Category: Shopper

Post-pandemic consumer: restraints strengthen cravings    

Posted on by sandra

by Mirna Djuric, Product Capability Director at EyeSee

The world has gone through quite a few disruptions over the last three years. According to CPS GfK over 60% of European households are in or close to a serious budget squeeze, with Western European countries, especially on the rise. Nearly 2 in 3 consumers declare to cut their out-of-home (OOH) spending, including visiting restaurants and bars, buying clothes (-48%), as well as gifts, decorations, and takeout/delivery (all at -46%).   

But even though shoppers are more focused on preparing meals at home, the EyeSee meta-analysis shows that the food part of FMCG has suffered the most. This meta-analysis is based on 250 studies in the FMCG category. Samples ranged from 50.000 to 150.000 respondents per method, spread over 4 geographies – US, Europe, APAC, and Latin America. They included methodologies such as Eye Tracking, Facial Coding, Virtual Shopping, and surveys, and they were all done in highly realistic shelf environments that, 95% of the time, matches actual shopping behavior.   

After gathering all the data, it was grouped into pre-pandemic (2018 and 2019) and post-pandemic and all subsequent events (2020-2022), and eventually compared.  

Food category products are more likable but less bought  

It does not appear obvious that in times when shoppers are spending more time preparing meals, food would be the most crisis-influenced category in the FMCG category. However, if we remember that one of the key takeaways from the EyeSee pricing study was that the main goal of shoppers is to spend as little as possible, even if it means buying smaller packs of products and getting less value for their money, we may be able to gain a better understanding of this type of behavior. Food products are the ones we buy every day, and we can see their price increases getting higher and higher, whereas, in other non-food categories, we do not buy as frequently, so we do not have a sense of their impact on our overall budget.  

However, when shoppers are directly asked about the products, they will react positively and describe them as highly desirable, keeping in mind that we all want to resume our pre-pandemic lives as soon as possible. But what they will buy is a different story.  

In the food segment of FMCG, both consideration and penetration rates have decreased by more than double. Simply put, fewer people are buying fewer products, and competition on the shelf is fiercer.   

Shoppers’ exploratory behavior has also decreased, and individual SKUs and brands appear less visible on the shelf. Shoppers appear to spend more time finding exactly the product they intend to buy and less time exploring other options.  

Visibility in the first 5 seconds dropped significantly, as did attention to the key zone, meaning shoppers’ exploratory behavior decreased and they are possibly spending time on shelves analyzing price tags instead of browsing products.  

However, the likability of products significantly increased, meaning they were found to be more and more attractive and relevant.  

Is e-commerce a saving grace for FMCG in the US? 

With increased e-commerce spending, we can expect that FMCG in the US will potentially remain healthy. It is also interesting for this market that on the pack navigation, the US stands out by brand importance.  

This is the only region where brand logos are gathering more consumer views. Like other markets, secondary images lost visibility while claims gained it. This suggests shoppers want to be more certain they are getting the product they intended to buy beforehand, meaning shopping is more targeted.  

Very similar patterns are evident in the European markets as well; although actual shopping hasn’t yet universally decreased, there are indications that shoppers are more cautious (relying on tried-and-true brands) and therefore less exploratory.   

The nonfood category remains stable but claims gain importance  

Even though non-food products are still in the same or similar demand, and even though post-pandemic cravings among shoppers are strong, when spending money in times of crisis, they may feel the need to justify their spending, so they will turn to claims and question them, having more information now than during carefree pre-pandemic times.  

This higher level of caution is confirmed when looking into navigation patterns in the non-food category. Claims have gained significantly more consumer looks resulting in a 50% increase in claim visibility. Other pack elements, particularly imagery, both primary and secondary, suffered in consumer attention.  

Our packaging and claim expert, Tijana Lukic, provides more context in terms of what post-pandemic consumers look for in the non-food category.  

“End-user benefits are most important, and the more specific and concrete they are, the better.“ She also notices that shoppers have become true experts, they are knowledgeable about ingredients, their benefits, and their risks, so they choose cautiously.   

“Shoppers are open to innovation in this category still, but they need to be educated by the pack design about what the innovation brings for them. So, the concrete benefits are appreciated. Sustainability of the product is important, but it hasn’t exited the nice-to-have category yet in most non-food categories.”  

Latin American market can expect further decreases in FMCG   

In the Latin American market, on the other hand, shelf purchases significantly decreased, but not only that; consumers are consciously saving. Even stated purchase intent, which usually lags the actual purchase, shows a decrease in this market. This suggests we can expect further decreases in FMCG in LATAM.    

Conclusion  

With all of these insights in mind, it is evident that different markets show different results depending on their strengths and weaknesses. However, the pressure of one crisis after another can be more or less felt everywhere. Even though the average consumer wishes to go back to his previously carefree life and spending, their budgets simply do not allow it.   

From the producer’s perspective, category leaders are under more pressure than ever to sustain their market growth. If you are interested in this topic and want to learn more, register for GreenBook X EyeSee webinar on How Category Leaders Adapt to Post-Pandemic Consumer Behavior here – https://bit.ly/3Kwcs7D 

Interested in findings from our pricing studies from the US and which categories have we researched? Read all about it here or you can check out the full webinar featuring Heather Graham (Director Client Service @ EyeSee), Sasa Radojevic (Sr Shopper Insight Manager @ EyeSee), and experienced retailer & Awarded 2022 Top Women in Grocery (TWiG) Raina Rusnak.

