Value has become a main focus for Asian shoppers, partly driven by the economic situation and partly as a result of increased retailer activity focused around price and promotions. According to Nielsen’s Asia Pacific Retail and Shopper Trends 2009 Report, more than 70 percent of shoppers claim to have become more price sensitive compared to last year. The effect: shoppers are more inclined to buy only what they need, spending their money on essentials rather than on treats or what they now consider ‘nice-to-haves’. They’re also consciously trying to cut down on the quantity purchased and are actively seeking out products on promotion.

Over the course of 2008 in Asia, grocery markets continued to show volume growth, led by India (+9%), China (+9%) and Vietnam (+18%), with only Taiwan (-7%) experiencing a decline in sales. Value sales increased by double figures in many markets on the back of high inflation for key food categories. But with inflation falling in all markets, we have seen value growth drop sharply in 2009, although overall volume growth in many markets has held up reasonably well with shoppers not cutting back significantly on grocery categories.

Traditional trade continues to lose share

As expected, the traditional counter service trade continued to lose share in Asia, with overall share of trade dropping another percentage point to 47 percent in 2008. At the same time, the absolute number of traditional grocery stores in the region grew by one percent to over 12.3 million stores. In most developed countries, traditional store numbers fell by five percentage points or more. In Korea, where traditional store numbers dropped by nine percentage points, the share of trade decreased from 15.9 to 13.9 percent, while in Taiwan the traditional trade now accounts for just over six percent of sales, having lost 1.5 percent share in the last 12 months.

The retail landscape looks very different in Southeast and South Asia, however, where traditional store numbers actually grew year on year, and even though share of total grocery sales continues to decline slowly, the majority of shoppers in all markets continue to shop at this trade channel. The traditional channel continues to meets shoppers’ needs for everyday convenience, personal service and affordability – being able to buy the smallest sizes and quantities.

Growth of small modern trade outlets

Globally, many large retailers such as Wal-Mart, Tesco and Carrefour have embraced a multi-format strategy that includes the development of smaller neighborhood stores. Similar growth in small modern trade outlets is also being seen across Asia, with mini-markets/small supermarket store numbers increasing by 17 percent in 2008 to over 100,000 stores.

Indonesia has led the way over the last 10 years and in 2008 more than 1,500 new stores opened, taking the total to over 10,500. These stores now account for more than 16 percent of total packaged grocery sales. Shoppers in Indonesia are continuing to embrace the convenient location, relatively good service and acceptably low prices offered at mini-markets.

Retailers in China are also investing in this store format, with store numbers growing by 22 percent in 2008 to more than 70,000 stores, accounting for more than three-quarters of all modern self-service outlets.

In South Korea we are also seeing the leading Hypermarket operators expanding into small supermarket formats, or ‘Super Supermarkets’ as they are known in South Korea. Samsung Tesco is now operating over 150 SSM Homeplus Express stores and E-mart is planning to open 30 or 40 small, 300 square meter E-Mart Everyday stores. The expansion of these large chains into the small store arena has led to concerns regarding competition with small store owners, and the South Korean government is considering introducing a bill to regulate the opening of small supermarkets.

Sales across all of the company’s key divisions – Walmart Stores, Sam’s Club and International – grew on a year-to-year basis by more than 6 percent.  Comparable store sales in the U.S. grew 2.8 percent in 2008.

“Every player in the CPG industry is affected by Walmart in some way,” said Tom Pirovano, Director of Industry Insights at Nielsen.  ”By combining several Nielsen services, we can measure Walmart store count growth, Walmart advertising, Walmart shopper demographics and what shoppers are buying.”

The key to Walmart growth: food departments.  Sales of dry groceries, perishable foods and alcoholic beverages all showed strong results (11%, 11.5% and 18.5% respectively).  The top five food and beverage categories were pet food, bread and baked goods, carbonated beverages, snacks and packaged meat. Top growth categories were flour, pasta, vegetables & grains -dry, wine and shortening/oil.

