat a quick pace. Many retail clients are integrating theWal-Mart Channel data as part of their category man-agement process and are endorsing the use ofACNielsen’s Wal-Mart Channel data.The end resulthas been the collaborative use of data by both themanufacturer and retail communities.
The true competitive advantage for this new service isthe gold standard ACNielsen Homescan consumerpanel foundation. ACNielsen’s households have alwaysprovided price and causal level detail with 80% of theHomescan prices identically matching the scan price(90% within 10% of scan price). Over 90% of thesesame Homescan panelists shop in over 90% of Wal-Mart stores—maintaining ACNielsen’s advantage inleading measurement of C and D counties where Wal-Mart locates the majority of its stores.
Striving to continue the world-class coverage of Wal-Mart consumers, ACNielsen is adding 6,500households, predominantly in the South and Southwestregions of the country. This expansion allows the Wal-Mart Channel Service reporting to expand fromthe Total U.S. and Four-way Census region reporting(total Wal-Mart, discount and supercenter) availabletoday, to more granular Nine-way Census divisionviews by the second quarter of this year.
ACNielsen’s Wal-Mart Channel tool assists both manu-facturers and retailers in driving strategic businessanalyses and decisions. Clients interested in benefitingfrom this new service should contact their ACNielsenrepresentative for more details.
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Use Homescan CategoryManagement✽Insights for Strategic Category Planning
The challenge in today’s world is not in obtaining more information, but rather in finding how to measure, how to interpret, and how to effectivelyimplement against the analyses.
ACNielsen Homescan Category Management✽Insightstakes an innovative approach to strategic planning andsolving category management issues. Using data fromindustry-recognized ACNielsen Homescan applications,the seamless Category Management✽Insights databasecan help you define your strategy and build your cate-gory management process.
Category Management✽Insights has captured the attention of manufacturers and retailers alike. Using a powerful template set, you can gain insights fromconsumer shopping behavior to develop corporate, category and brand strategies. Uncover the importanceof individual product categories to a specific chain.Pinpoint which categories appeal to existing customersand/or target consumers. Or find the categories thatcan be used to build loyalty and/or frequency.
Release date: May 2002
The Patient Speaks with the HomescanRx/OTC Panel
Announcing a major breakthrough in prescription medication marketing information—the HomescanRx/OTC Panel helps you understand the Rx/OTC (prescription/over-the-counter) connection. Through overa dozen client interviews, ACNielsen uncovered the keyknowledge gaps in the industry and designed a servicethat can uniquely fill these voids.
The Homescan Rx/OTC Panel focuses on the consumerand provides first-ever insights into consumer householdand individual behavior for Rx and OTC products.Homescan consumer insights will drive business growthby helping Rx and OTC medication manufacturers andretailers to understand:
• Dual usage and replacement decisions for OTC and Rx• Compliance and persistence of usage• Effectiveness of Rx marketing efforts directed
at consumers• Ailments being treated (for products with
multiple indications)• Source of volume for OTC switch products
The new service is being launched in three phases. Phase1, available in May 2002, is the Homescan HealthcareSurvey. The survey provides consumer insights into prescription drug usage, ailments treated, and Rx/OTCbrand interaction from over 100,000 individual respondents of all ages.
Phase 2, available in Q2 2002, is the HomescanRx/OTC Panel. The panel is a nationally representativesample of 5,000 U.S. households/12,000 individuals whoscan all of their Rx and OTC purchases on a longitudinalbasis, covering 23 ailments and 200 drugs. Phase 3 is the expansion of this sample in Q4 2003 to 15,000households and the conversion from a paper codebook collection technique to a new scanner with onboard codebook.
The Homescan Rx/OTC Panel helps you to:
• Identify potential for increased sales at the patient level.• Provide insight into how that potential can be achieved.• Track success in exploiting that potential.
For more information on the Homescan Rx/OTC Paneland for charter member opportunities, contact MeredithSpector at mspector@acnielsen.com.
http://acnielsen.com/ci or call 1.800.988.4ACN
Business Tools forConsumer Behavior
Available in U.S. only
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Test Marketing Plugs Into
the Internet
When does a virtual experience beat reality hands
down? When it involves new product or con-
cept testing. With the advent of the Internet,
simulated test marketing has kicked things up another
notch—replacing mall intercept and phone feedback with
an online respondent community.
