Consumer panel data reveals essential insights into how consumers behave and the driving forces behind their purchases. Circana’s Complete Consumer™ solution provides a comprehensive, accurate view of consumer behavior by leveraging receipt panel metrics. By connecting consumer behavior to real purchase insights, we help brands more accurately dig into crucial business questions. 

Because receipt panel metrics and insights are still new to many retailers and brands, we’ve created this guide to provide clear insights into how utilizing this data can uncover opportunities. This guide provides three fundamental principles of consumer behavior that are supported by our data and examples of how these principles can be applied.

Receipt Panel Data Provides Valuable Data on Market Penetration, Customer Loyalty, and Competitive Performance

By tracking the same people over time, receipt panel data offers unique perspectives into consumer behavior, answering previously unanswerable questions such as:

●      How many different customers do I reach, and how valuable are they?

●      Are my customers loyal to me, or do they spread their wealth to my competitors?

●      What competitive brands do my customers buy when they don’t buy from me?

How does Circana collect and combine receipt and other types of consumer panel data?  

Our receipt panel data is referred to as longitudinal data because it tracks the same customers over time. Our consumer insights are powered by receipts we collect directly from the people on our consumer panel. Using our CoinOut® App, panelists snap photos of their paper receipts and passively share e-receipts directly from their email inboxes and third-party app usage. Panelists earn points by submitting these receipts. All receipts, regardless of basket size, retailer, or brand, are incentivized equally to minimize bias.

By combining traditional consumer panel data with receipt data that tracks the same consumers’ purchases across all the categories and brands they purchase and the retailers they purchase from, we gain an accurate understanding of what drives purchase behavior. And because we collect receipts from the same panelists over time, our longitudinal data offers multiple advantages over repeated cross-sectional data sources, such as in-the-moment tracking surveys. Only through longitudinal analysis can you uncover insights like how many customers you reach, how much they spend with you (and your competitors), and how your relationship with your customers changes over time.

What Longitudinal Market Metrics Do We Track?

Market/Category Penetration

The share of all consumers that a given brand, retailer, or category reaches during a given time frame.

Example: 70% of the U.S. population made at least one purchase at Retailer A in July 2024.

Purchase Frequency

The average number of unique purchase occasions per buyer of a brand, retailer, or category during a given time frame.

Example: People who bought athletic footwear in the first quarter of 2024 made an average of 1.5 purchases.

Spend per Buyer/Customer Value

The aggregate spend per customer captured by a given brand, retailer, or category during a given time frame.

Example: Among the 70% of the population that shopped at Retailer B in July 2024, the average spend per purchase was $41.54. Because each person made an average of 5.2 purchases that month, each customer walking into Retailer B that month is worth an average of $216.00 to Retailer B.

Share of Wallet

The distribution of spending across brand, retailer, or category made by a designated buyer group during a given time frame.

Example: Retailer C accounted for 12% of total apparel spending among people who bought apparel at Retailer C in the first half of 2024.

Customer Churn/Retention

The share of customers who return to a given brand, retailer, or category in a successive time period (e.g., month over month, quarter over quarter, year over year, etc.).

Example: 83% of Brand A buyers in June 2024 returned to make another purchase from Brand A in July 2024.

Three Data-Backed Principles of Consumer Behavior That Drive Brand Growth

1 - Build your base. Buyer penetration drives loyalty

Marketers are often enamored by brands that are frequently perceived to enjoy extraordinary loyalty from rabidly devoted fan bases. In reality, across all the industries we track, virtually no brand or retailer achieves unexpected size or growth through outsized loyalty or retention alone. Loyalty metrics are, in general, highly predictable and align with a brand’s penetration (customer reach). Larger brands reach more customers, and those customers are often more valuable and more loyal than smaller brands’ customers. Penetration and loyalty are so intertwined that it’s impossible for marketers to influence one without action on the other.

2 - Your customers aren’t yours. Buyer churn is inevitable

Churn is natural, and the rate at which you lose customers to other brands is predictable based on your market size. A larger brand will lose proportionately less of its customer base than a smaller brand, but all brands lose buyers and gain new ones over time. It’s important to attract enough new, valuable customers to offset the customers you will inevitably lose.

