RECALLS: THE CONSUMER PERSPECTIVE

Transcription

1 RECALLS: THE CONSUMER PERSPECTIVE Mark Vare Sr. Director Recall Solution / Inmar

2 Agenda An Exploration of: 1. Consumer study results 2. Terminology 3. Experience with product category 4. Expectations for responsibility and remedy 5. Impact on consumer behavior 2

3 Inmar recall study methodology Online Survey 15 minutes Collected June 2014 Sample Design 1,063 interviews Adults 18+ Primary/Shared decision-maker for grocery and household purchases Visited a retail store in the past 30 days Has at least heard the term recall Qualitative insights from Inmar s Mining for Millennials Consumer Panel held June 2014 with six participants aged 35 and under. Topics included their perceptions regarding shopping and supply chain issues. 3

4 Impact of Terminology 4

5 Terminology Significant time and energy are sometimes given to using specific regulatory terms in market action communications when reaching out to consumers. 5

6 Shoppers perceived awareness related to the occurrence of recalls and withdrawals is low 35% of shoppers say they are aware of the majority of product recalls that occur. 21% of shoppers say they are aware of the majority of product withdrawals that occur. 19% of shoppers say they are aware of the majority of both product recalls and withdrawals that occur. 6

7 Terminology Do consumers understand? Consumers say they know more about recalls than they do withdrawals. Consumers are not clear on the seriousness of a recall vs. withdrawal. 76% say they know a fair amount or a lot about recalls. 59% believe that a withdrawal is the same as or more serious than a recall. 37% say they know a fair amount or a lot about withdrawals. 41% believe that a recall is more serious than a withdrawal. 7

8 8

9 Government mandated vs. Voluntary Government Mandated Disagreement in severity No clear ownership of issue Firm refusal FY2013 FDA exercises mandatory recall authority one time out of 1,777 recalls 1:1,777 Voluntary The vast majority of recalls Consumer attitudes: A voluntary recall is more serious than a government issued recall 82% Agreed 53% Disagreed Have more confidence in a company that voluntarily issues a product recall or withdrawal 9

10 Terminology is important, but consumer perception and interpretation of the terms drive sentiment and behavior. Generally unaware of both recalls / withdrawals. Using the term withdrawal is interpreted by 41% of consumers incorrectly. Use of voluntary seems to have a direct positive impact on consumer sentiment. There is a significant subset of consumers who react more negatively when they hear that a product is withdrawn vs. recalled 10

11 Experience Product Category 11

12 Background 40% reported purchasing at least one product that was later recalled or withdrawn. Reported having this experience in an average of 1.42 product categories. 12

13 Product category: Experience (Purchased product that was recalled) Recall experience by rank Perishable Food 31% OTC Medicine 27% Baby or Children s Products 20% Non-perishable Food 17% Pet care Products 15% Other (auto, electronics, appliances, hardware) 12% Prescription Drug 8% Personal Care and Beauty 7% Household Supplies 5% Medical Devices 2% 13

14 Product category: Consumer concerns 1. Prescription drug 2. Perishable Food 3. OTC Medicine 4. Baby or Children s Products 5. Medical devices 6. Non-perishable food (does not need to be frozen or refrigerated) 7. Pet care products 8. Personal care and beauty products 9. Household supplies (e.g., trash bags, dish soap) 14

15 Product category Experience by itself does not appear to have a direct relationship on which categories consumers are most/least concerned about. Consumers were most concerned about actions involving prescription drugs, perishable foods and OTC medicines. Did see a statistical difference only when looking at baby and pet products - Those who had direct experience with a recall in these categories showed statistically significant greater concern : Baby Among those who chose this category in their top three concerns, those with a recall/withdrawal experience ranked it much higher (66%) than those without direct experience (45%) Pet Among those who chose this category in their top three concerns, those with a recall/withdrawal experience ranked it much higher (37%) than those without direct experience (22%) 15

16 Responsibility and Remedy 16

17 Responsibility and remedy Retailer Manufacturer There is a subset of population that has a strong opinion on who should handle. 9% prefer that store NOT handle. 14% prefer that manufacturer NOT handle. 17

18 Responsibility and remedy Balance Consumers seem to be indifferent when looking at responses that included agreement that both manufacturer/retailer be held responsible. 41% 28% 23% 8% prefer that both the manufacturer and the retailer are held responsible. prefer that the retailer be held responsible. said they prefer that the manufacturer be held responsible. said neither. Does product category impact preference? Preference for store OTC, Perishable Food, Pet Care Preference for manufacturer Rx Drugs, Medical Device, Household Supplies (all small samples) No Preference Baby (slight lean to manufacturer), Personal Care and Beauty 18

19 Recalling firms need to provide remedy options to consumers. Takeaways Retailer option Manufacturer-direct option? Consumer decision: who do they want to handle? Consumer preference: how do they want remedy handled? Matter of convenience? Matter of principle - Who they feel is more responsible? Speed/Immediate gratification? Previous experience? Product Category? Coupon/cash/replacement product/repair? What drives this decision? 19

20 Consumer Behavior 20

21 Consumer behavior Product vs brand: How deeply is product affected and is brand at risk? Buying a particular product are unlikely or very unlikely to buy the item again in the future after recall (41% after withdrawal). 40% Potential erosion of market share as a result of a recall 24% willing to continue buying a particular product (regardless of brand) after it has been recalled. 21

22 Consumer behavior Brands are less affected than products but still take a hit. Responses show that while specific products may suffer a significant loss in consumer confidence, brands appear to suffer less impact in consumer confidence than their products. Buying within a brand 45% willing to continue to buy products in a particular brand after a product within that brand has been recalled. 23% of all shoppers surveyed indicated they would not buy in a brand that includes a recalled product. 22

23 Behavior: Connecting perception to action There is a potential negative impact on buying behaviors when the term withdrawal is used within the group that misunderstands the term withdrawal. Product: Those who think After recall, don t buy product: After withdrawal, don t buy product: Withdrawal more serious 33% 53% Recall more serious 44% 33% Equally as serious 40% 43% 23

24 Behavior: Connecting perception to action There is a potential negative impact on buying behaviors when the term withdrawal is used within the group that misunderstands the term withdrawal. Product: Those who think After recall, don t buy product: After withdrawal, don t buy product: Withdrawal more serious 33% 53% Recall more serious 44% 33% Equally as serious 40% 43% Brand: Those who think After recall, don t buy within brand: After withdrawal, don t buy within brand: Withdrawal more serious 15% 28% Recall more serious 25% 20% Equally as serious 25% 29% 24

25 Behavior: Opposing forces Industry is recall averse. Consumers are withdrawal averse. Most companies want to avoid using the r word, but our data show that consumers respond more negatively to the w word. Opportunity in the middle? A significant portion of respondents answered neutrally on whether they would or would not buy a product after it had been recalled or withdrawn. A notable 32 to 38 percent of respondents answered Neither Agree or Disagree to all questions in this category. 25

26 Mark Vare

27 Click the survey button found on the session page.

28