Shopper Digest: Know Your New and Loyal Shoppers

Malaysia’s FMCG industry has demonstrated strong resilience in 2024 despite persistent challenges. Malaysians continue to grapple with household expenditure, facing constant pressure from the rising cost of living. As a result, shoppers are becoming more attentive and cautious in their spending behaviour. Therefore, brand owners must integrate these dynamics into their recruitment and loyalty-building strategies to drive growth during these inflationary times.

Lower average prices do not automatically generate growth, as observed in Category O. Despite an increase in penetration, Category O has experienced volume decline. The drop in prices did not drive an increase in basket size, resulting in a decline in both volume and overall spend for the category.

Did Brand A experience a similar performance trend? This case study highlights opportunities for Brand A to reverse its decline by targeting the right demographics for recruitment and strengthening loyalty among its shoppers.

Brand A is the market leader in Category O. However, its spend has declined at a faster rate than the total category, leading to share loss for two consecutive years. This decline has been further compounded by Brand A’s inability to expand its shopper base—while its competitors have successfully grown their penetration, Brand A has only managed to maintain its existing level. Consequently, Brand A sought to understand the profile of its new users, lapsers, and loyal shoppers to develop the right strategy for reversing its performance decline.
 

The next step was to conduct a New-Lapsed-Repeat (NLR) Buyer Analysis for Brand A. First, we analysed shoppers who purchased the brand in the previous year, then compared them to those who bought Brand A in the latest year. Next, we identified shoppers who only purchased Brand A this year, categorising them as New Shoppers. Those who only bought the brand last year were classified as Lapsed Shoppers, while shoppers who purchased in both years were labelled as Repeat Shoppers.

Through this NLR analysis, we discovered that Brand A’s recruitment rate was equal to its lapsed shopper rate. This explains why Brand A failed to expand its shopper base, unlike its competitors. Moreover, both new and loyal shoppers have reduced their purchase volume, contributing to an overall decline in Brand A’s total spend.

The analysis did not stop there. We further refined the NLR analysis by incorporating a demographic layer to enhance Brand A’s shopper profiling. This revealed that Brand A’s newly recruited shoppers are over-indexed among Malays, households in the North and Central regions, families with teenagers, and both low- and high-income households. Meanwhile, Brand A’s loyal users are over-indexed among Chinese shoppers, households in the South and East Coast regions, young professionals (Yankys) & mature families, and high-income households.

Through these two analyses, Brand A was able to be more efficient in its tactical approach when it comes to its recruitment and loyalty building activities. Brand A is now more equipped to utilise the right SKUs, the effective promotion mechanics, the right pack size and the proper channels to reverse its decline in Category O. 

In Worldpanel, we analyse shopper behaviour to understand the role of your brand in driving category growth. With consistent tracking, we can measure the quality of your new, lapsed and repeat shoppers. You can then identify the best practices to drive growth via optimising your marketing budget.

Source: P10 2024 database, Worldpanel Malaysia