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Page 1: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

1

LOGO HERE

WHERE HAVE ALL THE BABIES GONE?Focusing on new parents to come in the future

September 2016

Page 2: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

2

A LOOK AT THE BABY LANDSCAPE

• Birth rates decline

• Impact of the U.S. Economy

• A focus on new moms and moms-to-be

• Highlighting baby consumable items

• New mom baby consumables shopping behavior

• Top Baby Category Items Focus

• Baby categories performance at Albertsons/Safeway

• Opportunity markets at Albertsons/Safeway

• Where to Reach New Moms

• Recommendations

Highlighting the importance of new moms and mom-to-be

Page 3: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

3

RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT

Decline in birth rates is a result of financial instability

54

56

58

60

62

64

66

68

70

0

1000

2000

3000

4000

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2015 2016(Q1)

Outstanding Consumer Credit (EOP, SA, Bil.$) Birth Rate

Source: CNN.com; CDC NCHS, National Vital Statistics System; Federal Reserve Bank

59.8Births per 1,000 women is the

birth rate for the 1st quarter of

2016 and the lowest level

2.3MFewer babies were born

because of the recession

20%of women have postponed

having a baby because of the

bad economy

Page 4: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

4

THE FINANCIAL TOLL ON PARENTS

Pregnancy healthcare costs, unpaid leave, and baby’s 1st year expenses

84%The number of companies

in the U.S. that do not

offer paid maternity leave

42%increase in pregnancy

healthcare costs since 1985

Pregnancy Costs Baby’s 1st Year Maternity Leave

59%Mothers who say they work

because they have to, not

because they want to

Source: the Wall Street Journal; Huffington Post, Mintel – Marketing to Moms 2016

Re-entering Workforce

$12,190Mid-level income total

spend on baby’s first year

Page 5: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

5

FIRST CHILD EXPENSES

Diapers and food only make up a small piece of what new moms must buy

Source: USDA 2013 Annual Report- Expenditures on Children By Families

*For a middle-income family with a child born in 2012, adjusted for projected inflation

Housing30%

Childcare & Education

18%Healthcare

8%

Transportation14%

Clothing6%

Food14%

Diapers7%

Wipes1%

Toiletries2%

$11,401

$14,617

$18,271

1 Child HH 2 Child HH 3+ Child HH

Family expenditures on a child aged 0-2 years, by

number of children based on an average income

Page 6: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

6

AVERAGE AGE OF MOTHERS IS INCREASING

• As young Millennials reach their

late twenties and early thirties,

the average age to give birth to

their first child will increase and

we could see a “baby bounce”

Majority of new moms are Millennials and GenX, who could cause a

“baby bounce” as economy improves

23%13%

29%

29%

24%

28%

17%21%

7% 9%

2000 2014

Under 20 20-24 25-29 30-34 35 and over

Source: CDC NCHS, National Vital Statistics System

42%Percent change in teen

birthrate since 2000

25%Women 30+ birthrate

percent increase since 2000

Page 7: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

7

WOMEN ARE PUTTING OFF MARRIAGE & PARENTHOOD

Millennials in their child-bearing years are waiting later to hit major life stages

Marriage

53%Married/

Partnered

47%Single

Parenthood

44%Of Millennials are

parents

Source: U.S. CDC; Mintel, Marketing to Millennials; UN DESA, World

Population Prospects; CEB Millennials in 2016, Millenial Marketing

67%Of Millennials without

children say they would

like to be parents

27%Say they’re not

financially prepared

Page 8: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

8

WAITING FOR FINANCES TO BE IN ORDER

Financial instability at fault for young people delaying parenthood

MORE SCHOOL, MORE DEBT

$30,000Median Balance

Student Loan Debt

Those who began their career during the recession earn 2-9% LESS A YEAR than those who did not, for at least 15 years after starting their career.

