Multichannel shoppers spend significantly more money than single-channel shoppers in many CPG verticals, according to new data from The Nielsen Company.
Multichannel CPG Shoppers Have Higher Buying Rate
Multichannel shoppers across many CPG categories have buying rates four to five times that of single-channel shoppers. For example, the average pet food shopper who uses four-plus channel spends $291 in a year, compared to $68 for the average single-channel pet food shopper (4.3 times higher).
Even at the lowest end of the spectrum, the average oral hygiene product shopper using four-plus channel spends $62 in a year, about three times the $20 spent by the average single-channel shopper in this category.
The widest rate discrepancy occurs in the cough/cold category, where multichannel shoppers spend an average of $106 annually, more than five times the average $19 spent by single-channel cold/cough product shoppers.
Multichannel Buying Varies by Category
Multi-channel buying varies by category. Paper products is one of the most fragmented categories of the 15 examined; 83% of category-buying households shopped two or more channels in 2009 for paper towels, toilet tissue, facial tissue and other paper goods.
In addition, 82% of snack product shoppers in 2009 used two or more channels. Frequency of multichannel shopping drops considerably after these two categories. Carbonated beverages come in third place with 72% of shoppers in this category using multiple channels.
Conversely, about half of disposable diapers, coffee, vitamins and cough and cold purchases come from shoppers who shop for those categories exclusively in one channel.
On a dollar basis, the importance of dual and multichannel category buyers is even more pronounced. For example, almost two-thirds (63%) of paper products category sales went to households who purchased them in three or more channels. In all categories examined, the majority of category sales come from households who buy in two or more retail channels. And all categories have significant sales from three or more channel buyers.
Recession Pressures Push Down CPG Price
Nielsen’s recent review of retail prices found that during the four-week period ending June 12, 2010, prices were off or flat compared to a year ago, providing exceptional value to consumers, but weakening trends for retailers.
Unit prices have been dropping sharply since March 2009, and the number of items on promotion has gone up. Meanwhile, brands have resorted to more promotions to stimulate sales and stem the growth of private labels. Unfortunately for retailers, these price cuts and heightened promotions have not achieved the desired effects as both dollar and unit sales were off in each of the last three (four-week) periods leading up to June 12, 2010, according to Nielsen analysis.