Good Value Trumps Low Prices, Even In Tough Economy

Key Findings:

• Bigger pack sizes preferred when it comes to battling rising commodity prices 
• Consumers are employing different saving strategies around the world

Ho Chi Minh City – October 13, 2011– Nielsen, a leading global provider of insights and analytics into what consumers watch and buy, today released a report that shows consumers around the world employing different saving and shopping strategies for consumer packaged goods.

 Nielsen’s 2011 Global Online Shopping and Saving Strategies Survey of more than 25,000 Internet respondents in 51 countries show that 61 percent of global online consumers rated “good value” over “low price” (58%) as the most influential reason to shop at a particular consumer packaged goods retailer.

 In contrast, Vietnamese consumers ranked ‘the store that has great sales and promotion’ as having the most influence on their decision to shop at a particular retailer.  This is followed closely by the store’s personnel are friendly & knowledgeable (58%), the store has the products I want and they are regularly in stock (57%), I discover good value for my money when shopping there (56%), the store is a convenient location for me (55%).  In Asia Pacific, Europe, Latin America and North America, respondents indicate a preference for value over low prices when choosing a retailer, while slightly more Middle East/Africa respondents preferred lowest overall prices (59%) to good value (54%).

 Bigger is Better

As commodity and raw material costs continue to rise, there is a clear preference among consumers around the world for consumer packaged goods manufacturers to offer larger, economy-sized packages, with lower price per serving (36%). Half as many respondents (18%) say they prefer new, smaller-sized packages at lower prices, and about one-in-ten (12%) indicate a preference for modestly downsized packages at the existing price level.

 Vietnam echoes a similar sentiment as 28 percent of consumers stated they would prefer being offered larger economy sizes with lower price per usage/serving. 

 The option least favored among consumers across all regions surveyed is offering slightly lower quality products at current price levels, followed closely by proportionately raising prices.

 Coupon Use Varies Around the Globe

Nearly half (48%) of global online consumers surveyed report using coupons to save on household expenses, the second most popular saving strategy after buying items when on sale (59%). Reported coupon use is most prevalent in North America (65%) and Asia Pacific (55%), with the United States (66%), China (67%) and Hong Kong (65%) as the three leading markets.

 “In the U.S., coupons are back in vogue,” said Todd Hale, senior vice president, Consumer & Shopper Insights, Nielsen. “More consumers are looking for savings and with an increased focus on technology to deliver coupons, such as smartphone downloads and in-store kiosks, manufacturers and retailers are making it easier for consumers to use coupons. Across all U.S. households, coupon usage tends to be concentrated versus widespread. But these coupon enthusiasts are young, affluent, have large households and are big spenders across the storeall attractive demographics for consumer packaged goods companies.”

 “With inflation running high in China, particularly on food, coupons are a great way to attract consumers on key items at discounted prices,” said Dale Preston, managing director, Retail Measurement, Greater China, Nielsen.

 56 percent of Asia Pacific consumers surveyed indicate they use coupons to save on household expenses.  At a country level there are major differences as China and Hong Kong use coupons most with 67 percent and 66 percent respectively, followed by Korea (62%) and Vietnam (61%), yet in other markets, such as India (18%) Philippines (23%) and Thailand (36%), reported coupon use is less prevalent.

 The most popular way Vietnamese are saving on household expenses is by buying items on sale (74%), followed by using coupons (61%), shopping at value retailers (52%), purchasing smaller packs with lower unit price (35%)  and others choose to shop at stores located close to where I live or work (35%).

Are Consumers Stocking Up or Making Quick Trips?

Many consumers report they stock up on groceries and other consumer packaged goods as a way to save money, yet stocking up as a primary reason for making a trip to the store is not uniformly widespread across the globe.

 Stocking up for groceries is less common in Asia Pacific, Latin America and in the Middle East/Africa where approximately one-in-five consumers indicate that is the primary reason for the shopping trip. Across both the Asia Pacific and the Middle East/Africa regions, about one-third of online consumers say a quick trip for needed items is the primary reason for shopping trips (32% and 33%, respectively). Other trips are made to purchase a few essential items (28% of trips in Middle East/Africa and 29% of trips in Asia Pacific). Among the Asia Pacific region, quick trips to replenish empty items are adopted by most countries like Thailand (44%), Vietnam (39%) or Korea (34%). In Australia and New Zealand, consumers are likely to prefer stock up groceries and staples (70%) than making quick trips (14%).

  In Europe, 37 percent of online consumers say they stock up on grocery trips, while one-in-five (21%) shop when needing a few essential items and 25 percent make a quick shopping trip when they run out of an item.

 “Retail trip missions in Europe are dictated by store infrastructure,” said Vandenheede. “In countries where shoppers have a high density of stores to choose from, such as in Italy or Germany, consumers tend to shop more often. In countries that are dominated by hypermarkets with less retailer availability, stocking-up is the more dominant shopping pattern.”

The Future: Flexible Formats

When considering new and flexible retail formats for grocery shopping, consumer preferences for online delivery options emerge. While more than half (52%) of global online consumers say they are likely to place a grocery order online if it is delivered to the home, less than one-third feel the same if they are required to pick up the online order curbside (27%) or via a drive-thru window (30%). More consumers—over one-third (36%)—say they are willing to pick up an online order inside the store.

 In Asia Pacific, more than three-quarters (77%) of respondents say they are likely to take advantage of the online shopping/home delivery option, contrasted with one-fifth of North Americans (20%) and one-third of Europeans (35%). .

“The main resistance to online grocery shopping in developed countries in Europe and North America is primarily due to the high volume of available grocery stores,” said Vandenheede. “In Asia Pacific, fewer physical stores and a very digital consumer base create a fertile ground for online formats.” 

Using hand-held scanners to record purchases while shopping to avoid waiting on checkout lines was welcomed by half of global online consumers. While interest is highest among Asia Pacific consumers (60% interested and 14% unlikely to try it), in each region, more consumers indicate they are likely to try it than not. 

About the Nielsen Global Online Survey

The Nielsen Global Online Shopping and Savings Strategies Survey was conducted between March 23 and April 12, 2011 and polled more than 25,000 consumers in 51 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Online Survey, which includes the Global Online Consumer Confidence Survey, was established in 2005.

 About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.