Source: Bloomberg, Pew Research, Slate.com

UNDER-EMPLOYMENT

44%Of college-grads are

underemployed, working in

jobs requiring no degree

SAVINGS RATE

-1.8%Personal savings rate

for those under 35

Page 9: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

9

WOMEN ARE WAITING LONGER & HAVING FEWER CHILDREN

Smaller window of time per mom for purchasing baby category

86%

78%

63%

52%

36%

5%0%3% 5% 8%

15% 32%

69%

100%

20-24 25-29 30-34 35-39 40-44 45-49 50+

The Effect of Age on Fertility

Likelihood of getting pregnant

Likelihood of infertility

Source: Infertility in America 2015 by Reproductive Medicine Association on New Jersey;

Pew Research Social Trends; Gallup Survey 2013, CEB Iconoculture Parents in 2017

11%

24% 25%

40%

22%

41%

24%

14%

1 child 2 children 3 children 4+ children

1976 2014

Percent of Moms Ages 40-44 with 1-4+ children % chance over the course of one year

Page 10: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

10

NEW MOMS & BABY CONSUMABLES SHOPPING BEHAVIOR

Page 11: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

11

UNIQUENESS OF BABY CATEGORY

Also adding to the short timespan of baby category purchases

0-6 months 2-5 years 6-24 months 5-12 years

NEWBORN ACTIVE BABY TODDLER CHILD

Source: U.S. CDC

Page 12: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

12

HUGE BABY UNIVERSE

So many options!

– New Mom

Page 13: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

13

Purc

hase

Fre

quency

Avg. Weight/Cost of Purchase

Durables

Consumables

So many options!

– New Mom

Page 14: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

14

Disposable Diapers

49%

Formula18%

Wipes12%

Baby Food, 10%

Toddler Food, 4%

Skin Care (baby), 4%

Baby Bath Items, 2%Baby Remedies,

1%

BABY CONSUMABLES SALES LED BY DIAPERS & FORMULA

Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

Dollars per Household

Online and Brick & Mortar FMCG Channels | Last 52 weeks

89% Of total baby

consumables spend

by new moms

Source: InfoScout Panel Data

FORMULADIAPERS BABY FOODWIPES

Page 15: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

15

MASS GAINS MOST SALES BUT CLUB GAINS MORE PER HOUSEHOLD

Dollars per household means online & club surpass mass for baby consumables

Source: InfoScout Panel Data

Total Item Dollars – Baby Consumables

Online and Brick & Mortar FMCG Channels | Last 52 weeks

$127

$101$90

$51$43

$19$10

0

10,000

20,000

30,000

40,000

50,000

$0.00

$50.00

$100.00

$150.00

Item $ / HH HH Count

Dollars Per Household & Household Counts – Baby Consumables

Online and Brick & Mortar FMCG Channels | Last 52 weeks

Mass55%

Food17%

Club12%

Drug8%

Online7%

Dollar1%

Convenience0%

Page 16: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

16

45.2

29.3

18.916.0

14.4

4.6 3.8 2.4

Baby Food DisposableDiapers

Formula Toddler Food Wipes Skin Care (baby) Baby Bath Items Baby Remedies

Purchase Frequency

BABY FOOD HAS HIGHEST PURCHASE FREQUENCY

Typical child consumes an average of 600 units of baby food by 1-year-old

Brick & Mortar & Online Channels | Last 52 weeks

Source: InfoScout Panel Data

Page 17: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

17

DEFINING THE TOP BABY CATEGORY PLAYERS

Infant Formula, Disposable Diapers, Baby Wipes, Pureed Baby Food & Rice Cereal

FORMULADIAPERS BABY FOODWIPES

Page 18: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

18

A FOCUS ON DIAPERS & WIPES

Moms seek out retailers with the best prices & value on diapers

33% Of moms have decided on

diaper brand before baby’s birth

$7.2 BILLION ANNUALLY TOTAL U.S.Moms spend an extra $4,400 a year at retailers they

consider baby destinations, led by diaper sales

WIPES MEAN BIGGER BASKETAverage spend at grocery is 122% higher than when

wipes are not in the basket

DIAPER PENETRATION INCREASINGCurrently 79.7% for households with kids 0-4 yrs. old

