Babyboom All

8/6/2019 Babyboom All

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FEATURES:Global Household Product Sales

Employee Empowerment

Cracking the Retail C.O.D.E.

Tune Into Teens:Test Your TeenAptitude

Fall/Winter 2006

CONSUMER

I n s i g h t s t o d a y f o r t o m o r r o w ’ s d e c i s i o n s

Baby BoomerSegmentation:

Eight Is Enough



Seeing Tomorrow…Today

ConsumerInsight:

In every issue…Volume 8, No. 3

TrendwatchWalk-In Retail Clinics: A Healthy Savings Idea

Publisher ACNielsen

EditorsLaurel Kennedy

Kathy Mancini

Design & LayoutBlue Lemon Design

Editorial BoardJoe BuchererCarolyn CalzavaraMark Chesney Tiffany Graves Todd HaleLaurel KennedyDan LymanKathy Mancini Troy NobleDanell O’Neill

Tom PirovanoLori Tanking

Contributing WritersDoug AndersonResearch & Development ACNielsen Homescan & Spectra

Joe BuchererSegmentation Analytics ACNielsen Homescan & Spectra

Jon BusmanMarketing ACNielsen Homescan & Spectra

Mark ChesneyCommunications

ACNielsen Global ServicesRussell EvansBusiness Technology Solutions ACNielsen

Todd Hale Thought Leadership ACNielsen Homescan & Spectra

Laurel KennedyMarketing Strategy Age Lessons

Jane PerrinCommunications ACNielsen Global Services

Tom Pirovano

Retailing Insights ACNielsen

Bill RouseWal-Mart Analytics ACNielsen Homescan & Spectra

Copyright © 2006 ACNielsen. Printed in USA. All rights reserved. ACNielsen, ACNielsen with

globe design, ACNielsen Answers, Homescan, LabelTrends and Scantrack are trademarks or

registered trademarks of ACNielsen (US), Inc. Spectra and Consumer Trade Areas are trade-

marks or registered trademarks of Spectra Marketing Systems, Inc. Other brand, product or

service names are trademarks or registered trademarks of their respective companies.

For More Information

ACNielsen U.S.

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Schaumburg, IL 60173

800.988.4ACN

www.acnielsen.com/ci



contents

4

On the Cover:Baby Boomer

Segmentation

28

20

12

4 Baby Boomer Segmentation: Eight is Enough

Given its relative size and influence on U.S. consumer markets,

surprisingly little formal, quantitative segmentation work has been

conducted on Baby Boomers. The question remains: how to right-size

the huge Boomer cohort? How many segments would capture the

important often subtle nuances that can spell the difference between a

successful new product launch or marketing campaign and a complete

misfire? Turns out, eight segments is enough.

12 Global Household Product Sales:

Innovative Items Clean Up

Analyzing household products on a global scale involves a pretty big

bucket of categories and countries. What’s Hot Around the Globe—

Insights on Growth in Household Products, one in a series of ACNielsen

reports on the fastest-growing products and category drivers, encom-

passes 66 markets and 29 household product areas.

20 Tune Into Teens: Test Your Teen Aptitude

Teens are a moving target. They were born and raised during a digitized

age where change happens rapidly. Born into the MTV generation wherethe rally cry was “I want my MTV”, they have learned that what they want,

they get. In their world, everything is immediate. From instant messaging

to microwave meals, instant gratification is their mantra.

28 Employee Empowerment:

The Key to Capturing Productivity

Ask any successful salesperson, and they’ll tell you that timely, accurate

information represents the best armor they’ve got in the profit wars.

The bulletproof concept resonates with every salesperson who has

ever had to sell-in a new product, argue a price increase or stave off a

competitive threat. To be effective in today’s hyper-charged, customized,

store-level–focused retail environment, salespeople need a virtual arsenal

of presentations capable of being refreshed with current data at the

touch of a button.

34 Gas Price Hikes Put Brakes on Spending

Crude oil prices ignited again this summer, surpassing the $70 a barrel

threshold and pushing prices at the pump to an inflammatory $3+ per

gallon. Factors like market speculation, refinery capacity shortages and

a pronounced decline in spare global oil production converged, leaving

cash-strapped consumers scrambling to adjust budgets and spending

accordingly.

42 Cracking the Retail C.O.D.E.

Winning at retail is enabled by applying a simple, systematic four-step

process that we call “Cracking the Retail C.O.D.E.” The methodology

employs a series of critical steps to optimize brand or product success

in the marketplace. This consumer-centric approach links actions in thestore—where they matter the most—back to the consumers most likely

to purchase your brand.

50 Trendwatch—Walk-In Retail Clinics:

A Healthy Savings Idea

“Would you like some chicken soup with that prescription?” While grocery

stores have always stocked this form of “liquid penicillin”, today they’re

home to the real deal—walk-in clinics staffed by nurse practitioners

licensed to diagnose and treat common conditions such as allergies,

bladder infections, bronchitis, ear infections, the flu, heartburn, muscle

pain, pink eye, minor burns and rashes.

Global

Household

Product Sales:

Innovative Items

Clean Up

Tune Into Teens: TestYour Teen Aptitude

Gas Price HikesPut Brakes onSpending

EmployeeEmpowerment:The Key toCapturingProductivity

34


http://slidepdf.com/reader/full/babyboom-all 4/562 Fall/Winter 2006

OverviewACNielsen recently completed the 15th edition of its annual

Trade Promotion Practices Study which has traced industry

promotion budget and allocation trends on the manufacturer

side for 15 years, and corresponding retailer practices for nine

years. The longitudinal view of spending habits and preferences

affords unique insights into the ebb and flow of promotional

methods through time, and an enlightened look at the similari-

ties and differences between these trade partners.

Conducted via the Internet, the online survey polled senior sales

and marketing executives from 61 manufacturers and 38 retail-

er organizations. The electronic field work was supplemented

with in-depth telephone interviews to more fully develop areas

of special interest. The Trade Promotion Practices Study has

been distributed to ACNielsen clients and is available for pur-

chase on our website at http://www.acnielsen.com/store.

Benchmarking performance

Perennial favorite topics up for debate include the efficacy of frequent shopper programs and an assessment of which ele-

ments in the category management tool kit (assortment plan-

ning, promotional planning, shelf management, category busi-

ness planning, everyday low pricing, frequent shopper/loyalty

programs, micro-merchandising and micro-marketing) have

gained or lost favor in the calendar year.

A matter of opinionWhile retailers and manufacturers disagreed on any number of

issues ranging from the sufficiency of trade promotion dollars

to the effectiveness of shelf management, there were five areas

of accord. The following topics were identified by both groups

as critical success factors important to their business:

1. understanding consumers

2. new product introductions/implementation

3. category management

4. promotion efficiency/effectiveness

5. variety and assortment

Additionally, each faction identified important subjects specific

to their operations. In the case of retailers, those subjects

included private label activities and customer loyalty/retention

programs. In the case of manufacturers, those subjects included

trade partners, vendor relationships and category management.

Tailoring content

With study input available to guide editorial selections, theFall/Winter issue of Consum er Insight magazine serves up a

number of articles that directly address the top-ranked concerns

of retailers and manufacturers. When it comes to understand-

ing consumers (factor 1), the publication places the two largest

age cohorts in the U.S. squarely in the crosshairs—Baby

Boomers and Millennials.

The article titled “Baby Boomer Segmentation: Eight is

Enough” introduces a robust segmentation model from

ACNielsen Homescan & Spectra, based on the single

most influential determinant of consumer purchase behavior—

household composition, and in particular, presence of

children in the home.

The mantra “it’s all good” describes the teen scene in the article

titled “Tune into Teens” for marketers who take the time to

understand the zeitgeist of Millennials and their propensity for

electronic multi-tasking. While teens may not have the bank

accounts to purchase big ticket items, their influence over

household spending decisions is undeniable.

New product introsOpening a window onto the global new product scene

(factor 2), the article titled “Global Household Product Sales:

Innovative Items Clean Up” analyzes the packaging, ingredient

and social trends that contribute to successful new productuptake. Cleaning products with oxidizing properties swept

the worldwide sales ratings, along with so-called system

approaches to cleaning like the innovative Swiffer line.

C.O.D.E. breakersFor a comprehensive view of consumer-driven micro-

marketing, readers will want to spend time with the ar ticle

titled “Cracking the Retail C.O.D.E.”, which touches on

each of the critical success factors from the Trade Prom otion

Practices Study. Expanded, the acronym C.O.D.E. stands for



1. Consumer Profiling—accurately captures the

demographic profile of the brand’s consumer.

2. Opportunity Gapping—quantifies store-level

opportunities based on consumer demand potential

and diagnoses the prospect.

3. Dynamic Clustering—groups similar stores usingmultiple store a ttributes, including shopper demo-

graphics, the competitive set, and upside opportunity.

4. Executing for the Consumer—takes findings from steps

1–3 and develops store-level tactical plans, giving

the field force the right information to optimize

in-store presence.

Forward-looking insightsWith winter and the annual Consumer and Market Trends

Report release approaching, more than the ambient

temperature is dropping. The VNU Retailer Sentiment

Index (RSI) saw a continuation of the downtrend which

started in January 2005.

Comprising monthly polls of roughly 500 retailers about

current and future economic conditions, the VNU Retailer

Sentiment Index also takes into account indicators such as

store openings, hiring, earnings and general economic trends,

synthesizing the input into a comprehensive view of current

and future conditions.

Traditionally, retailers cited the competitive environment as

their top concern since the inception of the RSI. By mid-

year 2006, for the first time, the overall economy knocked

competition out of the top spot.

Social responsibilityThis year’s Consumer and Market Trends Report exhibits a

decidedly altruistic bent, delivered by two articles. One article

outlines the rise in organic products and the downstream

influence of Wal-Mart’s green commitment on the environment.

The second article discusses how corporate sustainability and

consumer pressure for environmental responsibility is sweeping

through board rooms.

True blueSegueing from the green theme, the Consumer and Market

Trends Report will also cover the subject of true blue customersin a detailed article on the subject of loyalty marketing. The

article walks through a framework for integrating a broad

range of data from loyalty programs and POS numbers, to

demographic profiles, attitudinal studies, share of wallet and

promotional responsiveness to convert regular shoppers into

loyal, high value customers.

Classic updatesNow in its tenth year, the Consumer and Market Trends

Report will include updates on classic measures of industry

performance including channel blurring and category sum-

maries. The channel blurring article investigates the impact

of consolidation on channel dominance and the behavior of

valuable multi-channel shoppers, while the category review

article examines results from the convenience channel.

Pricing it right

Price compression and assortment expansion are two opposingforces that define the fast-moving consumer goods climate of

today. From our custom analytical group comes a detailed

discussion of a repertoire modeling approach for simulating the

impact of a price change on volume, share, revenue and profit.

It’s all about youBy lifting the curtain on this and future Consum er Insight

articles, we hope to have piqued your interest in the publica-

tion, while demonstrating that we practice what we preach.

You are our readers. You are our customers. And our goal is

to provide customer-centric editorial content that addresses

the fundamental needs of your business.

To make sure that we stay on point, you can e-mail our

editor at [email protected] or contact

your client service representative any time to make a

suggestion that will improve our core product set or

thought leadership publications. We’re listening. C i



Baby Boomer

Segmentation:Eight Is Enough

“The most important thing to remember about Boomers is

that they are rule breakers. Individuality over conformity is

a consistent Boomer pattern. They always have done it

differently than the way it was done before, and as they

get older, they will continue to demand products that fittheir individuality.”

– From Rocking The Ages:

The Yankelovich Report on Generational Marketing

by J. Walker Smith & Ann Clurman

Given its relative size and influence on U.S. consumer mar-

kets, surpr isingly little formal, quan titative segmentat ion

work has been conducted on Baby Boomers. The question

remains: how to right-size the huge Boomer cohort? How

many segments would capture the important, often subtle,

nuances that can spell the difference between a successful

new product launch or marketing campaign and a complete

misfire? Turns out, eight segments is enough.

Often, when shaping products or programs for Boomers,

marketers have viewed this generation as a single, monolithic

entity with lockstep needs and purchasing patterns. Akin to

a “big gulp” theory, this framework poured every Boomer

into one purchasing pool of interchangeable consumers.That theory just doesn’t hold water.

At best, marketers acknowledged the sweeping 19-year age

span of 1946–1964, and using a little rough justice, split the

segment in half or thirds, addressing campaigns to older or

younger Boomers. In this generational approach, age serves

as an overly simplistic proxy for the correct measure—

household composition.

Under the generations method, rather than directly measuring

the elements of household composition, observed differencesin purchasing behavior are wrongly attributed to some

underlying, shared social/political/cultural touchpo ints.

That theory is out of touch with marketplace realities.

