Path To Purchase Study - Innovation Center For Us Dairy

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Path to Purchase Study Research Insights, Implications and Opportunities SUMMARY February 13, 2009 Path to Purchase Diagram Data Types by Research Method Journal Studies Observations Attitudes/Beliefs Shelf Behaviors Need States Influencers/Motivators Path to Purchase Usage Occasions Purchase Drivers Shopalongs 2 Path to Purchase Study Research Methodology Grocery Tracking Journal Study* - 32 participants from 2 markets (Houston & Atlanta) - 3 rounds of journals with 3 main activities Shopalongs* - 14 shoppers selected from Journal Study - Shopped unaccompanied using headcams Meal Log Observations + Intercepts - Two Houston grocery stores - 267 shoppers observed / 116 Intercepted Collages *Recruited Participants • Primary food shoppers 21 – 49 year-olds • Makes at least one major grocery trip per week • Value (n=8) Under $40K • Families with at least 1 child under 16 at home • Core (n=16) Between $40K - $75K • Eats at least 4 meals at home per week • Up (n=8) Over $75K • Heavier dairy consumers (per week: milk = 1 gallon / cheese = 16 oz / yogurt = 4 servings) 3 Segmentation by household income: Path to Purchase Study Executive Summary Strategic Opportunities 1. Reinvent the Dairy experience to align with shopper perceptions and behaviors 2. Focus the message within Dairy around Health 3. Communicate to shoppers the different benefits inherent in Milk, Cheese and Yogurt 4. Invigorate shoppers by introducing them to and encouraging their discovery of new and different products 5. Develop value-added products and services that address underlying shopper needs and build loyalty 4 Path to Purchase Study Grocery Store Selection Drivers • One stop shopping Shoppers were willing to make marginal sacrifices in quality and price if it led to convenience and efficiency. • Clean & organized Shoppers were concerned about store presentation, opting to visit more enjoyable stores (of even the same grocer). • In and out Shoppers avoided visiting particular stores or would shop at certain times to minimize the amount of traffic and congestion they experienced. • Simple couponing Shoppers valued stores that made the process of finding and using coupons effortless and painless. • Reliable private label Shoppers widely accepted the private label brands of their preferred grocers. • Community-focused Stores that were perceived as having greater ties with the local community were favored. 5 Path to Purchase Study Shopper Collages Path to Purchase Study Dairy Department Findings • Dairy = Health Dairy and healthy were synonymous in people‟s minds. Parents felt milk was something they should give their kids every day. • How Healthy is Dairy? Though people understood Dairy to be generally healthy, they have some uncertainty about its impact on health due to conflicting messages in the media. • Prefer all Dairy products together Having all Dairy categories (e.g. Milk, Cheese, Yogurt) adjacent made the most sense to shoppers. Shoppers also wanted to see all product varieties (e.g. Regular, Specialty, Organic) adjacent to one another, for ease in making comparisons and for understanding the range of options. • Difficulty distinguishing between product types Shoppers experienced frustration in distinguishing categories across the long run of a dairy aisle and in selecting between products in cluttered spaces like yogurt. • Fresh, cold, well-maintained products Temperature, refrigeration and expiration date were all on people‟s minds when considering Dairy. Stores must communicate to shoppers that Dairy products are fresh by being kept at proper temperature. A dirty, poorly-presented dairy section can have a discrediting effect on a store. • Dairy is an overly congested section People found it difficult to move through and shop Dairy due to congestion caused by high traffic in an area with limited physical real estate. 7 Path to Purchase Study Category Implications Insights Milk was regarded as the fundamental fuel for families “As long as I get her to have milk with every meal and I have at least a glass a day. … it makes me feel good that she does drink a lot of milk” – Kelly A. Implications Position milk as the category “hero” to build association with and incremental sales of all Dairy products Remind shoppers of the different milk types, their benefits and how they relate to different family member needs Yogurt had a broad offering with many benefits and features, which made the selection process challenging “Finding new things in yogurt is difficult because there's just so many yogurts. . . and [they] tend to just blend together” – Gina Shoppers relied on cheese for enhancing any eating occasion “If I want him to eat something I'll put some cheese on it. ” – Kristi The functional benefits and aesthetics of Dairy’s packaging can influence shoppers’ purchasing