••• grocery research
Center-stores doing just fine, thank you
Perimeters grow but centers still a factor
Despite what you may have read or heard, the center of the grocery store isn’t dead. In fact, Nielsen research that analyzed center-store business trends across the U.S. suggests that the industry rumor mill is working over-time. While the perimeters of many retail stores are starting to account for larger sales, the center of store is still contributing to overall growth.
When we look at today’s floor layout, the center of the store includes four key departments: grocery, frozen, dairy and alcohol. Comparatively, the perimeter consists of bakery, produce, deli, meat and seafood. But here’s the real insight: While many fear the center of the store is losing ground, it’s actually digging in. For the 52 weeks ending Aug. 22, 2015, the center of store accounted for $709.4 billion in sales across the U.S., up $56.7 billion from 2011. What were the key growth categories? Grocery, dairy and frozen posted combined annual growth rate increases of 2.4 percent, 2.8 percent and 0.8 percent, respectively.
But those three key areas aren’t the only places where sales are popping. We also see growth across a mix of indulgent products, as well as health and wellness-driven categories.
Salty snacks – which saw the biggest growth in sales last year – are also near the top of the list of products requested by families (with children under 18), with 58 percent of parents being asked for salty treats, according to a Harris Poll survey. The appeal of salty snacks is seen across various family breakdowns (54 percent among those with 3-to-7-year-olds, 61 percent for those 8-12, 68 percent for those 13-17) and seemingly increases with age. Candy is also high on the list: among 56 percent of these parents, kids have made requests for the sweets. Retailers should be aware of shifting preferences over time, as reported requests for candy are heard mostly among parents with 3-to-7-year-olds (63 percent) and 8-12-year-olds (65 percent) in the household before dropping to 54 percent among the 13-17 set. Similar patterns emerge when it comes to cookies (64 percent among those with 3-to-7-year-olds, 68 percent 8-12 and 57 percent 13-17).
While many products in the center of store contribute to growth, some may be dragging it down. As healthier eating habits and increasingly hectic lifestyles takeover, the sales of some products in the center of the store are declining.
The most shocking revelation may be the decline of the cereal category, which narrowly beat out soft drinks as the category with the largest sales contraction. According to Nielsen Homescan data, 90 percent of American households – and 97 percent of those households with kids under 18 – buy at least one box of cereal in a year. Moreover, cereal buyers with kids purchase an average of nearly 28 boxes of cereal in a year (compared with roughly 17 among those without children). Given all this, perhaps it’s not surprising that cereal is the item kids are most likely to have requested, with roughly seven in 10 parents (69 percent) saying their kids have asked for something in the cereal aisle.
With the center of store continuing to see growth, there are some instigators that manufacturers should be aware of that help drive finger-pointing on the shelves. Just over half of parents (53 percent) believe their children have been influenced at some point by something to do with a product’s packaging, with 43 percent specifying characters on the packaging and 32 percent more broadly citing the packaging’s appearance. Thirty-five percent cite something to do with the display, with 25 percent indicating a special store display and 18 percent more generally referring to the item’s position on the store shelf.
Today’s center of store is affected by numerous factors that are helping drive growth. Consumers are redefining how and when they eat and mealtimes are no longer static occasions that take place mainly in the home. Additionally, children are increasingly making specific requests for food items to their parents. In order to help the center of store continue to succeed, retailers need to understand how to reach consumers in new locations with products that will better fit an increasingly diverse population with on-the-go lifestyles.
Retailers should also be aware of products’ appeal to children, with 91 percent of parents recalling instances where their children made specific requests, and at the same time appealing to parents, as more than half (59 percent) recall instances they have had to say no. So while many believe the center of the store is in a depression, it’s important to remember that the sky isn’t falling, it’s just not as sunny.
For this study, a Harris Poll of 1,009 U.S. parents with at least one child under 18 in the household was surveyed online between Aug. 5 and Aug. 12, 2015, using the Harris Poll ParentQuery Omnibus.
••• the business of research
Insights drive growth, study says
Customer-centricity pays
Seventy-four percent of companies that over-perform on revenue growth create customer experiences based on data-driven insights, with only 30 percent of under-performing companies reporting the same, according to initial findings from Insights2020 – Driving Customer-Centric Growth, a global marketing leadership initiative. The study, led by Millward Brown Vermeer in partnership with the Advertising Research Foundation (ARF), ESOMAR, LinkedIn, Kantar and Korn Ferry, builds on the findings of Marketing2020 and is focused on aligning insights and analytics strategy, structure and capability to drive business growth.
Based on more than 325 in-depth interviews with senior marketing and insights leaders and 10,000+ interviews with practitioners across 60 markets, the Insights2020 initiative examines the drivers of customer-centricity and how being a customer-focused company impacts business performance. The research team analyzed over-performing and under-performing companies in terms of revenue growth to understand what over-performing organizations are doing differently to drive success.
