CivicScience Insight Report

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1 CivicScience Insight Report Out of Stock: A Comparative Look at Grocery Product Loyalists The majority of consumers have experienced going to a grocery store and finding an item on their list is out of stock. This report, derived from syndicated subscription insights collected in real time in our InsightStore, analyzes consumers based on how they react in those out of stock situations. Do they go to another store to purchase the product (which would be a loss of a sale for the original store)? Or do they substitute another brand or similar product (a win-win for the retailer and chosen manufacturer)? Each choice has its positives and negatives for food and beverage companies and retailers. It s important for companies to be mindful of consumers actions in order to pinpoint who is likely to be a product loyalist, a brand loyalist, or a non-loyalist - who is more willing to swap out their food and beverage purchases. June 25, 2015: When grocery shopping, consumers are likely to run into an out of stock item at some point. How they react is very important for retailers and food and beverage companies to understand. There are the product loyalists, the brand loyalists, and the non-loyalists. This report defines and provides some segment profiles on each group based on their behaviors when encountering an out of stock item. This Insight Report compares grocery product loyalists, brand loyalists, and non-loyalists in the areas of demographics, health and fitness behaviors, shopping habits, and entertainment and media consumption. We posed the following syndicated question across our polling network and weighted the results according to U.S. Census figures for those 18 years and older: When a specific brand of a grocery product you want is not in stock, what do you do? > All respondents in Country U.S. > Weighted according to U.S. Census figures for gender and age, 18 and older Go to another store to buy Wait until the next trip to buy Buy a closely-related item from the same brand instead Buy another brand s version of the product I have rarely or never experienced this Margin+/- 2% 6,184 responses from 4/10/2015 to 6/22/2015 Generated by CivicScience 9% 14% 19% 24% 34%

2 Segmenting by Out of Stock Behavior CivicScience Insight Report (continued) After collecting over 6,000 U.S. adult responses from April 10, 2015 to June 22, 2015, we can see that 86% of consumers have experienced an out of stock situation for a grocery item they wanted. Of those (excluding the 14% who say they ve rarely or never experienced this), here s how we categorized them: Product Loyalists Brand Loyalists Non-Loyalists 49% of consumers who have experienced an out of stock grocery scenario only want to buy the specific product, and will either go to another store to purchase the product or, slightly more commonly, will wait until their next shopping trip to make the purchase. The 11% who have encountered an out of stock grocery item buy a closely-related product from the same brand. 40% of people who have experienced an out of stock grocery scenario buy another brand s version of the product. These individuals are not as concerned with the brand. Let s first focus on the demographics of each group and compare them to the general U.S. adult population. Demographics Gender The gender breakdown for all the segments is close to the general U.S. adult population, except brand loyalists are slightly more likely to be women than average. Age Product loyalists are slightly more likely (+12%) to be 45 and older. Brand loyalists are slightly more likely (+14%) to be years old than the general adult population. Non-loyalists are 20% more likely to be Millennials (18-34) than the general adult population. Income Brand loyalists are 24% more likely to have a household income of $50K and under. The other segments have a very similar income breakdown as the general population. Education All groups have a similar education level as the general adult population, however, non-loyalists are slightly more likely to have a higher education. Residential Status Product loyalists are slightly more likely (+7%) to own a home than the general population. Brand loyalists are slightly more likely (+12%) to rent.

3 CivicScience Insight Report (continued) Parental Status Product loyalists are 19% more likely to be grandparents than the general adult population. Brand loyalists are slightly more likely (+11%) to not have children. Non-loyalists are 13% more likely to not have children. Now let s dive into the psychographic profiles of these segments to find out more about their behaviors and habits. Health and Wellness Health and Wellness Attributes Product Loyalists Brand Loyalists Non-Loyalists Values quality ingredients when dining out 17% 8% 10% Presence of GMOs affects their grocery purchases the majority of 18% 10% 15% the time Health and fitness activities are very important to them 39% 44% 31% Exercises several times per week 38% 40% 32% Usually focuses on aerobic/cardio when exercising 19% 25% 21% Doesn t eat healthier due to the expense 18% 18% 23% Doesn t normally eat breakfast 20% 27% 23% Usually goes out to eat for lunch 18% 16% 23% Eats at casual restaurants at least a few times a month 30% 38% 25% Eats fast food at least a few times a month 49% 49% 55% Product loyalists are more aware of their nutritional health and into food quality and non-gmos. Brand loyalists have the most fitness-oriented habits, followed by product loyalists. Non-loyalists on the other hand, seem to be more price conscious when it comes to their food spending, which is commonly seen among younger consumers that overindex in this group. Non-loyalists also are more likely to say they don t eat healthier because of the expense, and this could be why they frequent fast food restaurants more often than others.