Test marketing affords companies the opportunity to prove-
up concepts and tweak packaging and advertising presenta-
tions while tightening sales and profit forecasts. In addition
to acquiring valuable customer feedback, test markets
present the chance to observe potential impacts on the
entire product line, such as cannibalization, and can be
used to assess the reaction of the sales force, retailers
and distributors to the new product.
Taking Their MeasureWithin the world of test marketing, an entire portfolio
of techniques is available to marketers:
• Standard test markets. Actual launches in smaller
markets including sell-in to the trade and complete
marketing support.
Rating: best possible read of the market at the highest
possible cost with the longest execution time. Open to
competitive attack.
Jim Miller, Senior Vice President
Sheila Lundy, Vice President, Field Services
ACNielsen BASES
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• Controlled test markets. Comprises a panel of stores
with good geographic dispersion that carry new prod-
ucts controlling for facings, displays, POP promotions
and pricing. Conducted by companies such as Market
Decisions.
Rating: provides accurate barometer of trade reception.
Great for evaluating environmental issues like unusual
shelving requirements. Affordable. Minimizes exposure
if product fails. Requires sell-in.
• Simulated test markets. Consumers use seed money to
buy new items in a laboratory store and researchers
follow up. Consumers recruited at malls react to
product and promotional concepts, then provide
feedback via traditional survey methods. Electronic
panelists sample products at home, review concepts
and promotions online, then provide feedback via
traditional survey methods.
Rating: Lowest execution costs. Fastest feedback.
No finished packaging or advertising requirements.
Minimal security issues. High degree of accuracy.
Share vs. SalesThere are many classic debates in marketing, and the
comparative strength of share vs. unit-based forecasting
is one of them. This debate was especially prevalent
during the early days of simulated test markets. Share is
a powerful metric, but ultimately must be translated into
volume estimates for production and pro forma financial
statement purposes. One area of vulnerability for share
data relates to truly new products or categories.
Take the case of a new product that spans two cate-
gories, such as the first combination shampoo/conditioner.
Which category multiplier should be applied to convert
share into an accurate volumetric prediction? Good
question, and in the case of radically new products,
there is no definitive answer.
Volumetrics Speak VolumesThis unit vs. share dilemma was one of the reasons that
led to the development of the BASES simulated test
approach in the late 1970s. BASES yields a two year
volume number rather than a market share estimate.
Tapping into the average American mindset, BASES
recruits respondents at shopping malls, then shows them
concept boards and preliminary packaging ideas to gather
feedback early in the new product development process.
Underlying it all is a simple premise: ask consumers what
they plan to do and they’ll tell you. Although people
never do exactly what they say, they always do something
related to their claim. In a matched comparison of more
than 800 cases, BASES volume estimates fell within +/-20
percent of actual in-market results nine out of ten times.
Worldwide, the BASES model has been applied success-
fully to more than 28,000 new product concepts from
food and beverage to household items, personal care,
over-the-counter drugs, pet products and other consumer
packaged goods ideas. Today, BASES holds a 60 percent
global share of all simulated test marketing for consumer
packaged goods.
Seismic ChangesTwo concurrent circumstances converged to permanently
alter the BASES approach to simulated test marketing.
First, mall traffic, the source of consumer input to the
BASES models, plummeted from an average of 30 com-
pleted questionnaires per location per day in the 1970s
to a mere five a day by the 1990s.
Eighty percent of shoppers diligently avoided recruitment
and fully one-third of those who did qualify refused to
participate, boosting administrative costs and causing
timing delays. When queried, it turned out that time-
stressed consumers wanted to participate in research,
but on their own terms and in their own time.
Second, the Internet gained a foothold in American
households, thanks to the proliferation of personal
computers and low-cost Internet service providers.
Putting the two trends together, BASES explored the
idea of operating an electronic panel (e-Panel) which
recruited respondents from the virtual society.
Proof of ConceptBASES spent more than $1 million developing and
testing the e-Panel concept to ensure forecasting accuracy
and equivalency with the mall-based historical archives.
There were many questions to resolve: Could a
demographically matched panel be assembled? Would
cooperation rates differ? Would mall and e-Panelist
responses be similar?
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The Online CommunityAfter screening for issues like employment sensitivities
and demographic markers, eligible respondents complete
a test questionnaire prior to going live with a study. This
allows BASES to sync up results and match with the cur-
rent panel.
To keep respondents engaged, and build a sense of com-
munity, BASES personalized the panel, gave it a name
(PineCone Research) and a facilitator who serves as
its voice (Karen Scott), and posted interesting editorial
content on a dedicated web site (The Treehouse). The
typical panelist gets tapped for a survey once every
three to four weeks.
