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1 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Title of Presentation Copyright © 2012 The Nielsen Company. Confidential and proprietary.

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Presentation on theme: "1 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Title of Presentation Copyright © 2012 The Nielsen Company. Confidential and proprietary."— Presentation transcript:

1 1 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Title of Presentation Copyright © 2012 The Nielsen Company. Confidential and proprietary. Whats In Store: Canada Carman Allison Director of Consumer Insights January 2012

2 Understanding African American Consumer Power – February 21 st Digital Shopping: Topline on Online – February 28 th Hispanic Insights – TBD Upcoming Webinars

3 Todays presenter Carman Allison Director of Consumer Insights, Canada Carman Allison serves as Director of Consumer Insights for Nielsen in Canada. Carman is responsible for creating thought leadership reports and delivering client and industry presentations. Carman shares his insights on consumer shopping, buying and media consumption behaviours and attitudes to provide CPG manufacturers and retailers with strategic visions to facilitate brand, category and retail sales growth. Carman is often quoted in the Canadian press on consumer trends including a monthly column in Canadian Grocer. Carman has more than 20 years of experience in the consumer research industry with The Nielsen Company, where he held various account management and analysis roles.

4 2011… A Year of Extremes! Out with the old and in with… the new or more of the same?

5 The voice of the consumer is getting louder

6 Consumer Confidence: Still a Global Concern

7 Global consumer confidence is still struggling to recover to pre-recession levels Source: Nielsen Global Online Consumer Confidence Survey September 2011 Consumer Confidence Index

8 Asia and Latin America Lead Global Confidence 88 AP 97 EU 74 MEA 86 LA 97 NA 79 Source: Nielsen Global Confidence Survey 3Q2011

9 Economic power is shifting 4.3% LATAM 6.5% Asia Pacific 3.8% East Europe 3.5% MEA 1.7% West Europe 2.4% North America Average annual GDP growth rates in emerging markets from 2011 to 2016 is 50% higher than developed markets Source: IMF Sept 2011, World Economic Outlook Report

10 Canadians more optimistic than Americans 88 Canada 97 U.S. 77 NA 79 Source: Nielsen Global Confidence Survey 3Q

11 Top concerns for North American consumers Source: Nielsen Global Confidence Survey, 3Q2011 CANADA ECONOMY DEBT HEALTH U.S. ECONOMY JOB SECURITY DEBT JOB SECURITY FOOD PRICES FUEL PRICES

12 Employment is up Source: Statistics Canada Nielsen Global Confidence Survey 3Q2011- Canada Job Prospects? 54 % Positive -4 points from 2Q2011 – yet so is pessimism about jobs

13 State of personal finances continue to plague Canadians Personal Finances? 40 % Negative +4 points from 2Q2011 Debt plagues all levels of government Canadian consumer debt at an all time high ($100k+ / household) Loans vulnerable to rising interests rates Source: Nielsen Global Confidence Survey 3Q Canada

14 Average Hourly Earnings vs. Consumer Price Index Source: Statistics Canada * % Change vs 2002 Despite the increase in earnings, the cost of goods are increasing at a faster rate Source: Statistics Canada

15 Consumer spending remains flat Good time to buy? 65 % No! +9 points from 2Q % paying off debt 30% put in savings 23% have no spare cash Source: Nielsen Global Confidence Survey 3Q Canada Spare cash… 64% are trying to reduce household expenses The impact…

16 Slow growth in CPG retail sales, driven by modest inflationary gains Source: Nielsen MarketTrack, Canada National All Channels – 52 weeks to December 17, 2011 Total Tracked Sales excluding Fresh Random Weight CPG Inflation

17 Unit consumption flat heading into 2012 Source: Nielsen MarketTrack, Canada National All Channels – 12 weeks to December 17, 2011 Total Tracked Sales excluding Fresh Random Weight

18 Economic Outlook WHATS NEXT?

19 As we turn the corner… 2012 will be unpredictable But one thing is for sure, the consumer will remain cautious

20 Canadas future GDP rate of growth is forecasted to slow – similar to U.S. Source: US: IMF World Economic Outlook, September 2011 Update; TCG Analysis Canada: Scotiabank Group – Global Forecast Update: January 2012 GDP % Growth Canada United States

21 Poll #1 Do you think the recession is over in Canada 1.Yes 2.No 3.Not Sure

22 Is the recession over in Canada? Yes ? Economist Consumer

23 Almost half of Canadians think we are still in a recession % who think we are still in a recession Global Canada U.S. 62 % 92 % 44 %

