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The Best of Both Worlds: Panel and Shopper Loyalty Data

By Louis Winokur

 

Anybody working in consumer packaged goods (CPG) on the manufacturer or retailer side over the past 20 years is likely very familiar with panel data. It’s like a dependable, reliable friend –  always there when you need it, and something you can count on to provide solid advice.

However, like any long-term relationship, familiarity can breed frustration. Companies may be frustrated by the time it takes to get the sample size needed to inform new product launches, or bristle at the restrictions for looking at granular metrics across short time periods or specific demographic splits.

If you have similar concerns, there is good news. You can now easily access information on millions of loyalty card households across an array of retailers. When used in conjunction with panel data, you can have the best of both worlds. Panel data provides a proven way of tracking category and brand sales across all outlets and specific classes of trade, while the shopper loyalty information gives you the granularity on new products quickly and allows you to make deeper dives by key demographics across the universe of frequent shopper card households.

Here’s one real-world example:

A major health care company launched a new product in mid 2018 that was unlike other major competitor products. They had high hopes that the brand would expand the category and cater to a younger consumer demographic.

The product was part of a smaller health care segment with long purchase cycles. Getting an early read on household penetration and demographics would be very difficult through the National Consumer Panel. The panel sample was very small even six months after the product launch.

Tapping into IRI’s shopper loyalty database helped the client get an initial view of household demographics. This data helped us learn that the product’s core buyers actually were baby boomers and seniors, not younger generations.

A year after the launch, the new product has been a resounding success. From the panel, we learned category sales increased by over 25% compared to a year ago. The higher price point and premium positioning of the product drove an increase in dollars per buyer (across trips and dollars per trip). Despite this, the product did not draw many new buyers into the category.

With shopper loyalty data, IRI was able to dig deeper and run a “penetration by generation” trend over 13 four-week periods to find out exactly who was driving sales. As detailed in the chart below, boomers and seniors are clearly driving the business, but there is an opportunity to also market to Gen X consumers to fuel category growth. Based on their low penetration rates, most millennials aren’t going to adopt the product any time soon. Knowing this type of information helps companies avoiding wasting marketing dollars on those who don’t (and probably won’t) buy the product.



In this era of big data and increasing competition, it helps to have every useful tool available to gain an edge. The combination of panel and loyalty card information is a powerful way to get a clearer view of category and product dynamics so that your new and existing products get in front of those most likely to purchase them.




 

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