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Amid the COVID-19 Pandemic, Home is Where the Connectivity Is
It’s likely that the world has never been as reliant on connectivity as it has become over the past year. With much of the world spending more time at home, technology has become the lifeline to everything from commerce to social gatherings to the latest entertainment. Much has been written about these areas, but, given that connectivity affords millions of Americans the ability to work from home and provides countless children across the country access to virtual schooling, it’s fair to say that virtual is the new IRL.
That has inspired many Americans to think about where they want to live. Especially if a physical office location is no longer a consideration, the idea of relocation becomes a real option, particularly for those seeking to escape the density of heavily populated urban areas. Many consumers sought temporary solace away from big cities early on, but the prolonged duration of the COVID-19 pandemic has metro-dwellers thinking about more permanent moves, especially as many work-from-home and remote schooling arrangements remain intact.
The prospect of moving could have long-lasting implications for the distribution of the U.S. population. According to recent Oliver Wyman research, one in five urban dwellers is planning to move or considering a move because of the pandemic. And we’re already starting to see the shift. In looking at Nielsen’s year-over-year U.S. household data, we can see increases in an array of smaller-sized designated market areas (DMAs). Many of the increases represent changes of less than 2%, but a handful have been more significant, with the Charlottesville, Va., DMA registering a 16.6% increase in households between the 2019-2020 and 2020-2021 universe estimate periods.
This trend is important for brands and advertisers looking to stay in touch with consumers as their habits—and their habitats—shift.
Importantly, many of the country’s lesser-populated DMAs present a valuable opportunity given how digitally engaged their residents are. Whether they’re in cities in Texas, South Carolina, Indiana, Florida or Colorado, consumers in these markets are spending more time connected online. In Abilene, Texas, for example, which is just over 200 miles away from Austin, household use of fiber optics connectivity had increased 165% according to the survey data from Nielsen Scarborough. That connectivity has facilitated a 36% increase in usage of five to nine hours online per week, as well as nearly a 20% increase in usage of 20 hours or more online. In some DMAs, such as Myrtle Beach, S.C., and Wichita Falls, Texas, we’re seeing decreases in internet usage across shorter periods of time and increases in usage across longer periods of time.
In addition to spending increasingly more time using the internet, consumers in many less-populated areas are following the national trend of leaning into the growing realm of streaming and video on demand. As of second-quarter 2020, U.S. consumers were spending an average of 1 hour and 14 minutes each day with their internet-connected devices, up from just 50 minutes a year ago. Much of that time is spent viewing streaming content, which, according to Nielsen TV measurement, accounted for 23% of total TV time in streaming-capable homes in December 2020. And while the big five streaming video on demand (SVOD) platforms (Netflix, Amazon Prime, Disney+, Hulu and YouTube) accounted for 53% of streaming minutes each week, the myriad providers in the “other” category now garner the other 47%.
Multichannel video programming distributors (MVPDs; traditional cable companies that augment traditional delivery with a streaming app) and virtual MVPDs are newer to the streaming landscape, but accounted for 36% of the “other” category as of July 2020. They’re also gaining in popularity across many of the country’s lesser-populated DMAs, including Abilene, Burlington and Evansville. In Abilene, for example, Nielsen Scarborough survey data shows that consumers’ past 30-day usage of Sling TV (a subscription-based vMVPD) was almost 235% higher than during the previous survey period. Consumers in the Burlington, Vt.-Plattsburgh, N.Y. DMA report an increase of nearly 102%. Comparatively, consumers in Abilene and Burlington report increased or flat usage of the more traditional SVOD services, but the reported increases were notably lower than those reported for vMVPD usage.
