The Big Picture

CPG has been underperforming in e-commerce. While online sales are picking up, the growth is skewed to a few categories with most CPG categories still lagging. What can be the possible reasons for the low growth rate of CPG sales online? How behavioral science informed strategies can devise and influence shoppers, improving sales in the segment.

The objective was to identify the reasons for the low growth rate of CPG sales online and devise behavioral science informed strategies to influence shoppers.

Transformative Solution

The vast majority of prevalent research tools depend on respondent’s ability to introspect, deliberate and consciously provide responses and analysis. Unlike these, Fractal’s research methodology is game-based to go beyond “Say-Do” gaps – the difference between what consumers say and what they do.

Conundrum Ethnolab research tool is a group exercise designed to eliminate participants’ personal filters and capture responses representative of the emotions, mental models and biases underlying the behavior. We deployed the Conundrum Ethnolab in New York and in Chicago suburbs among a group of 85 consumers to understand true drivers of consumer decisions and the barriers to shopping online for CPG products.

The Change

As a result of the engagement, we were able to identify the following insights for clients to take action on:

  • Most CPG categories are bundled together as ‘grocery’ because of the long-standing association of buying them together with other perishable groceries. Consumers don’t differentiate between non-perishable CPG goods and fresh grocery because of this association. Consumers re-evaluate their shopping modes and choices only when their context changes. Until then this dominant ‘grocery mental model’ leads to consumers not even evaluating online channels for CPG purchases.
  • This process revealed that consumers are increasingly shifting to shop on mobile rather than laptops or larger devices. And this holds for CPG/grocery as well. Mobile-based shopping enables interstitial shopping – i.e. shopping between tasks. In this interstitial mode, consumers are far more satisficing than when they are shopping in a brick and mortar environment. This highly satisficing mindset makes shopping narrow and shallow – searching and adding one thing at a time (which gives very little chance for other categories – than the one being bought – to be considered) and making shallow comparisons on prices.
Build effective communication and product strategies

The Big Picture

A leading brand in the men’s grooming category already had over 80% volume share in all key markets. The penetration of the category was close to 100% already, and hence the only feasible way to grow business was to move consumers to higher-tier products. The business wanted to identify the right communication and positioning strategies for high-tier products to attract the consumers of low-tier products. The company also wanted to identify opportunities for a new product introduction to trade-up low-tier consumers.

Transformative Solution

The solution was designed to identify key brand drivers for different segments of consumers, and identify key product attributes to offer new products or in communication of existing products in order to trade-up low-tier consumers.

Equity drivers analysis was conducted with the help of network models on top of respondent-level equity tracking data to understand how perceptions are built in the minds of consumers. The solution identified what among various product attributes and equity measures drove the overall brand rating. The approach quantified the impact of each of those attributes on the overall rating and uncovered key equity paths that could be adopted in design of global and local campaign messaging and product positioning. This helped discover what consumers look for from the category that drives their perception and choice of brand or product across tiers.

The team established the key equity paths for the category using Structural Equations Models and identified the key drivers, as well as identified the key drivers for each of the consumer segments (based on current product usage) and highlighted the different needs across segments.

The Change

Based on the key drivers that emerged for each of the segments, Fractal identified the winning product proposition for the market and developed strategies to trade-up the low-tier consumers towards high-tier products and hence increase revenue for the business. Meta analysis of studies across different markets was conducted in order to compare key drivers and investigate commonalities and differences.

Comparison of key brand-drivers across markets revealed opportunities for global campaigns and product innovation, along with market-specific customization needed in communication strategies based on distinct drivers.

Build effective communication and product strategies

The Big Picture

A leading brand in the men’s grooming category already had over 80% volume share in all key markets. The penetration of the category was close to 100% already, and hence the only feasible way to grow business was to move consumers to higher-tier products. The business wanted to identify the right communication and positioning strategies for high-tier products to attract the consumers of low-tier products. The company also wanted to identify opportunities for a new product introduction to trade-up low-tier consumers.

Transformative Solution

The solution was designed to identify key brand drivers for different segments of consumers, and identify key product attributes to offer new products or in communication of existing products in order to trade-up low-tier consumers.

Equity drivers analysis was conducted with the help of network models on top of respondent-level equity tracking data to understand how perceptions are built in the minds of consumers. The solution identified what among various product attributes and equity measures drove the overall brand rating. The approach quantified the impact of each of those attributes on the overall rating and uncovered key equity paths that could be adopted in design of global and local campaign messaging and product positioning. This helped discover what consumers look for from the category that drives their perception and choice of brand or product across tiers.

The team established the key equity paths for the category using Structural Equations Models and identified the key drivers for each of the consumer segments (based on current product usage) and highlighted the different needs across segments.

The Change

Based on the key drivers that emerged for each of the segments, Fractal identified the winning product proposition for the market and developed strategies to trade-up the low-tier consumers towards high-tier products and hence increase revenue for the business. Meta analysis of studies across different markets was conducted in order to compare key drivers and investigate commonalities and differences.

Comparison of key brand-drivers across markets revealed opportunities for global campaigns and product innovation, along with market-specific customization needed in communication strategies based on distinct drivers.