Shopper behaviours as sales drivers
Identifying the levers of growth
At Worldpanel, tracking shopper behaviour across multiple markets and FMCG categories has enabled us to decode the formula for growth:
Sales are driven by penetration, purchase frequency, and basket size.
Penetration measures the number of shoppers, frequency measures the average number of trips per shopper, and basket size measures how much shoppers spend or purchase per trip. If a brand is able to grow these measures, they will drive overall growth.
All three drivers are important – but some have been proven to be more important than others. Analysing almost 1,600 brands in Malaysia across the three measures over three years has enabled us to plot a strong correlation between penetration and market share. Specifically, winning more shoppers tends to result in a higher share. This shows how crucial recruitment is in order to grow a brand.
On the other hand, a rise in frequency or a bigger basket size unfortunately do not guarantee a higher market share.
Brands need to remember that penetration is king. Having established that, what is the next most important measure to focus on?
Penetration represents the quantity of buyers a brand has, but frequency and basket size showcase the quality of its buyers, a factor that is largely associated with loyalty.
But is it more impactful to grow frequency, or basket size?
To determine the answer, Worldpanel by Numerator has analysed data from its close monitoring of Malaysian shoppers and their purchase behaviour across more than 120 FMCG categories for in-home consumption. The panel consists of 4,000 shoppers who continuously record their purchases using the Kantar Scope app on their smartphones. Through this, we uncover opportunities for brands to grow.
