consumer trends march 2018 - iri€¦ · social media influence on brand behavior by generation...

Joan Driggs

Vice President

Content and Thought Leadership

February 2019

CONSUMER CONFIDENCE REFLECTED IN E-COMMERCE GROWTH

Consumer Connect Q4 2018

© 2019 Information Resources Inc. (IRI). Confidential and Proprietary. 2

Consumer Connect Q4 2018

IRI’s Consumer Connect Survey is published after each calendar quarter and reflects shoppers’ reported

economic health, as well as behaviors and attitudes toward purchasing and utilizing CPG and health

care products.

For the most recent quarter, October – December 2018, we focus on respondents’ e-commerce attitudes

and behaviors. To review past Consumer Connect reports, click here.

https://www.iriworldwide.com/en-us/Insights/Publications/Consumer-Connect


Executive Summary

Consumer confidence has remained favorable

over the past several years. Still, 30 percent of

respondents to IRI’s Consumer Connect Survey

report they struggle financially.

Notably, Gen Xers, followed by Millennials, are

the most likely to report they struggle to afford

needed groceries. But these generations are

increasingly working their way out of debt and

into greater financial stability. Some 55 percent of

total Consumer Connect Survey respondents

report their households are in good financial

shape, up 4 percentage points from Q3 2018.

While 2019 is off to a rocky start, with a partial

government shutdown and trade challenges

attributed to tariffs, consumers at the close of

2018 were buoyed by their strong household

financial health and were spending accordingly.

Hand-in-hand with consumer confidence is the

growing and evolving e-commerce channel.

Consumers are increasingly comfortable with

online purchasing and retailers of all stripes are

investing in their online offerings.

Non-food items, particularly personal care

and home care products, are tops in online

purchases. IRI E-Market Insights reports that

vitamins, pet food and supplies, and skin care

products are the top selling items.

Pure-play retailers garner well more than

half of all online CPG purchases, but traditional

brick-and-mortar retailers continue to invest

and win share of the e-commerce pie.


0.0%

99.5%

97.0%

96.5%

97.5%

98.0%

99.0%

100.0%

98.5%

Q4

2017

Q1

2016

Q4

2016

97.6%

Q1

2017

98.2%

97.5%

Q2

2017

97.3%

100.0%

Q2

2016

Q3

2016

96.4%

97.0%

96.8%

Q3

2017

99.5%

Q4

2018

99.0%

98.7%

Q2

2018

Q3

2018

98.6%

Q1

2018

Average = 100

Source: Consumer Connect™, Q4 2018

However It Inched Up Marginally Since Q3 2017

Consumer Sentiment Is Up Nearly One Point Versus Q4 2017

Consumer Sentiment Index

Total U.S.

In Q4 2018, consumer

sentiment increased

as incomes rose and

unemployment declined.


Especially Seniors and High-income Households

Fifty-five Percent of Consumers Report

Their Financial Situation Is Healthy

55%

51%

55%

56%

53%

Q4 2018

Q3 2018

Q2 2018

Q1 2018

Q4 2017

Source: IRI Consumer Connect™, Q4 2018

82%

64%

55%

30%

$55K-$99.9K

> $100K

< $35K

$35K-$54.9K

53%

51%

52%

67%

Millennials

Gen X

Boomers

Seniors

Inc

om

eG

en

era

tio

n

Households Having Good Financial Health

% of Households, Total U.S.


Source: Consumer Connect™, Q4 2018

Among Generations, Gen X Report Having the Most Difficulty

Affording Needed Groceries, Followed by Millennials

30%of consumers

have difficulty

affording needed

groceries

34% of Millennials

36% of Generation Xers

32% of Boomers

20% of Seniors


Online Shopping Value Perceptions

by Generation

Online Shopping to Save Money Is Increasingly

Popular Among Millennials and Gen X Consumers

38%

20%

23%

29%

30%

49%

31%

28%

45%

43%

48%

23%

38%

20%

23%

27%

27%

Online order/in-store pick-up

(click-and-collect) allows me

convenience without the

added shipping fee

Buying online allows

me to find lower-priced

food and beverage options

24%



OTC medication

options

21%



home care options



beauty/personal care

product options

12%

18%

35%

14%

36%

19%

% of respondents, Top 2 Box Summary


Total U.S. Gen X

Millennials

Seniors

Boomers


Capabilities That Drive Channel Selection

In Addition to Convenience, Free and Fast Shipping

Are Also Main Drivers for Online Shopping

57%

47%

40%

30%

20%

68%

56%

52%

42%

26%

69%

61%

50%

42%

33%

56%

45%

39%

28%

17%

43%

32%

23%

16%

11%

Online purchasing

with

fast delivery

Online purchasing

of freshly

prepared items

Online purchasing

with

free delivery

Online purchasing

with

in-store pick up

Subscription services

for frequently purchased

grocery items

Boomers

Total U.S. Gen X

Millennials

Seniors

% of respondents, Very/Important Summary



$58.9 Billion E-Commerce CPG Sales

52 Weeks Ending 12/30/2018

E-Commerce Sales Are Shining Star of CPG Omni-Channel Universe

35.4%Increase from year ago

Source: IRI E-Market Insights Dashboard, January 2019; the categories include the 145 releasable E-Commerce categories from IRI E-Market Insights; 52 weeks ending 12/30/2018.

