The stats still show that women do the majority of shopping in the U.S., but with men facing a higher unemployment rate than women (8.8% compared to 7.9%, according to a February 2011 U.S. Bureau of Labor Statistics report), more men are at home than in the past and in many cases, they are taking a more active role in household duties. While women continue to dominate shopping trips in all retail channels except for convenience stores, men have increased trip shares between 2004 and 2010 in all retail channels but drug stores.

Nielsen recently took a closer look at the differences in shopping and media behavior between the sexes and found some surprising results.

Women are the biggest spenders per trip, an indication that they are more likely to go on the weekly planned shopping trips for their families. But in many channels, the difference between the spending of men and women is not that great. For example, at the grocery store, women spend an average of $44.43 per trip while men spend $34.81. And despite dominating the dollar and warehouse club channels, women spend just over $3 and $5 more respectively per trip than men.

Regardless of gender, Sunday is the most important shopping day of the week, although at warehouse club stores, Saturday is almost as important. Younger women shop mostly on the weekends, while women aged 55 and over spread their trips out more evenly over the course of a week (a pattern we also see for men).

Screen Wars
It’s a long-held fact that older people watch more TV than others, and this shows no sign of changing anytime soon. This can be largely attributed to the fact that many aged 65 and over are retired and have more time at home to watch TV. By gender, women watch more live TV than men at every age over 18, as well as more time-shifted programming recorded on a DVR. While DVD viewing is more popular among younger women, after age 45, men are slightly heavier  DVD users. And males of all ages dominate video gaming, especially in the younger years where playtime reaches over four hours a day for those aged 18 to 24.

Text or Talk – Women Do More of Both
Texting doesn’t have the same appeal for consumers over age 55 as it does for everyone else. In fact, all consumers under age 55 use their devices far more for text messages than for phone calls, with woman texting 30 percent more overall than men. Meanwhile, men lead high-end monthly data activity on their devices with activities such as surfing the Internet (31% for men vs. 29% for women), reading and sending e-mail (33% vs. 30%) and downloading apps (24% vs. 21%).

Online Shopping is for Everyone
Online shopping is popular among both sexes, with almost three-fourths of women (72%) and more than two-thirds of men (68%) having shopped online in the past 30 days. Consumers of both sexes age 35 to 54 had the highest levels of online shopping activity (74%). Women led most online purchase categories except music, auctions and computer hardware.

Innovation is the Fuel for Growth
While the old stereotypes still hold true: women shop the most, senior citizens watch the most TV, men play video games and women and the young like to text, in many cases, the picture is not as black-and-white as in the past. Baby Boomers, who are comfortable with technology, will increase online and mobile activity for seniors as they age. And as new technology further changes, younger consumers will stay on the cutting edge. It’s not likely that suddenly one day men will be the predominant shopper at the grocery store, but they are shopping more. Now more than ever is there a need for marketers to determine the appropriate method to connect with target shoppers.

These levels of connectivity also beg the question of when retailers will flip the switch on traditional feature ads in newspapers to digital versions. Differences in basket composition, planned versus impulse shopping and response to promotions are valuable tools toward designing the right level of shopper engagement. A number of retailers have already used their web sites to target senior citizens with special online promotions, clubs that offer discounts and other features. And one major consumer-packaged-goods manufacturer has even developed a site targeted toward male homemakers – a nod to the fact that more men are engaged in managing more of the day-to-day household chores than ever before. By using innovative approaches to target consumers, the results are not only more accurate, but they can be more effective too.

Inflation is becoming a critical issue in many parts of the world, but, especially in emerging markets such as Indonesia.  But while prices rose 7.9 percent in 2010, household spending increased at an even faster rate – up 19.3 percent in major cities and 18.5 percent in rural Java – making the year a good one for manufacturers of Fast-Moving Consumer Goods (FMCG) in the country.

In major cities such as Jakarta, Bandung, Surabaya, Semarang and Medan, household spending was more than Rp. 3.7 million, up 33 percent from 2007, while in rural Java, spending was more than Rp. 2 million, an increase of 36 percent from 2007.

More Variety = More Spending
Manufacturers have spoiled consumers by offering new products and variants so that consumers can choose different products that are most suited to their needs. This, and intensified marketing activities from manufacturers have driven consumers to try new variants or products and in some cases increased their consumption. Despite spending more overall, shoppers were actually making fewer trips. In the cities, the average shopper made 239 trips in 2010 (-9% from 2007) and spent approximately Rp. 15,800 each trip, an increase of 46 percent from 2007. Meanwhile, consumers in rural Java made 255 visits (-5% from 2007), but spending less than Rp. 10,000. While still low, that figure represents an increase of 41 percent compared to just Rp. 6,300 in 2007.