■ See chart 1.

by: Doug Anderson

Research & DevelopmentACNielsen Homescan & Spectra

Laurel KennedyMarketing Strategy

Age Lessons

Chart 1: Finding the years of the Baby Boom is pretty easy…

A n n u a l B i r t h R a t e o f t h e U n i t e d S t a t e s

35

30

25

20

15

10

1 9 0 0

1 9 1 4

1 9 2 0

1 9 2 6

1 9 3 2

1 9 3 8

1 9 4 4

1 9 5 0

1 9 5 6

1 9 6 2

1 9 6 8

1 9 7 4

1 9 8 0

1 9 8 6

1 9 9 2

1 9 9 8

Small cohort of youngpost war adults

+

Higher incomes and aprosperous economy

Higher consumption—especially housing, autos,

homes and appliances

&Lots of children

=



Simply put, there is no shared cultural milieu that resonates

with all Baby Boomers. Many age cohort members were nei-

ther born in the United States, nor grew up here, leaving the

shared culture concept significantly d iluted.

Size mattersWhen people hear the term Baby Boom generation, the first

thing that comes to mind is its massive size. The second

thing is its unabated appetite for conspicuous consumption.

Boomers have been tagged with superlatives since birth,

re-shaping American culture and institutions to reflect their

unique zeitgeist. Today, this age cohort is defined as follows:

• The biggest age band in history, numbering some 77

million persons

• The highest earners, with a median household income of

$54,170; 55% greater than post-Boomers and 61% more

than pre-Boomers

• The best educated of any group before it, with 28.5%

holding a bachelor’s degree or higher and 45 million

boasting some college

• The most influential investing group, with 40% of the

U.S. population age 50+ controlling 75% of financial assets

• The deepest pockets, responsible for more than half of all

consumer spending

• The preferred safe harbor for returning college grads (2/3

support an adu lt child) and their aging parents (25% live

with a parent)

• The largest homeowner group; 80% of Boomers vs. 69%

of the general population own a home; 25% own a t least

one property in addition to their primary residence

according to the National Association of Realtors.

More alike than differentWhile neither the one- nor the two-tier segmentation

approach is accurate, it’s easy to understand how this

convention emerged. As a group, Baby Boomer households

exhibit the least behaviorally differentiated purchasing

patterns of any generation. Th is apparent behavioral

flatness is due to the fact that there is often more behavioral

variation between different groups of Boomers than between

Boomers overall and the pre- and post-Boom populations

which bracket them.

Any segmentation structure assumes that there are behav-

ioral or other key differences within the group to be seg-

mented. As behaviorists, we believe that segments generated

should show differences in real, measurable consumer

behavior. In the case of Boomers, much of the intra-genera-

tional variation observed has more to do with household

composition, and less to do with membership in simplistic,

age-based cohorts.

Slicing the pieThe overriding factor dictating Boomer consumer segments

proved to be the presence of children in the home. In 2000,

65% of elementary and high school students had Baby

Boomer parents, and high school enrollments reached their

highest level since 1979. Nearly one in five school-age

children had at least one foreign-born parent, and their

ethnicity reflects the diversity of the Boomer band: 63%

non-Hispanic White, 16% African-American, 15%

Hispanic and 4% Asian.

A detailed ACN ielsen Homescan & Spectra analysis of Baby

Boomer households revealed eight discrete segments that

clustered into two broad groups: the four Boomer segments

with children under 18 represented 39.7% of the cohort,

while the four without children accounted for 60 .3% of

Boomer households. ■ See chart 2.

Chart 2: Percent of Baby Boomer households

by the behavioral consumer segments

SingleBoomers

Kids <18

New FamilyFrontiers

Ready toLaunch

No Kids

Late BloomingBoomers

Trailing EdgeFamilies

Leading EdgeFamilies

Leading EdgeCouples

Trailing EdgeCouples

11.35.1

15.5

9.8

9.322.1

15.5

11.5

Source: ACNielsen Homescan & Spectra



Kid stuffMarketing to the Boomer segments with children is anything

but child’s play. It requires an understanding of the nuances

between the four groups. For example, highly educated Late

Blooming Boomers may have made the choice to start fami-

lies later in life or are the by-product of divorce. As a result,

Late Blooming Boomers have smaller, younger families com-

prising one to two children under the age of 12. A single

parent heads fully one-third of Late Blooming households,

which also index above average for African-American and

Asian ethnicities, but below average for Hispanics.

Late Blooming heads of household span the entire Baby

Boomer age group. Since education correlates strongly with

income, any attempt to divide Boomers on the basis of age

alone would clearly miss the mark here, and leave out a

significant number of a ffluent Lat e Blooming households.

■ See chart 3.

Trailing Edge Families comprise larger, stable households

of 4+ persons who have lived at the same address for more

than five years. Unlike Late Blooming Boomers, Trailing

Edge heads of household fall into a narrow age parameter,

sharing a birth date between the years 1958 and 1964.

Averaging 2.5 children per household, they have far fewer

(less than half as many) adult children than Leading Edge

families, which appears to be a direct function of

parental age.

The least educated of any Boomer group, Trailing Edgers

are even less educated than the post-Baby Boom cohort.

Another note of internal segment consistency demarcating

Trailing Edgers is the above average concentration of

Hispanics populating the group, the most of any Boomer

sub-segment.

Older, not necessarily wiser, kidsLeading Edge Families feature older parents born between

1946 and 1957, large households averaging 2.4 children,

with approximately one “adult child” for every four chil-dren under age 18. As one might expect from the doting

parents who pioneered those ubiquitous baby-on-board

signs, the apron strings are proving hard to cut—or perhaps

just more elastic—as young adult children bounce back to

the security of home.

The purse strings to Junior are even harder to untie. As a

consequence, Boomer offspring are returning to the nest

after college in record numbers, or remaining at home while

getting their start in the working world. According to 2000

U.S. Census figures, 56% of men and 43% of women in the

18–24 age bracket reside with a parent, and 65% of recent

college grads enjoy the largesse of Mom & Dad’s hospitality.

While better educated than pre-and post-Boomers, Leading

Edge Families fall into the lower tier of academic accom-

plishment compared with other Boomer segments. After

Trailing Edge Families, Leading Edge Families are the most

Hispanic-dominant of any Boomer group and far and away

the “most married.” Seven in ten Leading Edge Family

households are headed by married couples.

Chart 3: Segmenting Baby Boomer households with

children less than 18

YoungerChildren

< 12 Only

OlderChildren

12 +

Trailing EdgeHOH

Age 42–48

Leading EdgeHOH

Age 49–60

Smaller FamiliesSize 2–3

Larger FamiliesSize 4+

Total BabyBoomer HHswith Children

Late BloomingBoomers

Ready toLaunch

Trailing EdgeFamilies

Leading EdgeFamilies




Working

RetirementsWork long and prosper. That’s the new mantra of the Boomer

generation as it edges toward Social Security eligibility and

retirement age. So hold on to those gold watches, because the

Boomers plan on retiring the traditional concept of retirement

with a characteristically bold move that will surprise detractors

and benefit—rather than hijack—the economic future of the

generations that follow.

The idea is simplicity itself: keep on working, earning and

contributing to the economy for as long as one is able and

enabled. Driven by a host of motivations ranging from self-

actualization to financial need, many Boomers reject the idea of

a leisurely retirement and plan to work well into their 70s and

beyond. In a 2006 Merrill Lynch study, 71% of adults envision

working in retirement, and half of those said they intended to

work as long as they were physically and intellectually able.

Companies need the workersWhile the statistics vary dramatically (estimates of a labor short-

age as early as 2010 range from 800,000 workers to almost

10 million), the inescapable fact remains that the “baby bust”

generation numbers 11 million fewer bodies than the Boomers.

Even with productivity gains, process changes, outsourcing

options and immigration inflows, there simply may not be

enough workers to fill available jobs. The obvious solution:

retain the ones you’ve got.

Progressive employers are experimenting with any number of

riffs on the traditional consulting contracts or part-time posi-

tions available to retired employees. Among the more innova-

tive working retirement ideas:

• capability-specific personnel banks of skilled temporaryworkers;

• roadblocking schedules, where retirees rotate between timeon/off the job for a pre-determined time increment (e.g.,three months on/off);

• job sharing, reviving what Boomer women elevated to an artform; two individuals sharing a job, salary and performanceexpectations;

By contrast, the Ready-to-Launch segment weighs in with

the lowest incidence of Hispanics and the highest incidence

of African-Americans among Boomers. All Ready-to-Launch

households have at least one child over 12, and for the most

part, only children over twelve, skewing toward the late

teens. The Ready-to-Launch segment splits roughly in half between couples with one child and single parents with one

or two children. Heads of household can be any age within

the Boomer bandwidth, and there are few adult children

in view.

Adults onlyApparent ly Single Boomers hit the books in college, tying

Late Bloomers for the title of “most educated.” Some 41%

of Single Boomers never opted for marriage, and established

single households. Half of the Single segment unpacked

their bags five or more years ago and still call the same

residence home today. ■ See chart 4.

Chart 4: Segmenting Baby Boomer households

without children

Trailing EdgeHOH

Age 42–54

Leading EdgeHOH

Age 55–60

SinglePerson HHs

TwoPerson HHs

Three +Person HHs

Total BabyBoomer HHs

without Children

SingleBoomers

Trailing EdgeCouples

Leading EdgeCouples

New FamilyFrontiers




• seasonal positions that follow employees who split timebetween two geographical locations (e.g., New York andFlorida);

• sampling arrangements that enable a worker to move

across departments for a new challenge.

Boomers need the moneyIt’s a good thing that Boomers say they want to work, because

it’s clear that many will have to work for financial reasons. One

factor that impacted even diligent savers was the stock market

decline of 2001–2003 that eradicated roughly $7–8 trillion in

shareholder wealth, much of it held by Boomers.

In the process, the dot-com crash ate away some $279 billion

in 401(k) assets and huge chunks of other retirement savings.Boomers dialed-in to the nuances of finance recognize that

401(k) and IRA/retirement money statements can create a false

sense of wealth, since these amounts will be federally taxed on

withdrawal (with the exception of Roth IRAs).

Everybody winsWorking Boomer retirees will have more discretionary income

to continue fueling the economic engine, less need to draw

down savings and liquidate investments, and can readily fill the

emerging labor gap by staying employed. Meaningful employ-

ment enables critical knowledge transfer from highly skilled

Boomers to other workers, and keeps older employees men-

tally and physically engaged.

At the same time, employers access a labor pool of proven

workers with the flexibility to calibrate hours to match demand.

In a Center for Retirement Research survey, older workers

earned consistently higher marks than younger counterparts

from employers for their “knowledge of procedures and other

job aspects” and “ability to interact with customers”. Overall,

older workers were seen as more productive based on their

accumulated institutional knowledge and efficient work habits.

Retailers like CVS Pharmacy, Home Depot and Borders have

already tapped the retiree talent vein with outstanding results.

When it comes to the workplace, some things apparently do

get better with age.

Trailing Edge Couples carved their own path on the matri-

monial front, and report the highest rate of unmarried

partners living together. Trailing Edge Couples typically

are headed by a person born in the 1952–1964 period,

who have occupied the same house for the past five years,

find themselves situated in the bottom Boomer tier on theeducation dimension, and have fewer than expected

Hispanic and African-American members.

The social vanguardLeading Edge Couples, with a head of household born

between 1946 and 1951, represent the first group of the

Boomer generation to serve as social change agents. One

of the top three best-educated Boomer segments, Leading

Edge Couples exhibit just half the unmarried rate of Trailing

Edge Couples and two-thirds have shared a residence for

five or more years. Less ethnically diverse than o ther

Boomer strata, Leading Edge Couples report a low incidence

of Hispanics and the lowest African-American incidence of

all Boomer groups.

One of the most interesting segments to emerge from the

Boomer study was the New Family Frontiers faction, char-

acterized by three or more adults sharing a household. The

typical New Family Frontiers household encompasses 1.1

children between the ages of 18 and 24, with 40% claiming

another resident relative such as a parent (1/3 of such family

units) or adult siblings.

From an economic perspective, it is worthwhile to note that

54% of New Family Front iers households have three or

more employed workers in the home. Among the highest

earning households, New Family Frontiers do a pretty

good job of hanging on t o wha t they make, second onlyto Leading Edge Couples on the savings front.

■ See chart 5 on page 10.



Gray mattersThe shift towards adult-only households will continue as

Boomers age. By 2007, fewer than 30% of Boomer house-

holds will have children under 18 at home. By 2010, that

number will have declined again to just 20% . By 2014,

fewer than 10% of all Boomer households will include

children under 18 . Americans are getting older, living

longer and having fewer children.

An 85+ population growing eight times faster than the

country as a whole will throw a new wrinkle into long-

standing assumptions which form the underpinnings of

social services programs. In 1995, Federal spending per

child under 18 years of age was $1,693 per child. For the

same period, per capita spending on each 65+ adult was

$15,636. The combined effect of population t rends and

federal spending patterns results in a double whammy—fewer wage earners paying into a system serving an

exploding population base.

Golden, global concernsNot only is the U.S. population aging, the very old compo-

nent is growing at an even faster rate. In 2000, there were

approximately 72,000 centenarians in the U.S. By 2050,

using mid-range Census Bureau estimates, that number will

increase fourt een-fold, exceeding 834,000. To get a relative

sense of size, it would take a city as large as Detroit to

house all the people older than 100 at the mid-century point.

