Channel Migration Presentation

Channel Migration:
Charting a Course on the Voyage for Value
Times & Trends

August 2012
Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
1 1Copyright
SymphonyIRI Group, 2010. Confidential and Proprietary.
Executive Summary
ACTION
INSIGHT
Trends in number of channels shopped hint at

a further honing of consumer shopping
strategies, where consumers confine their
CPG spending to a handful of channels that
they perceive as offering the greatest value
Channel penetration and channel sales trends
are evidence of the intensifying battle for share
of grocery spending
Trip frequency is slowing, while per trip

spending is on the rise, marking yet another
change in trip mission strategies as
consumers continue to evolve their behaviors
in response to ongoing market and personal
financial considerations

2 2Copyright
Develop and prominently tout a value

proposition founded on the needs and wants
of primary and high-growth consumer
segments
Drive purchase frequency and share with a

value-oriented and localized assortment of
high-demand categories, such as meal
ingredients, meal components and low-cost
convenient meals
Step up frequency and granularity of
consumer and market assessment in order
to anticipate and proactively address
changes in trip mission rituals
Executive Summary
ACTION
INSIGHT
Drug, dollar and club channels each

captured share of CPG spending during
the past year, posting important gains
across CPG departments
The Internet is having a profound impact

on CPG purchase behavior and quickly
gaining share of CPG spending

3 3Copyright
Closely monitor competitor strategies vis-vis new market entry to enable rapid
refinement/realignment of own strategies to
reflect evolving competitive landscape and
to protect and grow share across key CPG
categories and consumer segments
Invest to understand growth trends

around the Internet as a shopping tool for
learning about and purchase of CPG
products, and how to align marketing
strategies to leverage this tool to
influence and inform your key shopper
segments
Trends around number of channels shopped are shifting, hinting at the possibility that
consumers may be limiting their spending to the channels that offer the greatest
perceived value.
# of CPG Channels Shopped
% of Consumers
2012
100%
One Two
1% 2% Three
7%
Eight
5%
Seven
19%
% of Consumers Shopping Multiple Channels

By # of CPG Channels Shopped
2011-2012
Four
14%
51.4%
50.9%
52.4%
48.9%
46.3%
46.7%
44.5%
49.2%
Q3 2011
Q4 2011
Q1 2012
Q2 2012
50%
0%
Six
28%
Five
24%
Source: SymphonyIRI Consumer Network, 52 weeks ending 4/15/2012

4 4Copyright
Number of Channels
10>
Source: SymphonyIRI Consumer Network
5-9
<5
Supercenters and dollar stores are demonstrating healthy traction, and successfully
winning heavy shoppers from across competing CPG channels.
Supercenter & Dollar Channel Penetration
Point Gains Among Heavy Channel Shoppers
1.9
1.2
1.2
0.3
Heavy
Dollar
Heavy
Club
1.3
1.3
0.7
1.8 1.9
Channel
2012
Penetration
Point Change
vs 2011
Grocery
98.5%
(0.1)
Supercenter
73.9%
+1.0
Mass
74.5%
(2.0)
Club
51.7%
0.0
Drug
78.7%
+0.1
Dollar
65.1%
+1.3
0.9
Heavy Heavy Heavy

Mass Grocery Super
Supercenter
CPG Shopping Trends

% Households Buying by Channel
Heavy
Drug
Dollar Store
Source: SymphonyIRI Consumer Network Consumer & Shopper

Insights Advantage (SIA), 52 weeks ending 4/15/2012

5 5Copyright

CPG trip frequency has been on a slow decline during the past year, while per trip
expenditures have inched upward.
Average Purchase Occasions per Household &

Average Dollars per Purchase Occasion
All Outlet % Change vs Prior Year
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
Q210
Q310
Q410
Purchase Occasions
Q111
Q211
Q411
Dollars per Purchase Occasion
Source: SymphonyIRI Consumer Network Consumer & Shopper Insights Advantage (SIA), 52 weeks ending 4/15/2012
6 6Copyright
Q311
Q112
CPG trip behavior has been mixed across channels and trip missions during the past
year, with dollar and drug channels benefitting from fill-in and special purpose trends.
2012 Average Purchase Occasions per Household

% Change vs Prior Year
Grocery
Retailer Trips by Trip Mission

5.0%
-0.4%
3.0%
Supercenter
-2.4%
1.0%
Mass
-3.2%
Club
Drug
-1.0%
-5.0%
2.7%
Dollar
Convenience

7 7Copyright
-3.0%
2.1%
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
6.0%
0.4%
Total Trips
Quick Trips
Fill In
Special Purpose
Pantry Stocking