Source: Kimberly Clark Path-to-Purchase Shopper Report & Kantar Retail 2012

NET RECOMMENDATION FOR DIAPERS

AND WIPES BY RETAILER

DIAPER BRAND LOYALTY

27%Sampled brands to

decide best for baby

29%Switched brands

based on price

70%Remain loyal to

initial brand

74% 66% 63% 63% 59% 58% 58% 58% 52%

Amazon BJs Sam'sClub

Costco Target FamilyDollar

CVS Babies RUs

Walmart

Top Retailers Based on % Recommend

NET RECOMMENDATION FOR DIAPERS AND WIPES BY RETAILER

Page 19: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

19

62% Of moms will leave the store if specific

formula product is not available

84%

72%64% 64% 61%

57% 57%

Top Retailers Based on % Recommend

A FOCUS ON FORMULA

SHORT CONSUMPTION WINDOWInfant: 0-12 months

Toddler: 9-36 months

BREASTFEADING IS UNIQUE COMPETITOR Fluctuations in breastfeeding rates have a direct

impact on overall formula category consumption

~60% OF VOLUME DRIVEN BY WIC® WIC drives volume at food & mass retailers

Brand switch occurs if baby isn’t tolerating a formula

Formula represents even shorter consumption window than other categories

Source: Lucros Partners Shopper Intelligence, Mead Johnson Molly Johnson 2015 Survey

NET RECOMMENDATION FOR FORMULA BY RETAILER

Page 20: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

20

A FOCUS ON BABY FOOD

Opportunity for new moms as they try flavors/brands their baby likes

44% Of new moms say they

want organic options

CATEGORY WITH MOST OPTIONSBroken down by Baby Stage with several flavors per stage

HIGHEST PURCHASE FREQUENCYA baby consumes 600 jars of baby food in the first year

CONSUMER PREFERENCE MATTERSNew moms try different brands and flavors of

baby food for their baby during child’s first year

when palate is being trained

63%Increase in organic

and natural product

claims since 2011

Source: Mintel, 2014; Forbes; BNP Media - Brand Packaging

BABY FOOD TRENDS

$9.4BExpected in

pouch sales by

2018

68%58% 54% 53% 51% 50% 49% 48% 46%

Top Retailers Based on % Recommend

NET RECOMMENDATION FOR BABY FOOD BY RETAILER

Page 21: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

21

OF THE 30% WHO BUY ORGANIC BABY FOOD, ONLY 7% ARE LOYAL

Despite the rise of popularity in organic foods, moms are still choosing traditional foods

Source: InfoScout Panel Data

31%

69%

Organic Non-Organic

New Moms % of Spend

Based on Dollars Per Household

Brick & Mortar & Online Channels | Last 52 weeks

$53

$71

$118

Organic Only Non-OrganicOnly

Both

Dollars Per New Mom Household

Brick & Mortar & Online Channels | Last 52 weeks

Bought Non-Organic Only

70%

Bought Organic & Non-Organic

23%

Bought Organic

Only7%

Percent of New Mom Households

Brick & Mortar & Online Channels | Last 52 weeks

ORGANIC vs. NON-ORGANIC vs. BOTH

Page 22: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

22

MOMS BUY THESE TOP BABY CATEGORY PLAYERS IN THE MASS & FOOD CHANNEL

• Food & Mass

channels receive

most baby sales, but

diapers are more

likely to be

purchased across

other channels

And diaper sales show more competition across channels

Total Dollars by Channel

Brick & Mortar & Online FMCG Channels | Last 52 weeks

0

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

Diapers Formula Wipes Baby Food

Page 23: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

23

MOMS BUY OTHER BABY ITEMS ON SAME SHOPPING TRIP

Moms tend to buy 3-4 baby categories within the same shopping trip

Wipes &Wipe Holders

Toddler Food Baby Food Formula Skin Care(Baby)

Basket Affinity – Diapers

Baby Food Toddler Food Wipes &Wipe Holders

DisposableDiapers

Skin Care(Baby)