    Meet EyeSee’s Quirk’s awards nominees that turn data into precious insights

    Posted on by sandra

    Some people hear music when they see music sheets, while others can look at the data and see valuable insights that lead to strong business development recommendations. Insight managers are a true force behind the Market Research Industry and its cornerstone, each crafting insight stories in their unique way.  

    We use The Marketing Research and Insights Excellent Awards powered by Quirk’s to put them in the spotlight and give them all the credit they deserve because, without them, all we would have, is a big pile of numbers and statistics we would have no idea how to use.  

    We asked Tara Tesanovic, Saša Radojevic, Milica Kovac, and Bratislav Stefanovic, who are nominated for Outstanding Young Researcher and Researcher of the Year, to tell us a little bit about themselves and what inspires them in their work.  

    When did you realize you were hooked on behavioral insights and there was no going back?   

    Saša: I must admit that my mentor, Beca (Dobrinka Vicentijevic), infected me with enthusiasm and passion for turning data into insights and the magic of the aha(!) moment. I always love to experience those. You collect all the data and piece the puzzle together, trying to determine where your predictions were incorrect and, more importantly, why! So, you are constantly thinking about it, trying to connect the dots. So, when thinking about it becomes an obsession, you usually let it go, take a step back, and then it just happens.  

    Tara: For me, it is the gap between say and do in shoppers’ behavior that is so inspiring, and I also love how the implicit approach to research effectively reveals biases. For example, the entire marketing team may be baffled as to why some packaging labels have no impact on consumers and may have a variety of design theories, but eye-tracking methodology will quickly reveal that it is because they are positioned in such a way that they are not spotted at all.  

    Milica: More than 5 years ago I realized the potential of technological advancements to grant us new means to comprehend behaviors that eluded validation through simple conversations. Being a psychologist who was already deeply immersed in research by then, it felt like I stumbled upon new horizons. I’m eagerly anticipating the unfolding of future technologies in our domain. 

    Bratislav: It was when I started realizing that it was not always easy to decipher what respondents really thought by providing their answers and opinions to our traditionally defined questionnaires. Many times, I was left with the impression that something was missing, the unfathomable part of what they really thought or needed. Over time, I learned that consumers could easily and clearly express some of their needs, and that’s where traditional questionnaires were quite useful. But oftentimes, consumers cannot articulate their needs, and their responses can then be misleading or prone to biases. This is where the behavioral approach proved to be super useful, as all I did was to just put consumers in their typical and specific situations, with little to no influence or instruction, sit back and observe, and then look for typical patterns of behavior. This way I was much more confident with the learnings and able to draw bolder conclusions and recommendations on how to influence consumers. 

    The last few years have been in crisis mode for most (if not all) of us. How has the consumer changed?    

    Saša: I understand that the expected answer should be based on our personal impressions rather than a study with specific parameters, but I am afraid that once you recognize the importance of context and put on your insights manager glasses, you cannot just assume such things. So, I will let this one slide, if that is okay.  

    Tara: My personal impression is that when it comes to shopping, people become much more cautious and stricter. Especially when it comes to less frequently purchased and somewhat pricey categories like care and beauty. Shoppers will question every claim made about the product, so communication must be well thought out.  

    Milica: Living in a deeply consumeristic society, addressing this question isn’t straightforward. If we talk about shoppers, regardless of channel, knowing that trade is a human activity that has existed for a very long time and crisis are nothing really new to people, we see how swiftly shoppers adapt their strategies when crisis hits, making more informed and conscientious choices (crises elevate the significance of System 2 decision-making); at the same time, social media and technologically mediated social communication is a relatively young phenomenon in human history and we are witnessing those same shoppers as now social media consumers struggling to consciously dispose of their time in a way that they perceive as healthy, especially during crisis. 

    Bratislav: We are going through the most dynamic period with dramatic changes in the behavior of all of us as consumers. The recent events, COVID pandemic, global crisis and inflation have been shaping the way we shop and consume goods and services. During the pandemic, while locked down, we turned to e-com, but limited to spend as much as wanted, given the concerns and uncertainty, loss of jobs, but also derails in logistics, supply, or delivery. And we started craving. The moment we stepped out of it, unleashed, believing we were going back to the “old, good normal”, the global crisis and inflation hit. So, we are still torn between our wish to shop and consume, and the imposed need to prioritize and budget. But the way consumers changed their behavior depends on the category and consumers’ socio-economic level. In some categories, they started buying less or turned more to private labels. In others we observed an increase in sales of more premium brands. So, this urge to consume and spend is there, but we are reinventing and reprioritizing what is most important to us. 

    What is the one thing you are most proud of?  

    Saša: It takes a lot less time for me to reach the aha(!) moment because I believe that over time, I have improved the way I think about and approach problem-solving, and I am hopeful that this will continue.  

    Tara: Well, I am proud of the confidence that I have gained since I started working. When I give recommendations, I am very confident about them, and my clients act according to them. Somehow, they gave me their trust from the start; their instant confidence in me became a reason for me not to doubt myself and really feel encouraged. From that moment on, it just grew stronger.   