Concerns about aging are not confined within the bo rders

of the United States. Worldwide, the current ratio between

the young (under 20) and the old (over 65) is roughly 3:1.By 2050, that ratio will recalibrate to equilibrium at 1:1.

At that point, older people will outnumber younger ones

for the first time in recorded history.

Spending shiftsConsumption and spending patterns mirror changes in the

Boomer demographic. Food away from home eats up a

larger share of Boomer budgets when the need to stage a

nightly family dinner with the kids goes away. Beer and

wine top off the shopping list for those Boomers furthest

from child-rearing responsibilities. Alcoholic beverage mar-

keters can expect to tap into this bottled-up demand in the

future as consumption levels are expected to maintain even

as Boomers age.

When it comes to home improvements, Boomers gravitate

toward household textiles and furniture, outspending other

segments. Staying connected to friends and families is a

10 Fall/Winter 2006

Chart 5: New family configurations have new numbers of workers

P e r c e n t o f H

H s

100

80

60

40

20

0

No Workers One Worker Two Workers Three or More Workers

P o s t B

a b y B

o o m

L a t e B

l o o m i n

g B o o

m e r s

T r a i l i n

g E d g

e F a m

i l i e s

L e a d i n

g E d g

e F a m i l i e

s

R e a d y t o

L a u n c h

S i n g l e

B o o m

e r s

T r a i l i n

g E d g

e C o u

p l e s

L e a d i n g

E d g e

C o u p l e s

N e w F a

m i l y F

r o n t i e

r s

P r e B a b y

B o o m




Boomer imperat ive, accounting for their 50% higher spend-

ing rate on cellular phones and pagers. Plugged in to elec-

tronic entertainment media, Boomer spending rates outpacethe average for audio equipment, televisions and radios.

The Boomer obsession with health and wellness extends to

their extended family—including the four-footed, finned and

winged members. Boomers willingly open their wa llets for

veterinary care and other pet services such as grooming and

doggie day care.

Family financesThe Boomer relationship with money is complicated and

convoluted. Shaped by parental stories of the Depressionand WWII deprivation, Boomers learned to respect money,

save money, value work over leisure and savings over debt.

They look askance at credit issuers who mail out unsolicited

cards to college students, in the hopes they’ll be used. All

in all, one could say Boomers are a fiscally conservative

bunch—except when it comes to their kids.

It is not uncommon to find a Boomer parent liquidating

retirement savings or mortgaging their home to subsidize

their child’s college tuition. Despite years of denying them-

selves luxuries, they will indulge an offspring’s demands for

a car, expensive vacation or the latest and greatest in con-

sumer electronics.

A perfect stormThe graying of America presents a number of questions such

as the prospective impact of impending retirements on:

1. financial markets, as Boomers prepare to liquidate equity

holdings and supplement retirement savings;

2. real estate markets, as Boomers prepare to trade down

from large homes—a flurry of sales may add momentum

to the imploding housing market;

3. employment issues, as Boomers exit the workplace and

the baby bust generation comes up 11 million people

short of available openings;

4. consumer spending, as Boomers retire or are forced into

second careers, part-time or lower paying positions;

5. healthcare system, as Boomers begin to experience the

inevitable decline of physical vigor and the onset of

chronic illnesses like high blood pressure and diabetes.

An uncertain outcomeSome pundits ponder these issues and see the makings of

a perfect storm capable of capsizing the U.S. economy.

Others see the opportunity to extend the consumer use-life

by extending the Boomer work-life from an arbitrary retire-

ment at age 65, to an open-ended employment contract that

keeps people working, and earning, for as long as they are

physically able. ■ See sidebar on “Working Retirements”

on pages 8 and 9.

Society has never been asked t o solve a socioeconomic equa-

tion with so many unknown variables before. There simply

have never been so many old people, living so long and

staying so healthy.

From a marketing perspective, one thing is certain. Older

Boomers represent both a viable market and one too large

to ignore. C i



by: Jane PerrinCommunications

ACNielsen Global Services

Mark Chesney

CommunicationsACNielsen Global Services

Global Household

Product Sales:Innovative Items Clean Up

Analyzing household products on a global scale involves a

pretty big bucket of categories and countries. W hat’s Hot

Around the Globe: Insights on G rowth in Household

Products, one in a series of ACNielsen reports on the

fastest-growing products and category drivers, encompasses66 markets and 29 household product areas.

Findings surfaced by the study identified four major trends

responsible for growth: new product innovation, health and

wellness concerns, convenient delivery systems and develop-

ing country contributions. Aggregated 2005 sales growth

remained consistent with other reports in the series covering

food and beverages and personal care products, showing

4% growth.

Regional resultsOn an upbeat note, there were several regional pockets of

double-digit growth. Emerging markets posted a 13%

increase and Lat in America an 11% jump in household

product sales, leading Asia Pacific, North America andEurope results. Romania and Russia, both classified as

emerging markets, reported impressive category expansion

rates of 25%. ■ See chart 1.

The complexity of dissecting regional and country contribu-

tions is illustrated by Asia Pacific, a sector comprising both

emerging and developed markets, where the modest 4%

gain in Japan blended with the momentum of a 14% jump

in China. Turning from percentages to the absolute dollar

metric, Asia Pacific achieved the largest dollar value growth

overall at just under $U.S. 1 billion in 2005.

Chart 1: Global findings

Global (66)

Europe (19)

North America (2)

Asia Pacific (15)

Latin America (12)

Emerging Markets (18)

4%

0%

3%

6%

11%

13%

Global (66)

Europe (19)

North America (2)

Asia Pacific (15)

Latin America (12)

Emerging Markets (18)

15%10%5%0%

Value Sales (U.S.$M) inHousehold Products*

Global Growth inHousehold Products* (2004–2005)

0 $50,000 $100,000

*Based on number of countries measured (Number of countries in parentheses)



Leading categoriesAmong the 29 categories studied, only nine grew faster than

the global average, five paced the 4% rate; and t he rest

lagged behind. In prior studies, the fastest-growing categories

were also among the smallest in dollar sales. That was not

the case in 2005. Five categories in the fastest-growing top

nine—garbage bags, household cleaners, air fresheners,

insect control and fabric softener—also registered among

the top 10 categories in value sales. ■ See chart 2.

The remaining top performers included abrasive cleaning

pads, which shared top b illing with disinfectants at 13% ,

laundr y stain removers/boosters at 6% and plastic storage

bags at 5% .

Performance enhancersOn closer examination, specific sub-segments accounted for

the strong overall showing in some categories. For example,

battery-operated freshening systems powered up a 191%

sales increase, and air sanitizing sprays vaporized the

category with their supercharged growth in sales of 36% .

Similarly, the power cleaning sub-segment o f household

cleaners (75% ) and those products with oxidizing ingredi-

ents for stain removal (11% ) wiped up the rest of the category.

The cleaning system concept debuted by Swiffer, comprising

a re-useable element such as a handle with disposable

cloths, sponges or brushes, has been syndicated to other cat-

egories including bathroom cleaners, toilet bowl cleaners,

dusters, air care and insect control. The jury is still out on

whether or no t the consumer uptake on systems and one-

step, multi-use products will successfully cross category

boundaries.

Worthy of considerationConsumer health concerns gave a shot in the arm to house-

hold cleaner and disinfectant category results. Both recorded

higher than average growth rates, which may indicate a shift

in the type of products used to clean around the world.

While the discussion to date has surrounded growth rates, it

is worthwhile to note that even though laundry detergent

only expanded at the average pace, it represents the largest

category overall and contributed more than any other cate-

gory to global growth.

EuropeTotal Household Care (0%)

Brooms, Brushes, Mops (10%)

Disinfectants (3%)

Household Cleaners (3%)

Laundry Stain Remover (3%)

Garbage Bags (3%)

Auto Dish Detergent (2%)

Auto Dish Additives (2%)

Plastic Storage Bags (2%)

Batteries (2%)

Waste Pipe Openers (2%)

North AmericaTotal Household Care (3%)

Disinfectants (23%)


Garbage Bags (12%)

Abrasive Cleaning Pads (7%)

Toilet Care (7%)

Kitchen Paper/Towel (7%)

Air Fresheners (5%)



Aluminum Foil (4%)

Asia PacificTotal Household Care (6%)


Auto Dish Additives (16%)

Abrasive Cleaning Pads (14 %)

Fabric Fresheners (10%)

Air Fresheners (10%)


Fabric Softener (9%)

Batteries (8%)

Garbage Bags (8%)

Brooms, Brushes, Mops (8%)

Latin AmericaTotal Household Care (11%)

Abrasive Cleaning Pads (74%)



Bleach/Ammonia (15%)



Insect Control (13%)

Aluminum Foil (13%)

Toilet Care (12%)


Emerging MarketsTotal Household Care (13%)

Fabric Fresheners (277%)

Carpet/Rug Cleaner (37%)

Waste Pipe Openers (37%)


Laundry Water Softeners (21%)


Cleaning Cloths/Sponges (19%)




Chart 2: Only nine categories grew

faster than 4%Top No. of Markets Category CategoryGrowing Growing/ Growth Rate Growth Value

Categories Measured 04–05 $000

1. Abrasive Cleaning Pads 13 of 23 13% 129,2 15

2. Disinfectants 18 of 26 13% 81,1 483. Garbage Bags* 15 of 19 8% 209 ,806

4. Laundry Stain Remover/Booster 30 of 37 6% 82,87 6

5. Household Cleaners* 55 of 65 6% 338 ,553

6. Air Fresheners* 50 of 61 5% 244 ,081

7. Insect Control* 28 of 47 5% 168 ,489

8. Plastic Storage Bags 28 of 34 5% 78,04 0

9. Fabric Softener* 44 of 58 5% 255 ,008

*Also among the largest 10 categories in value sales

Chart 3: Top 10 categories and growth rate by region

continued on page 16



Stepping Outside Your

Own Borders?

Use the right marketing information tomake your expansion decisions.

Contact ACNielsen Global Services at 847-605-5904.

Global Services



Different strokesThe t op ten categories within each region d iffer significantly,

and none of the overall fastest-growing products shows up

in every regional ranking. In Europe, only the leading cate-

gory— brooms, brushes and mops—charted 2005 results

that bettered the global average. ■ See chart 3, page 14.

In North America, disinfectants killed off any competition

in the top ten with a 23% annual growth rate. Only the

laundry stain remover and garbage bag categories also posted

double digit regional growth at 12% .

Automatic dish detergents and automatic dish additives

floated to the top of the Asia Pacific top ten list. In Latin

America, every top ten contender boasted double-digit

growth, but abrasive cleaning pad results scoured all comers

with a whopping 74% . Laundry stain removers were a

distant second in the line-up at 36% .

The Emerging M arkets’ winning entr y, fabric fresheners,

was in a class by itself with a 277% annual growth rate.

Carpet/rug cleaners and waste pipe openers trailed with

strong 37% increases.

Coming cleanAbrasive cleaning pads, the runaway category growth winner

in Latin America, owes its phenomenal success to a single

country: Brazil. This one country accounted for more

than 95% of category sales, divided among three brands.

Aggressive media suppor t generated a 45% increase for the

leading brand, with the number two and three brands each

expanding by more than 200% .

Global brand dominance was more diffused than in Latin

America, with the top th ree brands comprising 65% of

category sales and private label brands absorbing an addi-

tional 16% .

Hygienic habitsGerm-aphobic Americans kicked their cleaning standards

up a notch, striving for a sanitized—versus merely clean—

household. This microbe-free goal resulted in a 23% regional

category sales increase. As always, convenience played into

consumer decision-making, explaining why 80% of the

absolute dollar growth in U.S. sales (excluding Wal-Mart)

derived from a 60% increase in wipes.

Disinfectant wipes, measured in only five markets, mopped

up consumer dollars on a global basis for a 35% growth in

sales. Their counterpart, disinfectant sprays, expanded at

an average 10% rate in 12 of 19 markets measured. Brand

sales are so heavily concentrated in this category that three

brands accounted for 71% of dollar sales on a globa l basis.

It’s worthy of note that a lthough only 8% of sales can be

ascribed to private label brands, their sales expanded by

26% in 2005.

Tying up salesGarbage bag sales expanded at an 8% annual rate, twice the

global tempo, with North America the sole region to wrap the

year with double digit growth (12% ). For such a seemingly

mundane category, garbage bags represent an endless sourceof innovative benefits from anti-odor attributes to a host of

tying options to stretch-and-flex fabrics that won’t rip.

New features, coupled with raw material cost increases for

the oil-based resins used in manufacturing, combined to

justify the higher reta il prices that raised dollar value sales.

Private label products captured a significant share of

Global Household Product Trends continued from page 14



garbage bag sales (40% ), almost enveloping the 49% sales

component contributed by the top three brands. Both private

label and branded offerings increased by 8% .

Spotless outcomesBoth t he pre-wash and in-wash products that compose the

laundry stain remover category captured double-digit sales

in three of five regions, with four of five regions ranking

the category among the top ten. Tepid Asia Pacific results

of 1% growth dampened the overall category average.

