TOTAL STORE CONNECTIVITY: ENTERTAINING ACROSS THE STORE Nielsen Fresh Research Prepared for IDDBA September 2016
TABLE OF CONTENTS Methodology, Study Objectives and Approach Entertaining Connectivity Across the Store Connecting with Entertaining Occasions Show and Sell Recommendations 2
METHODOLOGY Total Store Connectivity provides the first comprehensive and integrated store connectivity solution. It utilizes individual store/week sales and consumer data inputs across 200+ categories, through which value is redefined, new partnerships realized, and a new competitive advantage can be built. The study has two main parts sales data and consumer data. The sales data looks at the correlation between sales of 200+ categories across the store at the store/week level. Sales correlation shows the relationship between two categories. For this project, we used Pearson correlation methodology at the store/week level to produce correlation coefficients between -1 and 1 that explain the relationship between categories. In our study, over 0.5 is considered to be a statistically significant strong positive correlation, while less than -0.5 is considered a statistically significant strong negative correlation. With a correlation of positive 1, we see hypothetical results such as when bananas grow in sales, apples grow the same amount in sales at the same times. A correlation of -1 would be the opposite such as when bananas grow in sales, apples decrease in sales the same amount at the same times. We overlay consumer information, specifically buyer overlap (% of buyers that are shared between the two categories) and trip overlap (% of trips that contain the two items) to understand whether this correlation is driven by buyers, trips or both. 3
FRESH CENTER Copyright 2013 The Nielsen Company. Confidential and proprietary. OBJECTIVE: UNDERSTANDING THE CONNECTIVITY OF ENTERTAINING CATEGORIES THROUGHOUT THE STORE ENTERTAINING CATEGORIES INCLUDED 1. Crackers 2. Baking Ingredients and Supplies 3. Pickles, Relish and Olives 4. Snack Chips 5. Frozen Dessert, Fruit and Toppings 6. Refrigerated Baked Goods and Bread 7. Nuts 8. Bakery Cookies, Brownies, Bars 9. Bakery Cakes 10. Bakery Rolls 11. Bakery Pies 12. Specialty Deli Meat 13. Deli Platters 14. Deli Specialty Cheese 15. Deli Dips, Spreads and Toppings 16. Deli Snacks 17. Deli Appetizers/Sides/Desserts 18. Fresh Pork Roasts 19. Fresh Beef Steak 20. Fresh Shrimp Correlation Analysis Number of strong sales correlations % of Total Store dollars connected to Personification of shopper for selected connections COMBINATION OF DATA SOURCES Consumer Data Sales Trends Categories are ranked on all metrics compared to the remaining 221 categories *Connections = correlations >0.5) 4
APPROACH: CONNECTIVITY METHODOLOGY A comprehensive view across the entire store, including the fresh perimeter TOTAL STORE CONNECTIVITY ANALYTICS QUANTIFY connections IDENTIFY behavioral drivers Sales correlation drawn from 65 trillion unique category combinations 221 categories including fresh non-upc 18,000 stores 104 weeks Shopper behavior drawn from 19 million trips 60,000 static households All food outlets represented 104 weeks Includes all category buyingincluding fresh non-upc PROJECT SCOPE FOCUS CATEGORIES - Entertaining Categories TIME PERIOD - 52 Weeks Ending 6/27/2015 GEOGRAPHY -Total U.S. Fresh Coverage Area ~18,000 stores across grocery, mass/supercenter and club 5
ENTERTAINING CATEGORIES VARY IN CONNECTIONS