Importantly, despite the growing streaming options available to consumers (including free ad-supported offerings), many are focused on premium offerings. For example, according to Nielsen Scarborough data, consumers in Evansville report more than a 5% decrease in using an internet-connected device or app to watch free TV programs. In Myrtle Beach, consumers report a decrease of 26%. In combination with increased stated usage around paid video options, it’s clear that consumers in these DMAs are gravitating toward what interests them rather than what’s free. This speaks volumes about the value of quality content—even as the market is seeing an array of free, ad-supported options come to market. And when you consider that adults 18 and older were spending an average of almost 11-and-a-half hours with media each day as of June 2020, knowing which platforms and programs they’re engaging with—and the markets where they’re engaging—couldn’t be more important.
It’s Time For Your Media Planning To Focus On People
If you’re still planning your media the way you did a year ago, you’re a bit late to the party. Just like it has done to everything else, COVID-19 has thrown traditional media norms for a loop, forcing a massive reset amid rapidly evolving consumer behaviors. So in that way, banking on yesterday’s data and processes to succeed heading into 2021 is a recipe for dubious budget allocations, missed opportunity and wasted spend.
The depth, breadth and duration of the pandemic will have lasting effects on consumer behavior, as many of the shifts that have taken place over the past 10 months have now solidified into full-fledged, ingrained habits. Advertising, unsurprisingly, paused during the height of the first wave of lockdowns, but media usage skyrocketed. Shortly thereafter, media engagement normalized to seasonal levels, but the share of time spent with platforms and channels had shifted. Those shifts, and the ones ahead, are what brands need to be on top of—so they can appropriately plan and optimize their spend accordingly.
With change coming more quickly than ever, planning and optimizing might seem like a dizzying prospect. It absolutely doesn’t have to be. Importantly, brands need to re-focus their efforts on people—the north star for any marketing message, advertisement or campaign. Additionally, they need to maintain that focus 24/7, not just once or twice a year. By focusing on people and approaching the planning process continuously, campaign efficiency and effectiveness will assuredly improve.
FUTURE SUCCESS HINGES ON PEOPLE, NOT DEVICES
The marketing landscape has many nicknames for people: audience or customer segments, consumer groups, targets. By adopting a people-based lens, marketers can set aside words with variant meanings and focus on truth. Syndicated third-party and first-party data alike need to work together to ensure that campaigns are effective and successful. That success hinges on people, not impressions, devices or bots. Connections with real people have never been more important, and marketers who design their planning around people, then adjust to changing behaviors and habits, will reap the benefits for years to come. The connections marketers make with their customers will be true, authentic and meaningful, and so will their bottom lines.
Unlike in times past, modern marketers need to adopt agile practices and stay nimble. Static marketing proposals and plans based on data from six months ago are no longer viable for successful media planning. Pandemic aside, people change, as do their behaviors, so media plans need to be able to follow suit. To accommodate uncertainty, fluidity and the unforeseen, brands should use a flexible and continuous framework for all media planning.
CONNECTED SYSTEMS IMPROVE ACCURACY AND EFFICIENCY
In thinking about ways to remain people-focused and continuously planning, brands should use the same demographic profiles across their software solutions to ensure that their planning and buying stays accurate. This requires broader collaborations across the media landscape, yet facilitates true connections between targets and plans. The days of relying on spreadsheets are over. Data-driven solutions help marketers connect the same key demographic from refinement to optimization to buying. Specific demographics are just that—specific. So when data isn’t connected or aligned, it’s very easy to confuse moms who are shopping for SUVs with women aged 25-54 if all you’ve got to go on is a spreadsheet. Both groups are similar, but similar isn’t good enough anymore. For example, if you’re aiming to reach women 25-54 in your media buying system and you accidentally substitute the right value for moms shopping for SUVs, your target reach will be off.
When your systems are connected, accuracy and efficiency will improve—without question. Time is another benefit. When a marketer loads competitive intelligence data into a reach and frequency planning system, brands can optimize a previous schedule for a future scenario with a click of a mouse.
The future is people. Center your plan on people, plan around people and connect your data around people. That’s the blueprint for media planning success, and the data, complemented by an agile approach to it, will pave the road for effective marketing plans today and tomorrow—regardless of any unforeseen uncertainties.