Your customers probably aren’t all that loyal; they visit and purchase from your competitors, too. The proportion of customers you share with your competitors — and the share of your customers’ spending that “leaks” to those competitors — is predictable based on the relative market size of those competitors. Additionally, because your most frequent customers tend to be more frequent customers of the category, your heavy buyers are likely heavy buyers of your competitors, as well. 

3 - Heavy buyers fade. Light buyers matter

Light buyers make up a large share of your unique customer base — and a meaningful share of your dollars. Marketing strategy must not ignore the broad swath of lighter customers who demonstrate their willingness to buy your brand and may well have a significant opportunity to increase their relationship with you, given the right encouragement.

As the heaviest buyers satisfy their purchase needs in each time period, and/or shift their purchase preferences over time, they tend to “regress to the mean” and become less valuable, on average, over time. Likewise, lighter buyers will also regress to the mean; they tend to increase their purchase rate in successive time periods. To drive growth, marketing strategies and investments must focus on today’s heaviest buyers and on growing relationships with lighter buyers who present a greater opportunity to increase their value to the brand.

How to Apply the Three Principles of Consumer Behavior

Penetration Drives Loyalty — Customer Retention and Acquisition Are Inherently Linked

Loyalty metrics like purchase frequency and spend per buyer are generally predictable and directly correlated with a brand’s penetration. Larger brands reach more buyers, and they also earn more loyalty from their customer base than competing smaller brands. Larger brands reach more buyers than smaller brands because they’re more physically available or convenient to buy, address more customer need states, and they’re more often among a customer’s consideration set. For these same reasons, a larger brand earns more of its customers’ spending and retains more of those customers over time.

While theoretically it may be possible to grow your brand through increased loyalty and retention alone, in reality, it’s impossible to expand your relationship with existing customers in isolation from all other category buyers. Loyalty metrics inevitably follow penetration.

Given penetration’s outsized importance in driving growth, it’s often necessary that brands interested in growing adopt a broader, more “mass marketing” approach to their customer strategies. But expanding a brand’s mass appeal doesn’t mean delivering the same message or product to every potential buyer. Tactics like customer segmentation and microtargeted advertising campaigns can be vital to uncovering and reaching new audiences.

Chart Above: Energy Drink Brand 1 is the largest brand of energy drinks in the convenience channel. As expected, it reaches more buyers than its competitors, Energy Drink Brand 2 and Energy Drink Brand 3. Energy Drink Brand 1 also enjoys a higher purchase frequency among its buyers. As the dominant brand, Energy Drink Brand 1 reaches more buyers, and those buyers are more loyal.

Wherever you find exceptions to this direct correlation between customer reach and loyalty, it’s often because you’re comparing brands of different natures. A regional restaurant chain, for example, may appear to earn much stronger customer loyalty than might be predicted by its size relative to national chain competitors. The limited distribution of a regional player means it reaches many fewer customers than a national chain, but such a regional chain very well may be a top operator in the markets where it plays. In these “exceptions,” filtering only to markets where this regional player competes might reveal this regional chain to be quite dominant in reaching customers within its market, and its loyalty metrics likely will fall in line with expectations based on its penetration relative to competitors within its own geographies.

Likewise, similar “exceptions” may be found when comparing retailers or brands that sell to a niche customer segment (e.g., a men’s plus-size-only brand), or brands that sell a different mix of product categories (e.g., a footwear-dominant retailer versus an apparel-dominant retailer). When benchmarking penetration and loyalty metrics among a competitive set, it’s important to analyze like competitors.[2] 

Buyer Churn is Inevitable — Buyer Penetration Decreases Customer Churn

As consumers inevitably satisfy their purchase needs or shift their preferences among brands, some level of buyer churn is unavoidable for every brand. But the larger your buyer penetration, the lesser share of customers you will lose over time.