Basket Affinity – Formula

Source: InfoScout Panel Data

Brick & Mortar FMCG Channels | Last 52 weeks Brick & Mortar FMCG Channels | Last 52 weeks

48x

24x

17x 17x 15x

24x

19x 17x 17x 16x

Page 24: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

24

DIAPERS ARE FUELING BABY CATEGORY SALES AT TARGET

Brick & Mortar & online retailers ranked by total sales

1

2

3

4

5

6

7

8

9

10

Source: InfoScout Panel Data

All Baby Consumables

Target

Walmart

Kroger

Costco

Amazon.com

Sam’s Club

CVS

Walgreens

BJ’s

Meijer

Retailers ranked by total sales

Brick & Mortar and Online FMCG Channels | Last 52 weeks

1

2

3

4

5

6

7

8

9

10

Diapers

Target

Walmart

Amazon.com

Costco

CVS

Kroger

Sam’s Club

Walgreens

BJ’s

Meijer

1

2

3

4

5

6

7

8

9

10

Formula

Walmart

Target

Kroger

Costco

Meijer

Publix

Albertsons

Ahold

Walgreens

Sam’s Club

1

2

3

4

5

6

7

8

9

10

Baby Food

Walmart

Target

Kroger

Albertsons

Ahold

Meijer

Publix

Amazon.com

Costco

Southeastern Grocers

1

2

3

4

5

6

7

8

9

10

Wipes

Walmart

Target

Costco

Kroger

Amazon.com

Walgreens

Sam’s Club

CVS

BJ’s

Publix

Page 25: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

25

BUT WHEN RANKED BY DOLLARS PER HOUSEHOLD, ONLINE & CLUB TAKE THE LEAD

Brick & Mortar & online retailers ranked dollars per household

1

2

3

4

5

6

7

8

9

10

Source: InfoScout Panel Data

All Baby Consumables

Amazon.com

BJ’s

Costco

Sam’s Club

Target

Meijer

Walmart

Kroger

Jet.com

Publix

Retailers ranked by dollars per HH

Brick & Mortar and Online FMCG Channels | Last 52 weeks

1

2

3

4

5

6

7

8

9

10

Diapers

Amazon.com

BJ’s

Costco

Target

Sam’s Club

Meijer

CVS

Wakefern

Publix

Jet.com

1

2

3

4

5

6

7

8

9

10

Formula

BJ’s

Target

Meijer

Costco

Southeastern Grocers

Wakefern

Publix

HEB

Ahold

Sam’s Club

1

2

3

4

5

6

7

8

9

10

Baby Food

Amazon.com

BJ’s

Kroger

Meijer

Target

Walmart

Southeastern Grocers

Sam’s Club

Giant Eagle

Wegmans

1

2

3

4

5

6

7

8

9

10

Wipes

Costco

BJ’s

Amazon.com

Sam’s Club

Target

Wegmans

Wakefern

Kroger

Publix

Meijer

Page 26: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

26

SATISFACTION BY RETAILER CHANGES DEPENDING ON THE BABY ITEM IN THE CATEGORY

Online and Club channels have the highest satisfaction ratings

All Baby Consumables

Top

RetailersNet

Recommended

Costco 61%

Sam’s Club 60%

Target 58%

Walmart 57%

Babies R Us 54%

Publix 54%

Kroger 50%

BJ’s 49%

Meijer 48%

CVS 45%

Diapers

Top

RetailersNet

Recommended

Amazon 74%

BJs 66%

Sam’s Club 63%

Costco 63%

Target 59%

Family Dollar 58%

CVS 58%

Babies R Us 63%

Walmart 52%

Dollar General 49%

Formula

Top

RetailersNet

Recommended

Sam’s Club 84%

Target 72%

Babies R Us 64%

Kroger 64%

Costco 61%

Publix 57%

Walmart 57%

Baby Food

Top

RetailersNet

Recommended

Costco 68%

Target 58%

Babies R Us 54%

BJs 53%

Publix 51%

Sam’s Club 50%

Meijer 49%

HEB 48%

Albertsons 46%

Walmart 42%

Wipes

Top

RetailersNet

Recommended

Costco 51%

CVS 49%

Dollar General 46%

Rite Aid 45%

Family Dollar 43%

BJs 42%

Walgreens 39%

Walmart 38%

Target 37%

Sam’s Club 35%

1

2

3

4

5

6

7

8

9

10

Overall, thinking about your purchase of XXX, how likely would you be to recommend shopping at RETAILER for XXX to a friend? (SR)

