Frequent Shopper Data Analysis Turns Around Underperforming Brand and Boosts Category Sales at Retailer

By Natraj Kumar, Principal, Collaborative Gateways, IRI

Practitioners of shopper analytics tasked with turning around a brand's retail performance can relate to this hypothesis: If a brand is declining while the category and top competitors are growing, it means that the brand's customers are switching to competitors. Seems logical, right? But this is not always the case. A leading personal care brand's recent experience shows us why.

For a long time, Brand X held a strong category share with a loyal customer base, differentiating itself at a specific drug retailer driving bulk purchases. More recently, growth patterns shifted, with competitors to Brand X driving a majority of category growth. While Brand X had recommendations on a turnaround strategy via different types of trade promotions and CRM campaigns, it was hard to convince the retailer's merchant team to try alternate strategies because the category was performing fine. Don't fix what's not broken, right?

To encourage the retailer to implement these recommendations, the supplier had to convince them that the brand's turnaround strategy would also drive incremental growth for the category.

The IRI team partnered with the supplier to conduct a thorough analysis of Brand X and the overall category using the retailer's frequent shopper data. Through this analysis, the supplier was able to provide the retailer with:

  • A clear illustration of category headwinds and support for Brand X's turnaround recommendations
  • A deep understanding of the value of retained versus net-new shoppers
  • Strong proof of Brand X's right to win in this space


FSP Insights Bring Granularity to Category Insights

The analysis revealed that competing brands were retaining existing shoppers and attracting new shoppers to the category, but the retained shoppers were also making fewer trips. Meanwhile, Brand X was not losing shoppers to competing brands – Brand X shoppers were simply buying less of Brand X. This is an important view about what's happening with Brand X's most loyal shoppers.

The IRI team also identified that 17% of the shopper base make four or more trips per year, accounting for 62% of category sales. These shoppers bring 11 times more value compared to one-trip shoppers!

Two-thirds of that 17% of shoppers were new to the category i.e., did not purchase the category at this retailer during the prior year but did purchase during the current year. The remaining one-third of shoppers purchased last year and this year (i.e., retained shoppers). These two groups were the main drivers of category growth.

Brand X proved to play an important role in engaging key shopper segments:

  • Brand X is overdeveloped across four+ trip shoppers (+210 basis points).
  • Brand X drives high exclusive purchase (74%) and a high share of requirements (78%) across shoppers within this personal care category, despite holding less share versus competing brands.
  • Brand X drives substantially higher consumption via multi-unit transactions (45%) compared to its competitors (range of 14% – 20%).


Cohesive Trade Promotion and CRM Activation Strategy Focuses on High-Value Shoppers

Upon sharing these valuable insights, the supplier's retailer partner saw the value of investing in collaborative trade promotion and CRM activation strategy. Managing category relevance across four+-trip shoppers is important, but the one-trip shoppers also offer a significant opportunity for increased repeat behavior and, ultimately, increased loyalty at the retailer for this category. Together, the retailer and supplier:

  • Simplified promotions to balance multi-buy promotions with single, price-point promotions
  • Created personalized offers for newly acquired one-trip shoppers to drive higher lifetime value through repeat and larger basket purchases

This work allowed the CPG and retailer to tap into a $4.7 million incremental sales opportunity, turning around the underperforming brand and boosting category sales. The supplier was able to zero in on its high-value shoppers while the retailer achieved increased profitability and higher market share, creating a win/win scenario for both.

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