Who Are These People?As with most longitudinal panels, the granularity
of respondent information on the BASES e-Panel is
impressive. It includes media usage, shopping habits,
As Chart 1 illustrates, the initial investigation showed
that wired panelists were virtually indistinguishable from
the mall recruits. The panelist profile is practically
identical on important criteria such as household
size, average age, employment, race, gender and
education levels.
To validate e-Panel, BASES conducted more than 100
parallel tests over three years, representing a broad
spectrum of categories. Clients were so intrigued by the
potential of the Internet as a simulated test marketing
tool, they volunteered concepts for methodology
prove-up tests and anted up dollars to support
validation checks. A critical finding emerged from
the verification effort: as suspected, the key survey
measures for the e-Panel and mall tests were highly
correlated and the system showed very strong test/retest
reliability [See chart 2].
chart 1Panel Consumption
source: ACNielsen BASES
Mall Internet PanelTests Tests Members
Household Size 2.8 2.9 3.0Average Age 40.5 39.2 37.2Employed 71% 72% 69%Caucasian 86% 88% 89%Male 20% 21% 15%College Educated 40% 43% 46%
chart 2Correlation Coefficients
Mall/ Test/Internet Retest
Purchase Intent .86 .94Frequency .94 .97Liking .85 .91Price/Value .90 .99Uniqueness .91 .99
source: ACNielsen BASES
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pets and appliances. It covers chronic ailments such
as allergies and acid indigestion. It tracks promotion,
media and shopping habits including coupon use and
preferred retail channels.
Every e-Panelist is also Spectra-coded, enabling clients
to incorporate lifestage and lifestyle information into
their analyses for a holistic view of the marketplace
when making tactical decisions about couponing,
media and distribution.
How It WorksEach e-Panel study begins with outbound letters to
selected participants containing a log-in password, in
parallel with e-mail reminders. Panelists respond to a
survey online for a $5 incentive that is mailed prior to
the interview. Product samples are delivered directly to
the home. While a bevy of incentive opportunities were
investigated, a cash incentive won hands down by an
overwhelming 65% margin.
The Net TakeNow fully operational, e-Panel has been rated a
resounding success by clients for its robust capabilities,
equivalent forecasting accuracy, richer open-ended
questions and brand claim capability. On average,
e-Panel yields savings of 20% per study, lower ancillary
costs for concept boards and product shipment, and an
accelerated execution time that cuts one full week
off the mall production schedule.
An unexpected benefit of the e-Panel was the unfettered
honesty of answers. Respondents proved less restrained
in expressing dislikes via the impartial computer as
opposed to discussing dislikes with an interviewer.
BASES intends to pace technology advancements and
continuously enhance its e-Panel offering. Plans are
already in the works to introduce video testing in the
first quarter of 2002 and to grow the panel to 90,000
participants. As personal digital assistants, RIM devices
like Blackberry, and cell phones go mainstream, wireless
networks may represent the next simulation frontier.
CI Q1 Spring 2002 4/1/02 9:04 AM Page 23
ACNielsen Homescan syndicated category
management applications including ACNielsen
Homescan Consumer✽Facts, Channel✽Facts, Account
Shopper Profiler and Cross Outlet✽Facts, are now
available for Calendar 2001 Data✝.
These Excel template applications deliver national,
regional, local market and account level measurement
of hundreds of retail accounts, with
demographic and behavioral profiles of core
and occasional shoppers, representing more
consumer shopping trips than any other
household-based tool.
You simply cannot find a more complete and
accurate look at consumer shopping behavior
across all channels. Contact your ACNielsen
account representative to see how Homescan
syndicated category management applications
will help you manage your business.
You simply cannot find a better view of your shopperGet Your Updated Category Management Applications Now!
✝ Release dates: Consumer✽Facts, Channel✽Facts and Account Shopper Profiler—End of March, 2002; Cross Outlet✽Facts—End of April, 2002.
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T r e n d W a t c h :Relieving pressure at the front of the store
Retailers have helped find innovative ways to make the
shopping experience more convenient and enjoyable
for customers by implementing self-checkout lanes,
line busting and mobile point-of-sale stations. And while their
ultimate goal is to increase customer satisfaction and loyalty,
along the way, there are also many potential business gains
for the retailer—higher profits, improved inventory and reduced
labor costs, as well as a competitive edge.