Source: Lucros Partners Shopper Intelligence

Page 27: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

27

ONLINE SALES FOR THE BABY CATEGORYDriven by diapers and wipes

Page 28: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

28

ONLINE BABY CATEGORY SALES REACH $240M IN 1ST HALF OF 2016

Diapers driving online baby category sales

$1,000

$710

$390 $380

$260 $240 $230 $220$140

$100$60 $50 $40 $30

Healt

h S

upple

ments

Pet

Care

Facia

l Care

Cosm

eti

cs

Dri

nks

Baby

Hair

Cair

Healt

h O

TC

Ora

l Care

Cle

aners

Shavin

g

Hand B

ody

Laundry

& D

ish

Sun C

are

Top CPG Categories Ranked by Online Sales

First Half 2016 | Numbers in millions (Health Supplements = 1 billion)

Source: 1010data

Optimum

Nutrition

Garden of Life

Blue Buffalo

Pampers

Royal Canin

Wellness

Now Foods

Huggies

Clinique

Hill’s Science

Diet

Top CPG Brands Ranked By Online Sales

First Half 2016

Page 29: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

29

BUSY MOMS SEEK THE CONVENIENCE OF ONLINE SHOPPING

Busy, on-the-go moms look for ways to maximize time with child

50%

34%

34%

34%

21%

Don’t have to wait in line

Don’t have to worry about out of stock items

Don’t have to deal with other shoppers

Don’t have to look for parking

Don’t have to leave their sofa with baby in tow

“Why would you choose to go to the store when you literally have 2 hours to spend with your kid after work, when you could have what you need on your porch at home for the same or lower price.

It’s honestly a life saver! I don’t know how working moms survived before Amazon.”

-Hedish A., New Mom

Source: Soasta Survey, 2013, Google Consumer Survey April 2015

Parents said that shopping with apps on their mobile phone or tablet

is less stressful than going to a physical store for reasons that include:

56%Of Google searches

related to maternity are

done on mobile devices

2.7xNew & expecting parents more

likely than non-parents to use a

smartphone as primary device

Page 30: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

30

DESPITE FEAR OF ECOMMERCE, BRICK & MORTAR HAS A LEG UP

A look at ecommerce data tells us new parents shop in-store

99%

98%

98%

97%

96%

96%

91%

90%

1%

2%

2%

3%

4%

4%

9%

10%

Baby Remedies

Solid Food

Baby Food

Baby Bath Items

Skin Care (baby)

Formula

Wipes & Wipe Holders

Disposable Diapers

Instore

Baby Category

Online sales: $240M

Baby Category YOY

growth online sales Q1

2015-Q1 2016: 11%

Source: InfoScout Panel Data, 1010 Data Market Insights

Page 31: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

31

Baby Consumables Category

at Albertsons/Safeway

Page 32: WHERE HAVE ALL THE BABIES GONE? · 2019. 3. 15. · RECORD LOW BIRTH RATES WITH RECORD HIGH DEBT ... Diapers, formula, wipes and baby food make up almost all of baby consumables dollars

32

BABY ITEMS RETAIN SHARE-OF-WALLET WITH NEW MOMS AT ALBERTSONS/SAFEWAY

Albertsons/Safeway shoppers are spending more in the mass channel

Baby Food

Baby Remedies

Solid Food

Formula

Skin Care (baby)