“Oxi” products cleaned up in the category, spreading in

seven of the 10 markets measured at an 11% overall rate.

No-wash stain removers, including pen delivery systems,

achieved explosive sales of 200% over the pr ior year. Key

manufacturers virtually own the category, with the top three

brands accounting for 72% of sales.

Shipshape resultsConvenient, effective household cleaners were swept off

shelves by tidy consumers, with Emerging Market and

Latin America households setting the pace. The two

attributes dominating product selection were convenience

and effectiveness.

Major multinationals entered the power cleaning competi-

tive fray, where sales velocity reached 75% last year. Spray-

ons earned high marks on the convenience criteria, and at11% represented one of the fastest-growing segments.

Product proliferation served to modulate the trend toward

brand dominance observed in other categories, with the top

three branded household cleaners garnering 43% , pr ivate

label 9% and other products 48% of sales.

Something in the airAir freshener sales caught a favorable updraft in Emerging

Markets, Latin America and Asia Pacific, where 2005 con-

sumption increased by 23% , 16% and 10% , respectively.Recent new product entries have kept sales aloft and in the

top-ten tiers for four of five regions studied.

Battery a ir fresheners, unveiled just last year, saw 2005 sales

rocket into the stratosphere at a 150% rate. Air sanitizers

eliminated odors and obstacles to consumer trial, hitting a

respectable 36% growth number. Air freshener candle sales,

reinvigorated by the introduction of scented oils, achieved

an 8% growth rate, doub le that of the global average.

Abuzz with potentialInsect control, the eighth fastest-growing category, ow ed

its 5% expansion to Latin America, a region where bugs

are more than a nuisance; they carry potentially harmful

diseases such as dengue fever and malaria. Product refine-

ments, such as electrically-powered items, command a price

premium reflected in sales results.

The North American no-growth scenario masks a 7% spike

from Canada, possibly reflecting that country’s concern with

the mosquito-borne West Nile virus. Private Label products

barely show up on the radar screen in the insect control

Chart 4: Private Label growth by categoryPrivate Label Private Label Manufacturer

Product Area Share Growth Growth

1 Aluminum Foil 43% 0% 3%

2 Plastic Storage Bags* 41 % 8% 3%

3 Garbage Bags* 40% 8% 8%

4 Kitchen Paper/Towel 28 % 5% 3%

5 Cleaning Cloths/Sponges 26 % 7% 1%

6 Auto Dish Additives 22% 1% 4%

7 Plastic Wrap 19% 4% -3 %

8 Auto Dish Detergent 18% 4% 4%

9 Bleach/Ammonia 17% 4% 5%

10 Abrasive Cleaning Pads* 16 % 4% 15 %

11 Laundry Water Softeners 16% -18% 6%12 Toilet Care 12% 4% 2%

13 Brooms, Brushes, Mops 11% 18% 1%

14 Fabric Softener* 11% 4% 5%

15 Batteries 10% 3% 2%

16 Hand Dish Detergent 10% 5% 4%

17 Household Cleaners* 9% 5% 6%

18 Disinfectant* 8% 26 % 12%

19 Oven Cleaners 7% 5% -1 %

20 Laundry Starch 7% -16% 0%

21 Carpet/Rug Cleaner 6% 6% -4 %

22 Laundry Detergent 6% 1% 4%

23 Air Fresheners* 6% 1% 6%24 Laundry Stain Remover* 5% 16 % 6%

25 Fabric Fresheners 5% -5% -8 %

26 Furniture Polish 5% 6% -4 %

27 Waste Pipe Openers 4% 13 % 2%

28 Floor Polish/Wax 2% -12% -2 %

29 Insect Control* 2% -4% 5%

*Fastest Growing Categories

Manufacturer brands growing faster than Private Label



About the Study This survey of Household Products included 66 markets around the world and 29 categories. These 66 markets account for

more than 90% of the world’s GDP and over 75% of the world’s population. The markets have been grouped regionally into

five areas: Asia Pacific, Emerging Markets, Europe, Latin America and North America. For the purposes of this study, Mexico

has been included in Latin America.

ACNielsen analyzed data across 29 Household Products categories, comparing year-ending data from December 2005 with

December 2004. Within these 29 categories, ACNielsen reviewed subcategories of products, which for the purposes of this studyare called “segments.” This study looks at some of these key segments to understand the changes impacting the categories.

New to the study this year is the inclusion and analysis of private label products within each category. ACNielsen Global

Services intends to include private label information in future reports on product areas, to show the impact of both manufac-

turer and retailer products as drivers of consumer purchasing behavior.

As with Global Services’ other studies, this report is based on purchasing information from retailers in grocery, drug and mass

merchandise outlets and generally excludes kiosks or vending machines. In a few markets, sales from convenience stores

may be included. Within the United States, data from the ACNielsen Homescan consumer panel service has been included

to provide a total market read that includes Wal-Mart information.

category with a miniscule 2% of sales; the top three brands

and all others split the rest of the category sales evenly at

49% apiece.

In the bagPlastic storage bag sales did slightly better at 5% than the

global all-product average, with pockets of strength in Latin

America (14% ) and Asia Pacific (9% ). Interestingly, pr ivate

label sales for this category (8% ) bested manufacturer brand

performance of 3% . The pr ivate label preference was clearly

strongest in Europe, North America and Emerging Markets,

but picking up in Asia Pacific.

A soft touchNew product formulations, improved distribution, increased

advertising penetration and price reductions contributed to

the fabric softener category sales increases in EmergingMarkets (16% ) and Latin America (14% ). Of note, in

Mexico, products such as Downy Libre Enjuague (Rinse-

Free) reduced the hassle factor for consumers who hand

wash by eliminating the rinse step.

The top th ree brands occupy the number 1, 2 and 3 posi-

tions across the majority of markets studied and together

claim 68% of category sales.

Commodity concernsWhile private label offerings earned a 12% share of global

household product sales, that penetration level underper-

formed the norm reported in the ACNielsen 2005 study,

The Power of Private Label. However, the private label

expansion velocity equaled that of manufacturer branded

household products (4% ), so private label neither gain nor

lost ground in relative terms.

Private label share and growth figures varied widely by cate-

gory, from a 43% share in aluminum foil with zero growth ,

to an 8% share in disinfectants with a 26% growth rate.

Regional considerations such as economic development and

lifestyles influenced product uptake and u tilization figures.

■ See chart 4, page 17.

Home basicsHousehold products weighed in with overall global growth

rates consistent with other fast moving consumer product

areas. There is no denying the influence of Emerging

Mar kets as a factor in household product category growth,

alongside a continuous stream of product innovations that

keep consumers engaged and p rices on the rise. Uniformly,

consumers across the world gravitate to products that deliv-

er against two key benefits: value and convenience. C i



The Beauty Care Panel will help you:

• Identify high opportunity distribution channels and quantify the

sales opportunity of gaining distribution there.

• Identify “white space” in the marketplace and quantify new prod-

uct development opportunities.

• Evaluate new product performance and quantify cannibalization.

• Target high opportunity consumers and monitor your performance

across all channels.

The Beauty Care Panel gives you:

• The most comprehensive measurement of Beauty Care purchase

behavior across all channels in 32 beauty care categories, including:

–Make-up/Color Cosmetics

–Facial Skin Care

–Hand & Body Skin Care

–Self-Tanning

–Bath & Shower

–Men’s & Women’s Fragrance

• The Spectra BehaviorScape™ Framework, which helps you

increase the effectiveness of your marketing dollars.

Identify and Target High OpportunityBeauty Care Consumer Segments

Look at the world of beauty care through the

eyes of a consumer and what do you see? A

world filled with choice. As new products and

efficacy claims proliferate and the retail land-

scape becomes increasingly fragmented, mar-

keters are challenged to find a complete meas-

ure of their brands’ performance and identify

high opportunity consumer segments and new

product opportunities.

ACNielsen’s Beauty Care Panel provides

the most complete, accurate and actionable

view of beauty care consumers across all

categories and channels. From mass-

market to high-end/prestige brands and from

supermarkets to specialty beauty stores, the

Homescan ® Beauty Care Panel provides data

at the most granular level to help you effectively

target consumers and maximize sales opportu-

nities in these channels.

To learn more about the Beauty Care Panel, please contact your ACNielsen Client Service or Retail Services representative

or visit our web site at www.acnielsen.com.



Tune Into Teens:Test Your Teen Aptitude

If you’ve never visited YouTube.com, listened to Gnarls

Barkley or used the acronym ROTFL while instant messag-

ing, then find yourself a teenager and get educated. Today’s

younger generation , typically called M illennials (born

between 1980 and 2000), represent a group of well-connected, over-stimulated, media-savvy consumers who

are open-minded, optimistic and well-educated. They

represent the future. Tune in to what drives this very diverse

group of consumers and you will not only score points on

the “uber-cool” chart, but will also deliver messaging that

resonates with the world they live in.

Test your teen aptitudeIf you are thinking that teens do as teens did, then think

again. While it is true that all teens go through the same

growing pains, history tells us that each generation leavesbehind its own distinctive mark (see U.S. Teens Through

the Decades on page 24). To test your knowledge of today’s

teen market, see if you can answer the following questions:

1. Who is one of the lead singers for the Black Eyed Peas?

2. Who said, “Don’t be jealous that I’ve been chatting

online with babes all day”?

3. Who hosted MTV’s 2006 Video Music Awards?

4. What is an emoticon?5. Who is known for the phrase, “That’s Hot”?

6. What is the starting price for a Tracfone?

7. Billie Joe Armstrong is the lead singer of which band?

8. What is Naruto?

9. Who is Shiloh?

10.Who are two ma in characters on “Degrassi the N ext

Generation”?

So how did you do? If you were able to answer 8 out of

the 10 questions, then you are either: a) the parent of a

teenager, b) an actual teenager, c) a teenager wannabe, or

d) a superbly in-sync teen marketer. However, if you are

like most of us and had some trouble, then it is time tobrush up your knowledge of this influential and lucrative

market segment.

A moving targetTeens are a moving target. They were born and raised during

a digitized age where change happens rapidly. Born into the

MTV generation where the rally cry was “I want my MTV”,

they have learned that what they want, they get. In their

world, everything is immediate. From instant messaging to

microwave meals, instant gratification is their mantra.

Millennials are the first generation of true multi-taskers,

easily balancing e-mail, text messaging, music downloads,

homework and a strict schedule of sporting and other

activities, simultaneously. Th is generation is more adept at

communications than any of its predecessors. The wireless

Internet is their central nervous system, and simply put, they

just don’t need much else.

If they’re that connected, then connecting with teens should

be simple, right? Not necessarily. While it may seem easy to

develop a systematic marketing plan (if teens = computers,then website advertising = success), connecting in t he right

places at the right time to the right audience is a challenge

at best.

20 Fall/Winter 2006

by: Tom PirovanoRetailing Insights

ACNielsen

A n s w e r s : 1 . W i l l . I . A m o r F e r g i e ; 2 . K i p D y n a m i t e ; 3 . J a c k B l a c k ; 4 . E m o t i o n I c o n = ) m a d e u s i n g p u n c t u a t i o n o r t y p e ; 5 . P a r i s H i l t o n ; 6 . $ 2 9 . 9 9 ; 7 . G r e e n D a y ; 8 . J a p a n e s e a n i m e s e r i e s ; 9 . D a u g h t e r o f B r a d P i t t a n d A n g e l i n a J o l i e ; 1 0 . E m m a N e l s o n , J i m m y B r o o k s .



Equally differentAll teens are not alike, and grouping them together could be

a roadmap for disaster. Take, for example, a typical eighth

grader compared with a college student. While Disney’s

“High School Musical” is all the rage for one, the other is

much more engaged by the latest drama on MTV’s “The

Real World.”

And don’t discount the hugely important gender differences.

Anybody with kids knows how different boys are from girls.

Therefore, when analyzing teens, boys and girls need to be

viewed separately. For example, girls believe that they are

more grown-up than boys, and spend their money on very

different things, such as jewelry and clothing, while boys’

interests trend toward games and electronics. However, both

spend money on music and movies, which increases as kids

shift from the 12–14 age bracket to the 15–17 one.

It is also important to realize that “what’s hot” can be

polarizing, because for each teen fad with adoring fans,

there is a subset of teens who simply hate it. Finding a teen

idol as a spokesperson for a brand could divide an audience.

For each loyal fan of Justin Timberlake, there is another

teen who simply abhors h im. Interestingly, th is love/hate

relationship seems to be more common with the “beautiful

people” than with stars like John Heder or Jack Black, who

garner more universal appeal.

Stay ahead of the curveFor the most part, young people take their cues from those

a few years older than themselves for trends. This may be

why the Harry Potter books and movies which feature teens

have their strongest appeal to younger children. Or why

movies with a PG-13 rating are more enticing to teens. Or

why Paris Hilton, who is in her mid-twenties, is a fashion

icon for m any teenage girls.

Whether the new fashion is Crocs or Lacoste, whether the

latest video craze is Nintendo DS Lite or GameTap, you

can be sure of one thing: what’s hot today is not tomorrow.