Instant Shopping Gratification
Consumers in rural Java visited the store 7.5 percent more than the consumers in urban cities because traditional trade channels such as warungs and tokos are usually just next door to their homes. It’s almost effortless to shop. Due to the convenience and proximity of the stories, consumers’ shopping trips happens almost immediately as soon as they need something, so it’s not surprising that spending per trip is only around Rp. 9000. ‘Top-up shopping’ is definitely an emerging trend to watch.

These traditional retail channels remain prominent in Indonesia: 81 percent of rural household spending occurs there, while even in the cities, 52 percent of trade continues to occur there.  The remaining urban households are spending at modern channels such as mini-marts, hypermarkets and supermarkets.

So what are Indonesians buying? In the cities, households are spending on powdered milk while in rural Java, essentials such as cooking oil and instant noodles are key items. Personal care posted the highest growth for 2010 at 20 percent, followed by beverages (18%) and foods (17%).

Matthew Dodd, Senior VP of Research and analytics EMEA

E-commerce in the U.K. is booming. More than eight out of 10 of the active online population – 31.6 million people – visited at least one of the U.K.’s top 200 e-commerce sites in August 2010, according to Nielsen’s latest E-commerce Landscape Report.

What’s more, 16 percent of shopping visits ended in a purchase, with 89 million transactions resulting from the month’s 546 million shopping visits.

Conversion rates for the top 200 e-commerce sites showed strong performances – all above 15 percent – from Domino’s Pizza, Amazon, Interflora and QVC. Cut by category, we found decent conversion rates for ‘catalogue-clothing’ sites – Next, Freemans, Kaleidoscope and Bon Prix – all between 9-15 percent; whereas supermarkets – Tesco, Asda, Sainsbury and Marks & Spencer – grouped somewhat lower.

When it comes to spending, the most lucrative e-commerce category is electronic equipment. On average, respondents from our sample of 8,500 Britons spent more on electronic goods – £156 each – than on any other category in August. Amazon, visited by 36% of people shopping for electronic equipment, was the leading retailer in the category. FMCG shopping was the next-biggest spending category, with people purchasing an average £129 of groceries online in the month.

Around a quarter of the U.K.’s 50 most-popular sites are e-commerce sites – a ratio that has been maintained for the last three years. The most popular is eBay, with 17.7m unique U.K. visitors in August, putting it ahead of Amazon, Apple, Tesco and Argos.

Finally, looking at attitudes, the main reason for shopping online was ‘cheaper prices,’, given by 57 percent of respondents, and the ‘ability to shop at any time’ (32%), but an uncompromising 29 percent said ‘not having to deal with sales staff’ was one of their three biggest motivators.

Todd Hale, Senior Vice President, Consumer & Shopper Insights

In 2007 and for much of 2008, rising gasoline and commodity prices led to a wave of price increases in the consumer-packed goods industry. For some categories, it was not uncommon to have two to three price increases as ingredient, packaging, energy and transportation prices jumped sharply. During that time, many retailers—particularly those selling food and beverages—experienced a lift in sales and profits. As recessionary pressures intensified at the end of 2008, gasoline and commodity prices started to drop and many retailers began passing on the savings to their shoppers and cutting prices broadly to be more competitive with value retailers.

Lower prices on groceries, gas and other household items have offered some degree of relief to stretched American consumers. With uncertainty about the economy persisting, shoppers continue to watch their money and seek out value. But to retailers, lower prices present challenges: how to grow market share without taking a hit on the bottom line; and, after being very vocal about the savings they are providing their shoppers, how do retailers elevate prices without disenfranchising shoppers?

Nielsen’s recent review of retail prices found that over the 4-week period ending June 12, 2010, prices were off or flat versus year ago providing exceptional value to consumers, but weakening trends for retailers. Unit prices have been dropping sharply since March 2009, and the number of items on promotion—in the form of feature ads or displays—has gone up. When one store slashes prices to gain competitive advantage, others follow suit. Meanwhile, brands have resorted to more promotions to stimulate sales and stem the growth of private labels.

Unfortunately for retailers, these price cuts and heightened promotions have not achieved the desired effects as both dollar and unit sales are off in each of the last three (four-week) periods. But the big unanswered question is: would the situation be worse without these value efforts?

Which Departments Are Faring the Best?
For consumers, the good news is that prices across all departments are better now than what was experienced for much of 2008 and into early 2009. Some departments showed price increases in recent quarters, such as dairy, fresh meat and fresh produce, but prices are still very attractive for consumers seeking savings. Within dairy and fresh produce, it is interesting to note that increased prices are yielding stronger retail sales trends.

