Multipacks: When Less is More for the Retailer

May 1, 2004
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Multipacks: When Less is More for the Retailer

Retailers, such as mass merchandisers and club stores, like multipacks for several reasons. These bundles offer extra value for consumers and a bigger canvas for package graphics.
Retailers are especially fond of exclusive-size or -count multipacks. This uniqueness makes their stores a destination for consumers and makes it harder for their shoppers to compare the “best buys” among different retailers.
One trend in multipacks is for smaller sizes and/or counts. Why? Families are getting smaller. Inflation is causing product prices to rise.
Some large multipacks have hefty cash-register “rings.” These high prices can scare off some consumers.
Smaller multipacks are more affordable. And since consumers don’t buy as much, they use the products quicker and return to the store sooner. Increased shopping frequency means more chances for impulse purchases.
Out of gas
Rising fuel costs are a double-edged sword for consumer packaged goods (CPG) marketers. The spiraling costs of gasoline and other energy sources translate into higher raw material, production and transportation costs for CPGs.
At the same time, consumers have less money to spend. Economists estimate that $1 billion is lost in consumer spending for every penny rise in gasoline. That adds up to more than $50 billion in lost spending in the first five months of the year.
Wal-Mart recently warned investors that its shoppers have about $7 less a week to spend at their stores due to rising gas prices.
Convenience stores within gas stations are probably also feeling the “crunch.” More money for gas means less money for snacks, candy, beverages and other on-the-go items.
If you serve this market, it may be time to reevaluate your package costs, point-of-purchase displays and branding strategy. A “value” message in this environment might strike a harmonious chord with these “at-the-pump” shoppers.

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