24 Succeeding in 2012 is about PRECISION

25 KEYS GROWTH TO IN REACH: An increasingly polarized consumer 2.LEVERAGE: Redefinition of value 3.ALIGN: Innovation for long term growth 4.ENGAGE: The connected consumer in ways they trust 5.TARGET: Economically powerful consumer segments

26 Higher income homes, now account for almost half of CPG sales Source:Nielsen Homescan – Canada – 52 wks to October 1, 2011 $70K+ Household Importance and they spend 20% more than average $$$$

27 About Same Better Off Source:Nielsen PanelViews Survey – Canada - May 2011 Worse Off Compared to a year ago are Canadians financially… A greater portion of households with lower incomes are worse off financially than a year ago

28 Consumers are becoming more polarized $ $$$ Driving consumer behaviour and choice Value focused Value vs. Premium Brand Expanded Premium Private Label Discount vs. Conventional Retail Formats

29 Discount retailers continue to gain consumers share of wallet – and expected to grow Discount 38.1% (+5) Conventional 61.9% (-1) Discount Share Projections: 2012:39.2% 2013:41.4% Source:Homescan Grocery Watch, Canada National All Channels 52 Weeks to October 1, 2011 – Grocery Composite

30 You can no longer afford to be middle of the road Source: Nielsen MarketTrack, Grcoery+Drug+Mass – 52 wks to September 24, 2011 Total Tracked Sales excluding Fresh Random Weight Conventional Retailers can no longer be …conventional They need to differentiate themselves more than ever – to get beyond price

31 Premium retailers are alive and well in Canada…and expanding

32 High income households are more likely to shop the store and take advantage of services such as: % of $70k+ Shoppers Who Shopped Source: Nielsen PanelViews – Shopper Opinions Survey – May 2011 – Canada Pt Chg vs All Shoppers Bakery78%+5 Butcher44%+3 Ready to Eat Meals39%+1 Liquor/Wine Stores27%+4 Garden Centre24%+5 Florist23%+5

33 How do I get high income households to spend more? Offer larger sizes Carry quality products Offer free in store samples Build an in-store relationship Think meal solutions Offer value not the lowest price

34 KEYS GROWTH TO IN REACH: An increasingly polarized consumer 2.LEVERAGE: Redefinition of value 3.ALIGN: Innovation for long term growth 4.ENGAGE: The connected consumer in ways they trust 5.TARGET: Economically powerful consumer segments

35 Redefinition of Value: Balance how you connect with consumers on Value & Emotion

36 Value Consumer = PriceValue Consumer = Benefits/Price Value is not about price, its about the balance between price & benefits Mid-Tier Toothpaste Avg Price +80% higher Dollar Sales 13% Unit Sales 11% Dollar Sales-8% Unit Sales -6% Super Premium Toothpaste Source: Nielsen MarketTrack, Canada National GB+DR+MM, 52 weeks ending November 22, 2011

37 Dollar Sales +13% Unit Sales -4% Avg Price 131% higher Dollar Sales+4% Unit Sales 0% Mainstream Coffee Premium Coffee Pod Coffee Avg Price 205% higher Dollar Sales+140% Unit Sales +99% Source: Nielsen MarketTrack, Caanda National GB+DR+MM, 52 weeks ending November 22, 2011 Value Consumer = PriceValue Consumer = Benefits/Price Value is not about price, its about the balance between price & benefits

38 Value Consumer = Price Avg Price +71% higher Dollar Sales827% Unit Sales 1,336% Dollar Sales-1% Unit Sales 0% Non Greek Yogurt Total Greek Yogurt Source: Nielsen MarketTrack, National GB+DR+MM, 52 weeks ending November 22, 2011 Value Consumer = Benefits/Price Value is not about price, its about the balance between price & benefits

39 Product Variety and Solution Motivators Source: Nielsen, Global Online Survey, Q Canada

40 Poll #2 What do you do when the product you want is not in stock? 1.Purchase another size or flavour 2.Purchase another brand 3.Postpone purchase 4.Leave the store and buy it elsewhere

41 The risk of out of stocks 34% - Postpone purchase 26% - Leave the store and buy it elsewhere 23% - Purchase another brand 12% - Purchase another size or flavour 60% of the time you lose the sale! Source: Nielsen PanelViews – Shopper Opinions Survey – May 2011 – Canada

42 KEYS GROWTH TO IN REACH: An increasingly polarized consumer 2.LEVERAGE: Redefinition of value 3.ALIGN: Innovation for long term growth 4.ENGAGE: The connected consumer in ways they trust 5.TARGET: Economically powerful consumer segments