decisions “I prefer the packaging which is more natural, rather than the packaging. It doesn’t look as natural. It looks processed” – Laura 8 Build sales and shopper loyalty by organizing the shelf for easier navigation and creating clarity around product uses and benefits Consistently remind shoppers of cheese uses; leverage cross-merchandising of cheese to build higher total basket ring Highlight packaging innovations that promote sustainability, portability, convenience and product longevity Path to Purchase Study Department Implications Insights Shoppers sleepwalked through the Dairy purchase process “(How does Dairy compare to the other parts of the store?) Dairy is just Dairy. You just get what you need.” – Nyree Implications Slow down shoppers by dimensionalizing the space and making the Dairy department on par with the other perimeter departments Create points of disruption for shoppers operating on auto-pilot within Dairy by highlighting special interest areas Shoppers had clear expectations for the sensory experience within Dairy, which were not being met by current Dairy environments Establish a Dairy equity with a baseline of “clean & cold” and a positioning around “fresh, healthy & natural” “They had the food in the open cases - and that's why I like to go early in the morning, because it seems colder. Things don't seem to stay as cold that way.” – Deb People believed Dairy to be generally healthy, but those Retailers that answer shopper’s desire for beliefs were being challenged information will grow loyalty and sales; confirm the key feature/benefits of Dairy products and break down its misconceptions “For snacking I prefer lighter colored cheeses. It's a better kind of fat.” – Daria Shoppers valued a Dairy department that was accessible and sensible and found the current Dairy department challenging to shop Rationalize the layouts, categories and product sections and use visual tools to make shopping intuitive “I like shopping at , it's neater and cleaner, I don't like the way the is set up. It's tighter and the aisle don't flow very well.” – Dana 9 Path to Purchase Study Meal Provider Implications Insights Mothers were balancing the risks and trade-offs of getting their family to eat healthier Implications Provide mothers with new meal ideas they can be confident their family will eat “It’s difficult to experiment that much because they might not eat it.” – Mariela Support shoppers with the tools and information they need to introduce healthier alternatives into their family diet Show moms how to incorporate healthy ingredients into popular foods Shoppers were developing a heightened awareness about the purity of their foods “I know with everything you buy it's loaded with [bad things]. Unless it's fresh. If it came in a box you know it's not good for you. ” – Emily People had a desire to know what foods were new and different “In store is where I find new products, but it's much less in Dairy because I am brand specific. Unless my brand came out with something new I wouldn't notice it.” – Christine 10 Underscore the natural healthiness of Dairy in the department design, messaging and packaging; be transparent about how Dairy products are made and delivered to shoppers Improve exposure to and trial of new and different Dairy products. Reduce risk of trial by communicating benefits Path to Purchase Study Role of Variety + Newness • Desire to break routine Meal providers were seeking ways to introduce more variety into their meals in an effort to move beyond the standard “family favorites”. • Know what’s new Shoppers were universally interested in knowing which items are new, even if only as a consideration for future visits. • Most persuaded by trial Sampling was the most successful means of swaying shoppers to experiment with a totally new-to-their-family product. • New item risk/reward Shoppers were continually balancing their desire for novelty against the risk of disappointing their family. Of highest importance was pleasing their family, something meal providers feared jeopardizing. • Require simple shifts Shoppers were more likely to try new products if they related to the familiar. 11 Path to Purchase Study Dairy Department: Path to Purchase Milk Cheese Attitudes / Beliefs Usage Occasions Need States Purchase Drivers Influencers / Motivations Store Behaviors Value Proposition • THE healthy beverage • Breakfast / lunch / snacks • Gives kids essential nutrients • Will run to store to replenish • Degree of freshness (expire soon?) • Healthy and traditional kids beverage • No perceived difference between brands and private label • An everyday health essential • Get the right milk for the person or purpose (calcium for kids, skim for adults, whole for cooking) • Reach for furthest bottle in back which is presumed freshest • Has to always have in the home • Availability of “your” milk (fat content + size) • THE ultimate topping