Like many retailers, Walmart has seen solid growth in sales of private label (PL) products as consumers look to get the most value for their money.  Private label sales share was 15.8 percent across all Nielsen categories, with milk, sugar/sugar substitutes, unprepared meat/seafood, shortening/oil and canned fruit making up the top five categories.  Additionally, Walmart’s PLs outperform the grocery channel in a number of channels and can serve as a benchmark for other retailers.

Although Walmart has significant operations across the country, southern and western regions have most of the markets where Walmart dominates total sales:

While many top retailers have cut back advertising spending, Walmart actually increased spending by 56 percent in 2008, with a focus on groceries, furniture and health and beauty. More than 21 percent of their spending is on network television, with another 20 percent on cable. Almost 7 percent of their spend is on Spanish language network TV.

But Walmart is not immune to changing consumer behaviors: shoppers are making fewer trips.  And the company remains under-developed with higher income households.  Walmart continues to adapt to the market environment with a number of innovations such as their new Marketside format to attract upscale shoppers without the Walmart name or the “Big Box” image.

But according to an analysis of the most effective holiday retail TV ads, released Tuesday by Nielsen IAG, retailers did not appear to increase the proportion of promotional ads in the mix this year. 

About half of all TV ads so far this holiday season (Nov. 17 – Dec. 14) have been brand-focused, while the other half have been devoted to sales/price-focused messages — as was the case during the 2007 holiday season.

What’s Hot
Instead of promoting sales events and low prices, the most effective TV ads from retailers this holiday season used strong narratives, nostalgia, and family-focused storylines to communicate a brand’s benefits to viewers. 

“Practical” messages for shoppers were also a successful theme.  Take this year’s most liked holiday retail ad — a Wal-Mart spot that shows lights atop all of the cash register lanes flashing on and off, in sync with a well-known holiday song.  The key message is clear: more open register lanes at Wal-Mart make shopping there more convenient.

What’s Not 
What didn’t work this year?  According to Nielsen, seven of the 10 least liked holiday TV ads were 15-seconds spots — an indication that shorter-length ads garnered less appeal, in this case. 

What’s more, the elements that helped enhance appeal levels in the best-liked ads were largely lacking in the less popular spots.  According to Nielsen, among the commercials at the bottom of the pack, promotional messaging generally accounted for a greater share of the creative, leaving proportionally less room for “entertainment value.”

10 Most-Liked Holiday Retail Ads (Nov. 17 – Dec. 14, 2008)

Likeability refers to the percentage of television viewers who report liking an ad “a lot” after viewing it, among those who are able to recall an ad’s brand.

An ad’s “likeability score” is the percentage of television viewers who report liking an ad “a lot” (among those who can recall an ad’s brand) after being exposed to it during the normal course of viewing primetime TV on the broadcast networks.

Likeability scores are indexed against the mean score for all ads during the time period to calculate a “likeability index.”  A likeability index of 100 indicates average recall. A likeability index of 171, for example, means that an ad was 71% better liked than the average new ad during the four-week time period.

Read the full report.

Likeability refers to the percentage of television viewers who report liking an ad “a lot” after viewing it, among those who are able to recall an ad’s brand.

A traditional ad’s “likeability score” is the percentage of television viewers who report liking an ad “a lot” (among those who can recall an ad’s brand) after being exposed to it during the normal course of viewing primetime TV on the broadcast networks.

Likeability scores are indexed against the mean score for all new traditional ads during the time period to calculate an ad’s “likeability index.”

A likeability index of 100 indicates average recall. A likeability index of 190, for example, means that an ad was 90% better liked than the average new ad during the four-week time period.

Read coverage of Nielsen’s findings in Ad Age.

Unique visitors to the sites included in the Index reached 35.9 million, a 13% increase over this year’s Black Friday Web traffic.

Many of the top online retail destinations on Cyber Monday were the same as those on Black Friday. eBay drew the largest unique audience (10.6 million), while Amazon and Wal-Mart claimed second and third places, with 9 million and 5.2 million unique visitors, respectively.

Among the top 10 online retailers, Sears’ site saw the fastest growth (+58%, year over year).