The deli department has held up quite well, while alcoholic beverages is the shining star of departments, posting sales increases in both dollar and unit terms.

The departments with the most negative sales trends were fresh meat, non-food, and general merchandise, with dollar and unit losses the greatest among the non-food and general merchandise departments. Dry grocery department sales trends were similar to the total store trend. The frozen department was on a stronger sales trend, but unit and dollar sales have fallen in recent periods.

In a further sign that price cuts were not having a positive impact, only one of the top 16 categories with the largest price cuts actually saw dollar sales rise. So drastic price cuts don’t appear to provide incentives to alter the frequency of consumption!

Unemployment Continues to Stall Recovery
Perhaps the biggest factor preventing retailers and CPG companies from raising prices is the state of the U.S. economy. While the Great Recession may be officially over, the recovery has really only started in earnest—and in unique ways, namely, without the growth of jobs. After four straight months of job creation, the momentum was stopped dead with a surprise June announcement that the economy had once again shed jobs—this time 125,000. The unemployment rate dropped to 9.5%, but including people who are not working full-time but would like to be, that number goes up to 16.5%. Moreover, almost half (46%) of unemployed individuals have been without a job for more than 27 weeks. And, unemployment is particularly high among ethnic, younger, less educated and male populations.

These statistics are obviously sobering, and they limit the ability of CPG manufacturers and retailers to raise prices without losing customers to value brands and channels.

What’s the Answer?
As prices have fallen, so have same-store sales trends for retailers, particularly those focused on grocery. Retail price wars are having a negative impact.

So how do retailers get through this period? In the short-term, look for opportunities to raise prices on selected items when justified; merchandise assortment that you have a competitive advantage; look for opportunities to up sell shoppers to build baskets; offer your biggest spenders the special kind of attention they deserve.

Until consumers feel more confident about the state of the economy, their personal finances and job prospects, they are going to seek bargains and keep their spending in check. While there have been some signs of optimism, it seems as if something arises that cancels out any progress made. One thing is for certain, however: until there’s a period of consistently positive economic news in the U.S., consumers will be skittish, and retailers and CPG manufacturers need to be prepared to continue weathering the storm and finding innovative ways to grow share without sacrificing dollars.

Part 1 of 5 on Healthy Eating Trends and Myths

Tom Pirovano, Director of Industry Insights
Consumers in the U.S. might be trimming the fat from their budgets and diets, but contrary to predictions, they continue to demonstrate a healthy appetite for foods featuring health and wellness claims. From alpha (antioxidants) to omega (omega 3 fatty acids), foods touting the kind of heart-healthy, joint-buffering, free radical-extinguishing properties that appeal to aging Baby Boomers dominate the rapid growth list.

The big winners on the healthy eating front, each posting double digit growth, were products with label claims for omega, high fructose corn syrup free, antioxidants, gluten-free, probiotic, calcium, fiber and low glycemic and no salt/sodium added.

Still champions
Many longstanding health claims maintained their popularity even as upstart health and wellness claims debuted on the healthy eating scene. Chief among them: products with fat claims—generating 2009 sales of $46.1 billion—slid a modest 3% vs. 2008 results. This dip was attributable in large part to milk, which contributes $11.5 billion to all fat-claim product sales. Even though milk unit sales remained relatively flat (-0.5%), lower prices dried up milk dollar sales, which ended the year down 16.7%.

Other popular claims holding their own included products labeled “natural,” with $22.8 billion in annual sales representing 4% growth vs. 2008. The natural claim demonstrated real star power, outselling organics by more than a 4:1 margin in food, drug and mass merchandise retailers. Sodium claims—a $14.9 billion category dominated by soda products—kept its effervescence, recording no change in dollar sales over the last 12 months.

The “better-for-you” health movement to reduce saturated and trans fats resulted in a slender 1% uptick in products with an absence of a specific fat label claim—a $14.8 billion category. Products with a preservative claim still resonated with shoppers, resulting in a 1% sales gain to $14.5 billion. And that perennial favorite claim of “reduced calories” sold $11.7 billion in 2009, up 6% as consumers pursued the elusive goal of weight loss.

Losing favor
“Lowers cholesterol”—one of the established knockouts among widespread health claims—lost ground in 2009. Dollar sales for all products featuring cholesterol claims dropped 5% to $10.6 billion. The uptick in effective statin drugs used to lower cholesterol may be a primary contributor to the decline in popularity—a trend to watch. If an equally effective weight-loss drug is ever developed, it may have a similar impact on “low-fat,” low calorie and sugar-free products.

