Just over 80 years ago – July 1, 1941, to be precise – the first TV advertisement aired. It was a 10 second spot for Bulova, broadcast on NBC and watched by a meager 4,000 people. A few months later, America entered WWII which put a stop to TV sales and a temporary halt to the inevitable rise of TV ads. By 1947, when viewers tuned into the first televised World Series to watch the New York Yankees beat the Brooklyn Dodgers in seven games, the age of mass audience engagement had truly begun. An estimated 3.9 million viewers tuned in, and the era of lucrative TV advertising began, filling the coffers of Mad Men for decades to follow. Fast forward to 2007, when Netflix launched streaming, providing a rather convenient way to watch shows without ads interrupting the experience. Life was good for viewers, but no doubt rather concerning for Madison Avenue and beyond. But as we wind down 2022, the very company that disrupted the ad market is set to embrace it, rejuvenating the business it once stole eyeballs away from. With the service’s premium subscriber base seemingly capped out, there is an urgent need to create a secondary audience of consumers willing to pay a portion of that typically charged with ad-revenue expected to offset the gap. Further, rising content costs and Wall Street’s push to have media companies manage their streaming services towards profitability ( gasp ) is prompting a return of ad-supported TV. This shift had already begun but the true pivot, like the ’47 World Series, will be coming in a matter of weeks as both Disney+ and Netflix hit the U.S. market with their ad-supported streaming plans. More importantly this is reshaping the content distribution, pricing, and packaging strategies that will determine the winners in the next chapter of the proverbial streaming war. What’s old is new again. Of course, it’s hardly an original idea. Recall broadcast TV, basic cable, and premium channels; the construct that shaped programming distribution since the early 80s. It’s in the middle of being reshaped into FAST (Free Ad-supported Streaming TV), AVOD (Advertising Video-on-Demand) and SVOD (Subscription Video-on-Demand). According to NPD’s TV Switching Study , while fairly new, FAST already reaches an audience of 43.5 million unique U.S. households each month through distribution on over a dozen services such as Pluto TV and Freevee. Today, each of these services reach a rather different demographic. The opportunities are vast: migrate ad-spend to FAST, use it to generate an audience for your IP, and look for opportunities to use it to drive viewers to; wait for it…premium subscription channels, known today as SVOD. In other words, while ad-supported services open the door to more viewers, there is still the dream of upgrading them. Notably, the viewer commitment to ad-supported streaming TV isn’t quite the same as those paying the premium for ad-free viewing. Take Amazon for example; those watching the same movies on Freevee with ads as compared to Prime Video without ads are less likely to complete the movie. In fact, our Subscription Video Track data reveals they are eight percentage points less likely to do so. Free streaming and ad-tiers, while presenting vast opportunities come with hurdles. Our research has shown that viewers of ad-supported streaming services have less vested in content availability, exclusive programming, and search. The key point to remember is that many of them are not premium viewers. As such the proliferation of ad-supported subscription plans will drive a greater need to re-bundle services to retain subscribers. Sounding a bit familiar yet? We’re already seeing this happen, such as the recent integration of Showtime with Paramount+. When considering what’s next, I’d argue the first step should be revisiting successful strategies from the past. Effective distribution strategies should consider the optimal channel, be it FAST, AVOD or SVOD. Evaluations should have detailed financial models showing how much advertising revenue can offset, or even surpass, lower subscription costs. Lastly, and I can’t stress this enough, be thoughtful when assessing a re-bundling strategy. At this early stage of the redux service bundling will be a critical subscriber retention tool. But it has the potential to label streaming with negative consumer perceptions like those that plagued the cable industry. The guiding principle should be delivering greater value to the viewer in a profitable manner. Appeared as part of FierceVideo Industry Voices on September 29, 2022.

