Brands risk losing the Woman of

Size: px

Start display at page:

Download "Brands risk losing the Woman of"

Rolf Fitzgerald
6 years ago
Views:

2 Executive Summary This report is focused on the female shopper in the UK. It has been created for International Women s Day by Women In Nielsen, an employee resource group within our UK business supporting diversity and inclusion. Women dominate FMCG (Fast Moving Consumer Good) shopping, accounting for 70% of spend and 65% of trips. They therefore have a big influence on FMCG shopping behaviour overall. By age 67, a female has completed a whopping 10,000 shopping trips. Our report showcases female millennials, as in the next years they will become the shoppers with the most income to spend. Female millennials are increasingly retailer-promiscuous when grocery shopping. They are increasingly found in stores that primarily have a low-price reputation. However, they are willing to pay well for items they consider essential in their lives. The report covers: Why females and female millennial shoppers in particular are so important. Including: Significant changes in their shopping behaviour, compared to previous generations at the same age. The Ehrenberg Bass report on Are Younger Shoppers Easier to Win? Whether they consider private label good enough, or even better and cheaper. Where to best reach female millennials: Understand their online world, including the top women s website genres. Whether TV is a hit or miss when it comes to remembering programmes, adverts and brands, and how this differs between men and women, and across the generations. Seven actions for brands to reach and appeal to female millennials, to grow future sales. Brands will need to embrace female millennials, in order to increase sales in the next two decades. If they choose not to, then they are at risk of losing the women of tomorrow! 2 Brands risk losing the Woman of Tomorrow!

3 BRANDS RISK LOSING THE WOMAN OF TOMORROW! The millennials are growing up; the oldest have celebrated their 34 th birthdays; the youngest at 16 are nearing adulthood. This means they are on the cusp of becoming the most important shoppers in terms of the income they have available to spend. However this group is behaving differently to people of this age before them, due largely to the fact they are digital natives and have grown up in the recession. Millennials are tech-savvy. They have grown up in a world of technology surrounded by computers and are the fastest adopters of new technology. Nearly 90% own a smartphones, versus 66% for the wider population, according to Ofcom. Ordinary phones, dial-up phones and cassettes, to them, only belong in museums. The majority of devices carried by millennials are used to instantly access information just a couple of finger swipes away. Traditional television viewing is still important, but has declined over the years within this group. Importantly, video viewing is up. It is just that alternative viewing platforms are evolving. Even when they are sat in front of the television, they are likely to be using other devices (smartphones, tablets) at the same time. The post-2008 recessionary period has also framed the millennials shopping experience. Feed your family for a fiver promotions are just one example where UK food retailers have enabled shoppers to make smart savings to get through the recessionary times. This has led to cut-backs on spending for food but has been an enabler of spending in some other areas. Perhaps, not surprisingly, we are seeing these thrift lessons come through in the millennials grocery shopping habits. Shopping behaviour has changed, forever! Brands need to understand these changes and adapt strategies to ensure they survive and stay relevant in this era of millennial spending. Copyright 2016 The Nielsen Company 3

4 In terms of FMCG (Fast Moving Consumer Goods) shopping, females are by far the most important gender to consider. In households where a female is the main grocery shopper, they account for 70% of spend in this sector and 65% of trips. They are spending an impressive 22% more than male main shoppers on average each trip. Within this female group the most interesting group may be the millennials even though they currently only account for 10% of FMCG spend. This is because they demonstrate significant changes in behaviour to people that were this age in the generation before them. We will need to approach them differently. In the next years female millennials will come to dominate the tranche of shoppers that are the most important, the year-olds who account for 30% of FMCG spend. i AGE Shopping experience increases significantly with age. At age 18, someone who started being the main household shopper at 16 will have completed about 320 FMCG shopping trips. By the time they reach 67 they will have completed a whopping 10,000 shopping trips ii, amassing a huge amount of shopping experience along the way. Ehrenberg Bass Are Young Consumers Easier to Win report highlights that, younger shoppers are much more likely to experiment and try new brands, be less loyal and switch, until they grow older, less experimental and have built up a preferred repertoire. In other words, they are disloyal for longer. The exception here would be for brands that are trying to reach older consumers. Therefore it is important for brands to fish for new consumers where they re most likely to catch them among the younger age group; however, they also have to work harder to keep them. Categories and brands in decline are not catching or keeping these younger fish. Category examples here include Sherry and Ambient Ready Meals iii. For those brands and categories in decline due to these changing habits and needs, they need to bring in younger shoppers to survive they need to reinvent themselves and innovate. For other brands and categories, they need to make sure they understand how to stay relevant, and keep winning and preferably growing their young consumer base. 4 Brands risk losing the Woman of Tomorrow!