and flavor enhancer • Completes any meal • Universal flavoring ingredient or topping that pleases everyone • Special occasion / holiday • Weighing the price | convenience trade-off • Dish topping • Can make the uneaten eaten • Became exposed to during social event • The ability of packaging to keep product fresh • Suitable snack • Conflicting and confused views on health value • For hosting special occasions Yogurt • Great healthy snack • Breakfast / lunch / snacks • Tasty way to get your calcium • Contributes to digestive health – though different definitions • On-the-go • Healthy way to satisfy cravings 12 • Tasty milk substitute • In and out purchase – often without grabbing a cart/basket • Unfamiliarity with „specialty‟ varieties • Pays attention to product presentation and packaging • How appealing – does it look plastic? • Looking for healthier snacks • Co-branding (cartoon characters on packaging) • Healthy dessert substitute • Smaller cups minimize waste for kids • Difficult to shop and find products due to similar product shape and relative size • Helps beautify you inside and out • Taste enhancer – can be used to make anything taste better • Loved by all – a universal food that everyone enjoys • Versatile health snack – can be eaten by anyone, anywhere and at anytime • Suitable calcium source Path to Purchase Study Strategic Opportunities 1 Reinvent the Dairy experience to align with shopper perceptions and behaviors Parity between Dairy and other perimeter Contemporize the Dairy section while Co-locate all Dairy categories to departments making strong cues towards Freshness demonstrate the breadth of its offering 13 Path to Purchase Study Strategic Opportunities 2 Focus the message within Dairy around Health Give shoppers the recipe ideas they crave, Help shoppers assemble healthy meals with Communicate to shoppers the tangible but with an eye towards health with the help product bundles health benefits that Dairy can provide of Dairy 14 Path to Purchase Study Strategic Opportunities 3 Communicate to shoppers the different benefits inherent in Milk, Cheese and Yogurt Reinforce Milk’s value proposition: Fundamental fuel for families Reinforce Cheese’s value proposition: Reinforce Yogurt’s value proposition: The ultimate taste enhancer Versatile, healthy products for an active lifestyle 15 Path to Purchase Study Strategic Opportunities 4 Invigorate shoppers by introducing them to and encouraging their discovery of new and different products Help shoppers make gradual shifts towards new products by showing simple ingredient substitutions Sampling stations are the most reliable way for shoppers to experiment with new products Create Dairy touch-points that meaningfully connect shoppers beyond the department Capture shoppers attention by carving out interest areas throughout the Department 16 Path to Purchase Study Strategic Opportunities 5 Develop value-added products and services that address ancillary shoppers needs and build loyalty Support shoppers with helpful strategies for incorporating healthy ingredients into their meals 17 Develop products and services available in-store that enhance the lives of Dairy shoppers Path to Purchase Study Grocery Store Trip Missions Total Grocery vs. Dairy Products Participants made fewer unplanned purchases during quick trips (15 items or less) as compared to Stock-Ups. Regardless of trip type, people shopping Dairy also made fewer unplanned purchases as compared to Total Grocery. As a department, Dairy has been less effective at encouraging shoppers to make unplanned, impulsive purchases. 18 Path to Purchase Study Purchase Drivers Total Grocery vs. Dairy “Health” was the most common reason shoppers purchased Dairy products. Though shoppers attributed “taste” as the greatest purchase driver in most foods, it was not the case in Dairy. As compared to Total Grocery, Dairy products were more often kept on hand but perceived as a less convenient food. 19 Path to Purchase Study Purchase Drivers Dairy Categories vs. Total Dairy “Health” remained the most common driver for purchasing Milk and Yogurt, but of relatively minor importance in Cheese. Yogurt was less frequently kept on hand and was almost never bought with other foods in mind, but rather purchased with other people in mind. Cheese was the Dairy item that went with the most items, was considered the most convenient and best tasting. Milk‟s purchase drivers tend to be most in line with people‟s reasons for purchasing Dairy as a whole. 20 Path to Purchase Study Purchase Drivers New Products The role of “taste” proved to be one of the central reasons behind new purchases, suggesting the importance of new and different tastes were a driving factor in impulse purchasing. Additionally, more purchases than average were being made in convenience products as people were seeking out foods that accommodated their busy lifestyles. 21 Path to Purchase Study