4 CivicScience Insight Report (continued) Shopping Behaviors Shopping Attributes Product Loyalists Brand Loyalists Non-Loyalists Brand is more important than price when food shopping A company's social consciousness is very important to them Uses coupons every chance they get when grocery shopping 16% 13% 9% 26% 34% 19% 29% 26% 20% Product loyalists are slightly more likely to value brand over price when grocery shopping. If we think back to how we defined product loyalist, we combined those who responded Wait until the next trip to buy and Go to another store to buy, so we can see that they are both product loyal and brand loyal. Brand loyalists not only care about the brand, but also the company behind the brand: a company s social consciousness and overall kindness is very important to them in choosing where to shop and what to purchase. Non-loyalists are less likely than others to think brand is more important than price when it comes to grocery products, which is just another example of what we commonly see among younger consumers. Entertainment and Media Consumption Entertainment and Media Attributes Product Loyalists Brand Loyalists Non-Loyalists Actively visits YouTube 35% 34% 45% TV shows are very important to them 17% 26% 20% Watches TV programs online 23% 30% 37% Spends 2+ hours on social sites each day 14% 14% 18% The last category we researched was entertainment and media consumption. We found that non-loyalists, who are more likely to fall in the Millennial age buckets, spend more of their time on social media sites and watch more TV content via online streaming (which we would expect to see from Millennials) than the other two consumer groups.

5 What Drives New Brand Experimentation? CivicScience Insight Report (continued) In addition to what people do when a grocery item they want to purchase is out of stock, we also wanted to find out what drives consumers to try unknown or lesser-known brands. We used the following question: What is the primary reason you recently purchased an unknown, lesser-known, or new brand product at the grocery store? > All respondents in Country U.S. > Weighted according to U.S. Census figures for gender and age, 18 and older Price or on sale It was experimental because I like to try new things They were out of stock of the brand I usually purchase Ingredient quality or nutritional value The brand s values Great packaging I have rarely or never done this Margin+/- 2% 6,239 responses from 4/10/2015 to 6/22/2015 Generated by CivicScience 1% 4% 8% 9% 17% 19% 42% Of the 6,239 U.S. adults who answered the question: 42% say they will try a newer grocery brand product because of the lower price or because it was on sale. 17% say they do so because they like to try new things. Only 9% do this because the product they wanted to purchase was out of stock. 19% of consumers don t enjoy experimenting on new brands. The majority of adults (81%) will try new, lesser-known products. Conclusion It s worth knowing what types of grocery consumers are more (and less) brand and even product loyal, so that stocking the shelves for certain items aligns to the clientele. Also, when items are out of stock, retailers can better plan on how to direct consumers to purchase another product, rather than losing the sale to another store or having it deferred to a later trip. Product pricing is the leading driver for getting shoppers to purchase a less familiar product or brand when the one they want is absent from the shelf.

6 About the CivicScience Methodology: CivicScience Insight Report (continued) CivicScience collects real-time consumer research data via polling applications that run on hundreds of U.S. publisher websites, cycling through thousands of active questions on any given day. Respondents voluntarily opt-in their answers with no incentives, compensation or coercion -- they answer for fun and are kept anonymous, allowing for greatly reduce bias and higher levels of engagement. The 6,184 respondents for this report were weighted for the U.S. Census, 18 years and older, and data were collected from April 10, 2015 June 22, CivicScience builds deep, timely psychographic profiles of these respondents with each question they answer over time, providing valuable consumer sentiment and behavior insight data to the decision makers who care through subscriptions to our InsightStore. The CivicScience methodology has been scientifically validated by a team of academic leaders and by independent research firms. CivicScience currently has millions of anonymous consumer profiles stored in the InsightStore, growing daily. June CivicScience, Inc. Visit our online Insight Report library: Click here to browse more Insight Reports like this, leveraging real data from our InsightStore enterprise consumer research platform.