5 LOYALTY Gone are the days when the majority of people were very loyal to one store. Women and men of all age groups have increased their spend in Aldi and Lidl, however the most significant shift seen in the last two years is in younger, female shoppers. Female millennials are the most promiscuous of all demographics. In the last two years, they have significantly increased the repertoire of stores they use more than any other group. They can now be found in much larger numbers in pricedriven retailers, including discounters and traditional supermarkets primarily promoting products based on price. Increase in footfall includes 13.9% Aldi, 9.2% Lidl, Iceland 6.3% and Morrisons 1.6%. Not only are shoppers visiting price-driven stores in greater numbers, we are also seeing the biggest increases in average spend per visit from this group in these stores. Average spend in Aldi is up 4.29, Lidl up 4.07, Iceland is up 1.99 and Morrisons is up These four retailers now account for 23% of this group s spend, an increase of 6% in two years. iv Other retailers will also be looking to capture this trend. PRICE The majority of female millennials are very low price driven when it comes to FMCG shopping. When asked, 60% selected low price as the key reason for choosing where to do a grocery shop. Even when they are in store, the price focus remains. For example, over a third have used their smartphone to compare prices at other stores within the last 6 months. They also have the biggest penchant for coupons, with 82% agreeing that collecting and using coupons can really save money. v Value stores are also important to female millennials. In the last few months 69% have visited Poundland and 42% 99p stores, the highest of all age groups. The top three reasons given for this were low price, to save money on groceries and to buy well-known brands cheaply. vi But millennials are not cheap. They are willing to pay for what they consider essentials in their lives. We know the vast majority own a smartphone but another example would be in the book sector; female millennials actually buy the most expensive books of all female age groups. Price is still a factor in their choice but less so than with any other age group. vii Copyright 2016 The Nielsen Company 5

6 PRIVATE LABEL Is private label good enough or in some cases considered even better and cheaper? The answer to this, from the discounters, is a resounding yes. Last year, Lidl even held a roadshow testing own-label products against brands on 9,000 people, at 14 locations around the country. With the strapline Lidl as good if not better, money back guarantee. However it was not the discounters that started this campaign approach - they just improved upon it. It was actually the traditional supermarkets that first used the idea in the FMCG space. In 2009, Sainsbury ran a Switch to Sainsbury s own label and save on your shopping campaign. Shoppers are also getting this message elsewhere. The BBC s Eat Well for Less series, first on our screens in 2013, have run a similar approach. In this series, Greg Wallace, Chris Bavin and Lucy Jones help families across the UK eat well for less, testing a number of items - e.g. tea, mayonnaise, salt and vinegar crisps - to see how branded versions stack up against own label. The Good enough and cheaper message seems to be resonating across all age groups. In the female millennial group, 59% said own label offered good value for money and 35% said they were just as good in quality as branded products. viii Those percentages are likely to increase this year due to the continuing messaging from the discounters and a new series of Eat Well for Less. E-Commerce Just over 6% of FMCG shopping is now done online in the UK. ix It is the female Millennial group that is the most avid of online grocery shoppers. The top three reasons that they give for this are: 1) I can see a running total for my shopping basket ; 2) Buying online is quicker than instore and 3) I can compare prices easily. x 6 Brands risk losing the Woman of Tomorrow!