    Milica: I take pride in my diverse journey within research, spanning roles from shopper research consulting to creating and validating innovative technologies, all the way to advocating for consumer understanding through new business development. 

    Bratislav: For me, a business challenge has always been a creative challenge, too. So, together with clients I typically managed to design the most unusual and innovative approaches to a research problem. Very often you could consider such studies almost as pilot projects, without clear indications on how the study would end up and what the outcome would be. Fortunately, at least so far, such endeavors have ended successfully to my and the clients’ joy, which has convinced me that the “can do” attitude always pays off in the end, with a little courage, no matter how complex the challenge is, which I am especially proud of. 

    You look at ad and shopper behavior all the time! Ok, let’s be honest. But what kind of consumer are you?  

    Saša: Well, some habits never die. I used to go shopping with a list in one hand and a calculator in the other since I was a student and every penny counted, and I still do that. So, unless there is a good offer, I do not make irrational decisions impulsively. And, of course, I do the math before deciding that the discount is too good to pass up.    

    Tara: I am the total opposite. I want to try everything that is new. I like to try new versions of phones; I want to test every pack claim and try new flavors. When you imagine a shopper willing to engage with a product, you imagine me. 

    Milica: I’m sugar-free hooked! Besides that, ever since 2016, I’ve been happily immersed in the world of physical retail: whenever I hit the road, I transform into a retail explorer, tracking down mind-boggling stores across the world. To me, stores are the ultimate decision arenas. They hold the power to sway me toward novelties or classics. 

    Bratislav: When comparing myself to what I typically see in research studies I could say that I am quite an atypical consumer. I have my predefined set of favorite brands and usually I know what I am going to buy in advance, though I like to explore and try new things when they hit the market and quite often buy things on impulse. I rarely think about whether I am going to spend an extra buck on things I like. Typically, I assess the quality, value, and proposition a product offers rather than the costs it comes at. To illustrate my irreconcilable nature as a shopper and consumers, what may come as a surprise to many marketing people who try to “understand” consumers, if I cannot find my favorite soda (highly processed, artificially flavored) from a major brand in the store, I might as well reach for the most organic, 100% natural juice made by local small businesses. 

    Want to learn more about behavioral research from our experts? Find the list of EyeSee’s webinars here.

      Brand blocking traps you don’t want to fall into 

      Posted on by sandra

      By Bratislav Stefanovic, Senior Insights Manager at EyeSee

      Brand blocking has long been a go-to merchandising technique for brand managers looking to ensure their brand stands out on the shelves. Although it may not seem obvious, there are several challenging questions that need to be addressed when applying this technique:  

      • Is the brand’s portfolio broad enough so it would pay off, but not too broad to induce a paradox of choice? 
      • What is a wider shelf/category context: price thresholds, competitors, anchor points?  
      • Will brand blocking of certain brands support or disable category growth?  

      All these dilemmas arise from the fact that brand blocking is impactful on two different levels, brand growth, and category growth, and the key to success is to reconcile and align those two. To understand how to do that, we should first look at shoppers, brand managers, and category managers’ points of view separately.  

      Brand blocking impact on consumers 

      According to the Food Marketing Institute, a traditional supermarket has from 15.000 to 60.000 SKUs, or around 40.000 on average. This means that there are an enormously large number of stimuli “attacking” consumers from the shelf, so for their “defense”, they use all sorts of anchors not to feel lost. Sometimes that is a price, emotion, or a clearly communicated claim.   

      Simply put, in the overwhelmingly large and diverse rows of SKUs, things can get complicated, which nobody wants. Complexity leads to indecision, which could lead to walking away from categories and products.  

      That is why blocking should help consumers scan through shelves, allowing natural browsing patterns like book reading. It is believed that horizontal blocking makes them spend more time browsing, noticing new SKUs and smaller brands, while vertical blocking ensures loyalty and decreases switching behavior.  

      However, in a recent EyeSee study, it was proven that horizontal brand blocking of one brand, which at the same time utilizes vertical brand blocking of its subcategories, can result in a visible increase in sales.  

       With the speed of the “shelf scanning” cut for 2 seconds, that methodology provided 32% of sales growth. However, while this type of blocking prevents price comparisons with potentially cheaper competitors, if not placed wisely, it could experience potential cannibalization. And this leads us to a question of the brand manager’s point of view. 

      Is brand blocking really a must for all brands? 

      Brand blocking for brands looks like a no-brainer: the product is clearly visible from afar, it takes up more space, and more importantly, it covers a larger surface in the consumer’s field of view.  

      The whole brand portfolio should come from the same key visual that allows brand creativity to emerge. Aside from the lead color scheme, they use visual connectors, some kind of characteristic design detail that connects the group of products: a logo, a circle with the claim, a line, or even the illustration of a cat on the box of milk, whose figure is complete when we look at the product facings.  

      Heineken has its famous red star, and Coca-Cola has its characteristic typography with an underlying lineage.    

      Pack tests in a realistic shelf setting can and should be used to determine whether the pack is outstanding enough, has a clear claim, and has a strong point of difference in comparison to competitors. 

