Uniform Game

Rapid e-commerce growth rates are stabilizing in many markets, signaling the importance of balancing online and in-store sales strategies. Nielsen noted in its NIQ’s 2023 Consumer Outlook that in 2023, the digital and physical worlds of retail will merge in ways never seen before. Drilling down to the category-level sales performance indicates many categories have unique strengths in one channel or another. While 70% of consumers spend the most offline in physical stores, shopping habits, and spending budgets are still shaped by omnichannel. As a result, brands and retailers must understand the channel strengths and incrementality of the product or category.

The Omni Future of Retail: 2023 Outlook on e-commerce and in-store shopping

Why do meat products seem to violate one of the most powerful effects in That is a question the marketers of blended meat – a combination of meat and plant proteins – will need to answer if they want their category to establish itself. The powerful “compromise effect” explains why consumers tend to find the middle or blended option more attractive than two extreme offers. But with meat, blending the extremes of meat dishes and vegetable protein dishes has often been a lose-lose proposition, unless you’re Spam.

Fans of meat and meat substitutes like the blended solution in taste tests and those solutions have a smaller footprint. But when people find out what is inside, meat-lovers feel like they have received a lower-value product and environmentalists decry the incrementalism of moving away from their ideal of meatless food. As this article indicates, maybe the endurance of Spam offers some lessons. Treat the blend as an entirely new product, stress the benefits, and play down the reasons. What are your thoughts on the future of blended meats ?

The Sustainable Food Solution That Satisfies No One

The market for fragrances exemplifies why companies should understand their market characteristics carefully rather than assume a certain market structure can or should exist. This recent report from Circana – the company formed by the merger of consumer insights firms IRI and NPD – describes the fragrance market as having a growing luxury end and a growing “budget-friendly” end, but no middle ground. When luxury consumers want to pay less, they trade down in terms of pack size, not quality. As my co-author Arnab Sinha and I point out in our book Game Changer, market characteristics are an essential input to choosing a pricing game and setting a pricing strategy. How much value a company can share depends on the characteristics of its market and how it chooses to play in that market with its competitive advantages.

Splurge and Save: The Fragrance Edition

Is persistent inflation luring wealthier consumers into the dollar-store market? Their share of shoppers earning over $100,000 per year is growing, and slightly wealthier consumers are the fastest-growing demographic at Dollar Tree stores. In the meantime, Dollar Tree’s pricing seems to occupy the best of both worlds, with options at the low end and an increase in its price ceiling from $5 to $7. Has inflation changed how and where you shop?

Dollar Tree to increase max price in stores to $7, reports higher income shoppers

How much longer can consumer packaged goods (CPG) companies continue to drive higher profits through higher prices? The recent quarterly results of spice maker McCormick seem to show that the trend is still going strong, but the aggregate view masks some underlying trends. Overall, McCormick’s price increases continue to drive higher gross margins, but performance varies by segment and category. In their analyst call, the McCormick executive team emphasized the company will “continue to take a surgical approach to managing our price gaps to private label and branded competitors.” The company also anticipates a “return to differentiated and sustainable volume-led growth.”

McCormick & Company, Incorporated (MKC) Q1 2024 Earnings Call Transcript

Breakfast cereal exemplifies the ongoing transition period for many food and grocery products. are recalibrating their behavior and their value perceptions after a couple years of rising prices, a trend which I view as an overdue correction. companies in turn are shifting their focus to growing volume. normally cut through the noise in the Uniform Game, but when price changes become part of the noise, companies need to look at their promotion and portfolio strategies to help consumers make their choices. That was the topic my colleague Max Holz addressed in last week’s Game Changer Newsletter, and it’s a topic we will continue to monitor.

Despite complaints about the economy, consumers still not buying cheaper cereal

In this second episode of the Game Changer Expert Interview Series, BCG’s Jacqueline Martinez explains how intelligent analytics can drive winning strategies for companies of any size in the highly competitive Uniform Game. To learn more about strategic pricing and the new book from BCG’s pricing practice.

As part of the Game Changer Expert Interview Series, my colleague Jacqui Martinez goes into detail about the Uniform Game. Watch now to learn how players can gain a competitive advantage to win within the game.

Applebee’s is experimenting with a new pricing model that could increase traffic, re-ignite growth, and keep the chain’s roughly 1,500 US restaurants top of mind for consumers. Last month it launched the Date Night Pass. Customers pay $200 for a card that entitles them to a $30 discount off 52 meals (but not alcohol) over a one-year period at any participating location. The company said that its first tranche of passes sold out in less than a minute, though it did not say how many.

Last week, it announced that it would make another 1,000 passes available to customers through a random drawing of people who sign up online. The lucky winners will be notified by email on Valentine’s Day.  On paper, the move makes sense for the chain, whose same-store revenue was basically flat for the first nine months of 2023, as a higher average check offset lower traffic. An Applebee’s customer would need seven visits per year to amortize the cost of the pass. Whether they go alone, with a date, or with a group, the potential to drive more traffic is significant with the allure of the $30 discount for each visit.

Quick-service and casual dining restaurants will need to get more creative with pricing, as they face significant increases in minimum wages as well as the elimination of tipping in some cities. It’s unclear whether the Date Night Pass will work, but its launch demonstrates restaurants have more options than raising prices and trimming menus.

Applebee’s makes more Date Night Passes available, but there’s a catch