Amazon’s introduction of a Prime Day in October 2020 made a mark on the season’s top holiday shopping days, coming in third, according to data from Checkout, NPD’s consumer receipt-based information. In 2019 and 2021, the third most popular holiday shopping day landed on a Saturday in December. If the past year has taught us anything, it is that shopping behavior has changed through the course of the pandemic, and retail shopping seasons look very different than they have in the past. Part of the reason is consumers are buying what they need when they need it. However, given the financial concerns heading into the 2022 holiday shopping season, and lingering memories of last year’s supply challenges, there is a real opportunity for October promotions, like Target’s Deal Days and Amazon’s Prime Early Access event, to impact this holiday shopping season like they did two years ago. Marshal Cohen, chief industry advisor for NPD says that the bottom line is this: if the deal is good enough, it will spark the consumer’s interest. Even before it was officially announced, 60% of consumers planned to do some holiday shopping during the October Amazon Prime promotion event. – NPD 2022 Holiday Purchase Intentions Study “Pre-holiday promotions will jump-start the holiday shopping season and boost the lagging fall season. The weather has just started to change across much of the country, and consumers who became accustomed to almost unlimited spring and summer sales will be looking for fall fashion deals. From a holiday perspective, these promotions will get consumers thinking about their holiday shopping lists and how to save money, as the cost of living continues to increase.” – Marshal Cohen, chief retail industry advisor “The stretching of the holiday shopping season that began in 2020 has generally been beneficial for tech products. Black Friday was once a huge focus for tech, especially TVs, tablets, and gaming products, but has increasingly turned into a brutal price compression event over the years. The broader selling season eases pressure on retailers and brands to sacrifice profits, allowing consumers to spread their budgets out for these bigger ticket purchases.” – Paul Gagnon, consumer technology industry advisor “The last (and first) time Prime Day occurred in October back in 2020, the toy industry grew 56% that week and growth continued each week for five weeks. Of course, some of that growth was likely the result of COVID-guilt spending, with parents trying to make up for all that their kids were missing out on. I think the early start this year, with many retailers pushing promotions, will be beneficial. However, similar to the 2020 Black Friday week declines, the October promotions might negatively impact some, though not all, of the weeks between Thanksgiving and Christmas.” – Juli Lennett, toys industry advisor “Pre-holiday promotions reallocate the purchase of home products, moving up spending that might have occurred later in the season. Deal-oriented and early holiday shoppers will be encouraged to shop the pre-holiday promotions for small appliances and other home products that are always hot holiday and Prime-promotion sellers. Spending needs related to tailgating and Halloween can also be expected, as many consumers look to do some outdoor entertaining before winter kicks in.” – Joe Derochowski, home and home-improvement industry advisor 75% of holiday shoppers plan to spend the same or less than last year. – NPD 2022 Holiday Purchase Intentions Study “The consumer always has an appetite for deals, so their here-and-now shopping mindset will be the hurdle that marketers need to overcome. Cautious and selective spending will ultimately win out, but effective promotions could affect some of the prioritization.” – Marshal Cohen “Our research shows that TVs, AR/VR, and other key holiday products have a much higher level of price elasticity than other items. The need to shop deals is a prime motivator for tech shoppers during the holidays, so these early promotions are sure to be welcomed by consumers looking to save.” – Paul Gagnon “Buying toys is not optional for parents, so getting a great deal is an added bonus and exactly what many parents need to get them to shop early. Due to rising prices this year, toy consumers will be looking for deals on specific items. Parents are focused on buying the perfect toys which, many times, means the precise toys on their children’s wish list. For these parents, it could be a combination of buying the hottest full-priced toy that their child specifically asked for and/or a “close-enough” toy on promotion.” – Juli Lennett “It’s always about consumers and their needs. The impact of early promotions on home product spending will be more contingent on how well promotions hit the mark on products that the consumer truly needs. Most consumers like deals, and there will be those who match the deals with their holiday shopping lists. However, those shopping for their own needs, particularly related to holiday gatherings and entertaining, will be less influenced by deals.” – Joe Derochowski According to consumers, Black Friday is still the most opportune time to find the best deals (22%), followed