Hormone/antibiotic-free food claims—a $2.2 billion category—declined 2%, but with milk representing the largest contributor of hormone-free products, this finding is more a reflection of milk pricing than a shift in consumer preference. The low-carb movement was put on a diet, with sales dropping 5% in the $1.8 billion category as the popularity of the Atkins Diet continues to wane. And soy claim popularity dipped in both traditional food/drug/mass merchandise outlets (down 6% per Nielsen) and natural food channels (down 4.1% per SPINS).

Other claims that failed to gain traction included products with flax or hemp seed—a comparatively small category generating only $137million in traditional channels—showing a sales decline of 8%.

The pattern was reversed in the natural food channel, where flax seed sprouted a 1.2% sales increase and hemp products roped in 9.0% more sales than the prior year, according to SPINS. Although sales trends in the natural food channel may differ from mainstream retail channels, natural outlets may help marketers identify the newest trends in healthy eating. One such trend is Stevia, which has recently found its way onto the food/drug/mass sweetener aisle and into major brands. Can Kombucha—a fermented beverage made of tea and bacteria cultures—(up 18% / $6.7 million) in natural food stores be far behind?

Healthy impact
Savvy marketers understand that being part of a healthy lifestyle solution reflects positively on almost any brand—or retailer. Retailers can further leverage and deepen their relationship with shoppers through programs ranging from Wii Fit exhibitions on-site to light cooking demonstrations and product tastings. With no shortage of news stories on child obesity, families will continue to seek out brands and retailers offering healthy alternatives.

Healthy Eating Trends

• Part 1: Commitment Trumps the Economic Pinch
• Part 2: Organic Enthusiasts Remain Loyal
• Part 3: Eating Healthy Doesn’t Have To Cost More
• Part 4: Store Brands Expand Healthy Offerings
• Part 5: Healthy Eating Index Debuts

SUMMARY: Purchasing decisions in 2010 will be affected by factors such as brand innovation, retailer assortment, proliferation of store brands, and healthy eating preferences. Walmart’s “Project Impact” strategy and other similar retailer initiatives will test consumer preferences for clean aisles and lower prices vs. broader product selection. In the first few months of 2010, sales of healthier eating alternatives should be a good indicator of consumer confidence. As 2009 brought an increase in coupon activity, CPG manufacturers will look for more efficient and effective ways to reach consumers vs. traditional trade spending. Time will tell if new product innovation will be enough to drive shoppers back to traditional brands.

Throughout the recession, retailers and manufacturers have stepped up efforts to bring about innovation that seize the moment and “drive the recession wave” rather than “ride the recession wave”. Winners in 2010 will continue to innovate in the form of new formats, service offerings and differentiated products—a list of best bets for 2010 is described below.

Winning Brands Will Innovate and Differentiate
Sales of store brands have grown by $12 billion (up 17%) vs. two years ago as shoppers focus on value. As the economy improves, value is still important, but smart marketers are differentiating brands through innovation—with new products, new flavors, new packaging and with marketing/media campaigns with a heavy emphasis on social media to build rapid awareness and product trial. Brands that fail to innovate may also fail to win buyers back from store brands.

Product Assortment is a Point of Differentiation
Some retailers have followed the lead of Walmart’s “Project Impact” with cleaner aisles and limited assortment. Others have an opportunity to set themselves apart with a wider selection of products. Supermarkets that struggle to compete with Walmart’s prices will find an advantage with shoppers looking for variety. The trick is finding which categories require the broadest selection.

Healthy Eating Is a Solid Measure of Consumer Confidence
As the economy improves, consumers will focus on health and wellness priorities. An increase in sales of foods labeled “organic”, “natural” and “high fiber” as well as diet aids and reduced calorie/fat frozen dinners and entrees will be an indicator that consumer confidence is growing. Look for the first signs after the holidays, when consumers tend to start those New Year diets.

Manufacturers Get Stingy with Trade Promotion Spending
A whopping 50 million products each year—43% of supermarket purchases—are sold with a feature ad, display or price reduction funded primarily by manufacturers. An increase in coupon activity and new advertising opportunities such as cell phone apps and in-store TV networks will stretch promotion budgets. Retailers need to demonstrate sales performance to get their fair share of trade funds.

Direct to Consumer Options Thrive
Online price wars and the squeeze on in-store assortment will fuel large and small manufacturers to give consumers options to buy direct from manufacturers or from online services from the likes of Amazon, Drugstore.com and Alice.com.

