Shopper Digest: Gaining Relevance Back in a Declining

We are now accustomed to these trying times we face together – from the inflationary pressures among lesser subsidies, price hikes and tax increases. It’s no surprise that shoppers more than ever are perceiving what they buy differently and are tightening their budget, watching what they buy like a hawk. 

While some categories are viewed to be more important, others are seen to no longer be essential to shoppers’ livelihood. Today we are going to investigate one category that is declining in relevance as shoppers now perceive these products as non-essential.

Over the last two years, Category X has been declining in both volume and penetration as shoppers tighten household budgets. To attract sales, key category players have been driving steeper and steeper promotions. These led to category shoppers becoming increasingly promo-reliant to sustain purchases. Eventually, as the inflationary pressures continued to mount, however, such promotional schemes were no longer able to stem overall category decline from shopper reprioritization. Core shoppers (the Low and Middle-Income Group) are starting to reduce purchase frequency, shifting to smaller volumes per trip, with some even dropping out of the category completely.

We noticed that certain demographics viewed different functional values of the product as important, with different functional benefits appealing to Chinese households and Malay households respectively. 

This insight provided the Brand an opportunity to optimally plan the way to divide and conquer different shopper segments more strategically to mitigate the decline. We have found out that while promotions can temporarily win sales among shoppers who still have spare budgets, for a more long-term and sustainable growth, key players need to drive relevance back into the category and strengthen brand equity. To do this, players need to dial up their key benefits and amplify the needs and reasons for shoppers to buy the category beyond promotions.

We helped to identify the potential benefits and shoppers’ needs that can drive purchases among Malay and Chinese shoppers respectively. With this, the Brand was able to tailor their brand communications and messaging towards the respective targeted shoppers. By leveraging the right products across their portfolio, they can target and attract different shoppers, and additionally are able to strategize their actions in different retailers where different shopper groups are shopping. 

Penetration is our key measure referring to the % of population buying a category or brand over a length of time. With this, key industry players can evaluate the size of their existing shopper base and gauge for opportunities of expansion. In Worldpanel division, we track consistently on 4-weekly basis to produce penetration number so you can see a trended performance at category and brand level.