ENTERTAINING CATEGORIES VARY IN CONNECTIONS Center Store Many Strong Center Store Connections Refrigerated Baked Goods and Bread Snack Chips Nuts Pickles/ Relish/ Olives Crackers Baking Ingredients and Supplies Frozen Desserts/Fruits/ Toppings Cross Store Strong Center Store and Fresh Connections Fresh Pork Roasts Bakery Cakes Bakery Cookies/ Brownies/ Bars Bakery Rolls Shrimp Deli Specialty Cheese Deli Dips/ Spreads/ Toppings Steak Fresh Many Strong Fresh Connections Bakery Pies Deli Platters Deli Appetizers/ Sides/ Desserts Deli Snacks Specialty Deli Meat KEY FINDINGS Entertaining categories had varied levels of connectivity with categories across the store; crackers have the most strong category correlations (154) and bakery pies have the least (4) connections. Overall, entertaining categories in the fresh perimeter especially deli and bakery categories were less connected than center store entertaining categories. The entertaining categories fell into three groups based on their share of fresh to center store connectivity and types of categories to which they are strongly connected: center-store casual entertaining; cross-store entertaining; and fresh, premium entertaining. 7
% OF STRONG FRESH CONNECTION CENTER STORE ENTERTAINING ENTERTAINING CATEGORIES WITH A FOCUS ON CENTER STORE CONNECTIONS: MORE CENTER STORE CONNECTIONS MORE FRESH CONNECTIONS Refrigerated Baked Goods and Bread Snack Chips Nuts Pickles/ Relish/ Olives Crackers Baking Ingredients and Supplies Frozen Desserts/ Fruits/ Toppings 11% 18% 21% 23% 23% 24% 26% MEAT, DELI, BAKERY, PRODUCE, SEAFOOD, CENTER STORE 8
TOP CORRELATIONS Copyright 2013 The Nielsen Company. Confidential and proprietary. CENTER STORE ENTERTAINING CATEGORIES HAD HIGH CORRELATIONS TO DAIRY AND BAKING AISLES CRACKERS SNACK CHIPS BAKING INGREDIENTS AND SUPPLIES FROZEN DESSERTS/ FRUITS/ TOPPINGS NUTS PICKLES/ RELISH/ OLIVES REFRIGERATED BAKED GOODS AND BREAD # OF STRONG CORRELATIONS 154 142 147 127 85 142 94 1. Dairy Cheese 2. Salad Dressing 3. Grocery Bread 4. RTE Cereal 5. Jam, Peanut Butter and Other Spreads 1. Dairy Cheese 2. Salad Dressing 3. Crackers 4. Condiments 5. RTE Cereal 1. Spices, Seasonings and Extracts 2. Canned Fruit 3. Butter and Margarine 4. Remaining Grocery Breakfast Foods 5. Frozen Dessert, Fruit and Toppings 1. Canned Fruit 2. Baking Ingredients and Supplies 3. Butter and Margarine 4. Spices, Seasonings and Extracts 5. Dairy Cheese 1. Food Storage, Bag Wrap and Trash Bag 2. Disposable Dish 3. Coffee 4. Dish Detergent 5. Frozen Breakfast Savory 1. Dairy Cheese 2. Salad Dressing 3. Crackers 4. Condiments 5. Grocery Bread 1. Baking Mix 2. Breakfast Sausage 3. Canned Vegetables/ Beans 4. Dairy Cheese 5. Soup 9
% OF STRONG FRESH CONNECTION CROSS STORE ENTERTAINING ENTERTAINING CATEGORIES WITH A FOCUS ON BOTH CENTER STORE AND FRESH CONNECTIONS: MORE CENTER STORE CONNECTIONS MORE FRESH CONNECTIONS Fresh Pork Roasts Bakery Cakes Bakery Cookies/ Brownies/ Dessert Bars Bakery Rolls Shrimp Deli Specialty Cheese Deli Dips/ Spreads/ Toppings Steak 48% 53% 57% 57% 62% 75% 83% 84% MEAT, DELI, BAKERY, PRODUCE, SEAFOOD, CENTER STORE 10
TOP CORRELATIONS Copyright 2013 The Nielsen Company. Confidential and proprietary. CROSS STORE CATEGORIES ARE CONNECTED TO MANY OF THE PERIMETER DEPARTMENTS BAKERY COOKIES/ BROWNIES/ DESSERT BARS BAKERY CAKES BAKERY ROLLS DELI SPECIALITY CHEESE DELI DIPS/ SPREADS/ TOPPINGS SHRIMP STEAK FRESH PORK ROASTS # OF STRONG CORRELATIONS 84 77 75 73 66 58 51 29 1. Value- Added Vegetables 2. Bakery Cakes 3. Deli Platters 4. Deli Specialty Cheese 5. Bakery Muffins 1. Bakery Rolls 2. Bakery Cookies, Brownies and Dessert Bars 3. Deli Prepared Chicken 4. Bakery Sweet Goods 5. Fresh Chicken Breasts 1. Bakery Muffins 2. Water 3. Bakery Cakes 4. Nuts 5. Deli Pre- Sliced Meat 1. Deli Dips/ Spreads/ Toppings 2. Mushrooms 3. Value- Added Vegetables 4. Produce Herbs, Spices, Seasonings 5. Salmon 1. Deli Specialty Cheese 2. Deli Snacks 3. Mushrooms 4. Value- Added Vegetables 5. Bakery Bread 1. Spices, Seasoning and Extracts 2. Frozen Vegetables 3. Tomatoes 4. Eggs 5. Dairy Juice and Tea 1. Fresh Chicken Breasts 2. Tomatoes 3. Berries 4. Packaged Salad 5. Salmon 1. Deli Pre- Sliced Meat 2. Disposable Dish 3. Nuts 4. Bakery Rolls 5. Fresh Beef Roast 11
% of strong connections that are Fresh FRESH ENTERTAINING ENTERTAINING CATEGORIES WITH MOSTLY FRESH CONNECTIONS: MORE CENTER STORE CONNECTIONS MORE FRESH CONNECTIONS Bakery Pies Deli Platters Deli Appetizers/ Sides/ Desserts Deli Snacks Specialty Deli Meat 75% 82% 91% 91% 100% MEAT, DELI, BAKERY, PRODUCE, SEAFOOD, CENTER STORE 12
