I’m often asked for a brief overview of how categories are performing at retail, but it’s not a topic that leads to a quick take. There are many thousands of products on store shelves and a continued flood of new item introductions each year, so how can the situation be effectively summarized?
Enter SN’s annual Category Guide. Written by SN’s editors, it provides a snapshot of hundreds of categories and a deeper look at 50. Readers can scan for a quick look or dig deeper.
Particularly interesting are consumer and business insights into what’s driving category trends. I’ve picked out five of what I consider to be the most important influencers for special attention here.
1. Health Complexity:
There’s no doubt health considerations are steering consumer purchases across categories in fresh foods, center store and other segments. But consumers are often confused by media reports about health, a fact that changes their purchase decisions. As one example, while you’d expect vitamins to be capitalizing on health trends, sales are overall flat in the wake of conflicting studies about benefits.
2. Millennials March:
It’s not possible to overplay the impact of Millennials on food retail. Their behavior -– whether they’re spending or not spending -- is closely tied to retail success. A case in point is diapers. The fact that Millennials have delayed forming families has negatively impacted this category. The good news is these younger consumers now appear to be slightly more bullish about their financial situations, which will boost a range of categories if it sustains.
3. Clicks Quicken:
The impact of online sales is still relatively small but growing. Certain categories, including diapers and single-cup coffee, are already notably impacted by more online ordering, according to SN reporting. This trend will almost certainly play a bigger role in upcoming versions of the Category Guide.
4. Innovation Rules:
Retailers and brands are making innovative moves to liven up categories and overcome sales challenges. A case in point is the pet business. Retailers have been building pet sections into bigger destinations, including an emphasis on premium products and increased variety, a fact that has already begun to pay off, in segments including pet supplies.
5. Value Digs In:
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The Great Recession ended a long time ago, but its influence lingers. While shoppers are getting a bit less cautious, they haven’t shed their thrifty ways. The hair care segment has been lifted partly because shoppers are looking to save on salon visits. Likewise, categories including beer and wine have been boosted by value-driven moves to entertain more at home.
The best news is that value is just one of the trends listed here. A few years ago, at the height of the economy’s decline, value was the only consideration. This means retailers and marketers have more levers to pull to motivate consumer spending.
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