Wipes & Wipe Holders

Disposable Diapers

Baby Bath Items

Safeway/Albertons Other Food Mass Drug Club Dollar Convenience Online

7%

15%

7%

9%

24%

20%

7%

20%

Last 52 weeks

NEW MOMS SHARE OF WALLET ON BABY ITEMS

• Albertsons/Safeway

has an opportunity

to gain dollars from

the mass channel

Source: InfoScout Panel Data

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33

WHERE CAN ALBERTSONS/SAFEWAY GET THE BIGGEST BANG FOR THEIR BUCK?Demand Index & Sales Data

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STORES WITH HIGH DEMAND, BUT LOW SALES ON DIAPERS

• Stores with low sales but

high demand create

opportunity area for

Albertsons/Safeway

Using demand and sales data to strategically activate insights

High Sales – High Demand

High Sales – Low Demand

Low Sales – High Demand

Low Sales – Low Demand

Source: Nielsen Spectra Demand Index; Nielsen RMS Data

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STORES WITH HIGH DEMAND, BUT LOW SALES ON FORMULA

• Stores with low sales but

high demand create

opportunity area for

Albertsons/Safeway

Using demand and sales data to strategically activate insights

High Sales – High Demand

High Sales – Low Demand

Low Sales – High Demand

Low Sales – Low Demand

Source: Nielsen Spectra Demand Index; Nielsen RMS Data

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36

STORES WITH HIGH DEMAND, BUT LOW SALES ON J&J BATH

• Stores with low sales but

high demand create

opportunity area for

Target

Using demand and sales data to strategically activate insights

High Sales – High Demand

High Sales – Low Demand

Low Sales – High Demand

Low Sales – Low Demand

Source: Nielsen Spectra Demand Index; Nielsen RMS Data

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37

WHERE TO REACH NEW MOMSPersonal recommendations, Mommy Blogs & Social Media

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PERSONAL RECOMMENDATIONS HAVE GREATEST IMPACT ON NEW MOM

New moms look for advice from grandma, family & friends

With our first child we really

depended on the help of

my mom and our family.

- Ivy, 38, married mom of three

66%Of moms say they will try a product if someone they

know recommends it, despite bad online reviews

Source: Mintel – Marketing to Moms 2015

With my first child, I relied

on advice from my friends who had babies recently.

- Amy, 30, married mom of two

47%Of new moms say they are influenced

by other mom’s recommendations

36%Of new moms say they are

influenced by their own mom

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NEW PARENTS ALSO LOOK ONLINE FOR ADVICE

New parents search online 54% more than experienced parents

42% 41% 40%36% 35%

33%30%

28%

19%

28%30%

25%

16%18%

12% 11%

New Moms Experienced Moms

WHY THESE SOURCES?

35%Of moms say Mom Blogs offer

useful advice & are informative

90%Of moms say online reviews

influence purchase decision

Source: Mintel – Marketing to Moms 2015; BabyCenter 21st Century Mom Insights Series May 2016

REGULARLY USED SOURCES

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THE PREVALENCE OF MOMMY BLOGS

Moms trust other moms & read their blogs, social media posts & brand recommendations

90%Of consumers trust

mommy bloggers

20,000Monthly audience views of

established mommy bloggers

61%Of online consumers buy based

on recommendations from a blog

3.9MMommy Blogs in

the U.S.

Source: Mashable - The Rise of the Mommy Blogger; Alexa Rank

The Pioneer Woman Dooce Scary Mommy Money Saving Mom The Bloggess

3,920,755 followers 1,749,287 followers 1,639,000 followers 1,048,84 followers 638,971 followers

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41

CONNECTING BRANDS WITH “INFLUENCERS”

“Influencer” marketing agencies specializing in connecting brands to mom bloggers

“Our bloggers cover a wide range of topics, which allows us to curate our network to connect right influencers witheach brand we work with for maximum success.”

www.themotherhood.com

“Harness our network of powerful bloggers and social influencers to spread your message across popular blogs and social media accounts.”

www.socialix.com www.realclever.com

“CLEVER represents thousands of real people telling brand stories. We match brands with the right influencers to reach millions of the right consumers.”