Back to the Drawing Board: Media Planning Through Uncertainty
The norms for media planning have been completely reset due to changing consumer habits—greatly accelerated by COVID-19. The data and processes that marketers once relied on need to be adjusted to reflect the current environment and its lingering effect.
Watch experts from Nielsen and our guest Forrester for an insightful on-demand discussion focused on:
The latest trends around ad spend and media consumption and the impacts of COVID-19 on the industry
How brands can take an agile approach, supported by data, to create effective marketing plans today
Next steps to plan for the uncertain future to drive your business forward
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For retailers with brick-and-mortar stores, sales and shelf space are inextricably linked. That’s why they place so much emphasis on maintaining a well-balanced assortment; they continually assess and fine-tune their inventory to maximize sell-through.
This is especially true for neighborhood pet retailers and superstores that distinguish themselves from online competitors. But before adjusting their assortment, these retailers will want assurance from pet product manufacturers that any changes they make will lead to an increase in sales.
To convey confidence that your pet product will be a revenue-generating addition to retailers’ assortments, you must first demonstrate that your product has a strong growth potential within its category and among consumers. The right data can help.
Whether you’re selling to a retailer for the first time, or justifying your current shelf position during a line review, here are three ways that data can show why your pet product should be part of a retailer’s assortment:
#1. Discover Your Category’s Potential
How well your product’s category is performing will directly affect how willing retailers are to add your pet product to their assortment. For example, if the market for organic dog treats has grown by double digits for several consecutive months, a neighborhood pet retailer is likely to increase the number of products they carry in that category. Analyzing RMS data can help you identify similar category growth opportunities, even before retailers spot those trends themselves.
PRO ADVICE: Tracking category-level performance in addition to individual product sales means you can identify trends that will help you break into a retailer’s assortment. By using RMS data based on retailer POS information, you can compare monthly, quarterly or yearly sales volume for categories and subcategories and see where growth or declines are happening.
#2. Show How Your Product Impacts Basket Size
Even when consumers visit specialized stores like neighborhood pet markets, they rarely buy just one product per visit. Understanding the variety of items in a shopper’s basket and how it relates to per-trip spend can give you an edge when convincing retailers to add your pet product to their assortment.
PRO ADVICE: A combination of RMS data and consumer panel data shows the total composition of consumers’ shopping baskets per trip. By analyzing what else consumers buy when they purchase your product, you can demonstrate how the average basket size increases with your product in the assortment – and make a compelling case for inclusion.
#3. Define Your Product’s Potential
Category growth trends and your product’s impact on basket size are reliable indicators of future performance. But advanced analytics provides an even richer picture that will further boost retailers’ confidence in your pet product. An assortment optimization analysis with predictive analytics shows your retail partners how well-positioned your pet product is for success.
PRO ADVICE: Assortment and space optimization (ASO) provides a nuanced and complete projection of how your pet product will perform as part of a retailer’s assortment. With model diagnostics based on current distribution, category and segment data, you can create and analyze assortment scenarios with and without your product. This type of modeling shows retailers exactly how your product would impact their assortment and generate revenue.
How Nielsen Can Help You Break into Retailers’ Assortments
With Nielsen data, emerging pet product manufacturers like you can make conclusive arguments to retail partners about why your products deserve to be in their assortments. RMS data highlights category and segment trends, while basket analysis shows how your product influences consumers’ other purchases on the same shopping trip. An assortment and space optimization analysis provides both granular and complete projections of your product’s future performance to support your long-term success.
A Suite of Products to Help You Master Assortment Strategies
Assortment and Space Optimization: Based on current sales data, ASO helps pet product manufacturers plan and execute high-ROI shelf strategies.
RMS: Complete and current data on market shares, competitive sales volumes and insights into distribution, pricing, merchandising and promotions help you make the case for your product to retailers.