IRI Trip Typology Study Reveals New Insights on How Americans Shop.

Mix of Large Versus Small Shopping Trips Varies by Type of Product and Type of Store

CHICAGO -- The average American household takes one less shopping trip per month today versus five years ago, creating a big concern for both retailers and manufacturers, who now have fewer opportunities to "get the sale." In order for retailers and manufacturers to grow trip frequency and market basket size, they must understand the primary objectives behind various shopping "trip missions." The latest Times & Trends report, " Shopping Trip Missions: A New Avenue for Growth," from Information Resources, Inc. (IRI), the leading global provider of enterprise market solutions for the CPG, retail and healthcare industries, reveals that trip missions have a dramatic impact on where consumers shop, the path they take through the store, price and promotional sensitivity and what they ultimately buy.

"Marketers are recognizing the need to take consumer understanding one step further," explains IRI Global Chief Marketing Officer Andrew A. Salzman. "They should define their "target" based not only on consumer segments but also on types of shopping trips, such as when a consumer is planning ahead and making a large stock-up trip or running out for a few items they need right now. This IRI report is intended to help CPG manufacturers and retailers see the potential of trip mission analysis and identify high-level opportunities, so that they can act on these insights with speed and confidence and win at the shelf."

Trip Mission Types

The average number of shopping trips to all outlets has decreased from about 15 trips per month in 2001 to 14 trips per month today. Protecting and growing the share of consumer trips for retailers and share of category sales for manufacturers now requires new approaches to marketing and merchandising based on an enhanced understanding of how consumers shop.

* Quick Trips to fill an immediate need typically have one-to-three items in the basket totaling around $10. Quick trips account for about half of all shopping trips. While these trips generate just one-fifth of total CPG dollar sales, they are critical because they provide the most frequent opportunities to drive incremental purchases. Marketers can consider "quick trip" solution centers that are strategically placed in the front of the store and the placement of secondary displays on the shopper's path between the door and the most common quick-trip categories, such as milk and beer, to build quick trip baskets.

* Special Purpose trips are non-routine trips for a narrow set of products, but with a significantly higher basket ring than quick trips. This type of trip most often involves a specialty store, such as hardware, liquor, pet or mass merchandiser, and account for nearly one-fifth of CPG sales. While there is usually one main type of product purchased, there is opportunity to sell additional products related to this main mission.

* Fill-In trips span a broader range of categories than special purpose or quick trips, but are not as broad as pantry stocking trips. These trips account for one-fifth of CPG sales, and these consumers are likely to be more price and deal sensitive. Manufacturers and retailers should use competitive pricing and promotion and clear store signage to drive increases in fill-in basket size.

* Pantry Stocking trips represent about 15 percent of shopping trips, but generate roughly 40 percent of CPG sales. A high proportion of industry marketing and merchandising initiatives are focused against pantry stocking trips. Wide assortments with various package sizes along with competitive pricing on frequently purchased items are imperatives to capture and retain pantry stocking trips.

Implications of Trip Type Mix

Trip mix will vary by channel, retailer, and even by individual stores within a retailer, as shopper demographics are shown to influence trip mix. For example, in a comparison of various life-stage and income segments, middle-income urban singles and couples make far more quick trips than any other type of shopping trip, and quick trips are a higher percentage of their total trips relative to other consumer segments. The report suggests that retailers should use their store trade area demographics and their own checkout scanner transaction logs to refine merchandising strategies to address specific types of shopping trips as well as specific types of consumers. Retailers should collaborate with manufacturers on their trip-targeted merchandising strategies, as some products show strong skews toward quick trips versus pantry stocking trips.

Trip Missions by Retail Channel

While pantry stocking trips have traditionally been the mainstay of supermarkets, other trip types will likely offer stronger growth potential. For example, adding one $2 item per quick trip would drive an incremental $6 billion in supermarket sales. Further, quick trips may deliver a higher margin than pantry stocking trips, because quick-trip shoppers are more likely to say they are "in a hurry on this trip" and less likely to pay attention to prices, according to a September 2006 IRI survey. Manufacturers of products with a high mix of quick-trip and fill-in purchases should partner with grocers in creating new trip growth strategies.

Nearly three-fourths of drug store trips are quick trips. Consumers seem to use drug stores for quick trips in part because of their convenient locations and pharmacy services, but also because drug stores don't carry the variety of foods and perishables necessary for pantry stocking. The IRI survey showed that about one-fourth of drug store quick trips were for the main purpose of picking up a prescription, with a similar percentage being for the main purpose of picking up over-the-counter healthcare products. Given that nearly half of drug stores sales are from quick trips, drug stores must continually develop innovative store layouts, merchandising practices and advertising, as competition for quick trips will intensify.

Supercenters' broad product assortment across food and non-food categories provides the channel an advantageous position to capture special purpose trips. Manufacturers of products that are frequently and disproportionately purchased on special purpose trips, such as auto care, personal hygiene, cleaning products, and snack foods, should explore opportunities with supercenters to build trip size.

About the Report

Findings presented in Times & Trends: "Shopping Trip Missions: A New Avenue for Growth," are based upon an assessment of consumer purchase behavior across six million trips captured over a 52 week period utilizing IRI Shopper Insights[TM], Acxiom Personicx[R] and IRI Consumer Network[TM]. IRI Trip Typology[TM] Reports offer additional insight into trip mission-based growth opportunities for a specific brand, category or retailer. For an in-depth view of the full Times & Trends report, click on http://us.infores.com/page/news/times_and_trends.

About Information Resources, Inc.

Information Resources, Inc. (IRI) is the world's leading provider of enterprise market information solutions and services for the consumer packaged goods (CPG), retail, and healthcare industries, empowering its clients to grow their business profitably in a complex marketplace. Driving the transformation of the industries it serves, only IRI provides a unique combination of real-time market content, advanced analytics, enterprise performance management software, and professional services. The company's portfolio of services, solutions, and technology enable leading retailers and their suppliers around the globe to see what they are missing, act faster with greater confidence and win at the shelf. Ninety-five percent of the FORTUNE Global 500 in CPG and retail leverage IRI to power their business. For more information, visit http://us.infores.com.