INTRODUCTION

“One-stop-shopping” has clearly become an outdated term: three-quarters of today’s consumers shopped in five or more channels this past year to meet their CPG needs. Multi-channel shopping is now the norm.

Consumers’ drive for convenience and value pricing, coupled with the industry’s increased points of access and aggressive price/promotion strategies, have fueled channel migration for the past decade. The result has been sizable consumer spending shifts across channels – with the dominant flow from grocery and traditional mass merchandisers to supercenters.

IRI’s current analysis of channel migration trends, however, reveals that consumers’ shopping patterns have reached a new turning point, which is creating new opportunities and risks for CPG manufacturers and retailers.


KEY FINDINGS

CPG channel migration has reached a turning point. After years of share loss to supercenters, grocers are now successfully maintaining share of consumer CPG spending. Supercenter share growth is now derived predominantly from traditional mass merchandisers. As detailed throughout this report, however, share shifts vary significantly across departments and categories.
 

“Hotly-contested” cross-channel CPG categories share similar characteristics. High-ticket, stock-up and impulse purchases characterize the CPG categories with the highest levels of cross-channel competition. These categories include candy, coffee, batteries and cold/allergy/sinus tablets, among others.

Private label appears to play a minor role in heavy cross-channel battles. Among a majority of CPG categories with a high degree of channel share fragmentation (i.e., “hotly-contested categories”), private label share is significantly below average. Consumers appear to be looking for deals on national brands as they shop multiple channels within these categories. Healthcare categories are an exception.

Non-food departments have the highest degree of channel fragmentation. No one channel has a dominant share of spending across any of the major non-food departments. Dollar share is particularly widely dispersed across CPG channels within general merchandise, healthcare and beauty/personal care. Increased points of access, aggressive pricing and promotion, and the ability to stock-up or advance-purchase many of these products have all contributed to channel fragmentation among non-foods.

Older Baby Boomers are among the heaviest multi-channel shoppers. Consumers who are “heavy channel migrators” (i.e., allocate no more than 40 percent of CPG spending to any one channel) skew towards smaller households in the older Baby Boomer age brackets. With food and beverages comprising a significantly lower portion of their CPG budget, these consumers appear to shop around to fill their non-food needs.