Rather than focusing on what’s hot right now, it is more

important to develop too ls and approaches to monitor and

anticipate changes.

For example, tap into the fickle world of teen trends by

checking out websites such as Billboard.com for the most

popular ringtones, which btw, as of this writing, is the

Nintendo Super Mario Brothers Theme by Koji Kondo, or

the hottest d igital songs (Fergie’s London Bridge), or num-

ber one album (the self-named Danity Kane), or top single

(Justin Timberlake’s “SexyBack” ). Another popular teen

website is MySpace.com, where teens connect with others,

blog, rank music, and much more.

Cash or creditThe fact of the matter is, teenagers represent a powerful

buying force in the U.S. market. According to the 2005

Roper Youth Report, kids are earning $29.20 per week, two

dollars more than in 2004, with 29% of their money com-

ing straight from parents. Chores (37% ) and gifts (23% )

account for other popular sources of teen income. Nearly

one-third (30% ) of 8–17-year-olds say they are involved in

making family purchase decisions, up four percentage points

from last year, as parents increasingly turn to their kids for

advice on what to buy. Teens also indicate that they influ-

ence purchase decisions on everything from cell phone serv-

ice to the right cable provider.

For better or worse (probably the latter), teens are also

enamored by the magic of credit. According to the

Jump$tart Coalition for Personal Financial Literacy, an edu-

cational organization, nearly a third of high school seniors

reported having a credit card of their own or one co-signed

by a parent.

22 Fall/Winter 2006



Products with appealIf you live in a household with a teen, get ready to stock

up on deodorants, grooming aids, acne remedies and

other personal care products, instant meals and school

supplies—in that order. According to information from

ACNielsen Homescan, categories such as these are greatly

overdeveloped for the teen market.

While that may not come as a complete shocker, consider

the fact that many of the brands that have risen to t he top

of this typical list are those that cater to this trend-conscious

segment by offering something new, different or cutting

edge. Take for example Unilever’s AXE deodorant for men.

Appealing to the raging hormones of boys (and young men),

the product comes complete with its own risqué website

where the “AXE effect” promises to attract the opposite sex

“when used responsibly.” AXE now generates $269 million

per year in the food, drug and mass merchandiser channels

(including Wal-Mart).

Another product high on the dollar volume index scale pur-

chased by households with teens offering a unique edge is

Hershey’s Ice Breakers gum that explodes with a burst of

mouth-freshening extra mint taste. Cutesy advertising fea-

turing Hilary and Haylie Duff appeals like a gem to their

target audience.

While these products get high marks for originality, there is

a t remendous untapped opportunity to cross-merchandise.

For example, most cereals are marketed to either young

children or adults, but not teens. Offering a free iTune

download on t he package would certainly have more appeal

to this audience than would an action figure from the latest

kid movie.

Chart 1: Boys spend more on video games than girls

LifeStyle

Affluent Struggling Modest PlainCosmopolitan Suburban Comfortable Urban Working Rural

BehaviorStage Centers Spreads Country Cores Towns Living TotalMale 12–14 253 234 202 205 215 129 202

Male 15–17 89 144 113 178 97 101 120

Female 12–14 103 45 42 129 38 51 62

Female 15–17 2 4 30 26 8 5 13

Total 114 107 97 138 92 72 100

Source: ACNielsen Homescan & Spectra, Penetration (Population)/% Penetration Index, All Channels/United States, BehaviorScape Framework.

Chart 2: Girls spend more on clothes than boys

LifeStyleAffluent Struggling Modest Plain

Cosmopolitan Suburban Comfortable Urban Working RuralBehaviorStage Centers Spreads Country Cores Towns Living Total

Male 12–14 56 47 36 86 56 36 50

Male 15–17 50 52 67 82 32 63 58

Female 12–14 186 132 127 122 187 11 4 141

Female 15–17 97 173 132 123 135 223 156

Total 97 101 90 103 101 108 100

Source: ACNielsen Homescan & Spectra, Penetration (Population)/% Penetration Index, All Channels/United States, BehaviorScape Framework.

High Consumer, 120–149 Very High Consumer, 150+



Aligning the cross hairsFor marketers, targeting households with teens is just a

start. For some products in which consumption is driven by

individuals, however, a more granular approach is necessary.

Using Simmons Teen N ationa l Consumer Survey (NCS)

data, Spectra has developed a Teen Targeting Solution that

helps to understand the teen consumer and identify the best

way to reach and locate teens in their neighborhoods.

The NCS Simmons Teens Survey is a comprehensive survey

of American teens aged 12–17. It provides single-source

measurement of major media, products, services and in-

depth consumer demographics and lifestyle/psychographic

characteristics. Fueled by this survey, the Teen Targeting

Solution allows marketers to more precisely market their

brand to the teenager who buys the product.

The importance of analyzing teens by both age and gender

is illustrated in the following example. Young males ages

12–14 are twice as likely as the average teen to spend their

allowance on video games. Interestingly, teens in Struggling

Urban Core neighborhoods are also 38% more likely to buy.

24 Fall/Winter 2006

U.S. Teens Through the Decades1920s 1930s 1940s

• Youth Crisis—

Kids spending toomuch on gamblingand watching movies

• U.S. Boy Scouts andCampfire Girls founded

• World War One

• “Newsies”— kidsselling newspapers

• Many teens workedvs. attending school

• The Charleston,fox-trot andshimmy (dances)

• Flappers

• Flagpole sitting

• Marathon dancing

• Jazz• Emily Post’s

manners book

• First peanut butter

& jelly sandwiches

• First Miss America

• The Depression

• Fair Labor Standards Actlimited the age of child

laborers to 16

• Roosevelt’s Civilian

Conservation Corps

• Long-playing

phonograph records• The “golden age”

of radio

• 250,000 teens living

on the railroad

• Swing music

• Board games

• Hats were mandatory

for men

• First drive-in theaters

• The word “teenager”was coined

• World War 2, rationing,victory gardens

• Many jobs available toteens during WW2

• Seventeen magazinefounded in 1944

• The jitterbug (dance)

• Term “juvenile

delinquent” coined

• Zoot suits for young men,

“slacks” for women

• Largest number of teen

marriages after WW2

• Swallowing goldfish

• “Kilroy was here.”

1950s• Birth of rock & roll

• First hula hoops

• Brylcreem(hair tonic)

• Jack Kerouac, beatnik

• Marilyn Monroe, Elvis

Presley, James Dean

• Telephone booth stuffi

• 3D movies

• Poodle skirts, saddle

shoes, letter sweaters

• Car hops (before

drive-throughs)

• Sideburns

1910s



By contrast, female teens are much more interested in the

fashion scene, spending far more than average on clothing.

Thus, marketing programs designed only for the household

or for the adult consumer will not offer the most effective

way to reach heavy teen consumers. ■ See charts 1 and 2,

page 23.

Zooming inOnce the teen consumer has been identified, direct market-

ing can begin. Using the Spectra system, a t argeted profile of

the Brand A teen consumer is devised to reveal what maga-

zines they read, what TV shows they watch, what websites

they surf, how they spend their free time and where they shop.

In addition, subtle neighborhood differences are also

exposed. For example, in the upscale urban areas character-

ized by Cosmopolitan Centers, teens are more likely to beachievers. They have good access to home computers, are

savvy with money, and are less likely to watch TV. Teens in

more downscale areas, Struggling Urban Cores, are more

likely to access the Internet at school, and are very music

oriented. They know what songs are in the Top 10, wear

clothes that reflects their musical tastes and are likely to

characterize themselves as rebels.

Understanding the unique demographic nuances of teen con-

sumers allows the execution of a precise marketing strategy

among all the consumer segments that purchase the brand.

In addition, not only do teens represent a large share of

some product’s volume, they also are the next generation of

consumers who will fuel growth for all brands in the CPGindustry. A successful marketing campaign to teens will pro-

vide the foundation for brand loyalty and growth among

this generation well into the future.

The next big thingKeeping abreast of the next big thing on the horizon is criti-

cal. Think back to when the iPod Nano was introduced in

September 2005 and the Video iPod in October 2005. At

that time, Apple discontinued their older models, but several

mainstream retailers continued to advertise these models

while selling the incompatible accessories. Only a very few

nimble retailers were quick to align themselves with the new

iPod models by including photos and information on the

front page of their websites.

1960s 1970s1980s

1990s• 40% of the U.S.

population was under20 years old in 1965

• Woodstock

• Protests, civil rights,

Vietnam

• British invasion, Beatles

• Bell bottoms, miniskirts, turtlenecks

• The twist (dance)

• Love beads

• Surfing

• Tie-dyed shirts

• Bouffant hairdos,hair ironing, Afros

• Go-go boots

• Hippies, counter-culture

or “ alternative” culture

• Recreational drugs

• Voting aged dropped

to 18

• The draft ended

• 8-track tapes

• Streaking

• Feminism

• Punk rock

• Mopeds• Platform shoes,

earth shoes

• Disco

• First video games

• Rocky Horror Picture Show

• Ecology

• MTV goes on the air

• Latchkey kids

• Jelly shoes

• Video arcades

• Rubik’s Cube

• Boom boxes

• Rap, hip-hop,break-dancing

• Hacky sack

• Trivial Pursuit• Madonna, Miami Vice,

Michael Jackson

• The Breakfast Club ,and other John Hughes

movies

• Big hair

• Live Aid

• Music on CDs

• Mullet haircuts

what’s next?

2000s• The Worldwide Web,

online chat rooms

• Beanie babies

• Piercings, tattoos

• Boy bands— Backstreet

Boys, N Sync, O-town,98 Degrees

• Grunge• The Macarena

• Extreme sports

• Christian music

• “Seinfeld,” “Friends,” “Simpsons”

• DVDs

• iPod, MP3 players

• Mobile phones for teens,

text messaging,camera phones

• Xbox, Playstation 2,Gameboy

• Rubber wristbands

• Reality TV shows• Tivo, DVRs

• MySpace.com

• Low-rise jeans

• Napoleon Dynamite

• Sports gambling,fantasy leagues

• Body sprays

• September 11th



Wouldn’t it be nice to know why a customer purchased your

product—just after they made the purchase? ACNielsen

Homescan’s New Product Alert provides unique insights to

understand the motivation behind purchases of new products.

For the first time, you can reliably quantify the factors influencing

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Homescan ® panelists with online access transmit their purchases

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No other research method allows you to survey early adopters of

specific UPCs. Since households transmit purchases the same

week they shop, recall effect is virtually eliminated. The standard

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To learn more about New Product Alert, please contact your

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Instant ConsumerFeedback on

Your New Products

C i

While we can only speculate about what will happen in the

future, simple observations can be made to help keep in

tune with what teens are buying and what they are interested

in. A few recommendations include:

• track what kinds of gift cards teens give and receive and

find out what they redeem;

• visit popular teen web sites such as M ySpace.com and see

who advertises there;

• view videos posted on YouTube.com;

• check out iTunes and discover the top podcasts. Look

for ways to connect with the iPod and podcasting craze,

which shows no sign of slowing;

• learn about Z une, Microsoft’s answer to iPod. This may

be the next hot device;

• be careful to speak their language and don’t use terminology

that is old news (“da bomb” or “ bling-bling”—now just

“bling”);

• use bright colors and splashy graphics to complement

their fast-moving lifestyles and personalities.

The bottom line is this: understand your audience. In order

to make a difference, you have to think differently—even if

that means stepping back (or perhaps forward) in time to

relive those dreaded, wonderful teen years. :)



All teens are not alike. Individual purchasing behavior, media expo-

sure, attitudes and opinions can vary greatly by age, gender and

lifestyles—especially when it comes to categories such as snacks,

beverages, consumer electronics, apparel and personal grooming

products.

Understanding the unique nuances of your teen consumer allows you

to execute a marketing strategy among all the consumer segments

that purchase your brand. In addition, not only do teens represent a

key driver for many brands, they also represent the next generationof consumers who will fuel growth for all brands in the CPG industry.

A successful teen marketing program will provide the foundation for

brand loyalty and growth among this generation well into the future.

SolutionUsing Simmons Market Research Teen Survey, ACNielsen Homescan

& Spectra has developed a Teen Targeting Solution, which helps

you understand the teen consumer, identify the best way to reach

teens and locate teens in their neighborhoods.

The Simmons Market Research Teen Survey is a comprehensive

survey of American teens aged 12–17. It provides single-source

measurement of major media, products, services, and in-depth

consumer demographic and lifestyle/psychographic characteristics.

Fueled by this survey, the Teen Targeting Solution allows marketers

to more precisely market their brand to the teenager who buys

their product.

The Teen Targeting Solution helps you:• Evaluate brand opportunities among different teen consumer

segments for household products.

• Compare teen profiles to the adult’s consumption for products

purchased for individual consumption.

• Create a teen profile for your brand.

• Identify media outlets to reach your teen consumer.

• Locate teens in the neighborhoods they live and go to school.

For more information, please contact Sean Jafar at

[email protected].