       However, the impact of design is not the only thing that is relevant to shoppers. Price, or value for money, plays an important role as well. For example, if we put a large pack of products from the same brand next to or close to a smaller but premium pack and they have the same or similar prices, shoppers will compare those two segments of the same brand portfolio and will use the “cheaper” one as a threshold. In this case, brand blocking can be counterproductive unless Decision Three testing is used, which can help brand managers understand the role of every product in their portfolio and how it serves different target groups. 

      The category manager’s role in brand blocking   

      By using Decision Tree or Conjoint testing, category managers can get answers on whether it is the strength of the brand or price that will influence the shopper’s purchase, but in order to find an optimal solution, that will not be the only aspect they have to integrate into their decision making.  For category managers, category growth is, understandably, their top priority, and brand blocking can both help and sometimes stand in the way of that growth.  

      Brand blocking helps in the case when:  

      • brand’s strengths help consumers identify certain subcategories or segments, such as health or occasion-based ones  
      • brand is a category leader and a strong driver of innovation and change  
      • brand assortments, or planograms, are already made with a category growth mindset  

      On the other hand, they must pay attention to the following:  

      • brand blocking by brands that do not innovate, or change can lead to status-quo and the fallout of both brand volume and category  
      • brand blocking can decrease the time that consumers spend shopping – they make decisions before coming to the store, disabling impulsive shopping on POS, which results in a smaller number of SKUs in their basket, which has a negative impact on category growth.   
      • brand blocking isn’t fit for brands that have too narrow brand portfolios; it simply doesn’t pay off.  

      Conclusion  

      When we examine brand blocking from three different angles: consumers, brand managers, and category managers, finding the perfect category planogram is more like solving a Rubik’s cube than painting a nice, branded color scheme on the shelves. 

      However, it is critical to remember that both brands and retailers want the same thing: for products to move and large-volume sales to occur. To be successful, the brands’ growth visions must align with the growth mindset of the category, and vice versa. This necessitates constantly looking at the big picture and making a series of informed decisions supported by data-driven insights provided by a series of context tests of shopper behavior in realistic environments.      

      Interested in category management? Check out our latest Deep dive podcast episode with the Clorox Company Insights Lead.

        Decoding shopper behavior: An in-depth guide for insights specialists

        Posted on by sandra

        By Jason Bradbury, Senior Client Service Director at EyeSee

        As insights professionals, our understanding of observed shopper behavior (rather than claimed or rationalized response as captured though traditional survey research) is paramount to the success of packaging design strategies. According to ongoing research, up to 95% of consumers make purchase decisions in just a matter of moments while standing in front of the shelf. They rarely engage in time-intensive comparison-shopping; after all, an average supermarket has upwards of 50,000 SKUs! This underscores the importance of designing packaging to excel at the “first moment of truth” to drive market success.

        How then do you identify the crucial parameters for evaluating the success of a package? In this article, I provide a step-by-step walkthrough of a mix of KPIs that have been proven to accurately predict the best pack designs.

        Visibility: The gateway to consumer engagement  

        To address this, it is crucial to understand the physiological aspects that influence visibility, such as packaging colors, graphics, and structures that disrupt the shelf environment.  An additional point to bear in mind is that smaller brands or new product innovations often do not obtain optimal shelf placement (arm and eye-level placement) and thus may need to work even harder to attract attention.  Advanced technologies like the proprietary Eye tracking solution EyeSee employes provides valuable insight into how packaging draws consumer attention, enabling us to quantify its performance from a behavioral standpoint (rather than relying on ambiguous and less certain claimed recall metrics).

        Findability: Promoting product location and seamless line navigation

        Shopper confusion is detrimental to successful packaging. With limited time and cognitive resources (and the sheer effort required when shopping dozens of categories beyond just “your” specific one on a typical store trip), shoppers prefer products that are easy to locate and that minimize the time spent in product pursuit.

        Effective shelf presentation, clear differentiation of product varieties, and leveraging visual brand equities all help contribute to easy and efficient product line navigation. By using behavioral research to understand how packaging affects findability accuracy and search time, we can identify potential risks and opportunities for improvement prior to introducing new designs or products to market.  As contextual considerations are key to understanding shelf navigation, incorporating shelf-based metrics into testing is critical for gaining a comprehensive understanding of packaging performance.

        Consideration: Using communication to inspire consumers

        Packaging serves as a powerful communication tool, inspiring consumers to choose specific products or brands over all others.  This is especially important for new products as only a select few receive communication support at product launch. 

        Effective communication creates a compelling connection that drives consumer consideration. Through innovative online testing methods like EyeSee’s implicit Reaction Time communication exercises, we can evaluate how well packaging conveys key product details and motivates consumer behavior. Combining rational metrics with extensive behavioral insights enriches our understanding of long-term communication impact.

        Conclusion

        As consumer insights professionals, harnessing the power of consumer behavior is crucial for optimizing packaging strategies. By focusing on 1) visibility, 2) findability, 3) communication, and 4) measuring behavioral responses, we can unlock valuable insights into packaging performance. Armed with these insights, professionals can shape strategies that resonate with consumers and drive brand success in a rapidly evolving marketplace. 

        Want to know more about pack optimization? Dive deeper and learn how to choose successful claims!