Average basket size has been on the uptick during the past year, following several
quarters of strong declines; pantry stocking and fill-in trips have seen the strongest,
most consistent growth.
2012 Average CPG Dollar Sales per
Purchase Occasion
Basket Size by Trip Mission

5.0%
Grocery
Supercenter
3.0%
2.6%
1.0%
-0.1%
-1.0%
Mass
-1.0%
-3.0%
Club
Drug
Dollar
2.0%
-5.0%
Q4
2010
-2.1%
0.4%
Convenience

8 8Copyright
8.0%
Q1
2011
Total Trips
Quick Trips
Fill In
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Special Purpose
Pantry Stocking

Channel share has shifted slightly during the past year, with drug, dollar and club
channels each gaining ground at the expense of grocery and mass merchandise.
CPG Dollar Share by Channel*

Channel
2012 Share
Point Change vs 2011
Grocery
47.9%
(0.3)
Supercenter
18.6%
+0.1
Mass
5.7%
(0.1)
Drug
5.8%
+0.1
Dollar
1.9%
+0.1
Club
10.3%
+0.3
Specialty
6.7%
(0.1)
Source: SymphonyIRI Consumer Network, 52 weeks ending 7/8/2012

*Note: Convenience channel excluded as data are not fully representative; share will not total to 100% as not all channels are highlighted

9 9Copyright
Department-level dollar share trends are quite mixed at the channel level, but the drug
and dollar store channels each captured share across CPG departments.
Dollar Share Point Change by Department

2012 vs 2011
Mass
Supercenter
Merchandise
Grocery
Drug
Club
Dollar
Specialty
Beverages
(0.8)
+0.3
(0.2)
(0.6)
+0.4
+0.2
+0.6
Frozen
(0.6)
+0.1
+0.1
(0.2)
+0.4
+0.1
+0.1
General Food
(0.7)
+0.2
0.0
0.0
+0.3
+0.2
+0.2
Refrigerated
(0.3)
+0.1
+0.2
(0.7)
+0.5
+0.1
+0.1
Beauty
General
Merchandise
(0.1)
+1.5
(0.3)
(0.1)
(0.6)
+0.2
(0.6)
+0.2
+0.1
(0.6)
+0.3
+0.2
+0.2
+0.2
Health
(0.1)
+1.0
(0.8)
(0.2)
0.0
+0.2
+0.1
Home Care
(0.3)
+0.4
(0.6)
(0.2)
+0.2
+0.5
+0.1

1010Copyright
The battle for share of spending across key meals, meal ingredients and meal
components is fierce, and significant shifts are occurring across CPG channels.
Dollar Share Point Change
Key Meals, Meal Ingredients & Components
Change 2012 vs 2011
Grocery
Mass
Merchandise
Supercenter
Club
Dollar
Specialty
Flour/Meal
(2.3)
+0.3
+0.5
+0.5
+0.2
+0.9
Baking Mixes
(0.6)
+0.2
+0.7
(0.3)
+0.1
+0.2
Pasta
+0.7
+0.1
(0.8)
(0.2)
0.0
+0.4
Soup
Shelf Stable
Dinners
Dry Packaged
Dinners
(1.1)
+0.1
+0.2
+0.2
+0.2
+0.5
+0.5
(0.1)
0.0
0.0
+0.2
0.0
(1.1)
+0.1
+0.3
0.0
+0.2
+0.7
Butter
+1.8
0.0
(1.2)
(0.6)
0.0
0.0
Rfg Entrees
Fz Plain
Vegetables
(3.3)
+0.7
+0.1
+2.1
0.0
(0.1)
(0.5)
+0.4
(0.1)
(0.1)
+0.1
+0.1
Fz/Rfg Poultry
+0.4
+0.2
(1.8)
+1.0
+0.1
+0.2

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Share of healthcare spending is shifting at the category level, with drug, dollar and
club each winning share across several of the 10 largest healthcare categories.
Key Healthcare Categories: Dollar Share Point Change

2012 vs 2011
Grocery
Drug
Mass
Supercenter
Club
Dollar
(0.6)
+3.0
(0.7)
(0.1)
(1.0)
+0.5
(0.4)
+1.6
(0.7)
(0.1)
(0.4)
+0.2
(0.2)
(0.6)
(0.5)
+0.2
+1.5
(0.1)
+0.6
(2.2)
(0.2)
(0.3)
+2.3
(0.2)
(1.2)
+0.3
(0.4)
(0.8)
+1.7
+0.2
Internal Analgesics
(0.6)
+2.3
(0.5)
(0.5)
(0.9)
+0.4
Nasal Products
(0.1)
(1.7)
(0.6)
+1.0
+1.8
(0.2)
+0.1
+1.9
(0.6)
(0.8)
0.0
0.0
+0.2
0.0
(1.2)
(0.1)
+1.5
+0.1
+1.8
(2.1)
(0.5)
+1.1
+0.3
n/a
First Aid Accessories

