【正文】 Santiago Overall A B 521 114 316 Percentage of primary shoppers by segment, main retailers 33 SOME RETAILERS “ATTRACT” DISPROPORTIONATE SHARE OF CERTAIN SEGMENTS (3/3) 12179 97 517329 101617291735243244201721251714231726322721Average A B C D E 495 66 203 57 68 35 High ine bargain hunters Range seekers on a budget Avid bargain hunters 100% Source: Consumer survey, team analysis Quality seekers and time savers Indifferent shoppers on a budget Mexico Percentage of primary shoppers by segment, main retailers 34 McKINSEY PROPRIETARY RESEARCH IDENTIFIED SEVEN SEGMENTS IN THE . GROCERY RETAIL MARKET Shop around at many different stores to hunt down the latest special Want broad selection and national brands for a low price Use coupons 100% of the time, usually at a store close to home Pure Price Willing to pay more and drive farther for quality and service Want great service and ambience at any cost Willing to pay more to get in and out quickly at a store close to home Use every means available to get the lowest price – will not pay more for anything Bargain Hunters Selection for Less Coupon Clippers Quality Superior Experience Convenience Source: McKinsey North American Retail Practice 35 LATIN AMERICA SEGMENTS ARE FAIRLY SIMILAR TO THOSE IN THE . Selection for Less (12%) Coupon Clippers (10%) Quality (14%) Superior Experience (20%) Convenience (22%) Source: Team analysis Rangeseekers on a budget (22%) Quality seekers and time savers (21%) United States Latin America ( ) Percentage of total spend Bargain Hunters (10%) Highine bargain hunters (20%) Avid bargain hunters (20%) ? In Latin America, “more price oriented segments” are significantly larger than in the ., noticeably “Bargain Hunters” even adding the “Coupon Clippers” in the US ? Segments broadly similar in key characteristics Pure Price (12%) Indifferent shoppers on a budget (17%) 79% 44% 56% 21% More price oriented Less price oriented ? “Less price oriented” segments in the . more defined and significantly larger share of total population than in Latin America S 36 KEY TAKEAWAYS FROM STUDY 1. Latin America: diversity of consumers, and not just in the depth of their pockets 2. The few key levers that matter in building price perception – and the one that doesn’t 3. Consumers (mostly) getting it right in their search for value 4. Retailers have an opportunity to get it right more often in their search for a better price proposition 37 MAIN MESSAGES ? Reference price, range architecture and promotions are the three most important levers in determining consumer price perception in Latin America ? Reference price is the most important lever: – in all consumer segments, although other levers have disproportionate influence depending on the segment, such as range architecture for “Quality seekers and time savers” and “Indifferent shoppers on a budget”. – in all markets except Mexico City, where range architecture is slightly more important ? A limited number of KVIs appear to particularly important in driving consumers? perception of reference price ? From matching price perception with price reality, it is clear that consumers are able to quite accurately identify retailers with low average prices in markets where promotional activity is relatively low. Promotions do not drive price perception in any market and in fact obscure price reality in Sao Paulo and Buenos Aires. ? There are indications however, both in low and high promotional markets that some retailers are able to get more credit more value than they “deserve” 1 2 3 4 5 38 HOW DO CONSUMERS DEVELOP THEIR PRICE PERCEPTION? Source: Team analysis ? What are the different elements that can help explain price perception? ? What are the elements that are most relevant to explain price perception? ? Are these different for the various markets? ? Are these different for various segments? How do consumers perceive prices? ? Do Latin American consumers accurately perceive low price retailers? ? Are there differences in price perception accuracy when we look at the different regional markets and segments? ? What elements might explain regional differences in price perception? How does price perception match with price reality? 39 THERE ARE SEVERAL POTENTIAL DRIVERS OF PRICE PERCEPTION Source: Team analysis Reference price Promotions Range architecture Communications Instore environment Drivers ? Low prices on items bought most often ? Low prices on wellknown items ? Prices are usually low ? Frequent discounts ? Frequent interesting promotions (., 2x1, wow deals) ? Low priced alternatives for everyday basics (., OPP) ? Broad range of price and quality levels ? Private label with good price/quality ratio ? Believable low price ads ? Frequent promotion pamphlets ? Instore signs that clearly point to sales ? Overall store environment ? A lot of people shopping 40 PRICE PERCEPTION IN LATIN AMERICA IS DRIVEN MAINLY BY TWO ELEMENTS % total weight Source: Team analysis ? Reference price is the key lever of price perception, with KVIs as a very relevant ponent ? Range architecture – namely cheap alternative brands (OPPs) – are also very important ? Together they make up for 75% of the way a consumers builds price perception 30211941088Prices are usually low Cheap alternative brands Upscale store environment Frequent discounts Believable price ads Prices on wellknown items/bought most often Broad range