Common wisdom these days says that price is the motivating factor for many consumer purchases. Who can blame shoppers for selecting private label products which can cost up to 60% less than branded products. In response, retailers are busily introducing store brands with low prices in order to lure shoppers. But the fast action of retailers to increase sales could also be squeezing profitability.

The details in Nielsen’s Shopper Trends show that marketers should consider factors other than price when building shopper loyalty. The report emphasizes that the key to shopper loyalty is linked to:

• Store accessibility
• Store format and selection
• Pricing and value for money
• Availability of quality products
• Efficiency and loyalty programs

Nielsen analysts have specific recommendations for retailers. Be sure to promote private label brands which complement branded products and can increase sales overall. The analysts also encourage manufacturers to work with retailers to develop marketing campaigns that improve the partnership of private label with branded products. For example, a private label tomato sauce and a branded pasta positioned together in a weekly flyer could influence consumers to purchase both products. Marketers such as grocers who are fighting for market share would do well to remind shoppers of the ease of visiting their store and of the availability of a wide selection of products.

These types of promotions could increase sales while also improving profitability for retailers, especially those who operate in the margin-thin grocery sector.

[Source: The Lowest Price is not Always the Best Price, Nielsen, January 10, 2010]

Supermarket owners may suspect that there’s good reason to court their most loyal shoppers. Now a study by Concept Shopping confirms it: The top 10% of shoppers account for 40% of a store’s sales.

Here are the specific statistics on loyal shoppers:

• They shop at the store 2 times a week
• They spend an average of $39 during each visit or a total of $78 a week
• Only 11% of their spending is on marked-down items

This behavior is a marked contrast to less loyal shoppers who come to the store only once a month. Even worse, this group spends $9 on average and 35% of the spending goes to marked-down items.

Loyal shoppers tend to stay with a supermarket. The study results indicated that up to 30% of customers disappear in any given year. But “only 5% were from the highest-spending group.”

What can retailers do to keep high-value customers coming through the door? Concept Marketing VP of sales and marketing William Young says to “spend the lion’s share of their time, effort and promotional dollars on their top-spending, loyal customers.” Young also points out that retailers can expect to pay 5 times more to get a new customer through the door when compared to keeping a current customer.

Supermarkets will likely be looking for the best ways to market to their top customers in 2010 as competition increases in the industry.

[Source: Study Confirms Importance of the Most Loyal Shoppers, Progressive Grocer, 12.15.09]

Ad-ology Research recently updated their Industry Marketing Insights report for Wine Shops & Liquor Stores. The following are the predicted Top 5 Opportunities/Challenges from the report for this industry for the upcoming 12 months:

• Liquor stores can increase market share by positioning themselves as experts on a wide variety of products.
• When consumers purchase alcoholic beverages during economic downturns, value and convenience are important.
• Wine tastings and educational classes are increasing in popularity and attract a variety of customers.
• Traditional wine  and liquor stores must compete with a broader channel of competition including online in some markets.
• More consumers purchase these beverages to enjoy at home during economic downturns.

The Industry Marketing Insights report for Wine Shops & Liquor Stores is available on Ad-ology.com (Research Store) for $195 USD with local market data for any U.S. market.

[Source: Ad-ology Research, January 8, 2010]

While the recession has forced many restaurants to close their doors, some parts of the casual dining sector have fared well. This is especially true of the bakery café concept. Several of these operators have positioned themselves to benefit from consumers who are seeking to eat out more for breakfast and lunch. A recent Technomic report indicates that this sector racked up $4.5 billion in 2008 revenues.

A significant portion of these earnings, $2.6 billion, can be attributed to Panera, which maintains a national presence. But other operators are also finding success by appealing to consumer preferences. These include:

• Healthier menu options
• Expanded lines of breakfast foods
• Locations in non-traditional venues such as airports and military bases
• Revised catering programs

This sector now has over 3,107 outlets nationwide. Look for bakery cafes to expand their marketing in 2010 as they open more restaurants. According to Technomic, bakery cafes will continue to use social media to promote limited-time offerings as a way to increase traffic.

[Source: Technomic release, December 2009]