7 BOOKS In the book sector, 55% of books are now purchased online and this is a growing trend. Digital books now make up 31% of books purchased. xi The book category features highly in the list of products and services women most often purchase after seeing a social network ad (e.g. Facebook), with 27% saying they most often purchase books after seeing an ad. Clothes take the top spot with 38%. xii Female millennials are the group most likely to have observed a book advert on social media, or an author website, than any other age group. xiii Copyright 2016 The Nielsen Company 7

8 WEB BROWSING So, on which websites can women be found? Included in the top 20 website genres are Make-up, Cookery, Coupons & Rewards and Home & Garden. There is no sign of these four on the men s top 20. The men s top 20 include Sport, Online games and Adult websites. There is no sign of these on the women s top 20. Topping the list for women and second on the list for men is General Interest Portals & Communities (e.g. Google, Yahoo, MSN). Women visit fewer domains and pages than men and spend less time viewing overall, but they do linger longer on pages. Women can be harder to reach online as they are more dispersed than men. They are present in lower volumes on the popular sites. xiv TV VIEWING Is TV a hit or miss? Women remember more TV programs and adverts than men and are better at linking the advert to the brand than men across all age groups and different sectors: FMCG; Retail; Financial Services and Technology. There is one, perhaps surprising, exception: 65+ males have a higher recall for Technology. However, older women are up to three times more likely to remember than millennials. xv This is likely to be because older people have had more exposure to brands, and because millennials could be more distracted by using other devices at the same time. Women have a higher recell for ads in all age ranges net impact = remember ad which brands years years years 50+ years Women - FMCG 15% 22% 31% 40% MEN - FMCG 11% 16% 27% 35% Nielsen TV Brand Effect March August Brands risk losing the Woman of Tomorrow!

9 What actions can Brands take to reach and appeal to the female millennial? 1) Fulfil a need For innovation to be breakthrough, it needs to truly meet a consumer s need (Job s theory). Breakthrough innovation is rare. In Europe in 2013, 8,650 new FMCG products were launched; only 12 were breakthrough innovation winners, according to Nielsen s definitions. There is a causal mechanism that reveals why consumers pull brands into their lives, and that is the job to be done. Successful innovation resolves poorly-performed jobs. One of the winners in 2015 that appealed to female consumers was Scholl Velvet Smooth Express Pedi, the biggest innovation in foot care for probably 100 years, (yes ladies, there is now a faster solution than a pumice stone). xvi Most managers look at consumption to identify opportunities, innovators look for nonconsumption. One of the previous year s breakthrough innovations was Lucozade Energy Pink Lemonade. The Lucozade brand had historically been more male-focused, so when faced with the challenge of correcting the bias and being cool, Lucozade s brand team looked for a disruptive answer. How could the brand appeal more to females without alienating its core? With the launch of Lucozade Energy Pink Lemonade, the brand team hit the nail on the head, launching a solution for a different consumer, with a different palate and a different occasion. xvii So what does this mean for female millennials? Brands should focus on their needs and understand what causes them stress, confusion or inconvenience. The consumer won t necessarily tell them if asked outright. We know that when it comes to FMCG purchasing, this group want good value for money and low price. However, if you meet a need that is not currently being met, then it may well be something a millennial is willing to spend money on. In the book environment, the biggest growth driver of the market in 2015 was from mindfulness books. These books filled a need for pleasure and relaxation. For 69% of adult colouring books sold, the end-user was female. Out of this group, the biggest user group were millennials (31%). xviii 2) Grab their attention When marketing to females, take into consideration that the female brain responds better to: emotion-based marketing, visual imagery (e.g. human faces), social connections, feeling included, Let s... and We... collaborative language, a positive emotional message, stress-free tactics and nuance (rather than in-your-face messaging). xix Copyright 2016 The Nielsen Company 9

