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Nielsen: retailers and suppliers need to work together to offer overall value


Nielsen: retailers and suppliers need to work together to offer overall value


Overall value is proving to be, well, more valuable than low promotional prices, according to new Nielsen research. Topline growth was found not to be affected by low promotional prices (sales) in the current retail market meaning retailers and suppliers need to be more collaborative in order to provide overall value.

The research was presented by Nielsen’s head of retail, Kosta Conomos, at the Efficient Consumer Response Australasia (ECRA) annual conference in Sydney today.

“Just 1% of shoppers believe they are getting better value overall compared to last year – and instead are using promoted products to supplement their shopping basket as a whole,” says Conomos.

“Neither retailers nor suppliers benefit from this behaviour and instead they need to work together to offer overall value for the consumer to differentiate themselves through a combination of national brands and great quality private label goods in a far more targeted manner, as opposed to marketing to the masses. The key retailer battleground is set to become how to deliver more value,” he says.

Low prices was the answer given by just 20% of participants in the research when asked what good value entails. ‘Fresh food and groceries’ was favoured by 30% and 27% want ‘good private label alternatives’. 23% answered with ‘good deals and promotions’.

Nielsen research also shows that 1 in 4 shoppers swapped brands in the past year to buy
what was on sale and 20% say they would switch the store they shop at depending
what was on special that week. However more than half of shoppers who bought products
on deal used promotions to stock-up on what they already buy – and weren’t expanding
their basket overall.

“We support joint industry efforts such as today’s ECRA conference that encourages various players to unite and strategise how to differentiate and improve the overall experience for shoppers – which therefore bolsters the industry as a whole,” adds Conomos.

“Another factor set to have major impacts on the industry is the shifts in purchasing
behaviour, as more people go online to buy brands and do their shopping. Retailers need to understand this new dynamic, and work with suppliers to offer consumers an experience they feel is providing good value both on and offline, as this will allow for greater topline growth.”

The research also cements the importance of the online market with 9 in 10 online Australians (87%) making an online purchase every 6 months and a considerable 16% make an online purchase at least once a week.

“There is no slowing this online movement, and as Australian consumers continue to engage with and uptake multiple digital devices, there is a huge opportunity for retailers and brands to capture the full path-to-purchase of the online shopping experience,” Conomos says.


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