Understanding Shopper Preferences Boosts Diaper Sales 27%
In Malaysia, baby diaper manufacturers are constantly offering reduced prices to drive sales. A top brand was experience success in the training pants segment, but was only available up to the Jumbo pack size; the company engaged dunnhumby to help it grow its sales in the training pants market, knowing it’s a small segment at only 7% of the overall diaper market.
dunnhumby uncovered preferences within the baby diaper market, uncovering shopper patterns to identify potential new products that would satisfy their needs. dunnhumby also assessed comparable launches of competing products’ performance to leverage on emerging trends while at the same time mitigate the uncertainties leading to launch. Here are some key realizations:
- Mega packs were introduced into the market by few other brands which were the key growth driver for each of the brands, with an average price per unit of RM36.77 (only 24% higher than our client’s Jumbo pack)
- A competitor launched and listed its Mega pack in a major grocery retailer in January 2012 and has received sales and customer penetration superior to its existing Jumbo pack
- Our client’s Jumbo pack customers were buying on average 1.33 units per visit, indicating that, on a per pack basis, Jumbo-size was not matching consumption levels
- Our client’s Jumbo pack is the pack that has the highest visits per customer among pants brands, indicating that, well, customers really like it
dunnhumby insights showed customers were ready for a Mega pack, so the company launched one in sizes L, XL, and XXL in July 2012.
The customer insight that led to the decision to launch the Mega pack helped grow sales and customer penetration:
- Total category sales grew by 21%
- Customer penetration grew by 17%
- Brand sales grew by 27% with 76% of the sales increase coming from the new Mega pack
- 50% of the additional spend into the new Mega pack resulted in additional Baby Diapers category spend at the retailer — RM95k from New Category customers, and RM122k from those that expanded their spend by adding in the Mega pack