Retooling the Retail Machine

CHICAGO — Research firm IRI has released the first in a series of studies gauging consumer shopping and purchasing behavior, giving manufacturers and retailers new insights on how they can respond in a market where increasing food and energy prices are uprooting the retail landscape.

The study, “IRI Times & Trends Special Report: Competing in a Transforming Economy,” examines this competitive retail environment and delivers new insights on shifting consumer shopping and purchasing behavior and how retailers and manufacturers can develop new opportunities.

“While analysts may disagree on whether or not the U.S. economy is in recession, there is no question that the economy is in transformation,” says Thom Blischok, president of IRI Consulting and Innovation. “U.S. consumers have been hit on all sides with record-breaking gas prices, dramatic increases in grocery prices, high unemployment and declining home values. “

“These burdens,” Blischok said, “are driving fundamental shifts in what consumers buy and where they shop. Consumers are forced to make tradeoffs. Competing in this new, evolving economy requires fine-tuned pricing, promotion, assortment and brand development strategies that are built on an in-depth understanding of a changing consumer in a transforming economy. The challenges of growing in this economy are significant, but there are windows of success. This IRI study reveals where those windows are and how to push them wide open.”

IRI conducted an in-depth analysis of the current and projected economic environment and its consumer and market impact to provide manufacturers and retailers with a foundation for successful strategy development and refinement. This issue of “Times & Trends: Competing in a Transforming Economy” provides a high-level summary of key findings, including:

  • Escalating prices have bred exceptionally high price sensitivity, driving declining demand across multiple categories, growth in private label, trial of lower-priced brands and accelerated channel migration.
  • Long-standing consumer purchase drivers, including convenience and health and wellness, are losing some momentum; consumers are foregoing ultra-convenience, and some shoppers are unable to afford healthier foods.
  • Consumers are increasing purchases of basic ingredients and meal components due to reduced restaurant spending and are decreasing purchases of “non-essentials.”
  • Changes in consumer shopping and purchase behavior vary widely by segment, such as income, presence of children and life stage.

    In addition to the Times & Trends study, a full report is also available, exploring distinct trends by category, consumer segment, channel and market and identifying emerging opportunities and risks as well as recommended action items. The report is designed to help industry participants in a number of ways:

  • Leverage best practice analysis and insight-driven action plans.
  • Gain competitive advantage through early identification of emerging market shifts.
  • Build strategies addressing distinct requirements by consumer segment, market and competitive threat.
  • Discover strategic pricing and promotion opportunities.
  • Understand new assortment, merchandising and distribution priorities.

    IRI is also offering the new IRI Economic Key Indicator Tracking service to provide an instant view of emerging market conditions, such as price and cost indices, category and private label demand shifts and share, trips and trip mission mix shifts across channels, with monthly and rolling quarter measures.

    To download the Times & Trends study, visit: http://us.infores.com/page/news/times_and_trends. For more information and pricing regarding the full report, “Competing in a Transforming Economy,” contact Sheila McCusker at sheila.mccusker@infores.com.

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