Beauty was the fastest growing product category on Monday, increasing 151% over the previous Monday, November 24, 2008.

Toys/Videogames ranked second, growing 112% Monday over Monday, while Apparel rounded out the top three with an increase of 58%.

“The growth in traffic to online retail sites on Cyber Monday was better than many people expected, making retailers hopeful that this growth will carry through the holiday shopping season and drive sales,” Ken Cassar, vice president, industry insights, Nielsen Online, noted.  “It remains to be seen if people have done the majority of their shopping on these two big shopping days to save time, or if they are holding out for additional sales and promotions. If history is any indication, we expect that Monday, Dec. 15th will be the peak day for online shopping traffic.”

View the full press release.

Read coverage of Nielsen’s findings by the Associated Press and Bloomberg, as well as in The Wall Street Journal, the Financial Times, Investor’s Business Daily, Ad Age, PC World, the Orlando Sentinel, ClickZ.com, and InternetRetailer.com.

“Even with the weakening economy, an unstable stock market and a rising unemployment rate, Black Friday traffic to online retail sites grew at a double digit rate this year,” said Ken Cassar, vice president, industry insights, Nielsen Online.

Black Friday Online Conversations and Consumer Perceptions

• Not surprisingly, shopping incentives were a key part of Black Friday discussions. The terms “deals,” “sales,” and “doorbusters,” referring to deep discounts intended to get shoppers in the door, were all closely associated with Black Friday.
• Specific retailers were also mentioned in relation to Black Friday, including Sears, CVS, Wal-Mart, JCPenney, Staples and Circuit City, among others.
• Consumers discussed specific products and gift ideas, including high definition televisions, video games, laptops and toys.

See Nielsen Online’s Black Friday BAM here.

The Nielsen Online Holiday eShopping Index is comprised of over 120 representative online retailers across twelve categories, and acts as a barometer to gauge the level of activity at online shopping destinations during the holiday season. The Index illustrates increased shopping activity through category growth.

View the complete report.

Read coverage of Nielsen’s findings in TIME, the Financial Times, by the Associated Press and Bloomberg, and on CNET.com, NPR.org, and Digital Daily.

The results are based on a Nielsen Online survey, conducted November 6-11, intended to gauge online consumers’ holiday shopping plans for 2008.

Top 10 Reasons to Shop Online (U.S.)

Holiday Gift Dollars Shifting Online

Survey results indicate that holiday gift budgets are shifting online. Respondents said that they would spend an increased percent of their holiday shopping budget online, an average of 41 percent compared to 39 percent last year. And more respondents indicated that they would spend the majority of their holiday gift budgets online, up to 36 percent from 32 percent a year ago.

Prospects For Growth

More consumers plan to make purchases in the “Toys & Video Games” and “Books” categories this holiday season than last. The top three retailers when ranked by the year-over-year increase in respondents intending to shop there this season were: Amazon, Wal-Mart and Barnes & Noble.

“We believe holiday online sales will grow from 2007, but likely at a single-digit rate and representing the smallest increase we’ve seen since the online commerce market was born,” said Ken Cassar, vice president of industry insights, Nielsen Online. “If there is a silver lining, it is that consumers continue to view the online channel’s principal value proposition as convenience, more than price, allowing retailers the opportunity to differentiate on service and selection.”

Black Friday And Beyond

Throughout the upcoming holiday shopping season, which officially commences with Black Friday on Nov. 28, Nielsen Online will report weekly – and, in some cases, daily – online audience data for top online shopping destinations as well as for its annual Holiday eShopping Index.

Download Nielsen Online’s full press release.

The story noted that the in-store-media industry is facing new pressure to show its effectiveness, and cited Nielsen’s new Prism system, which measures in-store audiences and sales impact from in-store promotions and media. 

As a charter backer of Prism, Wal-Mart allows Nielsen access to some of its scanner data, AdAge reported.  The goal is to track in-store marketing and media the way traditional media are measured — making it easier to tap media budgets, rather than sales promotion coffers, to cover in-store media expenses.