closely by pre-November dates, like Prime Day (19%). – NPD 2022 Holiday Purchase Intentions Study “Consumers are in acquisition mode. With the lingering memory of a year of supply challenges, if they can get the right product at the right price, they aren’t going to wait and hope for a better deal.” – Marshal Cohen “The inventory situation will be a major wild card as overstocked retailers will be eager to exit the holiday season with a lower level of inventory in preparation for a difficult economic environment in 2023. If there is still a lot of inventory on hand, then it might become imperative to up the ante with promotions and capture consumers’ last-minute shopping attention.” – Paul Gagnon “Although we aren’t expecting product shortages this year, if parents see the toys they are planning to buy on promotion now, they will most likely buy it now. With that said, inflation will leave more consumers, especially lower-income consumers, cash-strapped over the holidays, which could cause them to wait for their last paycheck of the year to shop for toys. If early promotions go well for retailers, and they deplete more inventory than planned, they might not need to promote as much as we get closer to Christmas — which could surprise consumers.” – Juli Lennett “There will always be consumers waiting for Black Friday sales, but that doesn’t mean they won’t shop the October sales. Regardless, there are some things that are always last-minute holiday purchases, like massagers, electric toothbrushes, and other high-quality products in the personal care category. This year’s timing of Christmas and New Year’s Eve also creates opportunity for more entertaining needs later in the season, further spreading out the holiday spending timeline.” – Joe Derochowski Consumer perceptions of the economy and their own financial situations have fallen below levels seen in 2020, but 52% of consumers are less concerned about COVID compared to a year ago. – NPD 2022 Holiday Purchase Intentions Study Pre-holiday promotions changed the shopping dynamics in October 2020, but Marshal Cohen points out that consumers were in a very different state of mind two years ago – even beyond current economic challenges. Today, they have more shopping options with fewer COVID-related concerns, which could mitigate the influence of early-season promotions. However, there is also more social engagement this year, which leads to increased product consumption. by: Marshal Cohen Chief Industry Advisor, Retail Paul Gagnon Vice President, Industry Advisor, Consumer Technology Joe Derochowski Vice President, Industry Advisor, Home and Home Improvement Juli Lennett Vice President, Industry Advisor, Toys

While we can’t predict with certainty what the future holds, more economists are now issuing recessionary predictions for 2023. And several clear indicators of ongoing shifts in consumer attitudes and behaviors have arisen that all CPGs are acknowledging and are preparing for. Among these worrying trends are: Declining consumer confidence. A rising level of spending on home payments, energy and food as a percentage of disposable income. Average personal savings that are at their lowest point in over 10 years as the stimulus cash cushion has disappeared. Rising credit card balances and more credit card applications. This confluence of trends is resulting in growing consumer price elasticity in our current inflationary environment. People are looking for deals and promotions, and manufacturers are starting to offer them — though we don’t expect them to revert to the promotion levels that we saw pre-pandemic. At the same time, the work-from-home (WFH) trend is remaining more durable than once predicted. We expect between 20 and 40 million workers to continue to work remotely, at least for part of the work week in 2023. And this trend, coupled with the higher costs of eating out, will likely contribute to a continued preference for elevated at-home consumption into 2023 and beyond. How Consumer Behaviors Are Shifting As inflation continues, we are seeing consumers respond by shopping value channels more and trading out to buy lower-cost items like value proteins and greater-value meal solutions. They’re also buying fewer premium meals and snacks and holding off on inessential household and beauty items. Private label is also gaining market share, especially in staples where private-label products already held high share. And low-income households are clearly pulling back more on purchases as inflation increases compared to higher-income shoppers. Stores in low-income areas are seeing greater sales deceleration in fresh seafood, pricier meats, cosmetics, OTC healthcare and homecare products — showing the need for a bifurcated approach to reach lower- and higher-income audiences most effectively. What Brands and Retailers Should Expect in 2023 The macroeconomic environment for 2023 could include a wide range of scenarios. But the rosiest ones involve low to moderate economic growth at best, and the potential downside scenarios could include a recession and/or persistent high inflation. No matter where we ultimately land among these many potential macroeconomic possibilities, brands and