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Smart Insights: Consumer Goods

The number of touchpoints between brands and consumers is increasing at an unprecedented rate. Consumers are seeking richer retail experiences, rather than simply acquiring new products. There is also an intense competition for loyalty.

To be successful, consumer goods (FMCG, domestic appliances, home and living) companies need a comprehensive understanding of what is driving consumer choices and experiences at every touchpoint.

GfK's consumer goods research and insights illuminate the trends behind today's market realities and tomorrow's consumer demands.

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    • 05/18/17
    • Consumer Goods
    • Trends and Forecasting
    • Global
    • English

    What your brand can do now to attract today’s moms

    Nothing is more central to society, or more relevant to the fates of so many brands, than the evolving partnership between moms and dads. Parents not only make an extraordinary number of purchase decisions – they also deeply influence the tastes of the generations that come after. But still parents struggle with work and family pressures – the stress of being so needed in so many places. According to ongoing GfK Consumer Life research, the contract between parents has shifted noticeably in recent years. Dads are playing a greater role in some of the chores, like food shopping – but moms are still more likely to hold down the family’s most cherished functions and spend more time with their family in the home. Together they are more likely to sit and talk, eat, and read, while fathers tend to spend more time outside of the home with their children – going to the movies, volunteering, and playing sports. Despite changes in the family dynamics, moms are actually as stressed as they have ever been, with over two-thirds with kids under 13 saying they experience stress and tension – a number that is dramatically higher than average. And today’s sources of mom stress are vastly different from nearly two decades ago; some of the fastest-rising causes are health, weight, noise and not getting enough sleep.

    Opportunities in relief valves

    Moms and dads alike need “relief valves” – activities or opportunities that help them refresh, re-orient, and put down their burdens for a minute or three. This need offers powerful opportunities to marketers. Moms understand what’s truly important to their health and well-being, for example; but they fall short on following through, which exacerbates stress and fuels the vexatious mom-guilt. Smart, mom-centric marketers can offer real-time coaching to not only ignite a boost for healthier behaviors, but also help moms (and dads) stay on track. Whether the solution is smart health-tracking technology or product packaging that helps moms remember their nutrition, marketers can and should “be there” for over-tired moms of today.

    Looking to the future

    Now, a new wave of moms is coming, and they are undoubtedly different from the moms of today. According to the GfK MRI data, the youngest moms today (ages 18-25) are more apt to be minorities, work tirelessly on most weekends, juggling family and work lives under tremendous pressure. And GfK Consumer Life (Roper Reports) shows that these new moms are more driven. But they always give their best effort and value working hard, seeking fulfillment in what they do for a living. These new moms also need to feel secure and empowered about the brands they choose. The new wave of moms is considerably more likely to claim that they only buy products and services that speak to their beliefs, values or ideals. So, looking at some of today’s youngest moms, how can marketers anticipate the moms of tomorrow? How can they keep their brands strong and top of mind in a fast-paced and fragmented world of media, super-connectivity and hyper personalization?
    • First, stay with moms through close and consistent tracking of their likes and dislikes.
    • Keep close watch on the still-transforming contract between parents – which also means understanding young men and women alike, before they have families.
    • Do not add to their stress – provide outlets and escapes from their daily activities and struggles.
    • And show them that their efforts do lead to fulfillment; do not frustrate or ignore them at key moments.
    As always, attentive brands are also the smartest, making decisions that will build customer loyalty for generations to come. Are you on board? Jola Burnett is a Vice President on the Consumer Life team at GfK. She can be reached at jola.burnett@gfk.com. hbspt.cta.load(2405078, 'd3be8aa9-840a-4e4b-9ef6-87b070ef210a', {});
    • 05/02/17
    • Retail
    • Consumer Goods
    • Global
    • English

    Will online become the channel of choice for technical consumer goods?

    Internet sales have grown remarkably in recent years in Europe. In the technical consumer goods (TCGs) category, according to our POS Tracking data, online’s share of overall sales in terms of value passed the 10% mark about ten years ago. It exceeded the 20% milestone in 2014 to reach almost 24% in 2016. But is this trend set to continue? This is the big question and the cause of many a sleepless night for retail managers and sales and marketing directors.