2010 U.S. Outlook

Part 1: Cross Media

• Big Screen, Smart Screen, Small Screen: Top 5 Cross-Media Trends
• You Can Take It With You: Future Trends In Media

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Part 2: Consumer

• Winner Winner Chicken Dinner – Top 5 Consumer Goods Spending Trends
• Innovation Creates Opportunities for CPG Growth
• Aging Puts a Wrinkle in U.S. Marketplace

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Part 3: Advertising

• Talking Back – Top Five Advertising Trends
• Get Ready for the Audience-Centric Web
• What Would John Wanamaker Say Today?

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Part 4: Entertainment

• There’s No Business Like Show Business – Top Five Entertainment Trends
• Game On – The World is Watching More Than Ever
• Video Games in Play

SUMMARY: When the recession ramped up, retailers responded, passing along gasoline and commodity savings to shoppers, cutting prices to sharpen their competitive edge and leveraging EDLP strategies. Consumers also responded by clipping coupons and purchasing store brands to help ease the strain on the family budget. The net result: weak or declining sales on a department, category and same-store basis. Retailers should be highly selective about which categories get earmarked for price reductions in order to realize a sustainable volume competitive advantage.

Pricing these days is a balancing act. Cash-strapped consumers are pinching every penny and comparing prices across formats, forfeiting convenience for savings. Retailers have gamely responded by sharing cost concessions, but when retailers roll back prices en masse, two things happen: 1) no single retailer enjoys a competitive advantage from price cuts, merely maintaining parity with respect to traffic, and 2) category volume increases slightly, but not enough to offset the price decline.

Consumer packaged goods unit prices have nosedived in 2009. For example, as of March 2009, Nielsen research showed prices up 4.1% over the prior year, but dropping precipitously for the next few months as price increases ranged from just 1% to 1.9%. This stands in stark contrast to January results, marked by a 5.5% unit price increase across the store, more consistent with the aggressive 2007 and 2008 pricing patterns.

Handle with care
While food staples like cheese, milk and fresh eggs led the pricing pack in 2008, those price points proved to be highly perishable. Last year’s price leaders, according to Nielsen, became the biggest losers in 2009, with eggs scrambling to maintain profitability after a 23.8% price plunge to $1.63 per unit. A carton of milk sank 19.3% to $2.38 per unit, while cheese prices were shaved by 9.6% to $2.75 per unit.

Other poor performers among the 30 categories with the most dramatic unit price cuts were diet aids (slimmed down by 8.8%), baby needs (wiped out by 7.6%), fresh produce (a limp 6.5% decline in unit price), and shortening and oil prices (slid by 6.0%). Not a single category among those recording the greatest declines managed to eke out dollar sales growth. Conversely, five of the seven categories posting the greatest price increases realized dollar sales growth for the four-week period ending in July 11, 2009

Down, not out
Most economists agree that we can expect further contraction of the economy by approximately 2% for the remainder of 2009 and that waning consumer confidence will translate into less spending at retail and lower demand for manufacturers. The key to selectively—and strategically—lower prices is price elasticity of demand.

Nielsen research on pricing and promotion shows that most categories have a price elasticity much lower than -1.0, with most falling into the -.30 and -.70 range. For a sample category with a price sensitivity of negative .40, a price reduction of 10% converts into a unit sales increase of 4.3%, but a dollar sales decline of 6.1%. The recommendation then, is to be highly selective about which categories get earmarked for price reductions in order to realize a sustainable volume competitive advantage.

Clip it or click it
As retailers and manufacturers look to keep shoppers spending—and conversely, saving—they are leveraging ways to simplify the art of coupon clipping and clicking. Multi-tasking consumers are leveraging every possible vehicle for savings, with coupons enjoying an unprecedented resurgence. One reason is renewed reach and accessibility. Thanks to Internet, mobile phone and in-store kiosk distribution methods, coupon redemptions were up 23% for the first half of 2009, and redemption growth outpaced distribution, up by 20%. Key coupon activity stats from Inmar for the first half of 2009 show 188 billion coupons distributed and 1.6 billion redeemed.

The new generation of coupons reflects the immediacy of the media, with shorter expiration periods, fewer multiples and flat values. Food items represent the most active coupon segment and the 80/20 rule runs true to form: during the first half of the year—81% of units purchased with a manufacturer coupon were from just 19% of households. Both low and heavy coupon users have stepped up clipping activity, although all but the heaviest coupon user groups experienced negative total unit growth.

Winning numbers
Free-standing inserts (FSIs), a mainstay of the grocery channel, accounted for 89% of coupons distributed and 51% of coupons redeemed. The second largest category of redeemed coupons was electronic checkout at 10%, followed by instant redeemables at 9%, instant redeemable cross ruff (a coupon that’s on, or inside the packaging of, one product but good for another) at 6%, shelf pads at 5%, direct mail and handouts at 3%, in-packs and the Internet at 2%, and electronic discounts and in-ads at 1% each.

