Price, Promotion & Merchandising: The Reinvention of CPG Marketing

JULY 2009
EXECUTIVE OVERVIEW

IRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. This issue of Times & Trends provides insights into current and emerging CPG marketing trends being employed by an industry seeking to adapt to the new world in shopping behavior.

Introduction

During 2008, consumers faced unstable financial markets, major workforce reductions, crunched credit markets, and rising gas and food prices.

Recent headlines have been brighter, and there are signs that the economy is improving. The recession is not over, however, and consumers remain firmly entrenched in savings mode.

Though the consumer packaged goods industry has faced struggles in this difficult economy, growth opportunities have emerged from changing consumer rituals.

CPG prices have remained steadfastly in the spotlight over the course of the recession. Commodity and fuel prices skyrocketed in 2008, sending CPG prices in an upward direction and placing increased pressure of consumers’ already strained wallets. While commodity and fuel prices have eased, CPG prices remain well above historic norms. Consumers are looking for price relief, and CPG marketers are looking for ways to honor this demand.

This year will be an exciting one for CPG marketers.

This issue of Times & Trends provides insights into current and emerging CPG marketing trends being employed by an industry seeking to adapt to a new world in shopping behavior.

Select Findings

CPG prices increased 5.4% over the past year, a rate that is nearly one point faster versus the prior year, when prices increased an average 4.7%. Price increases were significantly higher across a range of key CPG categories, including several key staple categories. Though prices have moderated, a majority of shoppers indicate that higher-than-normal prices have impacted their financial situation; planning, trading down and sale shopping have become an integral part of the consumer shopping experience.

Select chart to enlarge.

All of the top categories where merchandising activity is highest are largely discretionary in nature. Merchandising is being heavily leveraged to drive purchase behavior across discretionary categories and to showcase innovation across key health and beauty categories. With difficult economic conditions predicted to persist throughout this year and into next year, merchandising activity in these areas will likely remain elevated.

See the complete report in the "Price, Promotion & Merchandising: The Reinvention of CPG Marketing" pdf.