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WHAT'S NEXT? HOW BRANDS AND RETAILERS MUST ADAPT TO THE "NEW NORMAL" OF THE GROCERY BUSINESS April 9, 2020
WHAT'S NEXT?
HOW BRANDS AND
RETAILERS MUST ADAPT
TO THE "NEW NORMAL" OF
THE GROCERY BUSINESS
April 9, 2020
3Agenda
● Inmar & Speaker Introductions
● State of Affairs
● COVID-19’s Effect on the State of
Grocery Shopping
○ Impact on shopper behavior
○ Impact on consumer dining
○ Impact on purchasing behavior
● What’s Next?
○ How CPGs and Retailers can
prepare for the “New Normal”
4
MEET YOUR PRESENTERS
Jim HertelSenior Vice President, Client
Development Analytics
Irving TurnerVice President, Analytics
5
We are a data and tech-enabled
services company. We turn insights
into actions to help brands, retailers
and healthcare companies do more,
save more, connect more and
earn more…
all in the face of changing markets
and consumer behaviors.
$120 BILLION
IN COMMERCE
FOUNDED 1980
PRIVATELY HELD
4,500 EMPLOYEES
47 OFFICES
90% OF CPGS IN U.S.
40K RETAIL LOCATIONS
50K+ PHARMACIES
90% OF PHARMA MANUFACTURERS
95% OF PHARMACY
460M PRODUCT
RETURNS ANNUALLY
IN THE NEWS
6
Boom in analysis and speculation on the growth and effect of COVID-19
7
TIMELINE OF BUSINESS ENVIRONMENT CHANGES
Shoppers begin
social distancing
SHELTER
IN PLACERestaurants, bars
and other social
businesses close
UNEMPLOYMENT
Panic-induced
stock-piling leads
to out of stocks
OUT OF
STOCKS
Lift in financial
optimism
STIMULUS BILL
DOW PLUNGES 2,300 POINTS:
STOCKS IN MELTDOWN AS
PANIC SELLING CONTINUES
THIS MEANS AT LEAST 311 MILLION PEOPLE IN
AT LEAST 41 STATES, THREE COUNTIES, EIGHT
CITIES, THE DISTRICT OF COLUMBIA AND PUERTO
RICO ARE BEING URGED TO STAY AT HOME.
SENATE APPROVES
ROUGHLY $2 TRILLION
IN CORONAVIRUS RELIEF
OUT-OF-STOCKS SURGE AT AMAZON
AMID PANICKED SHOPPING
THURSDAY’S UNEMPLOYMENT CLAIMS
COULD MATCH LAST WEEK’S 6.6
MILLION
Stock Market falls
amid fears of how
COVID-19 will
affect the economy
STOCK
MARKET
WSJ SURVEY: CORONAVIRUS TO
CAUSE DEEP U.S. CONTRACTION,
13% UNEMPLOYMENT
EFFECTS ON
SHOPPER
BEHAVIOR
SHELTER-IN-PLACE ORDERS AND OUT-OF-
STOCKS LEAD SHOPPERS TO LEAN ON E-
COMMERCE AND MOBILE APPS
9
Online food sales surged 183% between
March 1 and 25, vs. the same period last year.**
31% of U.S. households have used an online
grocery delivery or pickup service during the
past month compared to 13% in August of 2019.***
37% of shoppers expect their frequency of
purchasing groceries online to increase over the
next 3 months (55% expect it to stay the same)*
SOURCES:
*Inmar Intelligence March 2020 Shopper Survey
**eMarketer April 5, 2020 Article
***brick meets click, The Lookout March 30, 2020
41% of in-store shoppers downloaded and/or used
store mobile app (vs 22% in Q1 2019)*
LIMITED IN-STORE TRIPS
WILL REQUIRE BRANDS
TO ENGAGE DIGITALLY
● Dollar % Change vs. Year Average
for Total e-Commerce was 75%*
● 362% Increase in Shoppers
Discussing the Option of Grocery
Delivery and Pick-up**
● By 2022, 30% of all consumable
purchases will be auto-replenished
online***
10