Internet coupon redemptions grew exponentially with a 308% increase over the prior year. Magazine on-page coupons (157%), instant redeemable cross ruff (177%) and direct mail (168%) enjoyed triple digit growth as well. While redemptions for FSIs were up 31%, only 0.5% of distributed FSIs were redeemed—a much lower redemption rate than what was experienced by all other forms except for magazine on-page coupons.

Well-heeled clippers
Coupon users represent an appetizing demographic comprising younger female heads of household (54 years old and under), larger households, and more affluent families ($70k+ annual income) who reside in areas designated as “comfortable country” or “affluent suburban spreads.”

Typically, coupon enthusiasts are frequent shoppers and bigger trip drivers who patronize most retail channels serving the consumer packaged goods industry. While non- and light-coupon users book bigger shopping trips—stocking up because of the lack of frequency—coupon enthusiasts represent the second biggest per-trip spenders in the grocery channel.

Store brands soar
In every downturn, there’s a beneficiary, and at grocery, it’s private label. For the year ending July 11, 2009, store brands hit an all-time high for dollar (16.9%) and unit shares (21.5%). Even as store brands continued to flex their marketing muscle in edible categories, they also racked up gains in the non-food, health & beauty and general merchandise departments. Lead brands—the number one or two brand when a store brand was the category leader—generally held their own against the onslaught of private label. Private label share gains were primarily at the expense of all other brands.

Store brand sales levels and growth are still skewed to edible categories, but store brand growth (not share) in non-food, health and beauty, and general merchandise departments has been generally stronger than brands. Store brand share development is greatest in commodity categories (e.g., milk and eggs) or those with little differentiation (e.g., first aid and pain remedies). As might be expected given their value positioning, store brand development lagged in categories with high levels of marketing support and those requiring high levels of innovation like beer, candy and health & beauty.

Accelerated development
What’s behind the surge in store brands? Which shoppers are most likely to purchase store brands at an account? Do their brand preferences differ by department or category? Shopper behavior across lead retailers within four different formats was analyzed, drawing on Nielsen consumer panel data.

Topline results reveal that the Kroger demonstrated the greatest—and most consistent—growth in store brand sales from low to very high spenders. Slower store brand growth was detected at Costco and Walmart, with Walgreens ringing up a second place ranking on store brand sales growth. In all four retailers, shoppers (even among very high-spend shoppers) are far more likely to seek branded offerings when shopping competitive retailers. Retailers need to understand if competitive shopping is driven by not having the right branded assortment in their stores or from competitors offering greater branded value or less store brand focus.

Walmart was the only retailer where their shoppers devoted a greater share of their total spend to store brands when shopping in competitive retailers.

While brands drive the majority of category dollar and unit sales, further store brand expansion is likely given the slow rate of economic recovery and the strong retailer focus against store brand label initiatives. Kroger, Walgreens, Walmart, SuperValu and other retailers have expressed the desire to expand store brand presence along with assortment cuts to reduce store clutter and improve store shopping experience. And retailer store brand focus has never been greater as there are better quality offerings, expanded assortment, and increased marketing muscle and support.

Small and mid-tier brands remain at risk from private label poaching as retailers push to shelve house brands. Unless these smaller brands are unique or niche brands, their manufacturers may initiate or expand into private label contracting or pursue direct-to-consumer options. In any case, these brands need to proactively leverage analytic insights to demonstrate why their brands are deserving of shelf space.

Tread carefully
A word of caution to retailers: don’t let price gaps between store brands and brands get so large that they drive declining category sales. While price decreases benefit consumers, both manufacturers and retailers would be rewarded with lower sales. And with more and more consumers turning to coupons in this tough economy, continue to make usage easier with increased distribution and delivery methods. Finally, promote store brands with brands where there is limited shopper overlap to drive category sales and along with non-competitive or complimentary branded offerings to build larger baskets.

With the nation seemingly emerging from recession, American consumers remain skittish about spending their money during this upcoming holiday season according to new research from The Nielsen Company.  Households continue to focus on “essential gift giving” such as staple consumables, candy, beverage/alcohol and entertaining at home, and 86 percent said that they expect to spend the same or less this year than last — with a 7 percent increase in those indicating they would spend less.  Overall, Nielsen is projecting that holiday sales will rise 0.03 percent this year, accounting for $90 billion in dollar sales.