Chart Above: Fast Food Chain 1 reaches the largest customer base of any restaurant and likewise loses a smaller proportion of its customer base year to year. It is important to understand your brand’s churn rate so you can employ the right marketing and advertising strategies to continually attract enough new buyers to offset inevitable customer losses.

Light Buyers Matter — Advertising/Marketing Strategies Need To Target These Consumers 

Attracting dedicated, heavy-spending customers is no doubt vital to your success as a brand or retailer. But lighter buyers make up the largest share of your customer base and contribute more sales dollars than you probably expect. The commonly held 80/20 belief (Pareto’s Law), where the most valuable 20% of customers make up 80% of sales dollars, is rarely, if ever, seen in real life. In actuality, the heaviest 20% of customers generally account for just over half of sales, usually about 60%. That means the remaining 40% of your sales — 40 cents of every dollar you earn — comes from this long tail of lighter buyers.

Heavy buyers are important to attract and retain, but lighter buyers matter a great deal to your brand’s performance and must be accounted for in your marketing and advertising strategies.

Charts Above: The lightest 80% of buyers almost always account for more than just 20% of a brand’s sales. In the examples shown, light buyers are around twice as important to annual brand sales than would be predicted by the misguided 80/20 rule.

Heavy Buyers Fade — Performance is Driven by Customers Who Can Grow with the Brand

Heavy and light buyers aren’t static; consumers constantly uncover new wants and desires, satisfy other purchase needs, and shift their brand preferences over time. Many of your heaviest buyers in any given time period have fully satisfied many of their purchase needs. They’re very likely to decrease their spending and become lighter buyers in the next time period. Importantly, by the same token, lighter customers are more likely to have the capacity to increase their spending, and they tend to become heavier customers over time. Because lighter buyers also have so much more room to grow their relationship with you than already-dedicated, heavy-spending buyers, they’re critical to your brand’s growth. Your customer strategies and marketing investments shouldn’t focus exclusively on retaining your best customers; it’s also critical to continually develop your engagement with today’s lower-value customers.

Last year’s heavy and moderate Quick Service Restaurant Chain 2 buyers became less valuable to the chain over the most recent year. Previous non-buyers and light buyers, on the other hand, increased their engagement with Quick Service Restaurant Chain 2 and now account for nearly half of Quick Service Restaurant Chain 2’s current annual sales.

Your Customers Aren’t “Yours” — Customer Loyalty is Not Exclusive

Consumers tend to purchase from a portfolio of favorite brands or retailers — they’re rarely loyal to just one brand. That means you’ll inevitably share your customers with competitors at a rate proportional to the relative size of those competitors.

It’s important to recognize that the more often consumers shop a given category, the more unique retailers or brands they’re likely to buy from. This means your own heaviest-spending, best customers are even more likely to “cheat” on you with competitors than your lighter buyers. Because they are likely to make so many category purchases, your heaviest buyers simply have a greater opportunity to also purchase from a competitor.

Additionally, because of their high category purchase frequency, your heaviest consumers are likely another brand’s heaviest consumers as well. This means that you’re competing against your competitors even among your most loyal customers.

Chart above: Because Retailer Chain 1 is the largest women’s apparel retailer reaching the most customers, Retailer Chain 2, Retailer Chain 3, Retailer Chain 4, and Retailer Chain 5 share an outsized portion of their customers with Retailer Chain 1. On the other hand, Retailer Chain 5 is a much smaller retailer. Competing retailers share a much smaller proportion of their customer bases with Retailer Chain 5.

Unlock Brand Growth Opportunities with Receipt Panel Insights

Circana’s receipt-powered insights reveal fundamental truths about consumer behavior. Understanding the consumer buying behavior principles outlined here will empower manufacturers and retailers to make smarter, evidence-based decisions to drive growth. Our consumer behavior experts can answer your questions and help you unlock the full potential of consumer data

References & Sources

Sharp, B. (2010). How brands grow: What marketers don’t know. Oxford University Press.

Sharp, B. (2015). How brands grow: Part 2 (2nd ed.). Oxford University Press.