Product knowledge the key to success in difficult times
Understanding consumer behaviour in a challenging economic climate will drive the success of retailers and manufacturers in the coming year, according to leading global market information supplier The Nielsen Company.
History often provides a sound guide to the future and, as such, can highlight the products that are most immune and vulnerable to an economic downturn.
Historical trends and macroeconomic variables analysis from The Nielsen Company reveals that a number of products can maintain strong sales in a troubled economic environment including seafood, dry pasta, pet food, confectionery, beer and pasta sauces. Contrastingly, soft drinks, eggs, crockery, food preparation products and tobacco were among those most vulnerable to a drop in sales as a result of economic turmoil.
“Knowing which products are most affected by a recession can guide effective strategic decisions with regard to pricing, promotion and assortment tactics,” James Russo, Vice President of Food Sector Marketing at Nielsen, advised in a recent report.
Mr Russo suggested that opportunities were created by troubled times and planning for an economic recovery should begin immediately. “Category-specific opportunities exist to maximize in-store efforts,” Mr Russo noted. “For products that are performing strong and showing immunity during a recession, manufacturers and retailers in these industries have the opportunity to increase product exposure even further. For products at the other end of the spectrum, companies would be well-advised to target their marketing efforts to shore up performance and maintain traction during tough times.”
Changes to shopping trip habits also appear to be occurring, with non-discount retailers in America beginning to struggle. Nielsen reports shopping trips are down 4 per cent, with consumers increasingly looking to shopping centres to help save time and reduce fuel costs (35% more trips). They are also looking to save money via increased commitment to store promotions with coupon activity, stimulated by in-store offers, has risen by over 10 per cent.