Catalina Report Shows Power Of Consumer Choice In Driving Successful Data-Driven CPG Product Promotions

Research Finds Catalina Category Marketing Campaigns Elicit 20% Response Rates Among Targeted Shoppers and Significantly Increase Product Volume

10 Feb, 2016, 08:00 ET from Catalina

ST. PETERSBURG, Fla., Feb. 10, 2016 /PRNewswire/ -- With CPG manufacturers and retailers searching for efficient marketing solutions to drive revenue growth and share, a new report by the personalized digital media company, Catalina, finds that offering consumers greater choice in promotional campaigns increases response rates and moves more volume.

The new study report, entitled, "Expand Demand. Driving Efficient Volume Through Category Marketing," benchmarks the capacity of Catalina Category Marketing (CCM) campaigns to increase brand volume and loyalty for promoted products while growing category volume for retailers.  The report finds that data-driven CCM campaigns elicit very high response rates of 20 percent among targeted buyers, who on average grow their purchase volume by 2.4 times during a campaign and also significantly increase their share of requirements with the promoted product, both during and after the campaign. 

A copy of the full study can be found at http://www.catalinamarketing.com/ws_download/expand-demand/

Significantly higher response rates were found when consumers were provided with more choice in how they participated in a CCM campaign via multi-tiered incentive offers based on the number of items they purchased.  In fact, response rates among targeted shoppers were 44 percent higher for three-level reward offers compared to CCM campaigns with one level of reward.

"CPG brand marketers and retailers are asking themselves how to get greater performance from their promotion and advertising initiatives," said Todd Morris, President of Catalina U.S. "We think this study demonstrates, not only the power of purchase-based, data-driven marketing solutions to engage the shoppers who matter most to a brand, but the importance of unique promotional vehicles that offer consumers more freedom of choice in how they engage with a campaign."

Catalina Category Marketing campaigns are unique promotional solutions that typically target frequent brand and category buyers and incentivize them to buy more. Unlike most other product promotions, CCM campaigns do not offer a discount or rebate on the purchased item. Instead, they give the shopper money off on their next shopping trip at that store with complete freedom in how they spend the savings. Catalina verifies in real-time that a shopper has met the minimum requirements and prints the reward at point of sale. The reward can then be redeemed on the next trip.

Catalina is able to create CCM campaigns because of its unique capacity to see and respond to the evolving purchasing history of approximately 260 million US shoppers across more than 27,000 grocery, drug and mass stores nationwide.  Catalina has the ability to see and influence more than 1.2 billion US shopping trips every month.  Its shopper insights and programs reach approximately 80 percent of U.S. households.

Among key report findings:

  • On average, 20 percent of all targeted shoppers responded to a CCM campaign by purchasing the minimum amount of promoted items required for a reward.
  • Those who responded to a campaign purchased an average of 2.4 times as much product as they did in the previous time period, growing their aggregated contribution to product volume from 11 percent before the campaign to 27 percent during the campaign period.
  • Share of requirement, a strong measure of loyalty, grew dramatically among responders, from 37 percent in the pre-campaign period to 56 percent during the campaign. In addition, SOR remained elevated, at 42 percent, in the post campaign period.
  • Retailers benefited from CCM due to higher overall category sales. On average, total category volume grew 14 percent compared to the pre period, driven by a 63 percent increase in category volume among responders.

"The Expand Demand study shows that Catalina Category Marketing is a powerful approach to quickly and efficiently drive volume and revenue growth by turning frequent brand and category shoppers into Super Buyers of your brand," said Morris. "But rather than providing only a short-term volume boost, CCM also grows the relationship between the consumer and the brand, increasing brand share of requirements among responding shoppers even after a campaign has ended." 

The report is highly relevant to both CPG manufacturers and retailers at a time when the industry is grappling with the need for more measureable and efficient marketing levers to drive growth.  A recent study by Catalina of the Top 100 CPG brands at grocery, drug and mass stores within the Catalina network found that 90 of these brands lost market share within their categories and 62 declined in revenues during the 12-month period ending June 30, 2015.  In addition, a recent study by Nielsen, called "Nielsen Trade Promotion Landscape Analysis. How Do Your Promotions Compare with Best-in-Class?" reported that 67 percent of all CPG trade promotions fail to break even.

Study Methodology
The Expand Demand study analyzed the results of 130 Catalina Category Marketing campaigns in the Catalina network during 2015. For each campaign, the study looked at three distinct time periods to gain insights into changes in unit volume, sales and other shopper behavior. These included the pre period immediately preceding each campaign, the campaign period itself, and the post period. All three periods included the same number of days, based on the length of the campaign period.

About Catalina

Catalina's personalized digital media drives lift and loyalty for the world's leading CPG retailers and brands. Catalina personalizes the consumer's path to purchase through mobile, online and in-store networks powered by the largest shopper history database in the world. Catalina is based in St. Petersburg, FL, with operations in the United States, Europe and Japan. To learn more, please visit www.Catalinamarketing.com or follow us on Twitter @Catalina.

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