    Online’s share of overall sales in Europe varies between countries and product groups

    Our POS Tracking data shows that many markets in Europe can be considered mature in terms of e-commerce, with their online sales accounting for 20% or more of overall sales of TCGs in 2016 (see infographic). Diving deeper into our POS data, online’s share of overall sales for certain categories of TCGs in certain countries is particularly strong at close to – or more than – 40%. This is the case with:
    • photographic equipment in the Czech Republic, Ukraine, Slovakia and Great Britain
    • IT products in the Czech Republic, Slovakia and the Netherlands
    • telecommunication with Czech Republic and the Netherlands
    • small domestic appliances in the Czech Republic and the Netherlands
    • major domestic appliances in the Czech Republic and Great Britain.
    Other categories of products that you might think would sell better in a physical store where they can be seen and tried first, also sell well online. Internet sales of vacuum cleaner robots, for example, have reached about a 60% share of overall sales of this product in Germany, the Czech Republic and the Netherlands (see table below). Online’s share of overall sales of wearables in Germany, Great Britain and the Netherlands, and drones in Germany and Great Britain, have achieved a similar level. In some cases, it has increased its share further still recently. But this trend isn’t just impacting the sales of the latest generation of TCGs. More traditional white goods such as tumble dryers are also selling well online in certain countries. In the Czech Republic and Great Britain, for instance, online’s share of overall sales for this product is about 50%.

    Drivers of – and differences in – online sales penetration

    The balance between online and traditional channels’ share of overall sales is fluid and influenced by a range of factors including category idiosyncrasies, retailers’ strategies and shopper behavior. One of the biggest drivers of online sales has been retailers’ pricing strategies. As internet sales have matured, we’ve observed a general move by retail players towards aligning their online and offline prices in line with consumers’ belief that a product should be priced the same regardless of whether it is sold online or in a store (GfK FutureBuy, 2016). In Germany, for example, on average, the same TV is priced the same whether it is bought online or offline, and has been for the last couple of years. Our POS data shows that online’s share of sales for TVs in Germany is about 20%. However, there are examples where a product is priced lower online, as is the case with drones, in Germany, and online’s share of sales is higher at 61%. Pricing strategies impact on channel choice Price Index Development 2008 – 2016, Germany 1 Top 50 identical items sold online and offline | Based below 50 items Saving money, however, is only one motivation that drives consumers’ purchase journeys and channel choices. While the online option is often chosen for financial and convenience reasons, seeing and feeling a product before purchasing it clearly drives shoppers to visit physical stores. Top five factors driving consumers’ channel choice GfK FutureBuy 2016

    Consumers currently favor an omnichannel approach

    The differences between online and traditional shopping channels have so far led consumers to use them both on their path to purchase. What the availability of internet shopping has done is provide consumers with a level of transparency on pricing, among other things, that has encouraged them to adopt an omnichannel approach to shopping. They know that by conducting their own research across online and offline channels before making a purchase they can get the best deal.

    So, what of the future of online sales?

    Will the growth in online sales share of overall sales continue? If consumers favor using channels for different reasons, will we instead arrive at a point of balance between online and offline sales in the future? There is one certainty: we cannot sit back and wait to find out. The retail world is constantly changing. Neither online nor traditional channels’ share of overall sales of TCGs is fixed. To the contrary, they will continue to fluctuate and be influenced by Connected Consumers’ shopping behavior, and retailers’ – successful or unsuccessful – strategies and tactics for driving channel choice. ********** Source of data: if not stated otherwise, GfK POS Tracking Markus Tuschl is the Global Director of Digital Retail at GfK. To share your thoughts please email markus.tuschl@gfk.com or leave a comment below. hbspt.cta.load(2405078, '10b29126-0dcd-40d7-90b1-607513f3193b', {});
    • 04/28/17
    • Press
    • Financial Services
    • Retail
    • Technology
    • Consumer Goods
    • FMCG
    • Global
    • English

    UK Consumer Confidence drops to -7: Is pre-Brexit economic turbulence brewing?

    GfK’s long-running Consumer Confidence Index dropped one point to -7 in April.  Four of the five measures decreased, leaving only the Major Purchase Index showing an increase.
    • 04/19/17
    • Technology
    • Consumer Goods
    • FMCG
    • Connected Consumer
    • Global
    • English

    From “mission impossible” to “mission accomplished”: How tech manufacturers can maximize the media mix

    As a marketer of durable goods, your likely mission is to build brand image, optimize your media budget and ultimately to generate profit. While that might sound like “mission impossible”, the good news is that there is a tested research technique that can help. Marketing mix modeling offers a way for marketers to successfully overcome the mounting challenges they face. In this blog, we explore four reasons why marketing mix modeling is as relevant to manufacturers of durable goods as it is to the consumer goods industry. In doing so, we will help you navigate from “mission impossible” to “mission accomplished”.