Source: The Motherhood; Socialix; Real Clever

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BRAND PARTNERED MOMMY BLOG EXAMPLES

Leveraging influential bloggers by utilizing them for blog contributions

Source: Various Mom Blogs

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IT TAKES A VILLAGE TO RAISE A CHILD… AND SOCIAL MEDIA

Social media creates a community & provides information to moms

Source: Pew Research – Parents & Social Media July 2015; Salesforce – Social

Engagement Benchmark Report; Punchbowl – The World of Digital Moms

73%Of moms use social media for

brand recommendations

36%Of moms have made a purchase

based on a sponsored ad on

social media

67%Of moms believe they can

influence a company by voicing

their opinion on social networks

Chance to connect

emotionally & personally

Platform for convenient

& useful content

Content that appeals to

diversity of new mom’s roles

Opportunity for

authentic conversation

HOW SOCIAL MEDIA PLATFORMS CAN WORK FOR BRANDS

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FACEBOOK LEADS WITH MOMS

Mom’s have a large network & brands have an

opportunity to capitalize on their propensity to share

81%

40%

30%

24%

19%

Facebook

Pinterest

Instagram

LinkedIn

Twitter

Source: Pew Research – Parents & Social Media July

2015; Salesforce – Social Engagement Benchmark Report

Moms Use a Range of Social

Media Platforms

42%

20%

23%

11%

% of Friends

501+

251-500 friends

101-250 friends

0-100 friends

Moms have a large network

of Facebook friends 76%Of moms share, post or

comment on Facebook regularly

25%Of all social referral traffic

is driven by Facebook

44%Of new moms said

their Facebook use

increased after birth

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NEW MOMS CAN LOOK TO THE INSTORE EXPERIENCE FOR HELP WITH BABY

New moms are deciding which products are best for baby

235

168

142

130

127

126

122

110

102

98

In-store Kiosk

Signs or displays in the store

Coupons from Home

In-store circular

Requested by HH member

Item Price

Shopper Loyalty Card discounts

Newspaper circulars from home

Product label/packaging

Previous usage and trust of the brand

Mom’s Influencers of Brand Decisions In-store

Source: SymphonyIRI, MarketPulse Survey 2012

Index, moms vs total population, average = 100

New Moms Look For Advice on What to Buy

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NEW MOMS LESS SWAYED BY PRICE THAN EXPERIENCED MOMS

Look for large pack sizes, organic and convenient packaging

61%

73%

New Mom

ExperiencedMom

I am influenced by on sale

items.

41%

30%

New Mom

ExperiencedMom

Being organic or all-

natural is an influencing

factor.

34%

21%

New Mom

ExperiencedMom

I am influenced by

convenient on-the-go

packaging.

34%

26%

New Mom

ExperiencedMom

I am influenced by larger

bulk size offerings.

Source: CEB Iconculture – Marketing to Moms 2015

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47

RECOMMENDATIONS

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WHAT WE KNOW ABOUT THE BABY LANDSCAPE

New moms are vital to the baby category

Although new moms say

they want organic items,

they tend to purchase

more traditional items.

New moms look

everywhere from their

own parents, to online

blogs, and the in-store

experience for guidance

when shopping for baby.

New moms trust brands

who seem authentic and

find ways to help mom

cope with mommy-hood.

Women are waiting

longer to have children

to be able to afford

baby expenses.

Although women are

waiting, most within child-

bearing age say they do

want children in the future.

New moms are looking for

what’s best for baby, so

price is not as important.

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49

RECOMMENDATIONS

Catering to new parents who are looking for support to give baby the best

Create a Baby Rewards program,

with digital coupons, in addition to

membership discounts in-store.

Build a baby solution center that

gives parents a sense of caring

and personalization.

Gain new mom loyalty and pique the

interest of possible moms-to-be, to

maintain loyalty after having a baby.

Cater to busy, cash-strapped

parents by making their shopping

trip as convenient as possible.

Communicate to new moms via their

most trusted sources, in a way that

feels authentic and personal.

Capitalize on new parents who want

the best for baby, and are looking for

information from trusted sources.

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APPENDIX

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CROSSMARK BABY CLIENTS

Unifying the Baby Category at CROSSMARK