          Deep dive: How to nail your product claim

          Posted on by sandra

          The power of a product claim is undeniable: 80-95% of shoppers make their purchase decisions subconsciously in stores within seconds, and over 2/3 of them do so heavily influenced by claims specifically. 

          After going over why no claim is universally good in the latest podcast, our top experts explored persistent industry myths, reliable claim testing practices and generally what to keep in mind when navigating the complex shopper context. Check out the full episode for more!

          What (not) to do when making a solid product claim

          When assessing claims, keep in mind the deep category knowledge and try to understand what matters most for a given product. Sometimes brands look at consumers’ current behavior or what needs changing; for instance, in some categories, consumers may consciously prioritize making a healthier choice. Other times, there is a tension in consumers’ lives that the product is positioned to tackle. It is essential to recognize all the influences at the very beginning of the claim development process.

          The second step is to prioritize the influences. Brands tend to be very proud of their products (as they should!), and sometimes fall into the trap of trying to communicate everything. Combined with puffery and overstating the truth, claims can have a huge negative impact on consumer purchase decisions. So, say less, achieve more!  

          How to mitigate risks with the right research framework

          The mixed-method approach is the best way to mitigate risks when selecting your product claims. For example, at EyeSee, validation studies proved that combining Eye tracking with surveys gives 2-3 times more predictivity than surveys alone.

          Yes, claims test reports can be notoriously hard to read, but our team visualizes the results by plotting the claims on Relevance or MaxDiff score and Uniqueness simultaneously. By zooming in on these two metrics, brands can get a pretty good insight into which of their claims can make their product stand out.

          Is testing claims in a branded context a must?

          Another frequent assumption is that respondents must be aware of the brand when the product claims are tested or else the study makes little sense. However, this is not always necessary, as researchers often purposefully conduct blind tests to get a less biased idea of whether the claim works.

          Well-loved, reputable brands are known to cloud judgments of claims’ believability in the sense that it is much harder to see whether any claims are ‘objectively’ vague and insufficiently substantiated. Thus, to test claims which focus on important innovation or feature, you could consider going “unbranded” to get a clearer picture of your perceived communication.

          In unbranded tests, you can still tackle how the claims align with a brand by revealing the brand and asking about the claims’ brand fit in the end survey.

          Sandra Stojanovic (Brand and Communications Director at EyeSee), Tara Tesanovic (shopper expert and insights Manager at EyeSee) and Nicole Tudosie (New business development Director at EyeSee), explained how to approach developing a product claim – check put the full episode for more!

            Pricing adjustment strategies in APAC: Are you keeping up?

            Posted on by sandra

            By Iskra Herak, Sr Insights manager @ EyeSee

            We live in a complex world where consumers face vast financial pressures; however, these pressures are felt differently across the globe. Our team at EyeSee looked into how pricing adjustment strategies affect shoppers; we’ve previously published the key findings for the US market, as well as the more detailed breakdown of four tested CPG categories. Now, let’s take a closer look at the results for the APAC region.  

            How does APAC cope with price increases?

            EyeSee has just wrapped up its first pricing study in this region to identify how consumer behavior is shifting when exposed to different pricing adjustment scenarios. In studies like these, it is important to test various categories, not only prices. The psychology of buying household items and the mindset of buying chocolate are completely different. The frequency of purchase depends on type of product category, even in the unstable times like these.

            Using a conjoint exercise, we looked at four shopping categories:

            • 2 high-frequency categories – sweets and instant noodles
            • 2 low-frequency categories – face moisturizers and antibacterial handwash

            Consumers were shown different options for increased prices – 5%, 10%, 15%, 20% and 25%.

            Different adaptation scenarios are possible, and while an increase in purchasing multi-pack and big size packaging can occur for household items, it is not what would be expected for indulgence products. While certain patterns and cycles re-appear in these situations, if you are a brand, it is important to stay in touch with the consumer through research and understand in which phase of the cycle they are at, at which stage the product category is and consider all those factors to best curb the pressures of the current situation. 

            Here are some of the main findings.

            Back to the basics and functional 

            Regarding low frequency categories, as the crisis prolongs, consumers are very much looking to cover the basics and stick to essentials. It is important for brands to understand that because it is what consumers search for when they are choosing among a variety of face moisturizers and antibacterial handwash. Innovation and flavors won’t be deal-breakers – it’s primarily about simplicity, price, and necessity.

            When it comes to noodles, a product in the high-frequency category, the price of the category leader does not significantly impact consumer purchasing behavior. Even if the price increases, the level of purchases remains relatively stable; consumers’ attachment to the leading and well-established brand is not at risk but rather reinforced. It serves as further evidence that consumer behavior tends to gravitate towards the fundamentals/basics during uncertain times.

            Chocolate, however, is still worth it

            In our pricing study we had a category of impulse buys, such as chocolates and sweets. We observed that the inflation of prices for the small packs of chocolates doesn’t decrease their consumption. On the contrary – it has increased. At the same time, there is a decrease of consumption of the king size and multipacks with the price increase. Our hypothesis is that it is probably because small-sized chocolates are treated as a small indulgence and something extra consumers don’t want to give up on.