    Mission one: Harness the digitization of media

    Put simply, in the digital age, there are more media channels and more connected devices. Consequently, Connected Consumers are exposed to more advertising messages than ever before. This media fragmentation makes it difficult for manufacturers to know where, when and how to reach consumers. In addition, the immediacy of the digital channel has placed more pressure on marketing campaigns to deliver short-term sales. Add to this the proven decline in consumers’ average attention span, and you have a challenge that even the Impossible Missions Force’s Ethan Hunt might be happy to see self-destruct in five seconds. The success of any campaign depends on getting your media mix right. In order to maximize your budget, it is essential to have accurate insights on how your ads are performing at any given moment. What you need to understand is which campaigns on which media platforms positively impact sales of your product. Marketing mix modeling evaluates the contribution of the different media channels – both online and offline – enabling you to allocate your budget so that it delivers maximum ROI.

    Mission two: Think omnichannel

    In the technical consumer goods (TCG) sector, e-commerce is an extremely important channel, and its share of sales is growing annually. According to our Point of Sales (POS) Tracking data, online accounted for 23.1% of overall sales in 2016 (see infographic). Shoppers have adopted an omnichannel approach to shopping in the TCG sector. The message couldn’t be clearer: if your products aren’t available across all channels, you are losing sales. Omnichannel shopping is becoming the norm across many categories % of shoppers reporting having shopped online and in store for a product, GfK FutureBuy, 2016 Online has also given consumers the power to check prices and compare products. This, in turn, has amplified the importance of both the manufacturer’s and retailer’s promotional activities. Marketing mix modeling enables you to understand exactly which of your promotions work, providing you with the intelligence you need to support your marketing decisions. Measuring the effectiveness of your executions gives you the power to fully optimize your activity for each channel.

    Mission three: Dealing with product feature commoditization

    When technology is new, success can be built on product features. However, as tech markets mature, all brands and models become very similar. In this type of market, it becomes virtually impossible to stand out for having a “great product”. Commoditization is rife, and manufacturers and retailers must find new ways to differentiate themselves from their competitors. Today’s Connected Consumers will only engage with, relate to and buy your product when they’ve had a brand experience. And they’ll only return to your brand if their experience of it was memorable. Consequently, we’re seeing the trend for marketing campaigns that focus more on product benefits and less on features spread across the globe. It is becoming more common for technology manufacturers to focus on a compelling brand experience in their advertising. Source: GfK Consumer Life A clear communications campaign is required if you are to succeed in conveying your product and brand values, and provide a memorable experience as well. Marketing mix modeling measures the sales impact of these campaigns and the media used to distribute them. It identifies the ROI for each channel and evaluates cross-media and cross-channel synergies.

    Mission four: Tackling the shorter product life cycle

    In consumer tech, the product life cycle is getting faster while the re-purchase ability slows down. At the same time, for almost all brands, advertising campaigns tend to be short-lived and focused specifically on new product launches. Ultimately, this means there is less time to deliver a margin. When planning your next advertising campaign, you may need to choose between investing in an intensive short-term but high-impact, high-cost TV spot versus a longer-term digital execution delivered via social networks. The commercial success or failure of your campaign may rest on this decision. This is where marketing mix modeling can provide directional insight. By providing weekly sales contributions for the different elements of your campaign, it can help you identify the most appropriate media plan to drive sales at the crucial moment. At the same time, it can also support your brand’s growth in the longer term.

    Summary: Mission accomplished

    We’ve addressed four of the key challenges faced by TCG marketers and manufacturers. Marketing mix modeling can help you understand how your above- and below-the-line marketing activities are driving your sales. We believe it is the way to accomplish your mission in today’s highly competitive global marketplace. Bjoern Kroog is Global Director of GfK POS Analytics. To share your thoughts, please email bjoern.kroog@gfk.com or leave a comment below. hbspt.cta.load(2405078, '0e591424-2780-48f3-9850-174d860e088d', {});
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