TOP CORRELATIONS Copyright 2013 The Nielsen Company. Confidential and proprietary. MOST FRESH ENTERTAINING CATEGORIES HAVE SIMILAR TOP CORRELATIONS The connections are focused on fresh, premium products Deli Snacks Deli Apps/ Sides/ Desserts Specialty Deli Meat Deli Platters Bakery Pies # OF STRONG CORRELATIONS 43 42 26 22 4 1. Deli Dips, Spreads, Toppings 2. Mushrooms 3. Bakery Bread 4. Deli Specialty Cheese 5. Value-Added Vegetables 1. Deli Dips, Spreads, Toppings 2. Deli Salads 3. Deli Entrees 4. Deli Prep Chicken 5. Value-Added Vegetables 1. Deli Dips, Spreads, Toppings 2. Mushrooms 3. Cooking Vegetables 4. Deli Specialty Cheese 5. Produce Herbs, Spices, Seasonings 1. Bakery Cookies / Brownies 2. Deli Apps/Sides/ Desserts 3. Deli Entrees 4. Deli Prep Chicken 5. Value-Added Vegetables 1. Fresh Turkey Breasts 2. Bakery Rolls 3. Fresh Whole Turkey 4. Frozen Dessert/ Fruit/ Toppings 13
ENTERTAINING CAN SPAN MANY OCCASIONS
ENTERTAINING CAN SPAN MANY OCCASIONS FRESH AND FANCY ENTERTAINING Deli Dips/Spreads, Specialty Cheese, Specialty Deli Meat, Steak, Shrimp, Deli Snacks HOLIDAYS ARE A HANDFUL ENTERTAINING Bakery Rolls, Nuts, Fresh Pork Roast, Bakery Pies NO WORK ENTERTAINING Bakery Cookies/Brownies/Dessert Bars, Deli Platters, Bakery Cakes, Deli Apps/Sides/Desserts CASUAL PARTY FARE ENTERTAINING Pickles/ Relish/ Olives, Crackers, Snack Chips DIY ENTERTAINING Refrigerated Baked Goods and Bread, Frozen Fruit/ Dessert/Topping, Baking Ingredients and Supplies 15
FRESH AND FANCY ENTERTAINING Premium entertaining categories are correlated with many produce cooking categories to cater to the smaller gathering/dinner party occasions STEAK SHRIMP Key Findings: Premium entertaining categories share many similar connections in produce. Sales for many of these products peak during Saturday and Sunday. DELI DIPS/ SPREADS/ TOPPINGS SPECIALTY DELI MEAT DELI SNACKS DELI SPECIALITY CHEESE Recommendations: Sample deli specialty meat and cheese, and artisan bread or deli crackers together in the produce department in the evening to encourage shoppers to put more in their basket when shopping for dinner/cocktail parties. Fresh and Fancy Entertaining COMMON CONNECTIONS Berries Produce Herbs/ Seasonings Bakery Bread Cooking Vegetables Salmon Tomatoes Value-Added Vegetables Mushrooms TOTAL STORE CONNECTIVITY LOW HIGH KEY ENTERTAINING TIMES Small Christmas and New Year s Gatherings Weekends Upscale Baby and Wedding Showers 16
HOLIDAYS ARE A HANDFUL ENTERTAINING Holiday entertaining categories are correlated with many quick and easy preparation categories to cater to the large holiday gatherings NUTS FRESH PORK ROAST Key Findings: Hosting for the holidays can be a handful! Shoppers are looking to purchase quick, easy solutions to feed the whole clan, and disposable dishes are a must! BAKERY ROLLS BAKERY PIES Recommendations: For the holidays, run sales ads for these correlated items in the same week and on the same page to make your store the onestop shop. Price comparable or lower than competition in the market. COMMON CONNECTIONS Disposable Dish Holidays Are A Handful Entertaining Fresh Chicken Breast Coffee Bakery Rolls Nuts Deli Pre- Sliced Meat TOTAL STORE CONNECTIVITY LOW HIGH KEY ENTERTAINING TIMES Christmas Thanksgiving Easter 17
NO-WORK ENTERTAINING Convenient, prepared products are correlated to other prepared offerings in the deli and produce departments DELI PLATTERS BAKERY CAKES Key Findings: No-work entertaining categories share connections to deli products and value-added vegetables. There is an opportunity to expand connectivity outside of fresh. BAKERY COOKIES/ BROWNIES/ DESSERT BARS DELI APPS/ SIDES/ DESSERTS Recommendations: Make no-work entertaining even easier with displays of deli, bakery and produce platters and offering build your own options. COMMON CONNECTIONS No-Work Entertaining Deli Dips/ Spreads/ Toppings Deli Prepared Chicken Value-Added Vegetables Deli Entrees Place relevant center store products like disposable dishes and beverages in the perimeter. TOTAL STORE CONNECTIVITY LOW HIGH KEY ENTERTAINING TIMES Graduations Super Bowl Birthday Parties Wedding / Baby Showers Office Parties 18
