Uncertain Economy Shaping Shopper Behavior: Unilever Study
Over 30 percent of consumers are eating at home more, and 40 percent feel worse off than a year ago thanks to the weakening economy, according to "Winning Shoppers in Turbulent Times - A Unilever Trip Management Report," a study released today by CPG company Unilever.
The report shows how various demographic groups will change their shopping habits in a time of economic flux.
"Consumers are clearly feeling the effects of a perfect storm of challenging economic events such as the mortgage crisis, stock market volatility, and rising energy costs," said Lisa Klauser, v.p. of consumer and customer solutions, Unilever U.S. in Englewood Cliffs, N.J. "They are reacting by taking a new approach to shopping, as our study found that quick trips to the grocery store are declining and major stock-up trips that allow consumers to replenish their cupboards for a long period of time are on the upswing."
But even though consumers are currently counting every penny, they don't want to dispense with product quality. According to the study, the majority consumers will continue to seek trusted brands across the store, with most shoppers saying that they wouldn't switch to a less expensive private label counterpart.
Moreover, consumers want manufacturers and retailers to be creative when it comes to product packaging and sales. Shopper preferences identified in the study included introducing larger pack sizes, smaller package sizes at lower price points, and modestly reduced package sizes with the same price point. The least preferred option was the introduction of slightly lower-quality items with the same price point.
Among the additional key findings:
--To help balance their budgets, 55 percent, 50 percent, and 41 percent of survey respondents said they would "reduce spending a lot" on entertainment, vacations, and clothing, respectively;
--Shoppers are less willing to reduce spending on home heating/cooling costs, household necessities (food/personal/home care items), housing (mortgage/rent, taxes, maintenance expenses), and health care: Just 18 percent, 14 percent, 8 percent, and 7 percent, respectively, said that they would cut their spending significantly on these items;
--The top two savings methods employed by shoppers are "only buy when it's on sale" and "use coupons whenever I buy this product";
--The top dozen categories shoppers won't forsake are antiperspirant and deodorant, batteries, canned vegetables, fresh meat and seafood, hair care, household cleansers, laundry detergents, margarine, pain relievers and cold medicines, personal washes, pet food, and tissues and toilet paper (all are above the 98 percent category level); and
--The top five categories in which shoppers would reduce their expenditure if the economy continues its decline are air fresheners, cookies, beer/wine, frozen dinners, and soda/pop.
The study was based on a proprietary survey of 47,031 Nielsen households and was conducted between March 14 and April 3. The survey was then compared with shopper behavior as measured among over 10 million shopping trips taken by consumers during the year ending first quarter 2008. The survey is demographically and geographically representative of U.S. households.
"Winning Shoppers in Turbulent Times" builds on three other Unilever Trip Management studies: "Trip Management: The Next Big Thing" (May 2005); "Winning the Hispanic Shopping Trip" (May 2006); and "Boomer Shoppers: Following the Money" (May 2007).
To download Winning Shoppers in Turbulent Times, go to www.unileverusa.com/ourcompany/aboutunilever/.
The report shows how various demographic groups will change their shopping habits in a time of economic flux.
"Consumers are clearly feeling the effects of a perfect storm of challenging economic events such as the mortgage crisis, stock market volatility, and rising energy costs," said Lisa Klauser, v.p. of consumer and customer solutions, Unilever U.S. in Englewood Cliffs, N.J. "They are reacting by taking a new approach to shopping, as our study found that quick trips to the grocery store are declining and major stock-up trips that allow consumers to replenish their cupboards for a long period of time are on the upswing."
But even though consumers are currently counting every penny, they don't want to dispense with product quality. According to the study, the majority consumers will continue to seek trusted brands across the store, with most shoppers saying that they wouldn't switch to a less expensive private label counterpart.
Moreover, consumers want manufacturers and retailers to be creative when it comes to product packaging and sales. Shopper preferences identified in the study included introducing larger pack sizes, smaller package sizes at lower price points, and modestly reduced package sizes with the same price point. The least preferred option was the introduction of slightly lower-quality items with the same price point.
Among the additional key findings:
--To help balance their budgets, 55 percent, 50 percent, and 41 percent of survey respondents said they would "reduce spending a lot" on entertainment, vacations, and clothing, respectively;
--Shoppers are less willing to reduce spending on home heating/cooling costs, household necessities (food/personal/home care items), housing (mortgage/rent, taxes, maintenance expenses), and health care: Just 18 percent, 14 percent, 8 percent, and 7 percent, respectively, said that they would cut their spending significantly on these items;
--The top two savings methods employed by shoppers are "only buy when it's on sale" and "use coupons whenever I buy this product";
--The top dozen categories shoppers won't forsake are antiperspirant and deodorant, batteries, canned vegetables, fresh meat and seafood, hair care, household cleansers, laundry detergents, margarine, pain relievers and cold medicines, personal washes, pet food, and tissues and toilet paper (all are above the 98 percent category level); and
--The top five categories in which shoppers would reduce their expenditure if the economy continues its decline are air fresheners, cookies, beer/wine, frozen dinners, and soda/pop.
The study was based on a proprietary survey of 47,031 Nielsen households and was conducted between March 14 and April 3. The survey was then compared with shopper behavior as measured among over 10 million shopping trips taken by consumers during the year ending first quarter 2008. The survey is demographically and geographically representative of U.S. households.
"Winning Shoppers in Turbulent Times" builds on three other Unilever Trip Management studies: "Trip Management: The Next Big Thing" (May 2005); "Winning the Hispanic Shopping Trip" (May 2006); and "Boomer Shoppers: Following the Money" (May 2007).
To download Winning Shoppers in Turbulent Times, go to www.unileverusa.com/ourcompany/aboutunilever/.