            Knowledge and skill bring calmness and optimism

            In Philippines, around 1/3 of shoppers are price-aware and savvy consumers. They are focused on price, calculate the price per unit/kilo/ounce, and know where to find products on promotions. We found that they are very optimistic with regards to their future personal financial situation, employment security and job options, financial situation in the country, as well as the global financial situation. This is probably because they have a greater sense of control over their spending, so they feel like they know how to budget and don’t feel like they have to renounce anything. Inflation, if the gap between prices and the salary is not too big, won’t ‘break their spirit’ and will keep them spending and optimistic.   

            (Nothing) sweet about inflation

            However, for most APAC consumers, the pressure of inflation is firm, and it affects their behavior a lot. It is highly important to understand the changes in their behavior, their new needs and how it combines to influence the industry. Unpredictable times call for highly predictive insights obtained throughout relevant tools and research.

            Yes, there are many price-aware consumers who can deal with all this financial pressure, but the majority still can’t handle it. They won’t reject small pleasures and treats such as small chocolate, but that is the well-known lipstick effect. In psychology, the lipstick effect describes the observation that consumers will still tend to buy small luxury items even during an economic downturn. Cash-strapped consumers want to treat themselves to something that lets them forget their financial problems and enjoy modest delight and thrill. This can’t be applied in low frequency categories like face moisturizers and antibacterial handwash because rules are different here, and consumers want only the essential and basic.

            Knowing all this,  it’s crucial to understand your specific categories and how consumer behavior can change swiftly depending on the needs and products on offer
            _____________________________________________________________________________________

            Interested in findings from our pricing studies from the US and which categories have we researched? Read all about it here or you can check out the full webinar featuring Heather Graham (Director Client Service @ EyeSee), Sasa Radojevic (Sr Shopper Insight Manager @ EyeSee), and experienced retailer & Awarded 2022 Top Women in Grocery (TWiG) Raina Rusnak.

              Pioneering HFSS research: Rethink promotion and positioning in store

              Posted on by sandra

              While most of the Western world is currently examining the relationship with HFSS (high fat, sugar, and salt) products, the United Kingdom is the first country to put in place concrete measures to reframe how we access and buy prepackaged goods belonging to the ‘less healthy’ categories.

              Currently, the measures cover location; no HFSS food and beverage can be placed in high footfall areas of an affected store, like checkouts, end-of-aisle units, store entrances, and designated queueing areas. By the end of this year, restrictions on promotions will come into force, while advertising regulations are scheduled for early 2024. It is only a matter of time before other countries follow suit; the impact on industry will be monumental.

              To help producers and retailers understand how to adjust, EyeSee’s just wrapped up a behavioral study looking into how product windows and different placements impact visibility and, ultimately, sales.

              We’ve tested two locations of the product window: at the end of the aisle (Cell 3) and a central position (Cell 2); and compared those to a situation with no product windows (Cell 1), where respondents were merely shopping snacks, chocolate, coffee, and tissues each in their respective main aisles.

              Here’s the breakdown of our main findings.

              One thing is certain – shelf windows do attract attention

              In our study, we set out to test the impact of product windows to help guide the options retailers and brands should consider  when rethinking location and promotions in physical stores. The tests included two common snacking categories – chocolate and salty snacks, as well as two adjacent categories not directly related to snacking – coffee and tissues.

              All respondents visited the four categories and were given a task to shop for a small gathering at home with some friends; following this, they were exposed to virtual stores and shelves.

              Using webcam-based eye tracking, we’ve found that in the tissues aisle, almost all respondents noticed the window regardless of the product positioning. It is prominent and stands out presumably due to the unusual placement of snacks and a surprise factor.

              In the coffee shelf, almost all see the more central window, but not all look at the window at the end. While in both host categories, the window in the middle also gets longer attention.

              Unexpected and non-food categories drive purchases

              Visibility correlates with purchase; what is not seen is effectively not bought. Our virtual shopping tests concluded that respondents are also willing to go beyond visibility and buy from the window.

              Overall, the middle window attracts more buyers and penetration, as well as purchases. Whether we look at total value or value per buyer, the middle window is more effective.

              Interestingly, the window in the non-food category has a larger share of shoppers. Potentially more shoppers buy where the placement is less expected.

              Positive effects on total category sales

              As it is now, retailers have most of the windows within their own aisle (Pringles in crisps, Belvita or Oreo in biscuits); the ‘TESCO Clubcard’ have a mix of snacking products in snacking aisles e.g. biscuit aisle or in the chocolate aisle; Waitrose offers are a mix of products outside aisles with snacks inside the window.

              However, our data shows that combining the sales from the main aisle of chocolate with the sales from the window helps the category. The window outside the snack or biscuit category goes some way to compensate for the main aisle in terms of visibility and sales. Even without promotions or special prices; simply by being there.

              More challenging news is that the host categories, in this case coffee and paper products, experience a decline in sales when attention is redirected to the window and having less facings.

              Conclusion

              The shopping environment plays an important part in the way products are marketed to us, with simple factors such as the location within stores significantly affecting what we buy. Removing out of aisle promotion locations puts pressure on reframing how shoppers shop and get engaged.

              Request the full study breakdown at [email protected]! If you are interested in more shopper case studies, check out our latest one on best pricing adjustment tactics for inflation.

                Fresh pricing study: How do we shop for high and low frequency categories?

