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How to find new shoppers

The ECCT's Marketing Club hosted a lunch on the topic "Finding new shoppers - How brands grow in competitive and dynamic times" with guest speaker Marcy Kou, CEO of Kantar Worldpanel Asia. At the event the speaker shared some insights on global and Taiwanese consumer market trends drawn from Kantar Worldpanel’s annual Brand Footprint Report. For six consecutive years, the report has been the leading guide for global fast-moving consumer goods (FMCG) brands to the trends affecting the FMCG landscape, the global and local factors that have created challenges for manufacturers, and the opportunities for growth. The report is based on research of a billion households in 43 countries across five continents, covering 73% of the global population and 75% of global GDP. As part of the study, Kantar Worldpanel tracks more than 18,000 brands across beverages, food, dairy, health and beauty and homecare sectors.

According to the speaker, the FMCG landscape has been challenging over the past two years. Those brands that have succeeded in posting growth have done so by pulling on the “five levers of growth” to win over extra buyers.

Consumer buying habits have been driven in recent years by the desire for health and safety, happiness and convenience. For example, the success of a brand of sparkling water and certain snack products has been attributed to the brands’ ability to associate its products with a feeling of happiness. Meanwhile, certain brands of dairy and beauty products have succeeded in appealing to consumers’ desire for healthy products. Some of these products have been marketed as overcoming adverse circumstances. For example, some beauty products have been marketed as helping to alleviate the effects of pollution while some drinks are marketed as hangover cures.

Another noticeable trend is that consumers are willing to pay a premium for convenience. This explains the success of products such as baby pants (which offer a convenient option to parents of infants) and certain brands of breakfast cereals and frozen food.

In terms of the trend towards online sales, while online FMCG sales are rising in Taiwan, they are still dwarfed by sales from traditional (bricks-and mortar) stores in Taiwan.

Kou singled out PX Mart for its success in changing its image to appeal to young consumers, thereby consolidating its already dominant market share of Taiwan’s supermarket sector. Meanwhile, Costco has maintained growth through promotions of “hot items”. While the store has ventured into online sales, it has been careful to make sure that the online business is complimentary rather than cannibalising to its traditional stores. Kou also mentioned the way that Carrefour and other stores are finding innovative ways to attract customers by offering additional products and services, such as hot food and play areas for kids.

The five levers for growth are: Finding new needs, more categories, more presence, more targets and more moments. She noted that 11,000 new products were launched in 2017, the equivalent of 30 per day. However, not all of them were successful in increasing overall sales. She cautioned that products that are just extensions of existing products could actually be a waste of money if they cannibalise the sales of existing products.

During the Q&A session, Kou noted that retailers are starting to pay more attention to the potential room for growth in sales to senior citizens, given that many seniors have more disposable income than young people and are willing to pay a premium for products that meet their needs.

On a question as to how brands should split advertising budgets between traditional and online media, she said that traditional media still has a much greater reach and can be used effectively. However, she recommended finding the optimal level (in terms of frequency and timing) of advertising, rather than overspending.