CASUAL PARTY FARE ENTERTAINING Shoppers seek out the center store items when preparing for a laid-back party Key Findings: Everyday casual entertaining categories share common connections with predominantly center store categories. Pickles, Relish, Olives Crackers Snack Chips Recommendations: Enhance center store shelf displays with coupons offering discounts in fresh product areas. $1 off coupon for Brie as a great item to partner with rosemary flavored crackers. COMMON CONNECTIONS Condiments Grocery Bread Casual Party Fare Entertaining Salad Dressing Dairy Cheese Salmon Jam/PB/Other Spreads RTE Cereal Popcorn Get center store shoppers to fresh sections by offering partner samples. During peak foot traffic, put notifications near center store products about sampling events. TOTAL STORE CONNECTIVITY LOW HIGH KEY ENTERTAINING TIMES Basic weekday gatherings with best friends Casual game days Before going out to dinner 19
DIY ENTERTAINING Home preparation categories are most heavily connected to the Grocery and Dairy Aisles Frozen Fruit/Dessert/Toppings Key Findings: DIY Entertaining share many connections to the Grocery and Dairy aisles specifically areas that are involved in baking that require extra steps to create. Refrigerated Baked Goods and Bread Baking Ingredients and Supplies Recommendations: Encourage consumers to trade up when picking up their ingredients. Instead of crackers for their cheese and crackers, place pita chips and crostinis by the dairy cheese. DIY Entertaining Create seasoning packets for consumers to add their own homemade touches to bakery bread. COMMON CONNECTIONS Butter and Margarine Canned Vegetables and Beans Canned Fruit Dairy Cheese Spices/Seasonings/Extracts Crackers TOTAL STORE CONNECTIVITY LOW HIGH KEY ENTERTAINING TIMES Birthday Parties Family Get-Togethers Potlucks Brunch 20
SHOW AND SELL RECOMMENDATIONS
PUT INSIGHTS INTO ACTION Entertaining Occasion: Fresh and Fancy Entertaining Categories: Deli Dips/Spreads, Specialty Cheese, Specialty Deli Meat, Steak, Shrimp, Deli Snacks Insight Premium Fresh Entertaining category shoppers are willing to spend more for premium products for small gatherings These shoppers have a moderate level of involvement in the preparation for these occasions They want to spend time with their guests, enjoying the premium meal, not hidden in the kitchen preparing it Action: Discounting is not necessary, but selection is important. Have samplings during key times to highlight pairings for specialty meat and specialty cheese and trays available for purchase. Feature recipes for premium, make-ahead meals, such as a pan seared strip steak with mushrooms and a fresh berry cobbler dessert, in the deli department by the specialty meats and cheese. Increase Total Store reach by displaying high-end center store crackers and bakery breads by the specialty cheese and meats in the Deli. 22
PUT INSIGHTS INTO ACTION Entertaining Occasion: Holidays Are A Handful Entertaining Categories: Bakery Rolls, Nuts, Fresh Pork Roast, Bakery Pies Insight Holidays are key weeks for retailers to gain or lose in the market Shoppers for the holidays have a lot on their plates, and retailers can increase dollars by making shopping easy and convenient Group commonly purchased items together in holiday packages to take all the running around out of party planning Action: For the holidays, shoppers make purchases across the store! Run sales ads for these correlated items in the same week and on the same page to make your store the one-stop shop. Price comparable to or lower than competition in the market. Place secondary center store category displays for nuts by the deli or bakery departments and a secondary display for disposable dishes and bakery rolls in the meat department all week long to capture those additional sales for the holiday occasion. When shoppers choose the store, all categories WIN! Cater to shoppers by creating meal packages that include the items needed to host the party, such as the ham or turkey, bakery dinner rolls, seasonal pies and disposable dishes and utensils. 23
