What SymphonyIRI Group Customers Are Saying
"We switched our business from another marketplace information provider to SymphonyIRI Group, because we needed to be with the industry’s beer category content leader. SymphonyIRI Group’s high-quality, census-based store-level market information delivers the comprehensive insight that allows our organization to work closely with our retail partners to better market and sell our award-winning beverages."
Gary McGrath
Vice President of Sales
Pyramid Breweries
|
|
Press Releases
|
Archives (2005 to current)
Archives (2005 to current)
 |
|
 |
|
5/22/2008
Properly Executed Merchandising Activities Increase More Than Just Short-Term Sales
Latest IRI Insights Outline Strategies for Effectively Reaching and Shaping Consumers’ Perception, Increasing Brand Awareness and Store Traffic
CHICAGO, Sept. 27, 2005 — Merchandising is not just about the quick sales hit any longer, according to a new study from analytics and insights leader Information Resources, Inc. (IRI). Looking at today’s consumer packaged goods (CPG) landscape, life has become increasingly challenging for most manufacturers and retailers. Mass media marketing is diminishing in effectiveness, and consumers are demanding more value for their purchases. In this backdrop, merchandising has become one of the most powerful consumer behavior influencers in manufacturers’ and retailers’ toolkits.
The role of merchandising, historically used to drive short-term sales, has since expanded to effectively help shape consumers’ value perceptions of a brand or store, reach specific consumer segments, drive brand and product awareness and increase store traffic.
IRI, the leading provider of enterprise market information solutions for the CPG, retail and healthcare industries, released a study that analyzes the merchandising phenomenon and the proper levels and mixes of such activity for manufacturers and retailers. The report, entitled “CPG Merchandising Trends: Activity, Effectiveness and Optimization,” evaluates the effectiveness of merchandising across various categories to highlight potential improvement opportunities.
“To effectively reach today’s savvy consumer, it’s critical that manufacturers implement the right merchandising level and mix and that retailers effectively allocate limited feature ad and display space,” said Janet Eden-Harris, executive vice president and global chief marketing officer, IRI. “This report will effectively enable CPG marketers to improve their performance by benchmarking their merchandising practices.”
Industry Overview
According to the study, at least one-third of volume is sold with the support of feature ads, displays and/or price reductions across a majority of CPG categories. Furthermore, over two-thirds of CPG categories within food, drug and mass channels, excluding Wal-Mart, sell 30 percent of their volume with merchandising support, with the carbonated beverages category leading the way with 75 percent of volume sold with merchandising.
The report also revealed that while the trend toward more merchandising activity is increasing in two-thirds of CPG categories, its effectiveness is falling. A deeper dive discovered that sales lifts were diminishing when only feature ads or only price reductions were used.
Category Opportunity
To provide manufacturers and retailers an even clearer lay of the CPG land, the analysis dissected the merchandising activity within each category and highlighted several potential mix shifts that retailers and manufacturers should explore within the context of their overall merchandising objectives. Some highlighted findings included:
• Eight of the top 10 most heavily merchandised categories are snacks/desserts or beverages, reflecting intense category competition, significant new product activity, the discretionary nature of purchases and relatively long shelf lives that enable stock-up
• Increased mix of display activity within coffee and aseptic juices
• Increased mix of feature activity within bottled water, shelf-stable juices and ready-to-drink tea/coffee
• Shift in focus from “price reduction only” events within wine to combined feature/display events
• Total merchandising activity increase within chocolate candy
• Increase in combined feature and display activity within cookies and non-chocolate candy
• Increase in display and feature activity within soap and toothpaste
• Increase in feature activity within foils and wraps and bleach
• Increase in display activity within laundry detergent, dish detergent and bleach
Merchandising Tactics
The report concludes with some guidelines for retailers and manufacturers to use when choosing a merchandising approach. Display only merchandise activity is most effective in generating lift among meal components, everyday necessities and select impulse categories. With this tactic, though, retailers should take relative lift into account when evaluating display space allocation and should also consider such factors as margin, total basket ring and appeal to desirable consumer segments.
Feature ads appear to drive exceptional volume gains within stock-up categories and higher-ticket products with broad appeal, while price reduction only remains relatively ineffective in less frequently purchased categories.
The complete report can be found on the News & Events section of IRI’s Web site (www.infores.com) in the Thought Leadership section.
About the Report
Findings presented in Times & Trends: “CPG Merchandising Trends: Activity, Effectiveness and Optimization,” are based upon an extensive analysis of scanner-based sales tracking across Food, Drug, Mass channels (excluding Wal-Mart) from the IRI InfoScan® Reviews service and audit data from the IRI In-store Solutions Group.
About Information Resources, Inc.
Information Resources, Inc. (IRI) is the world’s leading provider of enterprise market information solutions and services, empowering its clients to grow their business profitably in a complex marketplace. Driving the transformation of the consumer packaged goods (CPG), retail, and healthcare industries, only IRI provides a unique combination of real-time market content, advanced analytics, enterprise performance management software, and professional services. The company’s portfolio of services, solutions, and technology enable leading retailers and their suppliers around the globe to see what they are missing, act faster with greater confidence and win at the shelf. Ninety five percent of the FORTUNE Global 500 in CPG and retail leverage IRI to power their business. For more information, visit www.infores.com.
|
|
 |
|
 |
|
|
|
|
|
|
|
|