Individual Targeting Solutions for Teens



Employee

Empowerment:The Key to Capturing Productivity

No discussion of productivity would be complete without a

reference to employee empowerment and the policies and

tools that make it possible. Any number of factors play into

empowerment—for example:

• whether it has been embraced as a corporat e value and

validated from the CEO office on down;

• whether policies and procedures exist to define and shape

empowered behaviors;

• whether review systems capture, measure and mete out

rewards for taking action;

• whether support mechanisms are in place to initialize or

enable field decisions;

• whether information technology facilitates ready access to

needed data , be it about product, p ricing, distribution o r

other issues.

For each employee to serve as a self-actualized unit, there

must be organic, seamless connectivity to all parts of the

organization.

Get connectedIn the knowledge economy, everything revolves around the

concept of connectivity, and Metcalf’s Law serves as the

behavioral guideline.

Metcalf’s Law:

The value of a computer is

proportional to the square of the

number of connections it makes.

Few jobs require as much independent thinking and employee

empowerment as sales. Empowered salespeople represent

the forward line, the guardians of differentiation, the cus-

tomer touchpoint in every marketing equation. They are

the u ltimate players in the so-called know ledge economy.

Unlike employees in silo or niche areas, salespeople need to

reach out and connect disparate information from diverse

sources in quick time to effectively address customer needs.

Their knowledge base reaches across the enterprise from an

understanding of customers to products and services,

processes and systems, the competitive set, and the arcane

combinat ion o f psychological and social skills necessary to

close a deal.

Technology to the rescueAsk any successful salesperson, and they’ll tell you that

timely, accurate information represents the best armor

they’ve got in the profit wars. The bulletproof concept

resonates with every salesperson who has ever had to

sell-in a new product, argue a price increase or stave off a

competitive threat. To be effective in today’s hyper-charged,

customized, store-level–focused retail environment, sales-

people need a virtual arsenal of presentations capable of

being refreshed with current data at the touch of a bu tton.

That need spawned the fast-track development of ACNielsen Answers® Presentation Builder, a best practices

solution that automates and standardizes the development

of data-driven presentation decks. Custom-designed to your

unique specifications by ACNielsen consultants, the applica-

tion automatically populates templates using the data calcu-

lations and benchmark metrics you choose. The look, feel,

reporting style and approach are exclusive to your company

28 Fall/Winter 2006

by: Russell EvansBusiness Technology Solutions

ACNielsen



and readily accessible via any Internet connection when and

where you want. Last minute changes and updates become a

mere mat ter of logging on instead of experiencing logistical

logjams.

Presentation powerIn the fast-moving consumer goods industry, presentations

are a fact of life. A truly great deck can facilitate a contract,

substantiate a strategy and move a group toward consensus.

Secondary benefits that accrue from presentations include

the opportunity to enhance the corporate brand image and

values with key audiences like customers, prospects and

business partners.

Ma intaining and nu rturing the corporate brand has become

a top priority of global companies because it represents one

of the few points of differentiation that cannot be duplicat-ed. Establishing a consistent presentation format and

methodology ensures that the corpora te brand is communi-

cated correctly, and in alignment with brand standards,

throughout the organization.

Productivity boosterBusinesses run on a 24/7 basis in a globa l economy, so every

minute off-line translates into a minute behind the times.

Productivity aids help compensate by enabling people to

log on, tune in and reach out from virtually any location.

Recognizing the need to stay connected, designers scoped

ACNielsen Answers Presentat ion Builder as a web-based

tool that delivers presentation decks directly to a laptop

or desktop.

By automating repetitive and time-consuming tasks,

Presentat ion Builder frees up valuable personnel for invalu-

able face-to-face time with clients and other high value-add

activities. Great-looking reports rich with timely informa-

tion and telling benchmarks can be generated by salespeople

who have no prior knowledge of PowerPoint or theACNielsen access and ana lysis tool.

Productivity calculatorHow much time does your sales organization spend re-

building standardized reports for individual clients? You

might be surprised at the hidden savings that can be recov-

ered by automating this time-consuming task with

Presentation Builder.

Take the case of Dan, a typical manufacturer sales represen-

tative serving the Midwest region. Dan needs to prepare a

20 slide presentation deck summarizing the most recent

performance in the Chicago market. Without Presentation

Builder, Dan is looking at more than 7 hours of grinding

work; with Presentation Builder, he can finish the job inunder 7 minutes. ■ See chart 1.

Best of all: Dan’s employer just saved over $1 ,000 in under-

utilized personnel time that can now be deployed against

revenue-generating t asks.

Multiply that number by the number of Dans in the organi-

zation, and the number of presentations each Dan creates in

a year, and the results will show up on the top and bott om

lines as you reap the benefits of improved customer relation-

ships, better stor e-level execution and more d irect sales time.

The cure for sales ailmentsEmpowerment tools like Presentation Builder represent an

effective antidote to three of the top impediments to sales

success: inappropriate use of technical resources, inability

to articulate value, and lack of an organized sales process.

Chart 1: Time saved using Presentation BuilderWithout Presentation Builder Time x Task

(minutes)

1. Determine which slides need to be built 50

2. Create calculations 83. Determine data requirements by slide 200

4. Design slide and manipulate data into presentation format 130

5. Perform final edit/run/testing of deck 40

6. Save final deck on hard drive/off to client meeting 1

Total Time (minutes): 429

(hours): 7:09

With Presentation Builder Time x Task(minutes)

1. Log into ACNielsen Answers portal < 1

2 . Select appropriate deck template within Presentation Builder 1

3. Submit a request new deck with Chicago market 2

4. Request email notification when complete < 1

5. Save final deck on hard drive/off to client meeting 2

Total Time (minutes): 7

Time Saved: 7+ hours




The Answer for Busy ProfessionalsStandardized client-ready presentations are a fundamental

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spent building presentations. ACNielsen announces a way to

reduce your presentation building time significantly. Now you

can focus your time on adding value to your organization

with bottom-line results instead of countless hours creating

presentation decks each month.

Presentation Builder, delivered through ACNielsen Answers ® ,

eliminates the time-consuming task of pulling syndicated data

content into the right format for client-ready presentations.ACNielsen Business Technology Solutions consultants can

automate the creation of your standard business presentations

seamlessly. This intelligent solution uses advanced proprietary

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design the presentation format and standard data calculations,

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Accessible from any Internet connection via ACNielsen Answers,

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time-saving solution is available when you need it, where you

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ACNielsen Answers Presentation Builderallows you to:• Automate the process of creating standard business

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Even first-time users can immediately understand the

Presentat ion Builder program and realize efficiencies from

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Value can be expressed any number of ways, from a rapid

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the customer have been identified, they become part of a

template that ensures consistent data presentation and

review within and across accounts.

Getting organizedFinally, we come to the issue of organization, the bane of

every salesperson who has ever juggled a cell phone, laptop,

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Once the sales group has agreed on client metrics and pres-

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rep needs to do is update a deck with fresh data before a

customer meeting. All the time-wasting decisions—which

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have been thought through and p rogrammed in. That way,

each meeting, each rep, each contact, each account, shares a

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ing feature proves especially helpful in global situations,

automatically synchronizing data for easy aggregation.

Power to the peopleYou’ve heard it a million times: “people are our most

important asset.” Smart companies are those that act like it,

empowering employees by put ting the r ight technology,

tools and training in place to guarantee success. C i

Employee Empowerment continued from page 30



One Click, One Place, All the Answers. Spend less time searching

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business intelligence



Gas Price Hikes PutBrakes on SpendingCrude oil prices ignited again this summer, surpassing the

$70 a barrel threshold and pushing prices at the pump to an

inflammatory $3+ per gallon. Factors like market specula-

tion, refinery capacity shortages and a pronounced decline

in spare global oil production converged, leaving cash-strapped consumers scrambling to adjust budgets and

spending accordingly.

To gauge the nature and depth of the consumer response to

fuel-flation, we repeated a survey of ACNielsen Homescan

Panel members that was fielded twice in 2005 (June/July

and October/November periods). The objective was to

provide manufacturers and retailers with a window on

consumer shopping and spending habits when they felt

the pinch at the pump.

Think aheadAs with last year’s surveys, consumers geared up for the

long haul by doing some advance planning, combining

errands and t rips to conserve gas. Mor e than two-thirds

(68% ) of respondents adopted this tactic, a seven percentage

point increase from June/July 2005, maintaining the upward

trend from O ctober 2005 r esults. ■ See chart 1.

Gas gouging really took a bite out of restaurant food sales

(39% of respondents said they were “eating out less”) and

general entertainment spending (39% said they were “do ing

more things at home”). These findings proved consistent

with published reports about softness in some casual dining

restaurants.

Encourage cocooningSetting politics aside, it is clear that unrest in the Middle

East will continue to put a crimp in the oil pipeline, and

high fuel prices that convert into higher transportation and

home heating/cooling costs are here to stay. Manufacturersand retailers will greet this with mixed reviews.

On one hand , manufacturing, packaging and shipping costs

will rise apace, given their reliance on petroleum-based

products. On the other hand, when consumers cocoon, do l-

lars once spent dining or playing out will be diverted back

to the grocery, club, drug and mass merchandiser channels.

Price pressuresThe key will be to hold the line and avoid the temptation of

passing along cost increases directly to the consumer in the

form of higher prices. Consider the fact that in the span of a

single year, 12% more consumers (almost half of all respon-

dents) stated they were reducing spending to either a

“small” or “great degree.” Clearly, price sensitivity enters

the equation when consumers evaluate spending trade-offs.

34 Fall/Winter 2006

by: Todd HaleThought Leadership

ACNielsen Homescan & Spectra


Chart 1: Households combining trips, eating out

less & staying homeImpact higher gasprices had on driving June/July Oct. June/July Chg vs

& spending habits ’05 ’05 ’06 yr ago

Combine errands/trips 61% 68% 68% + 7Eat out less 31% 35% 39% + 8

Do more things at home 30% 33% 39% + 9

Buy larger, economy size 10% 9% 11% + 1

Shop more at warehouse clubs 9% 7% 10% + 1

Shop more on Internet 5% 5% 9% + 4

Use public transportation more 3% 3% 4% + 1

Source: ACNielsen Homescan & Spectra Panel Views Surveys



Value pricing assumes even more impor tance in t his volatile

climate, and promotions touting at-home family fun nights,

home-cooked family meals and at-home entertaining con-

cepts accelerate to the front of the strategy options.

Changing habitsConsumers also cited other budget-stretching adjustments to

their shopping and pu rchasing patterns. Among them ar e

patronizing supercenters to buy in bulk at lower unit prices,

clipping coupons to capture available savings, and switching

to less expensive grocery brands.

Premium and mid-grade gas patrons downgraded to regular.

Warehouse club stores and Internet shopping options both

benefited from the desire to keep the lid on the gas tank and

spending.

Homefront, workfrontA Florida State University professor explored different

aspects of the fallout from gas prices, discovering that 44%

of the 300 employed consumers surveyed worried about

making ends meet; 41% were paying off debt more slowly

and 25% had gone without ba sic necessities like food and

heat to conserve funds.

When queried about how changes in their financial picture

affected their job, results were alarming. Respondents cited

negative outcomes across the board, related to more stress

at home. They were less enthusiastic about work and their

employer, less agreeable and helpful to o thers, less produc-

tive, more sensitive to daily irritants at work and more

depressed overall.

Penetrating insightsDollar stores, once on a seemingly unstoppable expansion

trajectory, actually experienced a t wo percent decline in

household penetration, the sole exception among the

“value” channels to lose ground. In a surprising turn

of events, this represents the first decline in dollar stor e

shopper penetration since we first began tracking the

channel. ■ See chart 2.

This is surprising on the one hand, because gas price

increases that affect those on fixed incomes and with

modest means (the prototypical dollar store shoppers),

might be expected to drive more consumers toward

dollar outlets. It is less surprising in the context of trip

consolidation, where shoppers try to meet all their needs

in the fewest trips possible. The limited food and beverage

assortment and lack of fresh foods at most dollar stores

may be the force behind the decline.

Gas Price Hikes continued from page 34

Chart 2: Dollar stores decline, Club &

Supercenters increase

% household shopper penetration

Warehouse

Supercenters*

Dollar

Drug

Mass Merch

Grocery

5050

52

5158

61

5967

65

868383

9587

85

1009999

20012005

mid-2006

Source: ACNielsen Homescan & Spectra *Includes Kmart, Target & Wal-Mart Supercenters



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Concurrently, the competing warehouse club and super-

center “value” channels enjoyed two and three percentage

point increases, respectively, in the penetration measure.

Underlying reasons for the upticks include continuing store

count expansion, which enhances accessibility, and a relent-

less commitment to delivering consumer value.

Trip decayTrip count results proved that consumers not only talked

the talk, they walked the walk and reduced the number of

shopping trips in every channel except warehouse clubs,

which held steady at 11 trips per household per year.

A review of trip count results by channel suggests that gro-

cery stores might need to re-examine their value proposi-

tion. Trip counts sagged by one trip per household at dollar

and drug stores, mass merchandisers and supercenters, butthe grocery trip frequency declined at twice that rate.