SOURCES: *IRI eMarket Insights Model
**Inmar PrescriptiveIQ March vs. February
***Kantar Retail IQ; 2020 retailing briefing guide:
Readjusting planning for the COVID-19 seismic shift. March 26 2020
EFFECTS ON
SHOPPER
DINING
#FLATTENTHECURVE INCREASES
DELIVERY AND DEMAND FOR
CONVENIENCE
12
SOURCE: PlaceIQ Social Distance Tracker, March 31, 2020
SOURCE: Inmar Social Listening Analysis
13
GROCERY DELIVERY SEES GROWTH IN INTEREST
SOURCE: Inmar Social Listening Analysis
EFFECTS ON
PURCHASING
BEHAVIOR
15
OUT-OF-STOCKS &
CATEGORY GROWTHNY Case Study: Categories Being
Affected & Out-of-Stocks
Average Store Blast Week
Shopping/ 8-Chain Composite(Index vs Base week: w/o 1/26/20)
Grew share of
Total Store $
High Out-of-
Stocks
Lost share of
Total Store $
Low
Out-of-Stocks
Across 950
Inmar-defined
sub-categories
Frozen Meat
Cold & Flu
Remedies
Premium Eggs
Canned Tuna
All Beef Hot Dogs
Pasta
Pasta Sauce
Ground Beef
Toilet Tissue
CSD Multi-Pack
Cans
Potato Chips
Multi-Pack Water
Tangerines
Blackberries
Green Grapes
Blueberries
Sushi Bar
Hot Entrees
Butter Sticks
Mac and Cheese
Blast Impact in NY State Landed Differently Across the Store
Value in Blast
Week
INDEX to w/o
1/26/20
Avg. Transactions 20,955 108
Avg. Dollars $1,218,572 150
Avg. HH 11,143 102
Avg. Basket Total $58.04 139
Avg. UPCs 25,387 105
SOURCE: Inmar syndicated subcategories; Inmar 8-chain food retailer panel
16
OUT-OF-STOCKS & CATEGORY GROWTHNY Case Study: Categories Being Affected & Out-of-Stocks
Shoppers Tried to Stock Their Cabinets
Toilet Tissue (Bath Tissue)
- Lost sales: -21%
- OOS: Extreme
- HHDs buying: +2%
- Active UPCs: -69%
- Panic level: High
Analgesics
- Grew sales: +62%
- OOS: Moderate
- HHDs buying: +104%
- Active UPCs: +37%
- Panic level: Low
Hot Entrees
- Lost sales: -70%
- OOS: Non-existent
- HHDs buying: -62%
- Active UPCs: +10%
- Panic level: None
Pasta
- Grew sales: +156%
- OOS: Some
- HHDs buying: +108%
- Active UPCs: +25%
- Panic level: Moderate
SOURCE: Inmar syndicated subcategories; Inmar 8-chain food retailer panel
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% Increase
New Shoppers
to Category
% New
Category
Buyers
210% 26%
% Increase
New Shoppers
to Category
% New
Category
Buyers
131% 25%
% Increase
New Shoppers
to Category
% New
Category
Buyers
163% 22%
OUT-OF-STOCKS & CATEGORY GROWTHNY Case Study: Categories Being Affected & Out-of-Stocks
SOURCE: Inmar syndicated subcategories; Inmar 8-chain food retailer panel
Deodorant Mac and Cheese Cough and Cold
OUT-OF-STOCKS WEEKLY TRACKER
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WEEK ENDING
CATEGORY MARCH 7 MARCH 14 MARCH 21 MARCH 28 APRIL 4
Bagels
Baking or Breading Products
English Muffins or Biscuits
Flatbreads
French or Italian
Hotdog and Hamburger Buns
Rolls
Traditional Sliced Bread
Commodity Eggs
Liquid Eggs
Premium Eggs
Box Wine
Domestic 750ml Wine
Import 750 ml Wine
Sparkling Wine
SOURCE: Inmar syndicated subcategories; Inmar 8-chain food retailer panel
*MediaPost April 8 2020 Nielsen Article
Week ending March 21:
Adult Beverage sales
+55% vs. previous year*
WHAT’S NEXT?