“Given everything the consumer has absorbed over the past 12 to 18 months, the fact that we expect this coming holiday season to be flat in dollars can be viewed as a modest positive,” said James Russo, Vice President, Global Consumer Insights at The Nielsen Company. “Americans have undergone a fundamental change in how they spend their money, and the days of stretching finances to make purchases not deemed as necessary are over, at least for the time being.  That said, our research has shown that consumers are looking forward to loosening their purse strings a bit, but only once they feel more confident about the state of the economy and their personal financial situation.”

Update: James Russo Discusses Holiday Spending on CNBC

Other key findings from the research include:

• Traditional items such as apparel, toys and technology will be most popular categories, albeit at restrained levels and primarily sold in “value” channels.
• Products aligned with at-home entertainment such as cookware, kitchen items, bed and bath accessories and alcoholic beverages will do well.
• Gift cards are one category where consumers plan to spend more this holiday season, followed by toys and apparel.
• Value retailers such as dollar stores, online, discounters and club stores will attract the lion’s share of holiday spending as consumers minimize trips and search for the best values, while office supply, pet stores, home improvement and drug retailers are likely to feel the brunt of the economic slowdown.
• Some 20 percent of households said that they had no plans whatsoever to entertain at home or away from home during the holidays.
• Spending cut-backs are being driven by all income groups.

So how can retailers make the most of this season? They need to recognize that U.S. consumers are, first and foremost, seeking value and will start their holiday shopping well before Thanksgiving.  They should also reach out to their best customers and make them feel special and give them a reason to shop at their outlet during the season and into 2010.   Successful retailing has always been about delivering the right product at the right price and in the right place.  The difference now is effectively mining and communicating to the right consumer as an active participant in driving growth.

Increases in wine and alcoholic beverages indicate that consumers are opting to consume their favorite beverage at home too. At the same time they are continuing to avoid discretionary items, according to the latest monthly update of U.S. Retailing & Consumer Trends from The Nielsen Company.

The non-edible departments were the greatest contributors to an overall 1.2 percent unit sales decline at food, drug and mass-merchandisers, during the 52-week period ending July 11. General merchandise categories suffered most with a decline of 7.9 percent. Non-foods dropped by 3.8 percent and health and beauty aides by 3.5 percent.

Canning and freezing supplies saw the greatest unit sales increases at 18.1 percent followed by seasonal merchandise (8.3 percent), fresh meat (6.2 percent), wine (5.6 percent) and dry mix prepared foods (5.2 percent).

There was also a 3.7 percent unit sales increase in vitamins, a category that typically does well during times of recession as consumers focus on maintaining their own health.

“By and large the categories that are growing the fastest are those related primarily to meal consumption-a notion of back-to-basics,” says Todd Hale, SVP, Consumer and Shopper Insights at Nielsen. “It’s also interesting that the No. 1 item on the list is canning supplies. There’s been resurgence in consumers growing their own fruit and vegetables and canning them.”

Across all departments, dollar sales over the latest 52-weeks experienced a 2.7 percent increase, which was mainly seen in edible department. Fresh meat had the largest increase at 9.7 percent followed by packaged meat (6 percent), dry grocery (5 percent) and alcoholic beverages (4.6 percent). Discretionary departments and the dairy department, which has experienced significant price reductions as a result of falling commodity prices, ranked in at the bottom of the dollar growth scale. Non-foods (3.1 percent) and health and beauty aides (0.1 percent) showed little growth. Dairy (-1 percent) and general merchandise (-5.0) were the only departments reflecting loss.

“As prices for many commodities have dropped this year, retailers are slashing prices broadly to lure shoppers who are very focused on value and low prices,” said Hale. “As their competitors follow suit with price cuts, we are already seeing a number of retailers struggle to maintain positive same-store-sales growth.”

While food staples were also prevalent in the top-15 dollar growth categories, seasonal merchandise and canning and freezing supplies saw the largest increases with 34 percent and 27 percent growth respectively. Dry vegetables and grains, flour, and pasta, all with gains of 18 percent or more, rounded out the top five.

Moving forward, “we’re going to continue to see consumer restraint in terms of where they shop and how they buy,” said Hale. “Food and beverage categories will continue to do reasonably well. Those manufacturers selling discretionary categories are going to have to work very hard to give consumers a reason as to why they should be buying now.”

Peter Leimbach, V.P., Multimedia Sales Research, ESPN

SUMMARY: Over the past 20 years, the American household has changed and traditional roles have shifted with men now taking on a greater percentage of the household shopping than in the past. Today, almost one-third of men are now the principal shoppers in the home. With more men in the aisles, marketers need to better understand how they impact brand sales and how to reach this growing segment of principal shoppers.

