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Feb 02, 2012
Merchandising Trends Point to Highly Promotional Environment
Conservative shopping behaviors seem to be the norm during these economically challenging times, and the value proposition plays a central role in consumers’ shopping experience. What’s more, merchandising has become a key platform for communicating that value to consumers, notes “Merchandising Trends: Driving Consumption through Shopper Marketing,” a new Times & Trends publication from Chicago-based SymphonyIRI Group. During the “Great Recession,” many retailers pulled back on “clean-floor” policies, ratcheting up merchandising display activity, the publication says. Merchandising activity has been growing at a decelerating rate since then, with price-only tactics experiencing the sharpest and most consistent acceleration. Merchandising in support of “key consumer rituals” such as eat-at-home occasions has been strong and has been “driving noteworthy sales lift” across channels, the publication says. But merchandising activity growth has been strongest within the drug channel, SymphonyIRI notes, with health- and beauty-related products getting extra emphasis. In 2011, 47 percent of consumer packaged goods (CPG) categories within the food, drug and mass merchandise channels (excluding Walmart) saw increased merchandising support versus the previous year, the report states. Although the increase was not as steep as in 2010, when 58 percent of categories enjoyed increased merchandising support compared to 2009, trends continue to point to a highly promotional CPG environment — one that “seeks to drive purchase behavior despite a difficult economic climate.” The top category by merchandising activity level in 2011 was carbonated beverages, the report notes, with chocolate candy, sports drinks, salty snacks, batteries, crackers, bottled water, vitamins, frozen pizza and ice cream/sherbet rounding out the top 10. Merchandising support of store brand products increased slightly; however, it continues to be “lower than average” across the majority of merchandising tactics and categories. Susan Viamari, editor of Times & Trends, told Progressive Grocer’s Store Brands that although store brands traditionally have not been merchandised as heavily as their national brand competitors, retailers are beginning to up their game here. “We are seeing retailers beginning to place increased merchandising support behind their store brand lines,” she said. “In 2010, 61 percent of store brand categories showed below-average levels of merchandising support. That figure slid to 59 percent in 2011 — still high, but better.” Because they own the retail space, retailers actually have “the upper hand” when it comes to merchandising their private brands, Viamari noted. “But they have a delicate balance to strike between promoting their own products versus national brand alternatives,” she said. “They do get trade dollars from national brands, and they do not want to risk alienating national brand partners.” For success on the store brand side, “retailers must continue to develop and execute consumer-centric merchandising programs,” the report adds. To read the entire Times & Trends issue, visit http://www.symphonyiri.com/Insights/Publications/TimesTrends/tabid/106/Default.aspx.
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