Retailers and manufacturers must develop new strategies, including looking at brand extensions and tapping into the trend for cooking at home, to thrive in the economic downturn, a study from IRI has suggested.
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According to IRI’s latest report, 2008 CPG Year in Review: A Market Re-Defined by Budget-Strapped Consumers, the lessons of 2008 provide invaluable insights into what to expect in the year to come.
“Recessions expose the health of CPG manufacturers and retailers,” IRI consulting and innovation president Thom Blischok observed.
“Innovative companies thrive, while weaker companies struggle and fail. To be a success in this recessionary environment, you must anticipate and respond to change before it happens. This is instrumental in establishing long-term shopper loyalty even after the economy gets back on track.”
In terms of innovation, IRI said that consumers are increasingly wary of unfamiliar – and untested – products. Rather than launching new brands, manufacturers should instead look to brand extensions to drive innovation, the researchers claimed.
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By GlobalDataThe report found that the recession has caused a tidal-shift in the shopping patterns of US consumers, who are increasingly planning their trips to the grocery store in advance.
As a consequence, IRI suggested that retailers and manufacturers should switch gears from in-store marketing to strategies that reach into consumer’s homes – through traditional media and online media.
Consumers are also increasingly cooking at home and making snacks and lunches to eat out. Retailers, IRI said, should respond by making fresh ingredients readily available, while manufacturers may need to “rewire their snack strategy”.
With the growing importance of price positioning, suppliers and retailers should “redouble their collaboration strategies to offer consumers the best value possible”, IRI suggested.