The past two decades has seen a role reversal of sorts taking place: the traditional roles of men and women are being redefined to better reflect today’s social norms. Today’s American households are looking less like Donna Reed—the paradigm for the ideal 1950’s family—and more like Mr. Mom.

Shifting norms
Since 1985 there has been a dramatic shift in the composition of male principal shoppers in the U.S. Several factors are contributing to this trend. First, the traditional family unit has multiple variations today. From two working parents to single parent homes, a younger generation is being exposed to new norms. Second, Americans are waiting longer to get married. According to the U.S. Census Bureau, in 2008, the median age at first marriage was 27.4 for men and 25.6 for women vs. 25.9 for men and 23.6 for women in 1988. Lastly, Americans are living longer and as Baby Boomers retire, the men of that generation are shopping more than their fathers or grandfathers ever did.

Today, almost one-third of men are now the principal shoppers in the household. With more men in store aisles, marketers need to better understand how to reach this growing segment of shoppers.

Increasing presence
Business Week reported in a September 2006 article, “Secrets of The Male Shoppers”, that “men buy, women shop: the sexes have different priorities when walking down the aisles”. This is an important distinction for marketers to consider when targeting male shoppers.

Nielsen data shows that while females dominate shopping trips in all channels except convenience/gas stores, their share of trips has declined in all outlets from 2004 to 2008/2009. On the other hand, men’s share of retail shopping trips has done just the opposite—increased in all outlets. The channels with the greatest relative importance to men include convenience/gas outlets, warehouse clubs and grocery stores.

And while females out spend male shoppers per trip across all retail channels, the average basket size spend differential is not as large as might be expected. The fact that women conduct more “planned” shopping trips than men is one explanation for the higher dollar amount..

Overall, men are substantially increasing their average dollar basket size across all channels—especially in grocery where they have increased spending by 56% over a five year span. Additionally, while their share of spending is growing across all retail outlets, women’s share of spending has declined. In the grocery channel, men’s share of dollars increased from 30% to 38%—a 27% increase versus women’s decline of 11%.

Not just beer and brawn
A shopping report commissioned by ESPN to evaluate Nielsen sales data based on the presence of the male head of house as the primary or secondary shopper on a trip revealed some unexpected findings.

From 2006 to 2008, there has been an upward trend in both the amount of dollars spent by men and their shopping frequency. The occasions when males were the primary or primary/secondary shopper have increased by 4% and 3% during this two-year time period and the total dollars spent has increased by 8% and 7% respectively.

And while a high percentage of dollars spent by men are in fairly predictable categories such as grooming care products and alcoholic beverages: men’s hair coloring (86%); men’s depilatories (84%); gin (83%); scotch (81%); and pre-shave cosmetics (80%), a peek inside their shopping basket reveals they are likely shopping for the family too.

More than half of the principal male’s shopping basket consists of items that indicate they are not just shopping for themselves.  Examples include:

• Men’s External Breathing Aids (61%)
• Canned Seafood (61%)
• Refrigerated Juices, Drinks (61%)
• Prepared Food-Ready-to Serve Stew (59%)
• Herbal Package Tea (57%)
• Prepared Food-Ready-to Serve Lasagna (55%)
• Health Bars & Sticks (54%)
• Non-Sliced Refrigerated Lunch Meat (53%)
• Refrigerated Yogurt and Shakes (52%)
• Dishwasher Rinsing Aids (52%)

Impact on media strategy

Advertisers need to evaluate the importance of men’s purchase volume for their brand and competitive brands and determine whether the current media mix appropriately reaches men purchasers. Traditional media tends to fall into 3 categories:

1. Programming that skew primarily female (network soap operas and female-targeted cable networks like Lifetime and Oxygen)
2. Programming with evenly skews male/female (network prime time, broad-based cable networks like USA Network)
3. Programming that skews male (primarily sports networks)

Nielsen conducted an analysis to determine how well a given media schedule was delivering both male and female brand users for a leading brand in the cold remedy category. The findings revealed that men accounted for 48% of brand users and 48% of brand sales came from shopping trips where the male head of house was the primary/secondary shopper.

And while the advertiser’s schedule included a wide mix of broadcast and cable networks, it focused primarily on targeting women and adults. Sports networks accounted for only 2% of the schedule’s GRPs. This mix resulted in a schedule where only 38% of the brand target impressions fell against men—far less than their share of brand spend.

Continued quest
The male as a principal shopper is not an emerging trend, as marketers have been struggling to understand this segment for over 20 years. But as marketers learn more about where and what this consumer segment buys, they are better able to guide brand positioning and media targeting to capitalize on this target when they are in the aisles.