20SOURCE: Inmar Social Listening Analysis
Changes in Purchase Cycles
● Variation in category purchase cycles and
consumption rates offers manufacturers some
reprieve
Return of Out-of-Home Experiences
● As work, school and dining activities slowly
return, consumption will shift
Panic shopping subsides
● Less stockpiling and return to normal
shopping cadence
WHAT’S NEXT?PREPARE FOR THE
SHIFT IN SALES
Category HHsPurchase
Cycle Days
Est. Pantry Load
Drawdown
Day
Diff
First Aid 1.04 MM 85.3 106.6 21.3
Oral Hygiene 1.32 MM 81.4 101.7 20.3
Cough and Cold 1.40 MM 80.2 100.2 20.0
Pasta 1.02 MM 71.4 89.3 17.9
Laundry 1.36 MM 70.1 87.7 17.5
Margarine or Butter 1.21 MM 68.8 86.0 17.2
Cookies 1.45 MM 66.5 83.1 16.6
Paper 1.66 MM 65.8 82.2 16.4
Coffee 1.10 MM 64.8 80.9 16.2
Candy 3.58 MM 64.5 80.6 16.1
Crackers 1.65 MM 64.1 80.1 16.0
Soup 1.50 MM 62.2 77.8 15.6
Bottled Water 1.45 MM 60.4 75.6 15.1
Cream or Creamer 1.07 MM 60.4 75.5 15.1
Cereal 2.06 MM 58.1 72.6 14.5
Beer 1.06 MM 57.4 71.7 14.3
Carbonated Beverages 2.49 MM 56.3 70.4 14.1
Salty Snacks 3.07 MM 55.0 68.7 13.7
WHAT’S NEXT?WITH DECLINE OF PANIC COMES A DECLINE IN PANIC BUYING
21SOURCE: Inmar Social Listening Analysis
Search Trends For Coronavirus Overlayed w/ Panic Buying
WHAT’S NEXTPOST-PANDEMIC DOESN’T MEAN OUT OF THE WOODS - ECONOMICALLY
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Rolling Timeline of Normalcy● Rolling peaks by state
● Unlikely problems will be resolved by the end of April*
Social● Theater chains hope to open around Memorial Day*
Back-to-Work● Some companies plan to split corporate employees into
groups to reduce crowding when corporate offices reopen
Recession● Experts expect food-at-home consumption to increase**
Rolling timeline and regionality of recovery lends itself to
digital engagements that can be nimble in times of flux
SOURCE: *Wall Street Journal April 8, 2020 Article
**New York Times April 7, 2020 Article
FINANCIAL VOLATILITY DRIVES SHOPPERS TO SEEK SAVINGS
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INCREASING COUPON USE
● First 2 weeks of March, digital coupon redemption increased
22% vs. 2019**
● 55% of shoppers looked for digital or paper coupons for in-
store purchases*
INCREASED INFLUENCE OF COUPONS
● Among shoppers who purchased a grocery brand for the first time
(in-store and online)*
○ 22% said "I had a digital coupon for the product (vs. 10% in Q1
2019)
○ 17% said "I had a paper coupon for the product" (vs. 8% in Q1
2019)
Increased unemployment & financial
uncertainty drove demand for
promotions during the last recession**
+15.2%
+6.3%
SOURCES: *Inmar Intelligence March 2020 Shopper Survey
(Respondents surveyed March 25 - 31, 2020
**Inmar Promotional Analysis
SUCCEEDING IN THE NEW NORMAL
IT’S NOT A SPECTATOR SPORT
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Supply Chain is Recovering, Protect Your Shelf
Turn Trial Opportunities Into Loyalty
Get Nimble and Prepare for Staggered
Shifts in Shopper Behavior
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Q&A