retailers should be prepared for: Low-income households continuing to trade out and trade down even while high-income households continue to demand more premium products and experiences (“market bifurcation”). Continued growth in value channels, essentials, higher-value options and greater-value brands and products. Expect a growing appetite for deals and higher sales of affordable luxuries for at-home consumption as occasional splurge items. Shifts to digital becoming habitual, altering consumer interactions with brands and retailers over the long term. 2023 Priorities for CPG Players It’s essential for brands and retailers to respond effectively to these trends. And doing so will require a balance between maintaining ongoing long-term investments and the tactical agility to aggressively monitor and respond to fast-changing market conditions. To do this successfully, CPG players should prioritize the following in 2023: Digitize your analytics for faster decision-making to gain real-time, granular insights from varying touchpoints to become more agile in response to market shifts. Manage your revenue management levers closely to drive net price realization. Tailor your promotions and closely monitor their effectiveness. Innovate quickly with the purpose of effectively meeting changing consumer needs. Promote new uses and occasions for your products and reposition your brands and categories as needed. Focus on relevant solutions and differentiated experiences that create overall value through the right combination of quality, convenience and price. Accelerate your digital marketing with a focus on personalizing consumer brand experiences across a variety of touchpoints. Don’t chase earnings per share (EPS) upside or look to mergers and acquisitions to plug EPS downfalls. Instead, lean into long-term investments and capability-building in things like automation and supply chain localization. Make sure your HR policies are aligned to ensure that you are optimally acquiring and retaining talent. Be ready to adjust your strategic plans when needed and excel at contingency planning. The recession of 2008 taught us that the companies that tried to save in the short term by failing to invest in enhancing their capabilities fell behind their competitors. And the past few years have reinforced that consumer behavior can now shift faster than ever, and sometimes out of character with historical norms. By investing now for the future — and in the technologies that enable better agility today — companies can foster both day-to-day operational excellence and customer-focused innovation. This approach will position them well both for a potential 2023 downturn, and for whatever comes next. This blog is based on a recent webinar with Nik Modi, managing director and CPG staples analyst for RBC Capital Markets. For more information, view the full report and webinar on this topic and/or reach out to your IRI representative or IRI@IRIworldwide.com . By Krishnakumar (KK) Davey, IRI

Paris, le 5 octobre 2022 : The NPD Group , en partenariat avec la Fédération française des industries Jouet-Puériculture et la Fédération des Commerces spécialistes des Jouets et des Produits de l’Enfant analyse les tendances du marché du jouet à quelques semaines de Noël. Des fabricants et distributeurs optimistes qui misent sur l’effet « boost » de Noël, mais qui restent vigilants dans un contexte économique tendu Le marché des jeux et jouets se prépare pour son moment clé dans le calendrier et s’attend à un Noël normal malgré un environnement tendu. En effet, comme chaque année, Noël va faire figure d’échappatoire bienvenue dans un quotidien marqué par les tensions géopolitiques, les hausses de prix et la menace du retour de la crise sanitaire. Depuis 2021, année record où les ventes ont dépassé 3,8 Md €, la France est devenue le 1er marché du jouet en Europe et compte bien le rester ! Florent Leroux, Président de la FJP, précise : « Noël représente traditionnellement pour une majorité de la population une parenthèse unique et un retour aux sources, un moment privilégié où l’enfant est roi. C’est pour cette raison que d’année en année la résilience du marché du jouet autour de la période festive a toujours fait ses preuves, quel que soit le contexte économique, géopolitique ou, plus récemment, sanitaire. » Cette année, les acteurs du marché doivent faire face en particulier au défi de l’inflation. Frédérique Tutt, Global Industry Expert, Jouet – The NPD Group commente : « Le pouvoir d’achat des ménages est très tendu en cette fin d’année et cela se reflète aussi dans nos chiffres qui montrent une hausse contenue de 6 % des prix sur le marché des jeux et jouets pour le mois d’août. Cette augmentation qui est totalement en ligne avec l’ensemble des prix à la consommation rapporté par l’INSEE, est très inférieure à l’inflation constatée sur l’ensemble des Produits de Grande Consommation (+ 9 % en septembre – IRI). La France est par ailleurs le pays en Europe où l’inflation des jouets reste la plus limitée par rapport à ses voisins Allemands +6,6 % ou Britannique +6,8 % ». Florent Leroux ajoute qu’ « en cette période de crise, l’inflation contenue sur le marché du jouet en France