11% of total

CPG Sales…

…but represent

64% of total

Omni-Channel Growth

E-Commerce Sales are


Top 10 E-Commerce Categories

by Dollar Sales

Categories: Top, Bottom, and Growing

Source: IRI E-Market Insights Dashboard, January 2019; sales are the sum of 145 tracked categories

Source: IRI Market Advantage, IRI E-Market Insights, latest 52 weeks ending 12/30/18

Dollar Sales

($millions)

Dollar Sales

% Change vs YA

E-Commerce Share of

Omni-Channel Sales

Vitamins $7,410.1 35% 49.9

Pet Supplies $5,652.7 44% 56.3

Pet Food $3,503.7 42% 23.1

Skin Care $3,354.5 30% 46.0

Coffee $2,232.9 26% 18.7

Weight Control $1,907.1 24% 33.2

Cosmetics—Facial $1,399.8 15% 39.6

Fragrances—Women’s $1,385.1 21% 67.4

Cosmetics—Eye $963.9 23% 31.7

Hair Conditioner $946.3 43% 29.9

TOP


E-Commerce Categories With the Most Growth

by Dollar Sales % Change

Categories: Top, Bottom, and Growing

Source: IRI E-Market Insights Dashboard, January; sales are the sum of 145 tracked categories

Source: IRI Market Advantage, IRI E-Market Insights, latest 52 weeks ending 12/30/18

Dollar Sales

($millions)

Dollar Sales

% Change vs YA

E-Commerce Share of

Omni-Channel Sales

Gastrointestinal—Liquid $338.9 310% 23.1

Hot Cereal $273.3 151% 17.2

Adult Incontinence $359.1 84% 15.8

Lunches—Rfg. $48.9 81% 2.0

Cold/Allergy/Sinus Tablets $469.2 78% 9.1

Appetizers/Snack Rolls—Frozen $48.5 77% 2.4

Breakfast Food—Frozen $87.8 74% 2.6

Dough/Biscuit Dough—Rfg. $31.2 74% 1.7

Baking Mixes $62.9 72% 4.1

Cream Cheese/Cr Chs Spread $38.4 70% 2.2

GROWTH


Traditional Brick-and-Mortar Retailers Need to Invest

in Customer Experience Both Online and In-Store

Channel Dollar Sales ($millions) % of Total E-Commerce

Total E-Commerce-RMA—E-Commerce $58,618.3 100%

Online Multi-Category (ex. Amazon, Peapod, FreshDirect) $32,226.8 55%

B&M Multi-Category (ex. Walmart, Kroger, CVS) $11,421.0 19%

Online Specialty (ex. Chewy, Birchbox) $4,965.1 8%

Brand / DTC (ex. Dollar Shave Club, Keurig, Lindt) $2,439.8 4%

B&M Specialty (ex. Petco, Sephora) $2,196.2 4%

Pure Marketplace (ex. eBay) $894.7 2%

Meal Kits $9.6 0%

Channel Dollar Sales ($millions) % of Total E-Commerce % of B&M Multi-Category

B&M Multi-Category $11,421.0 19% 100%

Mass $4,259.4 7% 37%

Grocery $2,120.5 4% 19%

Drug $1,919.4 3% 17%

Club $1,303.4 2% 11%

Dollar $54.0 0% 0%

2018 CY, Sum of 145 Tracked E-Market Insights Categories


E-Commerce Sales Are Evenly Split Between Click & Collect

and Delivery Fulfillment Methods

Source: IRI eMarket Insights 3.0, IRI Market Advantage, 52 Weeks Ending 12/30/18, Aggregate of 145 Tracked Categories, Based on Aggregate of Retailers with Multiple Fulfillment Types

47%37%

66%

53%63%

34%

All Tracked Categories Edible Categories Non-Edible Categories

Fulfillment Type Share For Brick & Mortar Multi-Category Retailers(Walmart, Kroger, Etc.)

Delivery/Ship Click & Collect

Sales mixes are opposite when comparing edible and non-edible categories, however.