PUT INSIGHTS INTO ACTION AND FEATURE SHOW AND SELL IDEAS Entertaining Occasion: No-Work Entertaining Categories: Bakery Cookies/Brownies/Dessert Bars, Deli Platters, Bakery Cakes, Deli Apps/Sides/ Desserts Show and Sell Insight No-Work Entertaining is all about letting the store do the work for you Show and Sell Action: Create a display of value-added vegetable trays, deli platters, and bakery cakes or cookies/brownies/bars. Shoppers want more involvement in what they are serving without spending lots of time Encourage more total store shopping by making it easier for shoppers to get everything they need quickly While these shoppers don t want to invest time, they are willing to invest money for quality Have in-store stations with build your own deli platters and vegetable trays that allow shoppers to customize based on their tastes and price point. Offer samples so they can determine what will be best for their guests. Display themed napkins, beverages and disposable dishes in the perimeter. This is especially relevant for birthdays, graduations and seasonal holidays. Offer better looking party-ready containers for deli prepared food and bakery cakes and cookies/brownies/bars that are themed around specific occasions like birthday parties or graduations. 24
PUT INSIGHTS TO ACTION AND FEATURE SHOW AND SELL IDEAS Entertaining Occasion: Casual Party Fare Entertaining Categories: Pickles/ Relish/ Olives, Crackers, Snack Chips Show and Share Insight Casual Party Fare category shoppers have a tendency to only shop in center store categories These shoppers keep it simple, filling a need for their party/event, but not going over the top Food is not the center of this occasion Attendees are more concerned with a game or attending a dinner Show and Sell Action: Get shoppers out of their routine. Enhance center store shelf displays with coupons offering discounts in fresh product areas. $1 off coupon for Brie as a great item to partner with rosemary flavored crackers. Feature toppers like salmon or deli meat/cheese that pair great with crackers/chips while also being hassle/preparation free. Draw them to the fresh section with Saturday Samplings at their local retailer. This occasion doesn t make food center stage. Focus assortment on a light offering that is combined with drinks and great conversation. 25
PUT INSIGHTS TO ACTION AND FEATURE SHOW AND SELL IDEAS Entertaining Occasion: DIY Entertaining Categories: Refrigerated Baked Goods and Bread, Frozen Fruit/ Dessert/Topping, Baking Ingredients and Supplies Show and Share Insight Show and Sell Action: DIY Entertaining customers are looking for ways to create dishes that they can call their own These shoppers are cooking for all sizes of gatherings: from small (such as brunch) to large (such as potlucks) DIY Entertaining allows shoppers to add a personal touch to their entertaining occasions while saving money for similar, storemade items Package par-baked bakery bread with various types of seasonings and sauces such as garlic parmesan, Italian herbs and cheese, and marinara. This allows shoppers to be a part of the bread preparation process by adding the extra ingredients and warming the bread at home. Create options for both large and small sizes of breads, dips, and cheese so that the shopper has the flexibility to choose the right size for their occasion. As they are saving money by creating their own dishes, entice customers to trade-up to higher quality products by putting pita chips and crostinis in the dairy aisle and deli to go with cheese and meat. Dollar-off coupons and samples in the dairy Aisle can also be used to encourage customers to visit the deli for alternatives to grocery crackers. 26
TOTAL STORE CONNECTIVITY For additional research from IDDBA & Nielsen Fresh regarding total store connectivity, check out the following reports at IDDBA.org: Total Store Connectivity: Revealing New Pathways to Win Specialty Cheese Total Store Connectivity: Revealing New Pathways to Win Bakery Bread (to be released October 4) 27