Shopper Digest: Turning Potential into Reality

When analysing brand performance data, it's important to differentiate between the potential and reality of growth opportunities. While there are various ways to grow a brand-such as attracting more shoppers, offering premium products, increasing pack sizes, or using promotions -it's crucial to understand how much each strategy will contribute to growth. This is where the concept of "Size of Prize" (SOP) comes in, helping brands assess the true value of each opportunity. 

Case Study: A Toiletries Category

The Category that we are exploring today is a well-established market with over 90% household penetration. Brand X, which has a strong presence among Ethnic A consumers capturing almost 50% of them, noticed a worrying trend: Ethnic A shoppers were buying smaller baskets, relying more on promotions, and taking longer to return after stockpiling. This suggested that depending solely on Ethnic A shoppers for growth was no longer viable.

By analyzing shopper behavior in Category A, three potential growth opportunities emerged:

1. Recruit Low-Income Households in Ethnic B: affordable pack sizes of Brand X have become popular with low-income consumers in Ethnic B.
2. Upsize Mid-High-Income Households in Ethnic B: These consumers are increasingly purchasing larger pack sizes of Brand X during promotions.
3. Recruit Non-Buyers in Ethnic A: There's potential to convert non-buying households in Ethnic A through stealing from competitors. 

The question is which direction should be their focus? Do all these directions yield the same value of sales? 

Sizing the Prize!

This is where the beauty of Shopper Panel lies, in that, we can calculate the Size of Prize of each strategy - by using the numbers of buyer / non-buyer households against the population against the spending per buyer and other shopper behaviour data from our Shopper Panel.

To understand the real growth potential of each opportunity for Brand X, we estimated the sales impact:

• Opportunity 1: Recruit 5% of low-income households in Ethnic B could add RM 2 million in sales.
• Opportunity 2: Upsizing 50% of current buyers among mid-high-income households in Ethnic B could bring RM 5 million in sales.
• Opportunity 3: Recruiting 5% of non-buyers in Ethnic A could generate RM 3 million.

At first glance, Opportunity 3 might seem like the low-hanging fruit option for Brand X, but we know Ethnic A shoppers are increasingly reactive, meaning growth here would take longer. In contrast, upsizing mid-high-income households in Ethnic B represents a more immediate opportunity, even though it's more complex.

Strategic Implications

Understanding the Size of Prize helps brands:

• Set Realistic Expectations: By estimating sales potential, brands can set achievable growth targets.
• Make Smarter Decisions: Focusing resources on the highest-value opportunities ensures better budget allocation.
• Manage Risk: Knowing the realistic outcomes helps anticipate challenges and adjust strategies accordingly.
• Appeal for Investment: Quantifying the potential sales impact makes it easier to secure funding and support from stakeholders.

In summary, while there are multiple ways to grow, brands must use data to differentiate between opportunities that appear promising and those that will realistically drive the most growth. Understanding the Size of Prize allows for more strategic, data-driven decisions.

Size of Prize is referring to the expected gain calculated based on the no. of household/penetration and spending per buyer which can be customised base on different demographics, product variants, pack size, channel etc to be targeted. In Worldpanel division, we track consistently shopper baskets on 4-weekly basis to understand their choice of category, variants, channel, pack size etc. so you can see a trended performance at category and brand level to help with calculating your size of prize.

Source: P6 2024 database, Worldpanel Malaysia, Kantar