est le résultat combiné des efforts déployés depuis des mois par tous les fabricants, qu’il s’agisse des groupes internationaux ou Français, afin d’optimiser leurs coûts de développement, de production ou d’approvisionnement mais aussi d’objectifs de marges nettement revues à la baisse . » Philippe Gueydon : « En dépit d’une hausse forte et rapide de leurs charges, les distributeurs spécialistes n’ont répercuté que progressivement les hausses de tarif fabricant. Cette année encore, nos 2000 magasins, présents sur l’ensemble du territoire, ont sélectionné une offre différenciée, de qualité et à prix raisonné ». « Face à l’augmentation des dépenses énergétiques, les ménages ont déjà adopté de nouveaux comportements de consommation et semblent avoir délaissé les achats d’impulsion et autres sèche pleurs. Cela étant, ils ont acheté tout autant de jouets au-delà de la barre des 10 € que l’année dernière », continue Frédérique Tutt. Croissance du marché versus 2019 et regain des spécialistes : les bons signaux A la mi-septembre, le chiffre d’affaires du secteur est en léger recul de 0,8 % par rapport à 2021 mais affiche une croissance de 5 % par rapport à 2019 – l’année de référence pré-Covid – et reflète un certain retour à la normale. Ces résultats sont même meilleurs que ceux de nos voisins moins protégés par le bouclier tarifaire énergétique. En effet, les marchés anglais et allemand affichent respectivement des baisses de 4 % et 5 % par rapport à 2021. Autre signe rassurant pour le marché : la croissance de ventes chez les spécialistes. Philippe Gueydon indique : « On observe une progression de 5 % des ventes depuis le début de l’année dans les magasins des enseignes spécialisées, un vrai vote de confiance des consommateurs qui recherchent non seulement des prix attractifs mais aussi du conseil et un large choix. » Cette performance des spécialistes est d’autant plus remarquable que le secteur a connu de fortes turbulences depuis quelques années et une rationalisation de son parc. Les chiffres NPD montrent qu’à magasins constants, les ventes en magasins spécialisés ont progressé de 9 % par rapport à 2019, preuve de la proposition attractive qu’ils représentent sur le secteur. Licences et Kidultes : deux tendances motrices Deux phénomènes porteurs dynamisent le secteur cette année et devraient perdurer pendant la période de Noël. D’abord les ventes de jouets à licences, soutenues par une actualité cinématographique forte qui affichent une croissance de 3 % et une part de marché record de 23 % à fin août. Dans le Top 5 des personnages qui ont généré le plus de ventes en 2022, on trouve dans l’ordre : Pokémon, Pat’Patrouille, Barbie, l’univers Marvel et Harry Potter. Ensuite, les ventes de jeux et jouets à destination des Kidultes. Ces fans âgés de 12 ans et plus sont chaque année plus nombreux et collectionnent cartes et figurines, se retrouvent pour jouer à des jeux de société ou construisent des répliques de vaisseaux Star Wars ou autres pour exhiber dans leur salon. Christophe Drevet, Directeur Général de la FJP souligne que « les ventes pour Kidultes ont ainsi augmenté de 9 % en un an entre juillet 2021 et juin 2022 pour représenter 28 % du marché. Révélateur de l’importance du jouet et du jeu dans toutes les familles et à tous les âges, ce segment représente un formidable levier de croissance pour la filière et permet aux fabricants de développer toute leur créativité. » Une saison tardive mais Noël sera bien au rendez-vous ! Cette année, The NPD Group, La FJP & la FCJPE s’attendent à une saison tardive, Noël tombant un dimanche en plein milieu des vacances scolaires ce qui pourrait pousser les consommateurs à différer leurs achats de jouets à la dernière minute comme cela avait été le cas en 2016. Décembre représente 1/3 du chiffre d’affaires annuel du secteur, un moment clé à ne pas manquer, surtout lorsqu’il offre, comme cette année, plus de latitude à ceux qui profiteront du début des vacances pour finir leurs achats. Frédérique Tutt conclut : « Le jouet reste un secteur très stable et un investissement relativement minime pour le consommateur qui va délivrer des heures et parfois même des années de jeu pour toute la famille. Cette année, les Français vont devoir faire des arbitrages au vu des contraintes conjoncturelles mais ils vont s’attacher à protéger l’esprit de Noël. C’est pourquoi, comme en 2020 et 2021, le marché des jeux et jouets devrait prouver encore une fois sa résilience. » Une filière engagée pour les générations futures : l’enjeu du développement durable Les consommateurs sont de plus en plus sensibles aux démarches éco-responsables. De nombreuses entreprises du secteur ont d’ailleurs engagé de manière volontaire des démarches d’économie circulaire depuis plusieurs années, notamment en augmentant la part des produits éco-conçus dans leur offre. 