Basket bonanzaConsumer behavior aligned with attitudes again, as bigger

basket rings across channels validated the “shop less, buy

more” reaction to gas prices. Warehouse clubs were the pri-

mary beneficiary of the new consumer spending directive;

witness the $6 increase in the average trip receipt, for a total

of $93 per trip. ■ See chart 3.

38 Fall/Winter 2006

Chart 3: Larger baskets in all channels—consumers making fewer small trips

Average $ basket ring—Total expenditures

Dollar

Drug

Grocery

Mass Merch

Supercenters*

Warehouse

111213

192223

32

3538

3944

47

5160

63

8287

93

20012005mid-2006

Source: ACNielsen Homescan & Spectra *Includes Kmart, Target & Wal-Mart Supercenters



Grocery, mass merchandisers and supercenters each experi-

enced a $3 per basket expenditure increase, raising the aver-

age consumer spend per format tr ip to $38, $47 and $63,

respectively. Drug and dollar stores sat at the bottom of the

rankings with an extra $1 added to the average shopping tab.

Resilient responseIn June 2006, former Federal Reserve Chairman Alan

Greenspan remarked that American business “to date has

largely succeeded in finding productivity improvements

that have contained energy costs.” However, he raised the

specter of continued upward oil price pressure leading to

an observable impact on the U.S. economy.

One reason Americans have been able to absorb price

increases to date ascribes to the fact that those who drive

the most can afford it. A larger percentage of affluent

consumers drive 200+ miles per week than those living

comfortably, getting by or the poor. ■ See chart 4.

Poor pay moreUnfortunately, rising gas prices will impact the most those

who can afford it the least. While gasoline costs represent

just 6% of the pre-tax household income for families earn-

ing $75,000 per year, they consume double that proportion

(12% ) for households earning $20,000 annually.


Turning a moment to the rising cost of natural gas and

other home heating alternatives, consumers can expect those

costs to increase as well. Last year, a mild winter mitigated

price hikes, minimizing the wallet wallop. In the aggregate,

the implications are obvious for the manufacturers and

retailers who target lower income households—get readyto feel the heat.

Strategic falloutThe thirst for oil will prompt manufacturers and retailers to

sharpen their pencils and continuously monitor the consumer

pulse to combat the margin squeeze. How will the fuel

Chart 4: Those who can afford higher gas prices drive more

% household by weekly mileage driven

Poor

Getting By

Living Comfortably

Affluent

1279212014810

1991320211134

2512162016812

3814151710511

No Vehicle51–100 Miles0 Miles101–150 Miles

1–25 Miles151–200 Miles26–50 Miles200+ Miles

Source: June/July 2005 ACNielsen Homescan Survey



Chart 5: Rising gas prices will impact low income

households and the retailers/manufacturers that

serve them

At $3 a gallon

Gasoline costs as % of pre-tax household income

Dollar Amount

12 $2,382

$2,820

$4,179

$4,647

$20,000

$25,000

$50,000

$75,000

11

8

6

A n n u a l I n c o m e

Source: Department of Energy, USA Today

crunch impact brand and format loyalty? How will

promotional strategies need to be adjusted in response?

What services could be added to make a store the winning

contender under the single-outlet, consolidation scenario?

Oil price pressures may precipitate any number of market

responses in the fast-moving consumer packaged goods

world, including:

• accelerated private label product growth;

• enhanced interest in large pack sales;

• broader assortments;

• value-based pricing;

• at-home entertainment focus in advertising and

promotions;

• added convenience store features, positionings;

• increased emphasis on trip capture.

Change in attitudeAs a country, the United States will need to wean itself from

oil dependency by developing viable alterna tive fuel opt ions

such as ethanol, moving to gas-saving hybrid vehicles like

the popular Toyota Prius, and re-evaluating our fundamen-

tal relationship with non-renewable energy sources.

As an industry, CPG manufacturers and retailers will need

to re-think the retail calculus and factor-in the impact of

higher transportation and heating costs on the brand buyer

and retail shopper mindsets. Even if the recently discovered

Gulf of Mexico oil field turns into a gusher, industry experts

predict it will be at least four years before that fuel supply

impacts consumers, and it will not be large enough to offset

the chronic and increasing U.S. demand. There is a real

opportunity for CPG industry leaders to convert a deep

understanding of the consumer response to persistent

gas shortages into a stra tegic lever that will drive sales

and profits. C i



Cracking theRetail C.O.D.E.You’re pretty good at Sudoku. You know how the DaVinci

code was solved. But do you know how to crack the retail

C.O.D.E.? Turns out, you held the key to unlock sales

potential at the store level all along: the consumer. As the

only common denominator across brand, product, accountand store activities, it is imperative that store-level strategies

and tactics begin and end with the consumer.

Two common factors often hinder the ability to take advan-

tage of store-by-store growth. First, consumer insights

alone, without resulting actions, simply turn into overhead.

Second, t reating an entire retail chain as if it served a single

shopper type often results in missed opportunities.

What’s needed, is to find an approach that enables scalable

action based on store-level insights to position a companyfor success with consumers. Store-level growth opportunities

exist, but they are often difficult to identify and procure

with a reasonable return. It takes the right tools to integrate

action and insight into a cohesive, repeatable framework

for success.

Getting startedThe first step into the new world of store-level marketing

begins by abandoning any preconceived notions about a

consumer-centric approach. There is no silver bullet report

with all the answers, no bedrock rule about how a categoryacts in response to consumers.

Realize that things are not always what they appear to be.

Narrowly focusing solely on category-specific action is no

better than looking down from a tall building and incorrect-

ly noting that all people are the same. Consumer-centric

planning is about analyzing specific groups of people and

identifying how to impact them where they shop—at ground

zero, the store level. It is a different way of looking at busi-

ness, one with an upside that pays off in sales and profits.

Winning at retail is enabled by applying a simple, systematic

four-step process that we call “Cracking the Retail

C.O.D.E.” The methodology employs a series of critical

steps to optimize brand or product success in the market-

place. This consumer-centric approach links actions in the

store—where they matter the most—back to the consumers

most likely to purchase your brand.

Four steps to successThe acronym C.O .D.E. summarizes a methodology that

begins with Consumer profiling, then moves to Opportunity

gapping, Dynamic clustering and Executing for the con-

sumer, the four steps to success in store-level marketing.

1. Consumer profiling—accurately captures the demographic

profile of the br and’s consumer.

2. Opportunity gapping—quantifies store-level opportunities

based on consumer demand potential and diagnoses the

prospect.

3. Dynamic clustering—groups similar stores using multiple

store attributes, including shopper demographics, the

competitive set, and upside opportunity.

4. Executing for the consumer—takes findings from steps

1–3 and develops store-level tactical plans, giving the

field force the right information to optimize in-store

presence.

This strategic approach provides a deeper understanding

of the consumers around a given store, measures the gap

between actual and potential demand, and offers an execu-

tion plan at the store and cluster level that fully addresses

42 Fall/Winter 2006

by: Bill RouseWal-Mart Analytics


Jon Busman

MarketingACNielsen Homescan & Spectra



the potential demand. The result is improved operat ional

execution, reduced out-of-stocks, fewer overstocks,

enhanced promotion performance and better inventory

management.

Step 1: Consumer profilingThe consumer should be the first and last consideration of

any consumer-centric initiative and the C.O .D.E. app roach

is no different. Products do not buy themselves, just as

shelves do not mysteriously empty by themselves. While

price reductions, competition, br and equity, slotting and the

like all influence purchasing, the common denominator is

the consumer.

It is only appropriate then, that the C.O.D.E. approach

starts with consumer profiling. There ar e various types

of consumer pr ofiling information available, from panel

purchase behavior to at titude and usage studies to focus

groups. Traditionally, point-of-sale (POS) data has been

utilized to tell us “what happened” but not who drove it.

Through consumer regression profiling, it becomes

possible to create a sales-weighted store profile by

estimating future consumer demand for products based

on historical sales data.

ACN ielsen Homescan & Spectra recommends utilizing

panel data to determine category and brand breaks, and

Opportunity Finder solutions to “consumerize” product

movement data, enabling retail-specific and item-specific

store profiles. This approach yields granular analyses down

to the SKU level. The ana lyses become reta il-specific, based

on t he retailer’s own d ata, w hich adds power to the recom-

mendations. Regardless of source, consumer profiles can be

used individually or in combination to formulate step one

of Cracking the Retail C.O.D.E.

Step 2: Opportunity gappingAre you leaving sales on the table? If so, how much? What

needs to change to convert potential and lost sales into reg-

ister rings? Op portunity gapping quantifies the opportunity

cost to each store for missing the mark two ways—either

with consumers or on the execution level. While fair share

gapping is a common practice to determine if a brand or

product is getting its expected share of the account or market

pie, what if you could estimate how big the slice would be?

Consumer profiling is the first step in executing the

C.O.D.E. approach, but without action it just becomes

“n ice to know.” In order to quantify opportunity, matchingthe consumer pro file to the known shoppers of an account

is critical. The degree of sophistication can vary from pr ofil-

ing your consumer and identifying a common trait within

a retailer (i.e., matching high income consumers to a high

income account like Whole Foods), to scoring an account

at the store level based on the most volume-predictive

consumers, also known as the Spectra Demand Index.

In essence, while Step One determines your consumer’s

fingerpr int, Step Two ma tches it to an account’s finger-

print—or even better, an account’s store-level fingerprint s.Now you have a basic roadmap for tomorrow’s volume.

44 Fall/Winter 2006

“Opportunity gapping provides

an indication of how much the

category could grow tomorrow if

I could fully execute, instead of only trying to

capture my fair share of yesterday’s volume.”

–Michael Himmelfarb, VP of Marke

ACNielsen Homescan & Spec



Windshield vs. rear-view mirrorThe C.O.D.E. methodology puts marketers in the driver’s

seat, steering brands and products by looking through the

windshield instead of the rear-view mirror. This approach

focuses action on stores that show growth opportunity, and

suggests maintenance level support for those with lower

growth potential.

Execution opportunity gaps materialize based on the yin-

yang interaction of two opposing forces: demand drivers

and demand inhibitors. Demand drivers include activities

such as promotions, cross merchandising and correct shelv-

ing. Demand inhibitors include competition, out-of-stocks

(OOS), distribution voids, and incorrect shelving or space

allocation.

Case in pointIn a typical prom otion scenario, 16% of stores won’t have

available space, 22% won’t display the promotion signage,

33% will put up the displays too late and 42% won’t have

the skilled labor t o execute the promotion. Opportun ity

gapping identifies problem stores—those that should have

sold more based on the consumer fit and performance of

similar stores.

Promotions can then be adjusted to focus resources on areas

with the highest potential upside. In essence, opportunity

gapping acts like a forward-looking diagnosis that deter-

mines if the financial upside return from a promotion is

worth the effort of store checks, additional labor, or the

promotion itself.

“Retailers and manufacturers are becoming

more precise in their targeting of consumer

segments and wish to optimize store

conditions at the local level.”

–Paris Gogos, Director

ACNielsen Retail Execution Services

Step 3: Dynamic clusteringClustering, or localization, as the Harvard Business Review

calls it, is the cornerstone of scalability. More than a capa-

bility, clustering has become an operating necessity in

today’s fragmented marketplace.

Retailers and manufacturers are increasingly moving to

micro views of their business to identify opportunities

associated with the demand drivers and demand inhibitors

unique to each store. This is most clearly seen in the grow-ing number of retailers adopting local or neighborhood

marketing initiatives. Most recently, Wal-Mart announced

they were dropping their one-size-fits-all approach to stores.

Similarly, manufacturers are becoming more precise in t ar-

geting of consumer segments, and wish to optimize store

conditions a t the local level.

Clustering attributesWhile there is a virtua lly limitless set of criteria upon which

clusters can be based, most fall into four major groupings:

1. Consumer Attributes. These may be as simple as

grouping stores based on a common trait like ethnicity,

affluence of the shopper, or a volume-predictive measure

of consumer fit.

2. Organizational Attributes. These may include DSD sales

routes, warehouse locations, regions or districts, or

specific shelving sets.



3. Store Attributes. These may range from physical store

attr ibutes like size and presence of specific depar tments

to proximities to high traffic intersections or landmarks

like beaches or universities.

4. Performance Attributes. These can range from basic

sales rates to promotion response to consumer-driven

category opportunity gaps.

Dynamic clustering brings criteria together into a cohesive

framework that leverages critical differences within the store

segments. Some companies may be able to execute effectively

using just two clusters; others may require 200; but clustering

is a necessary prerequisite for integrating action to “crack

the retail C.O.D.E.”

Step 4: Executing for the consumerThe final step in the C.O.D.E. approach takes us full circle,

back to the consumer and how best to shape and direct

activities to each store or cluster’s shoppers. M erchandising

strategies based on item roles, promotional and sampling

programs, space and facing allocations—all tailored to

defined dynamic clusters—can now be managed by follow-

ing the four-step C.O.D.E.