First Aid Treatment
Cold/Allergy/Sinus
Tablets
Gastrointestinal
Liquids
Gastrointestinal
Tablets
Vitamins
Weight Cntrl/Nutrition
Liq/Pwd
Home Health Care Kits

1212Copyright
The dollar channel posted dollar sales share growth across the 10 largest
beauty/personal care categories while other channels posted mixed results.
Key Beauty/Personal Care Categories: Dollar Share Point Change
2012 vs 2011
Mass
Supercenter
Merchandise
Grocery
Drug
Club
Dollar
Specialty
Hair Conditioner
+1.3
+1.1
0.0
(0.5)
(0.2)
+0.2
(1.7)
Shampoo
+1.0
+1.0
(0.3)
(0.5)
(0.4)
+0.1
(0.6)
Deodorant
0.0
+1.5
(0.4)
(1.0)
(0.8)
+0.4
+0.4
Soap
(0.1)
(0.2)
(0.4)
+0.2
(0.1)
+0.5
+0.1
Blades
(0.2)
+5.3
(0.7)
(1.7)
(2.5)
+0.1
(0.3)
Skin Care
+0.2
(0.6)
(0.3)
+1.2
(0.9)
0.0
+0.6
(0.3)
+0.9
(0.3)
+0.4
(2.5)
+0.1
+2.0
+0.1
+0.7
(0.1)
(0.7)
(0.2)
+0.2
+0.1
(1.1)
+4.2
(1.0)
(0.1)
(1.7)
+0.2
(0.7)
(0.2)
+0.9
(0.3)
(0.5)
(0.4)
+0.3
+0.2
Diapers
Sanitary
Napkins/Tampons
Toothbrush/Dental
Accessories
Toothpaste

1313Copyright
The battle for share of alcoholic beverage sales is heating up across non-traditional
alcoholic beverage channels, evidenced by sizable share changes across channels
during the past year.
Key Alcoholic Beverage Categories: Dollar Share Point Change

2012 vs 2011
Grocery
Drug
Mass
Merchandise
Supercenter
Club
Specialty
(1.8)
+0.3
+0.1
+0.7
+0.1
+0.6
+3.8
(0.2)
+0.8
+3.1
+0.9
(8.0)
(0.2)
+0.7
+0.1
+0.3
(0.7)
(0.3)
(0.6)
+0.1
(0.2)
+0.5
(0.2)
+0.4
+0.8
+0.8
(0.9)
+1.1
(0.8)
(0.6)
Beer
Premixed
Cocktails/Coolers
Spirits
Wine
Non-Alcoholic
Mixers

1414Copyright
Channel behavior across key consumer segments is mixed, with drug, club and dollar
channels posting widespread gains, while grocery, mass merchandisers and
convenience are showing flat to negative share growth trends.
Dollar Share Point Change by Consumer Segment

2012 vs 2011
Mass
Supercenter
Merchandise
Grocery
Drug
Club
Dollar
Convenience
(0.1)
+0.2
(0.3)
+0.2
0.0
+0.3
(0.1)
+0.1
+0.2
(0.2)
(0.3)
0.2
+0.1
0.0
(0.1)
+0.2
(0.2)
(0.6)
+0.8
+0.1
(0.1)
(0.9)
+0.5
0.0
0.0
+0.4
+0.1
(0.1)
(0.7)
+0.5
0.0
(0.5)
+1.1
+0.2
(0.2)
(0.2)
+0.6
(0.1)
(0.6)
+0.2
+0.1
(0.1)
(0.4)
0.0
(0.2)
+0.2
+0.4
+0.1
(0.1)
Under $35K
$35-$70K
$70-$100K
Over $100K
Hispanic
Households with
Children
Boomers

1515Copyright
Consumers use the internet for many shopping-related activities, and to buy a wide
range of CPG products.
What People Are Buying Online

% of Shoppers Who Bought the Product- Among Those Who
Have Shopped Online in the Past 6 Months
Digital Media Usage

% of Shoppers- Top 2 Box Responses
I download recipes off websites and

other online sources
I download coupons from manufacturer
websites
I download coupons from retailer
websites
I download coupons from couponing
sites (e.g., SmartSource)
39%
35%
Electronics
49%
Personal care
49%
Food
30%
23%
I visit online deal sites (e.g.,Woot.com,

Groupon)
I use social media sources (e.g. Twitter,
Facebook) to get coupons
I look for updates from
retailers/manufacturers via email/text
20%
15%
40%
Other household items
38%
Toys
37%
Music
37%
Pet supplies
33%
Medications
33%
Cleaning supplies
32%
Beverages
31%
13%
I research products on blogs
8%
I use social media sources (e.g.,