2022 marque une étape majeure pour la filière jeu/jouet en faveur du développement durable. En effet, dans le cadre de la REP (Responsabilité Elargie des Producteurs) portée par la loi AGEC (Anti-Gaspillage pour une Economie Circulaire) les fabricants et les distributeurs concernés financent désormais la collecte des jouets usagés ou en fin de vie (via une éco-contribution) afin d’en assurer leur traitement, à travers notamment le réemploi et le recyclage. La filière a fait le choix de l’éco-organisme Eco-mobilier pour la mise en place et la gestion de cette filière REP, dont le rôle est d’organiser le réemploi de ces jouets (en encourageant notamment le don), de développer des filières de recyclage, mais aussi de promouvoir l’éco-conception. Florent Leroux détaille « Un enjeu fort de la Responsabilité Elargie des Producteurs pour la filière est de concilier ces exigences environnementales avec les exigences de sécurité propres au secteur et de trouver un équilibre entre elles. » Les premiers bacs de collecte de jouets seront disponibles dès la fin d’année dans des magasins tests et le déploiement national se fera progressivement en 2023. Philippe Gueydon ajoute que « la mise en place de la loi AGEC constitue l’opportunité d’initier un cercle vertueux, de mettre en valeur les bonnes pratiques et de maîtriser la fin de vie des jouets, via leur collecte où les magasins et distributeurs ont un rôle primordial à jouer. » La communication et l’information auprès des familles et des enfants sera primordiale pour encourager notamment à donner aux associations leurs jouets non utilisés. Les enfants devenant ainsi des acteurs à part entière du recyclage avec un produit qui leur est très proche. D’après l’étude Future of Toys du groupe NPD réalisée en juin dernier, 41 % des consommateurs français ont déjà recyclé leurs anciens jouets au moins une fois ; un chiffre amené à croitre très rapidement grâce à ce programme. Les objectifs sont à la mesure du défi environnemental global. Dès 2024, 1/3 des jouets mis sur le marché devront être annuellement collecté (environ 33 000 tonnes) aux fins de réemploi, recyclage ou valorisation. Près de 20% de ces tonnes collectées devront être à terme réemployées, notamment par des structures de l’économie sociale et solidaire. A propos de la FJP Représentant officiel auprès de nombreuses institutions nationales et internationales, la Fédération Française des Industries Jouet-Puériculture assiste et conseille ses adhérents dans les domaines de la Sécurité, Qualité et Environnement des produits, du Juridique et Social, de la Communication. Elle compte près de 80 entreprises adhérentes, Françaises et Internationales, couvrant l’essentiel des marchés du Jouet et de la Puériculture. Fédération citoyenne, la FJP prend une part active aux débats publics sur des sujets tels que la mixité, le développement durable ou la politique familiale. Pour plus d’informations, rendez-vous sur www.fjp.fr et suivez-nous sur LinkedIn (@fjp). Á propos de la FCJPE La FCJPE regroupe les acteurs spécialistes de la vente de jouet en France, qu’ils soient des enseignes intégrées, des réseaux de franchises, des réseaux coopératifs ou des indépendants. Elle comprend notamment les enseignes Jouéclub, King Jouet, La Grande Récré, Jouets Sajou, Micromania, Oxybul, Disney Store ou encore Orchestra et représente 2 000 magasins et 20 000 emplois. La FCJPE est présidée par Philippe GUEYDON, dirigeant de l’enseigne King Jouet. Plus d’informations sur www.fcjpe.com

—Pent-up demand for dine-in visits slows, and carry-out increased after several months of declines Toronto, October 4, 2022 — Consumers continued their return to restaurants in August, increasing visits by 5% compared to a year ago, reports The NPD Group . Restaurant dollars were up 9% in the month versus a year ago. Dine-in visits slowed in August to a 28% increase from the triple-digit growth realized in the first months after the pandemic lockdowns. On the other hand, carry-out orders, which have been down since March, picked up some of the dine-in visits lost and were up 4% in August compared to a year ago. Breakfast visits grew by 9% in August versus a year ago, evidence that consumers have resumed their out-of-the-home morning routines. Visits at supper increased by 3%. Lunch traffic was down -3% in the month compared to a year ago. Customer visits during the morning and evening snack periods grew by 11%, and afternoon snack traffic grew by 9% in August, reports NPD, which recently merged with Information Resources, Inc. (IRI®) to create a leading global technology, analytics and data provider. Traffic to quick service restaurants (QSR), which represented 74% of restaurant visits, increased by 4% in August compared to a year ago. QSR breakfast traffic was up 13% in the month while the other main meal dayparts were down. Full service restaurant (FSR) visits, representing 26% of industry traffic, were up by 6% in the month versus a year ago. FSR supper was the segment’s bright spot, with visits up 7% in August versus a year ago, according to NPD’s continual tracking of the Canadian foodservice industry . “In August, we saw a mix of pre-pandemic and COVID-era restaurant behaviours with the slowdown in dine-in visits and the uptick of carry-out orders, says Vince Sgabellone, NPD foodservice industry analyst . “It’s too soon to say if the August results are a trend or a blip. Since September is traditionally one of the busiest on the foodservice calendar, the next data release will be a very telling indication of a cooling recovery or just cooling weather.”

