Shopper Digest: More than Meets the Eye

Festive periods can sometimes make or break a company's overall annual performance. While not necessarily consistent across all categories within the FMCG industry, sales achieved during festive periods like Hari Raya and Chinese New Year can easily amount to more than half of the company's annual revenue. It is, therefore, crucial for these brands to devise strategies to win shoppers during this narrow window of opportunity. In this case study, we will look at one such occasion where Kantar helped identify threats and opportunities for the following festive season.

During the most recent festive period, Brand A secured its position as the largest brand, ahead of Brands B and C. Brand A achieved this by having the fastest growth rate from the previous year's festive period, significantly outperforming its competitors. This impressive growth was mainly driven by penetration, where Brand A managed to almost double its buyers from 4.8% to 8.3% within just one year.

All seems well and good, right? Surely the mission has been accomplished, and the team can simply repeat what they did this year for next year’s festive period. After all, as the saying goes, “If it ain’t broke, don’t fix it.”

Whilst credit is due and the achievement calls for celebration, it would be foolish to think that all is well and done. During the presentation with the client, our team pointed out that the gain in penetration that Brand A enjoyed was mainly driven by new buyers coming into the brand.

Using the Source of Volume/Value Change (SOVC) analysis to ascertain the movement of shoppers, it was evident that Brand A was extremely effective in gaining new buyers into the market. These new buyers, who did not purchase the category during last year’s festive period, chose to enter the market via Brand A. While it is clear that Brand A was very successful at gaining new buyers, it failed to retain its past shoppers, with a churn rate as high as 85% from last year’s festive period.

Moreover, when examining the right chart that looks at the movement of shoppers among brands, it becomes apparent that Brand A is leaking the most within the market, with large numbers of shoppers switching to Brands B and D. With the help of even deeper analysis, our team was able to understand which pack sizes and retailers drove these shopper movements. These insights are crucial to understanding the behaviour of their lost shoppers who are now buying other brands.

With the help of the New, Lapsed and Repeat analysis as well as the Source of Volume/Value Change (SOVC), Brand A was able to dive deeper into the root causes of their shopper movements. Despite successfully positioning itself as the market leader for the latest festive period, driven by large penetration gains, we have unravelled the hidden problem of retention as they are losing the most shoppers internally within the existing market. Equipped with this knowledge, paired with deeper analysis by our team, they can form strategies to not only win back their lost shoppers but also defend their existing shoppers in the next festive period.

At Worldpanel, we conduct Source of Volume/Value Change (SOVC) analysis to ascertain the forces driving your brand’s volume movements. Whether it be stealing shoppers from your competitors, your brand being dropped from shoppers’ baskets, or shoppers increasing their purchases for your brand, we can help you develop specific strategies based on shoppers’ behavioural relationships with your brand. This ensures effective optimisation of your budget.