While consumers will continue to define value based on price, other key trends — including new product development, technology, store layouts and shopping patterns — will drive the market in 2012, according to SymphonyIRI research.
In its latest Times & Trends report, "CPG 2011 Year in Review: The Search for Footing in an Evolving Marketplace," SymphonyIRI said that in order to effectively compete in the market, consumer packaged goods manufacturers and retailers should take note of the following predictions:
- According to SymphonyIRI's MarketPulse consumer survey, more than half of shoppers still choose their store based on lowest prices, and 75% noted that price weighs heavily in brand decisions. However, SymphonyIRI said it anticipates that some shoppers will start to open their wallets more if positive economic reports continue;
- Consumers will embrace such money-saving behaviors as pre-planning (i.e., making shopping lists prior to trips to the store) and coupon use. Digital media will play an integral role in this trends, SymphonyIRI SVP marketing John McIndoe said;
- Retailers in the drug channel will accelerate their format evolution process. SymphonyIRI cited Walgreens converting of some of its stores into food oases as an example. Providing access to healthy food continues to be an area of focus for retailers, especially drug store chains;
- Manufacturers and retailers will pass manufacturing price increases on to shoppers, but reaction to potential commodity price deflation is yet unclear;
- Private label will continue to account for unit sales in the 22% to 23% range and dollar sales in the 18% to 20% range; and
"Evolving economic conditions have brought a polarity to the CPG marketplace," said Susan Viamari, editor of Times & Trends at SymphonyIRI. "There is a sizable consumer segment that is feeling more optimistic about the road ahead, while a similar sized group is expecting a continued deterioration of economic and personal financial health. Among optimistic and pessimistic shoppers alike, all indications point to continued frugality and conservatism in 2012. CPG marketers need to actively respond to these trends with products and strategies that really emphasize their understanding of consumers' most pressing needs and wants in order to drive purchase behavior and loyalty."[Source: "CPG 2011 Year in Review: The Search for Footing in an Evolving Marketplace." Times & Trends Report/SymphonyIRI. 20 Feb. 2012. Web. 20 Mar. 2012.]