“More than a set of activities, customer-centricity is a strategy to deliver business value against customer needs, guided by brand purpose,” says Frank van den Driest, chief commercial officer, Millward Brown Vermeer and Insights2020 global program leader. “Building on the findings from Marketing2020, Insights2020 found that companies that outperform their peers on revenue growth do so by over-performing on key drivers of customer-centricity. With a robust and global sample, we are able to quantify the financial opportunity for any business and guide organizations on their journeys to customer-centricity. The connection is clear and it is time to elevate insights and analytics to the boardroom.”
The research revealed a number of striking differences between over- and under-performing organizations and all tie back to three key dimensions of customer-centric growth (“total experience,” “customer obsession” and “insights engine”):
- 83 percent of revenue growth over-performers link everything the company does to its brand purpose, as opposed to only 31 percent among revenue growth under-performers.
- 62 percent of over-performers leverage insights and analytics to drive consistency across all customer touchpoints; only 26 percent of under-performers do.
- In 78 percent of over-performing companies, customer-centricity is fully embraced by all functions whereas this is only true in 12 percent of the under-performing companies.
- 66 percent of all over-performers are working to link their disparate data sources, compared with only 33 percent of under-performing companies doing so.
- The insights and analytics function reports straight into the CEO in 33 percent of over-performer companies; this is true for only 13 percent of the under-performers.
Phase two of Insights2020, available in early 2016, will build on the key drivers of customer-centric growth and will explore the roadmap for helping brands reach customer-centricity. For more information visit www.insights2020.org.
••• shopper insights
Consumers say corporate ethics matter
Skepticism still prevalent
Ethics have become increasingly important to a company’s reputation at a time when public opinion can go viral in an instant. New research from Mintel reveals that 56 percent of U.S. consumers stop buying from companies they believe are unethical. What’s more, over one-third (35 percent) of consumers stop buying from brands they perceive as unethical even if there is no substitute available and 27 percent stop purchasing even if they think the competitor offers lower quality. Overall, more than three in five consumers feel that ethical issues are becoming more important (63 percent).
Some 34 percent of consumers tell others when they perceive a brand to be making ethical actions or actions that are honest, fair and responsible, while another 29 percent of consumers take to social media to share their support of ethical companies. However, the likelihood to stop buying from “bad” brands is not met by the likelihood to support “good” brands, with just 45 percent of consumers buying products from companies they perceive as ethical. Despite 58 percent of consumers agreeing that buying ethically-produced products makes them feel good, there is skepticism toward company ethics. Half of Americans agree that marketing products as “ethical” is just a way for companies to manipulate consumers (52 percent) and that many companies behave ethically in one area while behaving unethically in another (49 percent). Additionally, one-third of consumers report that a company’s ethics rarely or never influence whether they purchase the company’s products (31 percent).
Many brands are using ethical icons and terms on product packaging to communicate ethical practices but Mintel research shows that this method leads to confusion among consumers. Some 68 percent of Americans are confused about what certain ethical icons mean, with nearly half (46 percent) confused about the meaning of certain ethical terms. For example, despite Halal being the most recognizable icon, just 20 percent of consumers report that they know what it means. What’s more, only 10 percent of consumers know what the icons for Fair Trade USA and Cruelty Free International mean.
“When corporate social responsibility went mainstream in the early 2000s, incorporating social initiatives and linking to ethics was an effective way to attract attention and promote brand loyalty. Now, with more than half of consumers willing to stop supporting unethical companies, it’s become the norm and is often expected by consumers. These efforts are no longer differentiators and can even draw skepticism among consumers,” says Lauren Bonetto, lifestyles and leisure analyst at Mintel. “Brands have attempted to boost their ethical reputations by using icons but these are only effective for reaching the most engaged consumers. Brands must consider alternative methods to showcase their ethical efforts, such as content marketing showing the full scope of a brand’s actions and participating in related grassroots efforts.”
As described in Mintel’s North America 2016 Consumer Trends, following the global financial crisis, consumers exchanged the “bigger is better” mantra for right-sized purchases and supporting small businesses, which led to an explosion in craft products and increased interest about a product or brand’s origins. One way big brands are trying to appeal to these consumers is by entering the craft and niche markets and by sharing genuine stories about the brand to form relationships with consumers and give them the security that the brand’s products are worthy of their investment and loyalty.
More than two-thirds (70 percent) of Americans are at least sometimes influenced to purchase products based on a company’s ethics and, according to Mintel research, a company’s size stands to help or hurt its ethical image due to consumer notions about the relationship between size and ethical behavior. Half of consumers say they trust small companies to do the right thing (49 percent), while big businesses (36 percent) are much less likely to be trusted. The most commonly considered factor when determining a company’s ethics is employee treatment (48 percent), followed by where its products are made (34 percent) and if the brand or product is environmentally-friendly (33 percent). Consumers are more likely to consider outreach in local communities (22 percent) over national (18 percent) or global (13 percent) outreach.
