sp

F ec all ia 2 l 00 ed 5 it io n

Ninth Annual

ACNielsen Consumer and Market Trends Report 2 0 0 5

contents
2 6 14 22 32 42 48 60 introduction retail perspective channel blurring categorically speaking private label muscle internet impact ethnic marketing behavior-based segmentation

This special edition of Consumer Insight features our Ninth Annual ACNielsen Consumer and Market Trends Report. The complete report is available for a purchase price of U.S. $495. To purchase your copy, please call 1-800-988-4ACN, or email your request to ConsumerInsight@ACNielsen.com. Complimentary issues of Consumer Insight will resume with the Winter edition.

i n t r o d u c t i o n
As consumers, the various physical places we gowhether it is to a park, a library, a playground, a store, home, school or workcan speak volumes about the cerebral place we are in. Living single with kids, single without kids, divorced with part-time kids, married with no kids, seniors with grandkids, married without kids. Todays family structure is limitless and the rule is: there is no rule. Purchasing patterns among the American family are as varied as the people who live here.

The refrain shop til you drop remains the anthem of consumers of all ages. Whether buying homes or hot dogs, Americans remain hungry for a good deal and willingly switch between formats and labels to get one. While the vision of true one-toone marketing has yet to be realized, behaviorbased marketing techniques enable retailers to find favor with ever-smaller specialty segments. Knowledge is power and empowering. Increasingly robust databases and more powerful analytical tools enable todays manufacturers and retailers to respond to increasingly finite, niche demands with specially tailored products that command loyalty and stimulate repeat purchase. The Ninth Annual Consumer & Market Trends Report provides a detailed perspective on the factors that affect the retail environment and consumer shopping behavior. From economic drivers affecting channel and category trends to the complex diversity of consumers who define product preferences, the report provides qualified insights to help you drive actionable results.

Retail Perspective
Smaller is big news, with everyone from Wal-Mart to Sears experimenting with urban, smaller formats. Global competitive turbulence localizes retailer focus on neighborhood preferences. Technology amps up the speed of life, and consumers struggle to attain work-life balance, using affordable luxuries as a way to vent. Climbing gas prices vaporize household budgets.

Channel Blurring
Dollar stores made cents with a sensible value proposition that appealed to penny-pinching consumers. Club stores clobbered the competition, combining big box buys with access to affordable luxuries, all at appetizing prices. Category killers

Internet Impact
Online Internet surfers become offline preferred customers, especially the registered segment, who spend 35% more than casual web site visitors. Recent research matches client information with actual purchase or surfing behavior to create highly customized media targets and segmentations.

Ethnic Marketing
continue to nibble away at the traditional grocery audience. Grab-and-go grub dominates end caps near checkout at virtually every home, pet, toy and office supply store on the local shopping strip. Asian influences have infused every aspect of American culture from food to fashion, from entertainment to health care. A uniquely educated, cultured and wealthy group, almost one in five Asian-American families boasts a household income of more than $100,000. African-American and Hispanic consumers share a penchant for home cooking with ingredients that reference their respective cultural roots.

Categorically Speaking
Healthy attitudes toward dieting dominate the new calorie counting calculus. Even before the revised USDA Food Pyramid debuted, shoppers opted out of extreme low-fat, low-carb and low-calorie diets, gravitating toward moderation across all food groups. The battle of the bulge didnt trim consumer spending, which increased in all departments for the combined food, drug and mass merchandise channels.

Behavior-based Segmentation
New research has determined that three factors primarily account for purchasing behavior: age of oldest child, age of household head and household size. Macro-oriented segmentation does a good job of explaining behavior, but it takes micro thinking to model in-store buying patterns. From the life changing arrival of a first baby to other more subtle changes that happen as children grow from dependents to independents, behavior-based segmentation makes sense of how motivations and priorities change with major life events.

Private Label Muscle

Graduating from fringe fad to mainstream mainstay, private label products now account for 17% of all food and beverage sales. The very public success of private label has led to a growth rate more than twice that of branded goods. At last count, private label has achieved Billion Dollar Club status in 18 separate product categories.

To purchase your copy of the complete Consumer and Market Trends Report, please call 1-800-988-4ACN, or email your request to ConsumerInsight@ACNielsen.com

150 North Martingale Road Schaumburg, IL 60173-2076 www.acnielsen.com

Copyright 2005 ACNielsen. Printed in USA. All rights reserved. ACNielsen and ACNielsen with globe design are trademarks or registered trademarks of AC Nielsen (US), Inc. Other brand, product or service names are trademarks or registered trademarks of their respective companies.