Twitter, Facebook) to research
8%

1616Copyright
55%
33%
I research products on websites
Source: SymphonyIRI MarketPulse, June 2012
Books
Baby supplies
Source: Etailing Solutions, survey of 1,098 consumers
13%
Conclusions: Manufacturers
Identify new growth opportunities
and risks through ongoing
category and brand channel
migration tracking
Closely monitor shifts in trip mix and
at the account level
Constantly evaluate the evolving
competitive set at the channel and
retailer level, including traditional
brick and mortar and online retailers,
to understand channel share shifts
across key categories and brands
Invest to understand hidden potential
among shoppers by analyzing based
upon their habits, purchase response
and history with your own and
competing brands

1717Copyright
Align distribution, marketing and

merchandising strategies with
channel migration patterns
Work closely with retailers that have
similar best shopper profiles to your
own
Align distribution strategies against
preferred trip types, channel
preferences and store locations of
your most important shoppers
Continue to enhance merchandising
and promotional strategies across
old and new media platforms to
ensure your value proposition is
beginning to impact the shopper in
the home, and is consistent
throughout the purchase process
Protect and grow share among

top shoppers
Drive satisfaction, trips and basket

size with specially-targeted
promotional programs that entice and
reward top shopper segments
Work to secure optimal shelf space
and placement by demonstrating
category/brand value in basket
building
Conclusions: Retailers
Identify new growth opportunities
and risks through ongoing
category and brand channel
migration tracking
Align distribution, marketing and

merchandising strategies with
channel migration patterns
Track shifts in trip mix at the market

level and across key shopper
segments
Work closely with manufacturers that

have similar best shopper profiles
to your own
Constantly evaluate the evolving

competitive set at the market level,
including traditional brick and mortar
and online retailers to understand
channel share shifts across key
categories and brands, as well as
existing and emerging product
assortment strategies
Ensure assortment and merchandise

strategies cater to your most
important shoppers preferred trip
missions and store locations
Establish profiles of existing best

customers by creating discrete
behavioral segments based upon
their habits, purchase response and
history with competitors

1818Copyright
Continue to enhance merchandising

and promotional strategies across
old and new media platforms to
ensure your value proposition is
beginning to impact the shopper in
the home, and is consistent
throughout the purchase process
Protect and grow share among

top shoppers
Drive satisfaction, trips and basket

size with specially-targeted
promotional programs that entice and
reward top shopper segments
Maintain a deep understanding of
emerging shopping patterns and
competitive threats among key
shopper and target segments

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Channel Migration:

Charting a Course on the Voyage for Value

Times & Trends

Trends in number of channels shopped hint at

Trip frequency is slowing, while per trip

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Develop and prominently tout a value

Drive purchase frequency and share with a

Drug, dollar and club channels each

The Internet is having a profound impact

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Invest to understand growth trends

% of Consumers Shopping Multiple Channels

Source: SymphonyIRI Consumer Network, 52 weeks ending 4/15/2012

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Heavy Heavy Heavy

CPG Shopping Trends

Source: SymphonyIRI Consumer Network Consumer & Shopper

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Source: SymphonyIRI Consumer Network Consumer & Shopper

Average Purchase Occasions per Household &

Dollars per Purchase Occasion

2012 Average Purchase Occasions per Household

Retailer Trips by Trip Mission

Source: SymphonyIRI Consumer Network Consumer & Shopper

Source: SymphonyIRI Consumer Network Consumer & Shopper

Basket Size by Trip Mission

Source: SymphonyIRI Consumer Network Consumer & Shopper

Source: SymphonyIRI Consumer Network Consumer & Shopper

CPG Dollar Share by Channel*

Point Change vs 2011

Source: SymphonyIRI Consumer Network, 52 weeks ending 7/8/2012

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Dollar Share Point Change by Department

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Key Healthcare Categories: Dollar Share Point Change

First Aid Accessories

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Key Alcoholic Beverage Categories: Dollar Share Point Change

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Dollar Share Point Change by Consumer Segment

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

What People Are Buying Online

Digital Media Usage

I download recipes off websites and

I visit online deal sites (e.g.,Woot.com,

Other household items

I research products on blogs

I use social media sources (e.g.,

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

I research products on websites

Source: SymphonyIRI MarketPulse, June 2012

Source: Etailing Solutions, survey of 1,098 consumers

Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.

Align distribution, marketing and

Protect and grow share among

Drive satisfaction, trips and basket

Align distribution, marketing and

Track shifts in trip mix at the market

Work closely with manufacturers that

Constantly evaluate the evolving

Ensure assortment and merchandise