43 New items are a key driver of sales $62.1 $ Existing Items New Items 5.6% ($3.5) 5.9% ($3.7) Billions $ 94.4% ($58.6) 94.1% ($58.9) Source: Nielsen MarketTrack, National All Channels – 52 wks calendar year # of New Items k k

44 The reality is, the majority of new items fail Nielsen MarketTrack tracked sales: Period ending November 25, % Are No Longer Available 70% Are Still Active in 23% > $50k 47% < $50k After 1 year almost 80% of new items are gone or vulnerable to delist 2 nd year… After a year…

45 Innovation needs to be about Quality Quantity NOT

46 Previous notion (More is Better) More Stuff = More Shelf Visibility The Retail reality today Years of sku proliferation Private Label increasing share of shelf Less shelf space available for new listings More Stuff = More De-listings of the manufacturers own skus Quality, not Quantity is also less at risk to the One In - One Out challenge

47 More Stuff just spreads volume across more skus – putting them at risk Volume Per sku Failure Ready Outstanding Risky Delisting Risk Fewer Bigger More Stuff

48 KEYS GROWTH TO IN REACH: An increasingly polarized consumer 2.LEVERAGE: Redefinition of value 3.ALIGN: Innovation for long term growth 4.ENGAGE: The connected consumer in ways they trust 5.TARGET: Economically powerful consumer segments

49 How we connect with consumers is evolving

50 New and traditional ways 3.5 Hours 74% Internet penetration DEVELOPED 22 % of Canadians own TVs with internet connection + Source: Nielsen Global Survey Q3 2011

51 Social Media has powerful reach 60 % Of Canadians visit social media sites 26 % Spend 6+ hours weekly Source: June 2011 Nielsen PanelViews Media Survey - Individual responses Time spent – 2010 survey

52 For our industry…What are consumers currently doing on social media? Source: 2011 Nielsen PanelViews Media Survey - Individual responses Focused on information sharing and getting value

53 For our industry…What are consumers willing to do on social media? Source: 2011 Nielsen PanelViews Media Survey - Individual responses Consumers are willing to get more involved

54 KEYS GROWTH TO IN REACH: An increasingly polarized consumer 2.LEVERAGE: Redefinition of value 3.ALIGN: Innovation for long term growth 4.ENGAGE: The connected consumer in ways they trust 5.TARGET: Economically powerful consumer segments

55 One consumer group has the… clout control +

56 By 2030, 65+ will account for 25% of Canadas population % of the population % 25 % 18 % Source: Statistics Canada

57 By 2021, close to 70% of Canadas wealth will belong to those over the age of 55 % Estimated based on median net worth from Statistics Canada

58 Boomers now capture 46% of CPG sales …and growing Source: Nielsen Homescan – All Channels - 52 weeks to July 2, 2011 Trips/HH $ Per Trip$48$48$43$38$30 % of CPG Sales

59 You need to adjust to accommodate different shopping and product preferences Its an age AND its an attitude This Not this

60 Know the difference between age groups and generations Seniors TodaySeniors Tomorrow More traditional Less technological savvy Conservative values Conservative tastes Requirements, conditions & ailments related to age Less traditional More technological savvy Less conservative values Willing to experiment Requirements, conditions & ailments related to age Same needs Different People Patient Consumer

61 Traditional health care modelEmerging health care model PATIENT Passive or reactive Cedes authority to doctor and health care system May complain but accepts treatments, outcomes Rarely seeks alternatives CONSUMER Proactive Respects doctor but sees self as director of own health Unwilling to accept bad outcomes Actively seeks alternatives Presentation to Nielsen Canada David Cravit, VP, ZoomerMedia Ltd. Changing the health care model

62 Dont bank on consumer loyalty for growth. Todays seniors may be loyal but tomorrows less so. Key categories and segments are posed for growth: Health and wellness, portion control, smaller sizes etc. Dont underestimate the use of new technology in reaching seniors Appeal to their needs and lifestyle, not life-stage Implications for the aging consumer

63 The power has shifted Consumer Brands Retailers

64 Succeeding in 2012 is about PRECISION

65 Q&A Thank you for attending If you have follow-up questions or want more information, please contact your Nielsen Professional Services Representative. If you are not a current Nielsen client, please contact us at: Phone: OR if you have any questions regarding the content of this webinar, you can also contact: Carman Allison, For insights specific to the U.S. market contact: James Russo, C


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