“Consumer attitudes toward big businesses have shifted, with many wondering if a company’s success is coming at the expense of others. While often popular for their lower prices and brand recognition, big companies may be criticized for the treatment of their employees and product sourcing. Companies can combat these concerns by launching regional brands, working with local suppliers and being proactive with community outreach,” says Bonetto.
••• entertainment research
Netflix users double their viewing
Mobile on the rise too
Regular (monthly) Netflix users in the U.S. have grown even more dependent on the service for viewing TV programming, saying they watch 10 shows per week via the platform – as well as four movies during the same time frame. For TV content, this represents a doubling of the level (five shows per week) found in the same survey three years ago.
Projected to the full population, this means that the average U.S. consumer ages 13 to 54 watches roughly five TV shows and two movies per week via Netflix using one or more platforms.
The findings come from “Over the Top TV 2015: A Complete Video Landscape,” a study in GfK’s ongoing the Home Technology Monitor series that tracks media technology and services. The new report includes trends from five prior over-the-top (OTT) studies conducted since 2010.
Watching via Netflix on mobile devices has also more than doubled in three years, with 24 percent of regular Netflix users reporting viewing in the past month via one or more mobile platforms, up from 10 percent three years ago. Monthly viewing on TVs has risen from 36 percent to 47 percent among the same group and watching on PCs (laptop or desktop) has jumped from 17 percent to 25 percent.
One-quarter (25 percent) of regular Netflix users also report binge viewing – defined here as watching three or more programs in one sitting – either “often” or “all the time.” Bingeing levels are highest among Generation Y (ages 13 to 35), with almost one in three (31 percent) reporting this behavior.
“Netflix is a TV ecosystem unto itself and now an established force in the total TV marketplace,” says David Tice, senior vice president of media and entertainment at GfK. “But it represents just one aspect of an increasingly complex OTT picture, which also includes subscription services like Amazon Prime and Hulu, delivery systems such as Roku and Apple TV and threatened incumbents like cable and satellite companies, which are trying to leverage their content with ‘TV Everywhere’ options. The upshot is that OTT has now gone mainstream and consumer expectations of control over their viewing experience continue to rise. When today’s teens become breadwinners, they may bypass traditional distribution channels in ways we cannot even imagine now – challenging all of today’s content players to stay up to speed and continue to experiment with delivery innovations.”
••• youth research
‘Just 5 more minutes’
Study looks at global parents’ bedtime battles
Parents – across the U.S., U.K., France, Canada, Australia, Brazil and Mexico – who are in charge of getting their children tucked in at night say that it takes an average of 17.5 minutes each night trying to get their children to bed, according to a study conducted by Ipsos Public Affairs on behalf of Netflix. Getting their kids to bed can be a challenge for many, with six in 10 reporting that their children have come up with some creative stall tactics to try and delay bedtime (61 percent). Further, nearly eight in 10 (79 percent) saying that they sometimes make compromises with their children to get them to go to bed, with the most common negotiating tactic being giving their children five more minutes of whatever it is they are doing (38 percent).
While about four in 10 parents of children ages 2 to 10 say that they typically can get their child tucked into bed in 10 minutes or less, including 16 percent who spend less than five minutes getting their child into bed, and another 24 percent who say they can typically accomplish this in about six to 10 minutes, for many parents it is a longer process. Nearly three in 10 (27 percent) spend about 11-20 minutes on bedtime routines, with another one in five (20 percent) saying that it usually takes them between 21-30 minutes to get their child into bed. Nearly one in 10 (8 percent) say it takes up to 45 minutes and another 5 percent say it takes even longer than that.
Parents living in France typically spend significantly less time trying to get their children into bed compared to those in all other markets, with bedtime averaging 12.3 minutes. Respondents from Australia, averaging a bed-time of 16.5 minutes, are also among those most likely to spend the least amount of time getting their children into bed.
When thinking about how many nights over the course of an average week their children go to bed on time, parents across markets say that their children go to bed on time 69 percent of the time, or 4.8 days a week, on average. This includes more than a third who say that their children go to bed on time five nights a week (36 percent) and another one in seven each who say their kids go to bed on time six (15 percent) or even seven (15 percent) nights a week. While at least one in 10 manage to accomplish getting their kids tucked in on time three (10 percent) or four (17 percent) nights a week, very few parents say that their children go to bed on time only once (3 percent) or twice (5 percent) a week.
Respondents from France spend the least amount of time putting their kids to bed and are also significantly more likely than parents in all other markets to say that their children go to bed on time (average of 5.1 nights a week). Parents from Mexico (4.9), the U.K. (4.8) and Canada (4.8) also fare rather well here, on par with the global average.