Self-Checkout: Mutually BeneficialA recent Harris Interactive survey reported that 35% of
shoppers said their supermarket did not have enough cashiers
on duty when they shopped. Despite many retailers’ best efforts,
the consumer perception is that that there are not enough lanes
open in the average store, which is a source of frustration.
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Make plans to attend ACNielsen's CategoryMasters Conference on August 19�22, 2002 atThe Century Plaza Hotel & Spa in Los Angeles,California.
Plan now to join hundreds of representatives from
the industry�s top retail and consumer packaged
goods companies at Category Masters, the
premier industry event to learn and exchange
knowledge on consumer-focused category
management business processes.
Through workshops, presentations and
networking, you will gain the tools to convert
your conference experience into solutions that
will impact your organization.
A Category Masters conference brochure and
registration form will be mailed to you this
coming May. Conference registration will also
be available on the Internet beginning in June at
http://categorymasters.com.
We hope to see you at Category Masters!
Make Plans To Attend
Category Masters�
August 19�22, 2002
The Century Plaza Hotel & Spa
Los Angeles, California
C AT E G O RY
MA S T E R S
C AT E G O RY
MA S T E R S
For this reason, many grocery retailers have embraced the concept
of self-checkout. Customers check out their own grocery items via
a scanning and weighing system. The item is scanned and once
placed in the grocery bag, it is weighed as an extra measure to
validate that it is the same item, thus acting as a theft deterrent.
The customer can then pay via credit card or cash. The technology
itself is not new, but more retailers are testing and putting the
application to work.
Although retailers are still in testing phases with this technology,
there are benefits for them if the concept becomes widespread.
For one, retailers can lower their front-end labor costs. During the
self-checkout experience, if the customer needs assistance, there is
an employee on staff to help out, but that same employee now
minds four checkouts instead of one.
Are self-checkout lanes faster than retailer-staffed lanes? Studies
have shown that, in the stores where self-checkout is offered, the
process itself is not actually saving consumers time. The system is
said to work extremely well with small to medium size grocery
loads, but is not yet ideal for the large order.
However, the consumer perception seems to be that customers get
out of the store quicker (and are therefore more satisfied) because
they have more control over their shopping and checkout experi-
ence. Customers feel like they’re contributing to their checkout
process, not just waiting passively or browsing through the latest
tabloid. In addition, some consumers—such as elderly customers
and those concerned with protecting their privacy—also report
liking self-checkouts because they can control the pace of the
process and their privacy concerns are minimized.
By giving customers more choices, these retailers are creating
convenience and satisfaction. Consumers are busier than ever and
retailers are more labor constrained. These front-end solutions
address both issues—retailers can have more lanes open so lines
are less backed up, and the employees are more freed up to focus
on other areas of the store like bakery, deli and floral, thus
improving customer service.
Mobility and Flexibility Help at the Front EndSpecialty and mass merchandise retailers are also finding ways to
squelch customer dissatisfaction by interrupting long lines at the
checkout. Line busting, or queue busting, is the latest answer to
backed-up lines and slow checkout processes. Retailers are taking
different approaches to line busting, such as scanning the
customer’s items while in line, so all they do is pay when they
get to the cashier, or checking them out on the spot with magnetic
card readers and mobile receipt printers. Line busting is also a
Continued on page 29.
SAVE THE DATE!
CI Q1 Spring 2002 4/1/02 9:04 AM Page 26
S e e A C N i e l s e n a t t h e s eu p c o m i n g i n d u s t r y e v e n t s .
May 2–3Institute for International Research PrivateLabel Impact ConferenceChicago, ILFeatured speaker: Gail Zielinski, AccountDirector, Homescan Consumer Insights,ACNielsen, will present on private label trends.
May 13–14CMS Client Conference Asheville, NCFeatured speaker: Joe Bucherer,VP, ClientPrincipal Southeast, KnowledgeWorks™
Analytics Practice, ACNielsen, will present on effective consumer promotions.
May 20–21Institute for International ResearchIntegrated Promotions ConferenceNew York, NYFeatured speaker: Ann Marie Dumais,VP,Integrated Marketing,VNU Entertainment,will present a series of online/offline marketing case studies.
Upcoming Industry Events
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April 11Retail Merchandiser/Progressive Grocer Store Specific Merchandising & Marketing Conference Orlando, FL Featured speaker: Ken Greenberg,VP,Homescan Marketing, ACNielsen,presents on the Hispanic market.
April 22Consumer Pak 2002Scottsdale, AZFeatured speaker: Ken Greenberg,VP,Homescan Marketing, ACNielsen,will be co-presenting along with theCultural Access Group.