                Posted on by sandra

                EyeSee has recently published the second wave of the pricing tracker in the US to look into how consumer behavior shifts when exposed to different volume and pricing adjustment scenarios.

                This study had two separate exercises (virtual shopping and conjoint) and independent samples going through these exercises to obtain data for four categories.

                Like last year, we tested two lower frequency categories (body wash and dishwashing) and two higher frequency categories (bacon and chips). And within these exercises, consumers faced different scenarios.

                In virtual shopping, the participants looked at various scenarios, among them:

                • a shelf with current pack sizes and current pricing
                • increased prices on 1/3 of the shelf and the entire shelf
                • decreased pack size on 1/3 of the shelf and the entire shelf.

                In the conjoint exercise, the respondents were faced with different price increase scenarios, as seen on the visual below – from only 5% all the way to a 25% increase, as well as a decrease in pack size.

                The goal of this study was to look at two possible strategies that brands can opt for – shrinking pack sizes or increasing prices – and how do consumers react to both in the current inflation.

                Let’s dive deeper into analyzed categories.

                Original variants of chips and small bags remain stable

                In this study, we looked at multiple chips variants such as original and flavored, but also big and small packs.

                Regarding the size of a pack, a shrinking approach does matter and gets noticed – especially so for smaller volume variants. For example, if someone traditionally buys a family size pack, if the volume gets reduced by five chips, it won’t affect them and they are not going to notice that. But if we’re talking about a smaller size pack, even the smaller reduction in volume has a big impact. However, if volume stays the same, and we look at our data, on size choices, we see that people tend to forego big packs at a big price increase, and tend to replace it with a smaller bag of chips.

                Also, what we noticed right away is that no matter the price increase, the original flavor pretty much remains intact. On the other hand, the same cannot be said for flavored variants that start to take a hit somewhere around a 15% price increase. We can assume that people won’t give up on chips as a basic small pleasure, but special flavors are seen as a luxury in a time when you fall back to your basics.

                A reactive shift to smaller packs in the body wash category

                When it comes to lower-frequency products, such as body wash, the main data cut we had a chance to investigate is between big packs with 30 oz and more, and small packs with less than 18 oz. And what we noticed is a distinct shift in buying from bigger to smaller packs – notice how white bars continue to decrease with every next price increase scenario while it is vice versa for smaller packs.

                This shows us that consumers are very sensitive to the current out-of-pocket situation, trying to spend as little as they can, and they often resort to stockpiling as one of the options. As we saw in another segment of the study, people are most likely to stockpile several products such as – canned products, toilet paper, dry pasta and pasta sauces, bottled water, sugar and salt.

                When does private label win in the dishwashing category?

                At a macro level for dish washing products, we see that the machine-washing subcategory stays stable, similarly to hand washing products. What’s most interesting in this category is the comparison between market leaders and private label brands. The market leader liquid product, although not significant, takes a slight hit at the 5% increase and then stabilizes throughout the other price scenarios. Pods on the other hand, take a more notable hit, especially with a 25% increase scenario.

                We assume that people go in part to private label pods, which nearly doubles as a choice over different increase scenarios.  We know that approximately one quarter of consumers in the US are reporting that they are purchasing private label brands more often now than they were one year ago, to save money and, and to try to make their budget stretch a little bit further. This is especially true regarding products which are not personal care or indulgence. In our study, we’ve seen that the dish wash is the subcategory where we saw PL benefiting the most – so in these more practical categories, brand loyalty seems to be the least strong.

                Has bacon reached a price increase threshold?

                As we all know, in the US bacon plays a larger-than-life role in many consumers’ lives. It’s more than just food to them, it’s a symbol, a feeling, and an experience. So, we were intrigued to see what happened in this category.

                From the conjoint exercise, we noticed that the biggest packaging options (16 oz and larger) suffer with each price increases how the big bags so suffer to a certain extent. All the while smaller packs see growth with every price increase scenario at the expense of those bigger packs.

                When it comes to this category, we should also consider the historical per-pound prices. In 2021 and 2022, retail bacon prices have skyrocketed and reached the highest annual average price on record. We must keep that in mind, because those, already increased prices were used as the ‘current’ in our research. Each further price change can be a deal breaker and that’s why we can say that we have probably reached a threshold for acceptable prices of bacon for the average consumer. Customers will just walk away from the category if we increase the price too much more.

                Interested in more findings from our latest study? Notice the full webinar featuring Heather Graham (Director Client Service @ EyeSee), Sasa Radojevic (Sr Shopper Insight Manager @ EyeSee), and experienced retailer & Awarded 2022 Top Women in Grocery (TWiG) Raina Rusnak.

                  New pricing study: Reduce pack volume or increase price?

                  Posted on by sandra

                  By Saša Radojević, Sr Shopper Insights manager at EyeSee

                  With almost 2/3 of households in the US living paycheck to paycheck, the additional pressure of inflation pushes consumers to prioritize, rethink and, in some cases, give up on purchases.

                  EyeSee has just wrapped up the second wave of the pricing tracker in the US to identify how consumer behavior is shifting when exposed to different volume and pricing adjustment scenarios.