10 On TV, advertising to females is more effective than advertising to men. However, millennials find it harder than older women to successfully remember an advert and link the brand to it. The message to take away here is to ensure your adverts are well branded, distinctive and appeal to the desired audience. 3) Care more about online: Fish where the fish are Firstly, carefully consider your product type and whether digital is appropriate. Don t rule out TV. Retailers and brands should over-commit to ad opportunities with a higher female reach, due to their higher spending. Millennials are also the most avid online shoppers that s worth leveraging. Remember that women are more dispersed and harder to find online than men. Use a defined audience segment (e.g. female, age 18-34, heavy buyers of shampoo) over a scattergun approach to more accurately reach them online. Alternatively, look at the most popular websites. For example, on which websites are you most likely to find heavy buyers of shampoo? Which websites do heavy shoppers at Aldi most often use? xx Make sure you are reaching female millennials and optimise whilst the campaign is live. xxi Female millennials are also the most important book-buying group out of all female age groups in terms of spend. Book sellers should therefore over-target this group, (unless the book is geared at an older age group - or men, of course). Remember young females are the ones who are most likely to have observed an advert on Facebook, an author website or Twitter than any other age group. 4) Be Better than Good Enough a) Understand how good you need to be to be better or fulfil a different need than own label. b) Be there to be bought. In other words, are you standing out enough for the female millennial to visit a different store to buy you, or will they just swap to something that is good enough.that may then become part of their repertoire. Out of stocks become a high risk because a substitute purchase may end up being good enough, or even better. c) Ensure you are competitively priced, unless you fulfil a need where there is no competitor. d) Brands need to be distinctive to be thought of more often. Ensure they have easily recognisable packaging. 10 Brands risk losing the Woman of Tomorrow!

11 5) Fast and Easy Shopping What can retailers do to make the shopping experience easier? One of the reasons that female millennials state for doing FMCG shopping online versus in-store is to save time. How else can retailers save them time and attract them back into store? Can they solve problems for them? Can they fill a need? What can they do to make the shopping experience easier? A few suggestions for them to explore: childcare, post office services, in-store gym, in-store dentist, valet parking benefits for loyal shoppers, more special occasion eating, free magazine to keep children amused during the shop, etc. 6) Just Enough Assortment in Store Ensure that the store has the appropriate ranging: a) Think about incrementalism and less is more. For example, do not have 10 SKUs of the same product. Perhaps have two SKUs but offer more choice related to the product in the same area in store to drive additional sales. An example could include putting tonic or soda next to vodka and lemons. b) Know who you are targeting. Consider what is best for the locality and which consumers are in the shopping radius of the store. (Consider both home and work locations.) c) To attract female millennials, think about saving them money - low price is key. 7) Price it right Last, but by no means least, price the product right! Female millennials are giving the message loud and clear that they do not want to rely on promotions to get good value. Their habits have adapted to go to the Every Day Low Price (EDLP) retailers. Therefore having the right regular shelf price is increasingly important if you want to attract this group. Don t forget that coupons are popular with the female millennials. You may need to personalise offers using coupons to really cut through. Brands will need to embrace female millennials in order to grow sales in the next two decades. If they choose not to, then they are at risk of losing the women of tomorrow! Copyright 2016 The Nielsen Company 11

12 i Nielsen Homescan, 52 weeks to 5 th December 2015 ii Nielsen Homescan, 52 weeks to 5 th December 2015 iii Nielsen Scantrack and Nielsen Homescan iv Nielsen Homescan, 52 weeks to 5 th December 2015 v Nielsen 2015 State of the Nation Survey vi Nielsen 2015 State of the Nation Survey vii Nielsen Book: UK Books & Consumers Survey viii Nielsen 2015 State of the Nation Survey ix Nielsen Homescan. x Nielsen 2015 State of the Nation Survey xi Nielsen Book: UK Books & Consumers Survey xii Nielsen Harris Interactive UK: SocialLif4 July 2014 xiii Nielsen Book: UK Books & Consumers Survey xiv Nielsen Netview 2015 xv Nielsen TV Brand Effect, March August 2015 xvi Nielsen Breakthrough Innovation Report, European edition, December 2015 xvii Nielsen Breakthrough Innovation Report, European edition, September 2014 xviii Nielsen Book: UK Books & Consumers Survey xix Nielsen Consumer Neuroscience xx Nielsen Audience Segments and Nielsen Brand Media View xxi Nielsen Digital Ad Ratings 12 Brands risk losing the Woman of Tomorrow!

13 author Elizabeth McLellan, Marketing Effectiveness Analytics Product Leader, Nielsen Europe About Nielsen Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content video, audio and text is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world s population. For more information, visit Copyright 2016 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies.16/9717 Copyright 2016 The Nielsen Company 13

14 14 Brands risk losing the Woman of Tomorrow!

Understanding Assortment Expandability and Saturation

Understanding Assortment Expandability and Saturation For Revenue Growth Copyright 2015 The Nielsen Company 1 Summary Perhaps the only thing more staggering than the large number of new products each year