April 23National Frozen & RefrigeratedFoods Association—Retail ExecutiveConference Tempe,AZFeatured speaker: Ken Greenberg,VP,Homescan Marketing, ACNielsen,will be co-presenting along with theCultural Access Group.
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dConsumer Panel Data continued from page 18.
Let’s take a look at each of these terms individually.
Penetration is determined by the number of households
purchasing the product at least once during the time
period. For example, if there are 10,000 households, and
5,000 households purchase Brand X at least once, then
Brand X’s penetration is 50%.
The buying rate is the average volume purchased by
buyers during the given time period. As an example, If
500 households purchase 3,000 units of Brand X, the
buying rate is 6 units.
Purchase frequency is the average number of times each
buyer purchases the brand during the time period. For
example, if during the given time period, 1,600 purchase
occasions are made by 500 buying households, Brand
X’s purchase frequency is 3.2.
Purchase size is the average product volume purchased
each time the product is bought. For example, if 3,000
total units were purchased on 1,600 separate occasions,
Brand X’s purchase size is 1.9 units.
The major benefit that consumer panels provide is feedback
on the direction of your marketing strategies. For example,
if you find that the penetration of your product is falling or
is below competitive penetration rates, you can increase
penetration with advertising, brand extensions, couponing,
trial packs, product sampling and displays.
A decline or deficiency in purchase frequency can be
addressed with smaller package sizes, couponing, displays,
in-pack/on-pack promotions, and sweepstakes/contests. If
you need to increase the purchase size, marketing tactics
like two-for-one deals, bonus packs, trade deals, and larger
packages will address this issue.
Behavioral MeasuresIn addition, panels offer the capability of measuring
key behavioral activity that also influences sales. These
measures are deal propensity, repeat rate, purchase cycle
and loyalty.
Deal Propensity is the percentage of Brand X volume sold
that a panelist reported, “on deal.” Deals can represent
manufacturer coupons, store coupons, store deals or other
deals. For example, if 5,000 units purchased were reported
as “on deal” out of a total volume sold of 20,000 units,
then 25% of Brand X sales are “on deal.”
Repeat rate is the percentage of buyers that make two or
more purchases during a given time period. This is a very
important measure when introducing a new product. If
Brand X has 10,500 total buyers and 3,500 of those buy-
ers have purchased Brand X at least twice, the repeat rate
for Brand X is 33%.
Purchase cycle among repeat buyers is another key behav-
ioral measure. It is often confused with purchase frequency.
However, purchase cycle only considers the number of pur-
chase occasions among repeat buyers, while purchase fre-
quency considers the number of purchase occasions among
all buyers, including one-time buyers who have a frequency
of 1.0. Purchase cycle is expressed in number of days and
gives a feel for the consumer usage rate of your product.
Brand loyalty is another important behavioral measure. It
represents the percentage of category volume purchases
among item buyers who are satisfied by that item. This
important diagnostic measure is frequently included as a
key business objective in growing brand volume. Loyalty
rates are calculated by dividing the brand volume pur-
chased by the total category volume purchased among
Brand X buyers. For example, if a Brand X buyer purchas-
es 10 units of Brand X out of a total category purchase of
20 units, that buyer is 50% loyal to Brand X.
There are a number of additional factors—including cate-
gory purchase frequency, time period purchased, number
of competitive items and penetration strategies—that
impact loyalty. Low frequency categories tend to have high
brand loyalty numbers because of the many one-time buy-
ers. Shorter time periods show higher loyalty because there
is not enough time to observe switching behavior. Fewer
competitive items generally lead to higher loyalty, as there
is less opportunity for switching. And differing penetration
strategies may affect loyalty as some households take
advantage of promotions and offers. For these reasons, it is
best to look at loyalty on an annual basis.
Household panel data provides an excellent complement to
store-level scanning data. Scanning data provides you with
key measures of what happened to your business—sales
up or down, share up or down. Household panels, on the
other hand, help complete the picture of the consumer’s
behavior—giving the “why behind the buy.” Why did sales
increase? To which competitor did my brand lose share?
What caused my sales to decline—purchase frequency or
purchase size? Most important, household panel data pro-
vides a strong direction for manufacturers and retailers to
develop their marketing strategies.
CI Q1 Spring 2002 4/1/02 9:04 AM Page 28
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Business Tools forCustom Research
Online Focus Groups Provide Advantages
ACNielsen Custom Research provides qualitative research in an online environment. This revolutionary alternative to traditional focus groups has many advantages.It has no geographic limitations, and online participation ismore convenient for panelists. Online research allows for useof dynamic multi-media presentations methods. And theanonymity and individual nature of the research elicits morecandid responses, uninfluenced by group dynamics.
Uses and MethodologyOnline focus groups can be used for concept testing; imagetesting for products, websites or advertising; consumer feed-back; and more. People are invited—most often by e-mail ortelephone—to participate in an online session, and are thenprovided with instructions on how and when to “sign in.”An ACNielsen Custom Research Consultant moderates thediscussion by posing questions, requesting clarification andencouraging participant interaction. Clients can observe anddirect the moderator to probe further on specific issues.
For more information, contact Tim Hodapp attim.hodapp@acnielsen.ca.
Conduct Reliable Survey Research
The ACNielsen Family Shopper Omnibus provides CPG manufacturers, retailers and their advertising agencies with an efficient way to conduct reliable survey research amongprincipal household shoppers. The service delivers economiesof scale through multi-client participation with customizedproprietary questions. Telephone interviews are conductedquarterly in February, May, August and November, among arandomly selected sample of 2,000 nationally representativeprincipal household shoppers.
The ACNielsen Family Shopper Omnibus is a useful tool forunderstanding the following:
• How attitudes and motivations for products and servicesvary by key demographic groups
• Attitudes and awareness factors affecting purchase behaviour• Attitudes surrounding new products and services or line
extensions
The ACNielsen Family Shopper Omnibus allows clients to talkto the people who make purchasing decisions.
For more information, contact Tim Hodapp attim.hodapp@acnielsen.ca.
quick and efficient way to collect customer information via
loyalty cards so that retailers can utilize the data for future
promotions and merchandising.
Retailers are also using mobile technology to staff the aisles
and check customers out as they shop. This is especially
prevalent with large appliance or furniture retailers, where
the customer would typically buy only one or two items
and doesn’t want to wait in line. Checking out customers as
they shop relieves front-end congestion. And customers can
spend more time shopping in the store rather than waiting
in a checkout line.
Retailers benefit by enjoying more satisfied consumers,
lower labor turnover rates, and more accurate inventory
management. This mobile technology is also used to imple-
ment price changes in the aisle, in real-time, while also
updating inventory levels, again demonstrating how a focus
on helping their consumers also can help the bottom line.
Advances in the front of the store—self-checkout, mobile
POS, “express markets,” instant payment devices (such as
the Mobil SpeedPass), information kiosks and many other
innovations—all add convenience to consumers’ lives.
Through technology, retail operations are becoming more
streamlined and connected. And when this technology
enables consumers to enhance their shopping experience,
retailers are reaping these additional benefits as well.
Trend Watch continued from page 26.
http://acnielsen.com/ci or call 1.800.988.4ACN
Available in Canada only
Has Consumer Behaviour Changed?At the same time, consumer attitudes and buying behav-
iours may have changed during the downturn. 2001 would
have been the first time some shoppers ventured into
discount formats or picked up private label products. If
those experiences have been positive, should we expect
habits to change just because the economy is healthier?
Fortunately, signs are that both the U.S. and Canadian
economies are rebounding and that CPG marketers and
retailers will benefit from increased consumer confidence.
But last year’s economic downturn does have its hang-
overs. Now, more than ever, the success of any one store
format or brand will depend on smart price and promotion
strategies and a sophisticated understanding of the shopper
and consumer.
I look forward to reviewing a year of growth and innova-
tion when we do this again next year!
Executive Insight: Patrick Dodd, continued from page 5
CI Q1 Spring 2002 4/1/02 9:04 AM Page 29
Category Business Planner provides the common ground for a true meeting of the mindsbetween retailers and manufacturers. How? By delivering category information in the retailer’s customized view.
Powerful Web-enabled tools let you drill down and do in minutes what once took weeks.Imagine, the hours you once spent on data compilation and analysis can now be spentworking together to create thoughtful, effective category plans. Your productivity will beimproved. And your business partnerships strengthened. Finally, you can realize the fullpotential of category management.
Sound too good to be true? Go to acnielsen.com/cbpand see for yourself.
At last, there�s a one-number system for collaboration at the trade desk.Introducing Category Business Planner from ACNielsen.
©2002, ACNielsen Corporation. ACNielsen is a trademark of A.C. Nielsen Company.
CI Q1 Spring 2002 4/1/02 9:04 AM Page 30
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