Social Media Influence on Brand Behavior

by Generation

Reviews and Opinions Posted in Social Media

Influence Consumers’ Purchase Decisions



46%

21%

56%

31%

58%

31%

45%

20%

32%

6%

I like to share

my opinions about

brands on

social media

I will switch to a

new brand if

I’ve read a

good review online

Total U.S. Seniors

BoomersMillennials

Gen X


Benefits of Online Shopping

by Generation

Convenience and Choice Are Key Drivers

Towards Online Grocery Shopping

21%

33%

25%

21%

11%

Online ordering

makes it easier to find

needed grocery items



Total U.S.

Millennials Boomers

Gen X Seniors


Propensity to Make Additional Purchases

by Generation

Nearly 54% of the Younger Generations Feel They

Are Less Likely to Make Impulsive Purchases Online



50%

54%

54%

49%

44%

I am less likely to make

impulse purchases

when buying online

SeniorsTotal U.S.

BoomersMillennials

Gen X


Circulars/Coupons Behavior

by Generation

Many Consumers, Especially Seniors Clip Coupons and

Look to Retailers’ Circulars During Their Shopping Trips

% of respondents, Frequently/Occasionally Summary


67%

60%

35%

68%

58%

51%

66%

59%

43%

67%

59%

34%

69%

66%

18%

Download coupons from

online deal sites

Clip coupons from

circulars/newspapers

Compare prices in

retailers’ circulars

Total U.S. Gen X

Millennials

Seniors

Boomers


Purchase Behavior in the Coming Year

Download of Coupons and Price Comparison on Retailer

Websites Tops Among the Money-Saving Opportunities

% of respondents, Frequently/Occasionally Summary


54%

53%

23%

22%

11%

5%

Download coupons from a

retailer/manufacturer website

Use online subscription services

for some of my grocery items

Compare prices on area

retailers’ websites to find the

lowest prices on needed items

Order online and

pick up in store

Use online meal kit

delivery services

Order online for

home delivery


Online Shopping Value Perceptions, by Generation

In 2019, More Grocery Spending Will Happen Online

Source: https://www.digitalcommerce360.com/2018/10/26/more-grocery-purchases-will-move-online-in-2019/

U.S. Grocery Consumers Who Shop Online (%)

• While online shopping still represents a small part of the

overall grocery market, KPMG reports a growing

number of consumers plan to shift more of their food

buying online in 2019.

• In an effort to remain relevant with shoppers, more

traditional brick-and-mortar retailers, including grocery

chains, mass merchants and drug chains, are investing

heavily in their online shopping offerings. These

retailers face the double challenge of improving the

shopper experience both online and in-store.

• Look for more retailer investments in mobile interfaces,

such as payments and endless aisle assortment, as

they work to catch up with consumers already

comfortable using their mobile devices to manage

routine tasks.

48%

59%

2019 (projected)2018

2018 Grocery Retail Consumer Perception Survey


Highlights: E-Commerce Sales Benefit From Consumer

Comfort With Technology and Financial Health

Home care items top the list of online purchase categories, followed by

beauty/personal care products. However, vitamins rank as most purchased item.

An increasing number of consumers look for reviews and recommendations

from online sources to help them make buying decisions.

Fifty percent of consumers report they are less likely to make impulse purchases

when shopping online; highest among high-income groups and millennials.

Even shoppers working to stay within budgets are turning to online shopping;

they leverage ability to make price comparisons and download coupons.

Online shoppers appreciate delivery options, easy ordering, and

lower-priced options.

Online orders with free/fast delivery are gaining traction among high-income

consumers and those with kids.


IRI Consumer Connect Analysis since 2016:

https://www.iriworldwide.com/en-

US/Insights/Publications/Consumer-Connect

E-Market Insights 3.0 Press Release:

https://www.iriworldwide.com/en-US/News/Press-

Releases/IRI-Announces-Enhancements-to-Industry-

Leading-E-Commerce-Measurement-and-Insights-Solution

MORE INFO AVAILABLE

mailto:https://www.iriworldwide.com/en-US/Insights/Publications/Consumer-Connect

mailto:https://www.iriworldwide.com/en-US/News/Press-Releases/IRI-Announces-Enhancements-to-Industry-Leading-E-Commerce-Measurement-and-Insights-Solution

© 2019 Information Resources Inc. (IRI). Confidential and Proprietary. 22© 2019 Information Resources Inc. (IRI).

Confidential and Proprietary.22

Joan Driggs

[email protected]

Vice President, Content and Thought Leadership

Sam Gagliardi

[email protected]

Senior Vice President, E-Commerce

THANK YOU

mailto:[email protected]

mailto:[email protected]

consumer trends march 2018 - iri€¦ · social media influence on brand behavior by generation...

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