The C.O .D.E. approach makes high definition marketing

possible, allowing marketers and retailers to zero in at themost granular level possible—the store. Working from a

shared viewpoint, with shared definitions for target clusters

or stores, manufacturers and retailers can collaborate on

promotional and assortment strategies with optimal appeal

to the right set of consumers, and operational strategies that

take cost out of the system by reducing inefficiencies such as

out-of-stocks and distribution voids.

The C.O.D.E. holds the secret to finding opportunity gaps,

making the most of consumer profile information, and

improving logistical execution to squeeze more bottom-line

profit out of even more top-line sales.

See pages 48 and 49 for a case study that illustrates the

C.O .D.E . process in action.

46 Fall/Winter 2006

C i



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Cracking theC.O.D.E.A Case Study

Step 1: Consumer profilingJoe’s Cookies utilized a hybrid of ACNielsen Homescan

Panel data and POS-based profiles to identify its preferred

consumer. Since Joe’s Cookies had low penetration in the

marketplace, the company used panel data to profile the total

category, and then used Spectra Opportunity Finder Solutions

to profile individual SKUs.

The result of this analysis: Joe’s Cookies gained an under-

standing of how its brand consumers differed from the overall

cookie category and competitors. The typical Joe’s Cookies

buyer skewed to African-American and Hispanic ethnic make-

up, earned $50,000–$100,000 per year and lived in a house-

hold with children. ■ See chart 1.

Step 2: Opportunity gappingJoe’s Cookies then ranked retailer stores based on the “fit”

between the store consumer profile and the Joe’s Cookies

consumer profile, quantifying the consumer opportunity gap.

The analysis determined that store opportunity varied greatly

once the consumer was inserted into the equation.

For example, Joe’s Cookies found Store A and Store B identi-

cal in every transactional way. Joe’s Cookies had two facings in

each store, and the store shelf set and total sizes were virtually

identical. However, sales results for Joe’s Cookies were any-

thing but identical. Store A sold approximately $90 per week of

cookies, while Store B sold closer to $230 per week.

A consumer trade area analysis for each store uncovered very

different shopper bases. Store A was located in an urban set-ting with many households without kids in its consumer trade

area. Store B, on the other hand, was in a rural setting with

many households with kids in its consumer trade area. As a

result, Store A was not the underperforming store it initially

appeared to be, but in fact, had captured most, if not all, of its

opportunity. Store B, initially thought to be over-performing in

its trade area, was actually under-performing and should have

sold an incremental $130 more per week. ■ See chart 2.

Instead of allotting resources against a store that appeared tobe an under-performer, Joe’s Cookies targeted the real under-

performing store. Joe’s Cookies followed the C.O.D.E. method

and assessed the different demand drivers and demand

inhibitors affecting the store in order to chart a path for Store B

growth. This exercise was repeated for other chains to diag-

nose the amount of unconverted opportunity by account and

develop tactical plan for realizing untapped potential.

Chart 1: Cookie consumer profiles

Joe’s Jane’sCookie Cookies Cookies

Category 16 oz. 16 oz.

White Med. High Low High

African Am. Low High Very Low

Hispanic Low High Very Low

< $50K Low Low Low

$50K+ High Very High Medium

$100K+ High Low Very High

No Kids in HH Low Very Low Very High

Kids in HH High Very High Very Low


Chart 2: Opportunity gapping

Store A: $90 in Sales Store B: $230 in Sales

Consumer Trade Area Consumer Trade AreaFew Kids— Urban Many Kids— Rural

Consumer Opportunity Gapping

Gap Upside: $8 Gap Upside: +$130!




Step 3: Dynamic clustering The next step for Joe’s Cookies was to make similar recom-

mendations to its retailer that could be executed in a scalable

manner. Joe’s Cookies clustered similar stores based on

consumer, store, and performance attributes including

consumer fit, opportunity gaps, competitive interaction

and existing store sales.

In doing so, Joe’s Cookies focused its efforts against several

types of consumers and enabled action that was scaled yet

appeared customized on the shelf. Dynamic Clustering also

identified which clusters were not only a strong fit, but quanti-

fied the upside opportunity. This approach allowed Joe’s

Cookies to take action where it was needed and to minimize

where it was meeting demand. Demonstrating the power of

Dynamic Clustering in action, when applied from the category

down to the SKU level, Joe’s Cookies executed against the

opportunity for its brand and the category. ■ See chart 3.

Step 4: Executing for the consumer Turning to tactical considerations, Joe’s first cluster (Blue Collar

Suburban) represented $2.7 million in sales, spread across 20

stores. It appears to be under-performing with respect to many

product types and within certain cookie sub-segments.

Joe’s Cookies implemented a dynamic clustering framework

and pursued tactics that included:

• identifying cluster potential to assist with assortmentdecisions;

• determining the competitive forces affecting each dynamiccluster to assist with tactics;

• assigning key merchandising roles to SKU-level items bydynamic clusters to determine the turf and image enhancers;

• allocating shelf size based on dynamic clusters;

• performing SKU-level rationalization based on consumerdemand and potential sales by cluster to put the rightproduct in the right store.

The Retail C.O.D.E framework has helped many manufacturers

and retailers unlock hidden sales opportunity previously

masked by results aggregated at the account, region or trade

area level. C.O.D.E. proponents integrate a variety of consumer

and retail information to de-code available opportunities and

implement comprehensive action plans designed to improveproduct and category performance. Are you ready to crack the

Retail C.O.D.E.? Your sales depend on it. Your consumers

demand it.

Category/Brand

Consumer Fit

20 Stores

$2.7 Million Gap

35 Stores$0.8 Million Gap




10 Stores

$1.1 Million Gap

Gapping

Opportunity

Competitive

Interactions

Sales Influencers

Chart 3: Dynamic consumer profiling—allows

you to take action where there is potential


Clusters



Trendwatch

Walk-In Retail Clinics:A Healthy Savings Idea

“Would you like some chicken soup with that prescription?”

While grocery stores have always stocked this form of “liquid

penicillin,” today they’re home to the real deal—walk-in clin-

ics staffed by nurse practitioners licensed to diagnose and treat

common conditions such as allergies, bladder infections, bron-

chitis, ear infections, the flu, heartburn, muscle pain, pink eye,

minor burns and rashes.

■ See chart 1.

The ultimate in one-stop shopping, patients can see a health

care professional, hang a left to get the prescription filled, and

be on their way in 20 minutes. Anyone who has cooled their

heels in the typical general practitioner’s waiting room knows

that that kind of turnaround time represents a true medical

miracle.

The consumer pulseClearly, consumers are warming-up to the walk-in clinic con-

cept. In a Spring 2006 survey, ACNielsen Homescan &

Spectra took the public’s temperature on the walk-in clinic

subject and discovered that one-third of respondents were

either very or somewhat likely to visit a walk-in clinic

located in a grocery, drug store or mass merchandiser.


While half of participating households had visited a doctor’s

office in the last year, 8% had visited an independent or free-standing walk-in clinic, and another 1% had visited a walk-in

clinic embedded in a retail format.

Presently, walk-in clinics appear to be a perimeter

phenomenon, with the South Atlantic (21% ) and East Nor th

Central (16% ) regions leading on a household patronage

basis, followed by the Pacific and West South Central areas at

13% each. The eastern geographic skew may reflect a travel

pattern of older New Yorkers commuting between their win-

ter home in Florida and the Empire state.

50 Fall/Winter 2006

by: Joe BuchererSegmentation Analytics


Chart 1: Types of ailments suffered in U.S.

Percent of households with at least one household member suffering

from the following ailment during the past 6 monthsTotal U.S.

Allergies (seasonal and/or year-round) 51 %

Acid Reflex/Gerd/Heartburn/Acid Indigestion 41 %

High Blood Pressure 36 %

Cholesterol Problems 31 %

Joint Neck/Back Pains (Not Arthritis) 34 %

Obesity/Weight Control 32 %

Insomnia/Problem Sleeping 24 %

Muscle Pain/Spasms 23 %

Anxiety/Depression 23%

Arthritis— Osteo 20 %

Constipation 18%

Diarrhea 19%

Asthma 15%

Diabetes-Type II (Oral Medication Needed) 12 %

Menopause 10%

Lactose Intolerant 9%

Arthritis— Rheumatoid 9%

Irritable Bowel Syndrome 9%

Heart Disease/Heart Attack/Angina 7%

Osteoporosis/Calcium Deficiency 6%

Attention Deficit Disorder 6%

Incontinence 7%Diabetes Type I (Insulin Needed) 3%

Source: ACNielsen Homescan Panel Views Survey— Feb/Mar 200 6— Total U.S. Households



Everybody winsMany walk-in retail clinics, like the 100-square-foot

MinuteClinics, are designed and sited to feel like an exten-

sion of the store pharmacy counter, virtually ensuring cap-

tive Rx sales.

While the retailer incentives are obvious and include driving

traffic to the store, raising trip counts and creating the

opportunity for incrementa l sales, the walk-in clinics benefit

insurers as well. One Minnesota-based health plan deter-

mined that the walk-in clinic fees are so low (a minimum of

30% below a regular doctor visit), that the insurer waived

any co-pay to encourage members to utilize the new service.

A rash of growthPopularity has led to proliferation. Among the more appeal-

ing aspects of the walk-in clinics are the easy physical

access, proximity to home and work, available parking,

intimate formats (smaller ones have chairs vs. exam tables),

posted prices, evening and weekend hours, and electronic

patient files that can be quickly transmitted to doctors along

with a referral.

Wal-Mart expects to open 50 stores by 2007, then roll out

the service nationally. TakeCare has slated 20 Chicago area

clinics for third-quarter 2006. MedXpress launched this

summer and debuted an aggressive expansion plan calling

for 500 U.S. locations by 2010. Solantic, a Florida-based

company differentiating on the basis of physician staffing,

intends to have 1,000 sites up and running over the next

five years.

Rx for the ER?One of the newest developments in consumer-driven

healthcare, walk-in clinics represent the latest response

to a system that encourages patients to control health

costs. As a serendipitous by-product, walk-in clinics

may prove to be a much-needed panacea for

overtaxed emergency rooms, and an antidote for

the 40 million uninsured Americans who represent

the target audience.

The cost savings are undeniable. One uninsured New

York City paralegal priced out a doctor’s visit to deal

with a minor problem. Quo te: $150 for the visit.

Opting to try the walk-in clinic solution, she walked

out with two prescriptions and a b ill for $49,including medications.

Profit prognosisIf retailers needed any additional motivation to take

a serious run at the walk-in solution, the most telling

diagnostic is the profitability test. According to a California

HealthCare Foundation study, prescription drug margins

run around 16% compared with general merchandise profits

of less than 5% . That t ranslates into a profit injection for

the bottom line, even as center store results weaken.

Very Likely 10%

22%

18%

15%

36%

SomewhatLikely

Neither LikelyNor Unlikely

SomewhatUnlikely

Very

Unlikely

Source: ACNielsen Homescan Panel Views Survey— Apr/May 2006— Total U.S. Households

C i

Chart 2: One in three households is likely

to visit a retail walk-in clinic, if available

in their area

How likely would you be to use a walk-in medical clinic if it wereavailable in a grocery, drug or mass merchandise/discount store near

your home?



So what’s the new trend replacing “Low Carb”? There is much activity around Superfoods, as consumers are

looking for food and beverage products that enhance their active lifestyle. While these trends are small, they

are certainly something to closely watch. The mainstream trends like Whole Grain and Low/No Fat are still

popular as consumers are responding to a nationwide concern with obesity. Consumer food marketers are

flooding the market with a plethora of food products with health & wellness claims, but which ones are most suc-

cessful in capturing consumer sales? LabelTrends™ is a new service that monitors sales trends in 27 of the

hottest consumer packaged goods (CPG) product segments, such as low-carb, low-fat, organic and sugar-free.

With over two-thirds of Americans dealing with obesity and many individuals on some sort of diet regimen,

LabelTrends is well suited to help you evaluate new product opportunities to meet consumer demand and work

with your retailer partners in optimizing assortment at the shelf for fast turnover.

LabelTrends help you to:

• Understand the latest trends in the health & wellness arena and develop marketing strategies to

provide consumer solutions.

• Identify potential candidates for mergers and acquisitions.

• Understand which health & wellness claims are most successful in building brand loyalty.

• Assess competitor brand/item performance and develop counteractive strategies.

To learn more about LabelTrends, please contact your ACNielsen Client Service or Retail Services

representative or visit our web site at www.acnielsen.com.

Track the New Health& Wellness Trendswith a Few Clicks



It’s All About What’s Happening

at the Store LeveSuccess goes to the smart, the swift, and those who can manage through the complexity of today’s retail environment. Retailer

and Manufacturers strive to recognize the diverse and changing faces of consumers, focusing on what increases demand while

reducing what inhibits it. The store is where the best-laid plans shine or go awry.

ACNielsen Scantrack StoreView provides the clearest, most flexible and precise store level picture of what's selling where, why

and to whom. It provides a view that allows you to zero in on the store to understand demand drivers and demand inhibitors fro

different points of view. It allows for a new perspective, a more precise way to pinpoint consumer demand, focus on sales per-

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