More than six in 10 parents say that their children have come up with some creative stall tactics to try and delay bedtime (61 percent) – although this is especially true among parents living in the U.S. (66 percent), Mexico (65 percent) and the U.K. (64 percent). In addition, more than two in five parents further agree that their kids’ stall tactics frequently work to delay their bedtimes (44 percent) and that these tactics can be too cute or so clever that parents give in and let their kids stay up past their bedtimes (41 percent).
Brazilian parents (52 percent), and to a lesser extent American parents (49 percent), are among those most likely to say that their child’s stall tactics frequently work to delay bedtime.
Parents living in Mexico, in their turn, are significantly more likely to say that they give in and allow their children to stay up past their bedtime thanks to the cute and clever tactics their children use (60 percent), while those in Brazil (44 percent), the U.K. (42 percent) and the U.S. (41 percent) follow here, though at a distance.
Those in France are significantly less likely than those from all other markets to agree that their kids’ stall tactics frequently work to delay their bedtime (29 percent) and that these tactics are so cute/ clever that they give in and let their children stay up (29 percent).
The most common age cited for when children begin to display bedtime stall tactics across markets is between 3 (23 percent) and 4 (20 percent) years old – although a similar proportion of parents say that their child’s stall tactics started as early as 2 (18 percent) or not until 5 years old (14 percent). In comparison, stall tactics performed by 1-year-olds are not as common, with only 7 percent of parents saying that this is the age around which their child first began to exhibit such behavior. Similarly, parents are not as likely to say that their children didn’t start using bedtime stall tactics until they were ages 6 (8 percent) or older (10 percent; ages 7-10). When it comes to different styles of stall tactics, the “just five more minutes” negotiator (42 percent) and the “super-starved or soooo thirsty” routine (41 percent) are most commonly witnessed by parents across markets; while roughly a third each say that their children try to stall by using flattery (“I love you mom/dad!”) (33 percent) or by acting as slow as snails (31 percent). One in six parents say that their children try to be clever tricksters (18 percent) or act forever forgetful (15 percent). One in 10 parents mention some other stall tactic (8 percent), while a slightly greater proportion say that none of these is closest to the stall tactic style of their child (12 percent).
Roughly a third of all parents say that after trying everything else, they sometimes have to trick their kids to get them into bed (35 percent) – although this is especially true among parents living in Mexico (45 percent), Brazil (39 percent) and the U.S. (38 percent). Meanwhile, a slightly smaller proportion admit – though reluctantly so – that one of the quickest ways to get their kid into bed is a bribe (28 percent), with respondents from the U.S., the U.K. and Mexico all standing out this time as those most likely to agree here (33 percent in each market).
In fact, nearly eight in 10 (79 percent) say that they sometimes make compromises with their children to get them to go to bed – and giving children five more minutes of whatever it is they are doing (38 percent) is the most common negotiating strategy among all parents. Three in 10 promise their children a fun activity the next day (30 percent) or the chance to stay up later on the weekends (29 percent), while one in five get their children to go to bed by letting them watch part of a TV show (19 percent), get food/eat a snack (18 percent) or watch one more full TV show (16 percent). Parents are not as likely to say they’ll do whatever it takes (7 percent) to get their children to go to bed, although nearly one in 10 negotiate in this manner, while very few use money (4 percent) or something else (5 percent) to help get their kids to go to bed. One out of every five (21 percent) parents say that they never make compromises to get their child to go to bed – especially those from France (33 percent), and to a lesser extent parents from Australia (26 percent).
The time and effort taken to put children to bed is well worth it for parents, with nearly nine in 10 across markets agreeing that the last snuggle, once their child is quietly tucked into bed, is one of the most special parts of their day (87 percent). However, more than half of all parents nevertheless admit that getting their child to bed on time can be a struggle (51 percent), and even more wish they had a way to make it easier to get their children to bed (56 percent).
While respondents in the U.S. are significantly more likely to admit that getting their child into bed on time can be a struggle compared to those in other markets (61 percent), those in Mexico stand out as being significantly more likely to wish they had a way to make it easier to get their children into bed (74 percent).
These are findings from an Ipsos poll conducted on behalf of Netflix, fielded September 2-23, 2015. For the survey, a sample of 7,277 adults between the ages 18 and over living in one of the U.S., U.K., France, Canada, Australia, Brazil or Mexico, was interviewed online, including 7,087 respondents who say that they are the primary parent responsible for getting their child tucked into bed at night at least some of the time (approximately 1,000 parents in each country). The precision of the Reuters/Ipsos online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 1.3 percentage points for all parents. The data were weighted to the U.S. current population data by gender and age based on Census data. Statistical margins of error are not applicable to online polls. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding.