Retail stores compete in meals on-the-go
Six percent of the roughly 62 billion commercial food-service meals and snacks consumed in a year are pur-chased at retail stores (food, drug, discount, department and price clubs), and convenience stores represent an additional 7 percent, according to Retail Meal Solutions, a report from Port Washington, N.Y., research company The NPD Group. Retail food service represents a spending level of close to $13 billion.
According to the report, which analyzes how retailers are satisfying consumers’ needs for ready-to-eat foods, retail ready-to-eat meal and snack purchases increased 2 percent for the year ending August 2008. The quick-service restaurant (QSR) segment, with which retail stores directly compete in providing convenience meal solutions, served only 1 percent more meals and snacks. The full-service restaurant segment saw a downturn.
“Consumers’ increasing use of food service for ready-made meals has long been recognized by grocery retailers as an opportunity,” says Bonnie Riggs, NPD restaurant industry analyst and author of the Retail Meal Solutions report. “For some time, retail stores have offered prepared foods in the deli department, but have now expanded food-service offerings to include a variety of cold and hot ready-to-consume meals and snacks.”
The report dispels the popularly-held belief that supper is the prime day part for retail meal and snack so-lutions. NPD finds supper accounts for only 17 percent of retail meal solutions consumed, but is steadily growing, whereas it’s a weakening day part for QSR. Night-time snacking represents the largest share (35 percent) of ready-to-eat food consumed, followed by lunch (27 percent) and then the morning meal (21 percent).
Consumer motivations in purchasing prepared meals and snacks from retail stores include convenience, availability of healthier options, variety and affordability - the very attributes, Riggs points out, that consumers say QSRs lack. For more information visit www.npd.com.
Honda brings back most repeat customers
When it comes to bringing buyers back to the showrooms, no brand does it better than Honda, according to the 2008 Power’s Customer Retention Study from J.D. Power and Associates, a Westlake Village, Calif., re-search company. For 2008, Honda saw 64.7 percent of its buyers return when shopping for their next vehicle. Toyota placed second at 63.2 percent and Lexus third at 60.4 percent.
“Honda has historically been a strong performer in terms of customer retention, but 2008 marks the first time since the inception of the study that the brand has achieved the highest retention rate in the industry,” says Debbie Ortuño, manager, product research and analysis, J.D. Power and Associates.
The industry as a whole averaged 48 percent retention, though about a third of all brands increased their retention rates over 2007. Land Rover marked the biggest increase in retention, up 18 percent.
Power also notes that fuel economy and safety have surged in the rationales of shoppers when buying a new vehicle, and addressing those needs will be even more important in 2009, when new vehicle sales are expected to crater at around 12 million units. For more information visit www.jdpower.com.
Texting hotspots found in the South
El Paso, Texas, is the top U.S. city for text messaging, as 57 percent of cell phone subscribers age 18+ in El Paso text message versus 48 percent of adult cellular subscribers nationally, according to study results from Scarborough Research, New York. Other leading markets for text messaging include Salt Lake City, Dallas and Memphis, Tenn. Fifty-five percent of cell subscribers in these cities utilize the text messaging feature on their phones. Fort Myers, Fla.; Charleston, W.Va.; and Grand Rapids, Mich., are the local markets least likely to text message. Thirty-six percent of Fort Myers and Charleston cellular subscribers utilize the text messaging feature on their phones, as do 35 percent of those in Grand Rapids.
Youth and cultural diversity are two demographic commonalities among these so-called texters. These consumers are 49 percent more likely than all cellular subscribers to be ages 18-24, 14 percent more likely to be Hispanic and 24 percent more likely to be African-American. Scarborough points to these similarities as likely reasons why El Paso, Salt Lake City, Dallas and Memphis are the top text messaging markets. El Paso and Dallas both have Hispanic compositions that are well above average. Further, Salt Lake City and El Paso are top markets for 18-24-year-old adults, and Memphis is a leading city for African-Americans.
“Text messaging could be largely disproportionately appealing to marketers because it delivers a young, multicultural audience. Additionally, texts can provide a very locally-targeted vehicle for marketers wanting to reach people in the right place at the right time, ready to make a purchase,” says Gary Meo, senior vice president, digital media services, Scarborough Research.
In addition to being young and diverse, texters are among the country’s highest spenders on cellular ser-vices. On average, they spend $87 on their monthly cellular bill. By contrast, all cellular subscribers spend an average of $75 monthly. They are 46 percent more likely than all cellular subscribers to typically spend $150 or more on cellular service monthly. Texters are 12 percent more likely to plan to switch services. They utilize a wide variety of phone features - such as picture messaging, streaming video and e-mail - at a rate higher than that of the average cell user.
Texters are more likely than the average cell phone subscriber to live in a household that owns - or plans to buy - a wide variety of high-tech items, from HDTVs to MP3 players to video game systems. In looking at specific stores, Best Buy is the leading audio-video store for texter households. Thirty-nine percent of texters live in a household that shopped this retailer during the past year versus 27 percent of all consumers nationally. Other leading stores for texter households include Wal-Mart and Target.
Texters are also leading online spenders. One-fifth of texters spend more than $1,000 online annually, versus 17 percent of all cellular users. They are avid online users overall, as Internet applications permeate all aspects of their lives, from household tasks (such as bill paying) to entertainment (such as downloading movies or TV programs) to interaction (such as blogging and downloading a wide variety of content).
When not online or shopping, texters are active, on-the-go consumers. They are 37 percent more likely than all cellular subscribers to have played basketball (as a leisure activity) during the past year, 29 percent more likely to have gone jogging/running, 29 percent more likely to have played tennis and 23 percent more likely to have practiced yoga.
Their interests reflect their youthful demographic and active nature. Texters are 12 percent more likely to have attended a professional sports event and 57 percent more likely to have gone to an R&B/rap/hip-hop concert during the past year. For more information visit www.scarborough.com/press.php.
Online shoppers put their money where their trust is
Consumers may be willing to spend a little more online if they know their identities are protected, as 85 per-cent of consumers state that trusting the site is most important when interacting on a Web site and sharing confidential information, according to research conducted by Chicago research company Synovate and commissioned by Mountain View, Calif., communications company VeriSign.
In contrast, 9 percent said competitive pricing was most important, and 5 percent said ease of use was most important. Additionally, 93 percent of respondents said they would stop transacting on a site that’s not secure.
Findings also revealed that 76 percent of consumers claimed that identity theft is a major concern for them. When asked how they felt about brands that did not protect their online identity, 56 percent of respon-dents felt distrustful, 17 percent felt disappointed, 13 percent felt betrayed, 6 percent felt indifferent and 4 percent felt let down. Finally, 20 percent engage in fewer online activities due to security concerns.
“Identity theft can be an avoidable evil, and, as our research indicates, security-savvy consumers will put their money where their trust is,” says Fran Rosch, senior vice president, products and strategy, at VeriSign. “These consumers understand that the repercussions of identity theft outweigh the few dollars they may be able to save by shopping on a questionable Web site, which is why 85 percent opt for sites they trust.”
When asked how much savings they’d expect before considering shopping on an unprotected site, one in three consumers said they would expect at least a 30 percent discount. This finding suggests that businesses that don’t provide security measures to gain consumer trust cannot anticipate getting the same value for their goods. For more information visit www.verisign.com.
Organic preference wanes as economy struggles
Despite more organic food and beverage products on grocery store shelves, all is not healthy in the world of pesticide-free, additive-free edibles. In fact, Chicago research company Mintel predicts that market growth rates for organic food and drink will decline, especially as the economy struggles.
According to Mintel, the market for organic foods and beverages should reach $7.2 billion in 2008, an in-crease of over 140 percent from the $3.0 billion recorded during 2003. But year-over-year, Mintel has seen sales growth slowing. With many Americans now struggling financially, Mintel projects that sales of organic foods and beverages will not rally anytime soon.
“Rising food and gas prices, the credit crunch and economic uncertainty have deeply affected people’s shopping habits,” says Marcia Mogelonsky, senior analyst at Mintel. “Across the board, Americans are spending less and ‘organic versus traditional’ is a decision many people are thinking about carefully.”
According to Mintel, the price of all food at home increased more than 7 percent in the past year. “To cope with higher prices, many shoppers are simply opting not to buy pricey organic or premium brands,” says Mogelonsky.
People are also saving money by reaching for private-label organics, which have exploded in recent years. When Mintel asked survey respondents about the difference between name-brand and private-label organics, three in five (60 percent) said it didn’t matter - that they reached for “whatever is available” when shopping. Private-label posts an increasingly large threat to branded organic lines.
“Economic struggles will undoubtedly change the way organic food and drink is sold. But we don’t expect people to completely stop buying organics,” says Mogelonsky. “We anticipate more subtle changes, such as the formerly all-organic shopper who returns to traditional cookie brands while sticking with organic produce. These small changes will slow market growth.”
Mintel’s survey of adults revealed that 47 percent said they purchased organic food in the past year, while 21 percent reported purchasing organic beverages. Mintel GNPD tracked over 2,000 new organic food and drink launches in 2007 in the U.S., and Mintel expects 2008 totals to top that figure. For more information visit www.mintel.com.
Younger viewers change prime-time TV trends
Although overall time spent watching television during prime time has changed remarkably little in the past four years, the specifics of how, what and where that viewing happens are being transformed, according to research from Knowledge Networks (KN), a Menlo Park, Calif., research company. These changes in the prime-time experience are being driven in part by the very different habits of Generation X, Millennials and young Baby Boomers.
According to the report, How People Use Primetime TV, the proportion of people typically watching TV in a given hour between 8 p.m. and midnight has remained stable - with shifts of 0-2 percentage points in each hour since 2004, when KN produced its last report on prime-time television viewing. But there are signs that a more purposeful approach to viewing is being abetted by technologies such as DVRs and the ability to have a TV set to oneself. The proportion of those who report recording prime-time shows has jumped by over 40 percent, from 27 percent in 2004 to 38 percent in 2008. Forty-eight percent of viewers say that most of the time they turn on the TV in prime time with the intent to watch a particular show, compared to 41 percent in 2004. Reported switching in each hour decreased 4-8 percentage points in 2008 compared with 2004.
Looking at the habits of different age groups, the report shows that Millennials (ages 13-29) are 50 percent more likely than young Boomers to say they switch around during prime-time commercial or program breaks (63 percent for Millennials, 42 percent for young Boomers); are more than three times as likely to watch prime-time TV out of their own home at least once a week (39 percent versus 11 percent of young Boomers); and are substantially more likely to say they watched prime-time TV with others in the room (55 percent for Millennials versus 41 percent for young Boomers).
“Prime time represents an important block of time when people want to be entertained and informed,” says David Tice, vice president and director at KN. “It is becoming less about the shows’ or TV networks’ schedules; more and more consumers can find what interests them and watch it when they find time. The more flexibility that media companies offer consumers for watching on their own terms, in their ‘personal prime time,’ the more viewing hours they will capture.” For more information visit www.knowledgenetworks.com.
Hispanic shoppers may be more open to in-store promotions
Hispanics are avid shoppers, unhurried browsers and rate trust as a key driver for store selection, according to Hispanic Shopper 360, a report from New York research company TNS. Additionally, in-store promotions and advertising are much more likely to influence Hispanic shoppers’ purchase decisions than the average shopper.
Twenty-four percent of Hispanics cite trust as key store-selection criteria, compared to just 17 percent of the total non-Hispanic shopper population, reinforcing the importance of building stronger brand relationships. “The Hispanic population is ripe with avid shoppers driven by both family size and interest but needs to feel comfortable, welcome and to completely trust their store,” says Emil Morales, executive vice president and general manager, centers of excellence, at TNS. “Trips to the store for Hispanic consumers are about more than just availability of goods. It is also largely about service and the store experience. This sense of trust is a key reason that community-based stores (bodegas and supermercados) are successful despite limited selections and often charging higher prices.”
Hispanic shoppers are browsers and they are unlikely to rush hurriedly through a store. Only 16 percent of Hispanics found “getting in and out quickly” important compared to 39 percent of total non-Hispanic shoppers. Hispanics are not avid users of coupons acquired outside of the store, but once in-store, their more leisurely shopping habits make them considerably more aware of and open to in-store displays, discounts and other tactics to drive purchases.
Although they tend to know the brands of products they are going to buy before shopping, Hispanic shoppers are open-minded and their final purchase decisions are often heavily influenced by in-store pro-motions. Thirty-four percent of Hispanics versus only 14 percent of total shoppers are influenced by in-store ads and coupons, and 34 percent of Hispanic shoppers claim to be influenced by in-store price reduction compared to 22 percent for total shoppers. Hispanic shoppers rank coupon redemption lower in their list of lifestyle attributes than total shoppers (ranking 26 versus 74, Hispanic versus total shoppers). Hispanics are also much more likely to know which brands of products they are going to buy before shopping (ranking 22 versus 3, Hispanic versus total shoppers).
Hispanic shoppers shop at more channels than the total shopper population and tend to favor mass merchandisers and drug stores. Convenience stores are big, particularly with Hispanic males. Dollar stores and supercenters are frequented less by the Hispanic population than the average shopper. However, significant positive preferences appeared for supercenters in Texas and southeastern Florida.
Hispanic grocery shopping habits also show a preference for cooking and finding pleasure in cooking, which may indicate increased opportunity for brands specializing in “authentic” ready-to-cook meals or meals that are focused on healthy and fresh alternatives. For more information visit www.tns-us.com.