                  The study included two separate samples to gain an in-depth insight into consumer confidence. One group (a sample of 3200 individuals) was exposed to virtual shopping exercises, while the other sample completed a conjoint exercise (a sample of 1650 individuals). Both surveys aimed to identify new patterns of behavior and understand shoppers’ perspectives on the current situation.

                  To understand the retailer’s perspective on the matter, check out our latest Quirk’s webinar.

                  So, what buying behaviors have changed over the last year?

                  In the first wave of the tracker that was conducted mid last year, we asked respondents to forecast how they plan to buy in the upcoming period of six months.

                  In most categories, such as cosmetics, entertainment, traveling, finance and insurance, and other long-term investments, the behavior and predictions align well. Surprisingly, this time last year, over a third of respondents claimed that they will be stockpiling food and other items over the next six months, yet fewer did so.

                  Eating out has been affected more than consumers predicted a year ago, as well as the overall purchases of food and beverages. This makes sense when paired with the stockpiling trend among over 28% of respondents, which indicates they are very much looking to cover the basics and stick to essentials.

                  When it comes to predictions for low frequency categories like household essentials, clothes, and sports equipment, as well as subscriptions and memberships – these have all been affected to a greater extent than predicted a year ago.

                  Is shrinkflation your best move?

                  Same as last year, we investigated two lower frequency categories (body wash and dishwashing) and two higher frequency categories (bacon and chips). And within these exercises, consumers faced different scenarios.

                  • In virtual shopping, the range of choices included the current pack price and size, increased prices of one third of the shelf and then the entire shelf, but also a decreased pack size of 1/3 of the shelf and then also the entire shelf.
                  • And in conjoint, they were primarily faced with different price increase scenarios ranging from 5% increase all the way to 25% increase, but also a size reduction of its tax by 20%.

                  When looking at conjoint, volume decrease scenarios have low impact on respondents’ behavior. However, virtual shopping data tells a different story. Specifically, if we zoom in on the price sensitive segment, we can see that shoppers are extremely sensitive to any type of shrinkflation, especially in the body wash category.

                  Chips and dish wash sales are also affected, but primarily when only 1/3 of the packs on the shelf are reduced in size.

                  Thou shalt not pass price thresholds

                  Out of four categories we looked at, Bacon is the one impacted the most particularly when the whole category takes a price increase. In our research, we are using today’s pack sizes and prices, however it is important to consider the historical record of the bacon category fluctuation over the last couple of decades to fully understand the shift.

                  Last year, our study showed little to no impact, presumably because the prices skyrocketed in 2021 and 2022; the consumers were desensitized. However, this year in the scenario where the price was increased by another 25% on top of the already high price, data shows that the consumers walked away from the category at this point.

                  For each of the categories, there are thresholds – and for bacon, we are nearly there.

                  Want to know more? Check out the full webinar featuring Heather Graham (Director Client Service @ EyeSee), Sasa Radojevic (Sr Shopper Insight Manager @ EyeSee), and experienced retailer & Awarded 2022 Top Women in Grocery (TWiG) Raina Rusnak.

                    Planograms: Recession-proof your shelves

                    Posted on by sandra

                    Unpredictable times require highly predictive insights as smart shopper optimization can make the difference between winners and losers of inflation. In our latest podcast episode, we sat down with top minds to explore in-store strategies. EyeSee’s seasoned researchers Milica Kovac and Ana Golubovic were joined by Shalini Sahi, Americas Insights Lead for pladis Global to bust some of the most persistent planogram myths.

                    Is it time for category management 2.0?

                    Internal brand and category management systems often pre-decide to put certain products in specific category segments and shelves. But is that a solid practice? EyeSee’s shopper studies stress how much it is important to localize the category story but also certain brand product placements within each of our markets. Product affiliation to a certain segment is conditioned by consumer perception, consumption habits and even cultural differences between markets.

                    That localization piece of the consumer understanding is very important, and the understanding is obviously driven by consumption, and it is consumption-based. The insights industry makes a lot of assumptions around this topic, but it is highly important to know precisely, claims Shalini.

                    Delisting products – is it worth it?

                    Many brands are reducing their portfolios under post-pandemic and inflationary pressures. However, there are several other strategies to consider. During times like these, producers need to make sure that they are optimizing to deliver the best possible product with the right value to the consumer.

                    Winners will go beyond just cutting down; brands need to rethink and restructure their offers. While the first instinct is to reduce or freeze the innovation budgets, new approaches in promotion, packaging and actual product might be the best tactic to adapt to the new situation and end the crisis in the best possible place.

                    Does brand blocking always work?

                    Brand blocking is one of those well-established tactics in product assortment which both retailers and consumer brands consider a safe choice. Of course, in many cases this approach works favourably for all parties – brands and categories and, most importantly, shoppers – because it offers a much needed simplicity in finding the right option by matching the product sizes, shapes, colors on the shelf. However, what can be seen across categories, especially those with lots of product offerings, huge brand blocks lead to weaker navigation and even trade down because that type of assortment prevents consumers to compare between brands. Instead it is priming them to compare within one brand and then look for the cheaper option, more volume and eventually trade down.

                    Now more than ever, it is crucial to stay close to the consumers and rely on predictive insights to navigate your inflation adjustment. If you want to explore this topic in more detail, listen to the full discussion.

                      Thanks for your interest!

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