As we head into the final quarter of 2022, B2B technology reseller demand in the U.S. has remained positive, up 15% year over year through August, totaling nearly $43 billion in sales. According to NPD’s Vertical Reseller Tracking Service data, 19 of the 20 NAICS sector verticals are seeing growth even in the wake of record inflation, lingering pandemic conditions, and a recovering supply chain. While the strength and resilience of the channel has been a welcome sight, economic conditions overall are expected to remain difficult until the supply and demand imbalance returns to a more predictable state. Inflation in many cases has been a biproduct of an overheated economy and the Federal Reserve is working to slow the economy down through a more contractionary policy, leveraging interest rate hikes to help slow investment and economic expansion. With the Fed’s policy changes beginning to take effect, what are some things businesses can do to attempt to anticipate economic impact? How can they determine which sectors will likely feel the greatest impact and what will the potential impacts be on IT spending in 2023? Leveraging NPD’s Vertical Reseller Tracking Service data, sector mapping provides the ability to identify sector performance and based on reliance of consumer discretionary spend and other factors, can help identify which sectors will likely be more negatively impacted during a recession. Based on this analysis, 11 of the 20 sectors fell within the highest risk classification. Through August 2022, these sectors represented the highest growth percentage, up 22% vs. year ago; however, represented only 35% of total revenue in the channel. Much of the accelerated growth was seen in sectors affected by pandemic conditions receding and consumers returning to travel, restaurants, as well as sports and other venues. Looking at the sectors that felt the least impact, combined growth reflected a more modest 8% revenue gain vs. year ago through August, however revenue contribution was significantly higher at more than 65% of total revenue year to date. Sectors in this set include critical services such as healthcare, utilities, and public administration, which all fare better during poor economic times as they are significantly less reliant on consumer discretionary spend. As we round out 2022 and embark on the new year, we expect there will be continued economic pressure as inflation will likely remain elevated through the majority of the year, with the Federal Reserve continuing tactics to help slow the economy. Expectations from a B2B technology perspective are that in the event of a recession, IT spend will see momentum slow in midsize and enterprise organizations as projects will likely be more closely scrutinized as higher interest rates will impact overall company performance and the ability/willingness to expand. Based on NPD’s Future of B2B Technology forecast, we expect to see overall unit sales increase 7% in 2023 vs. 2022, as a result of declining average sales prices. This will lead to a slight revenue decline of 1% vs. 2022. While 2023 still has a fair share of unknowns and potential challenges, the resiliency of the channel is expected to drive a return to revenue growth in 2024. Get insights straight to your inbox

Do you find yourself scrolling for hours on TikTok? I’ll admit that I’m guilty of doing so from time to time. As a fragrance enthusiast, TikTok’s algorithm often gives me a front-row view into the evolution of the PerfumeTok hashtag. Over the last two years TikTok, and subsequently PerfumeTok, expanded and progressed in terms of content, consumer impact, and the ways brands are engaging with their target audiences. The PerfumeTok hashtag has had more than three billion views on TikTok, and it has arguably contributed to an increase in fragrance purchases. In fact, TikTok accounts for 45% of social media-driven fragrance purchases in the U.S., according to the 2022 “ Fragrance Consumer Report ” from NPD — a substantial increase of 15 points, versus last year. For Gen Z consumers (aged 13 to 25) TikTok is now tied with Instagram as the top social media platform to influence fragrance purchase decisions. While TikTok’s highest penetration is among Gen Z, the social media platform is gaining significant traction among all U.S. consumer cohorts. At its inception, the PerfumeTok community was primarily comprised of creators talking about their favorite scents. Fragrances inspired by premium brands soon became a hot topic, and nearly one out of every 10 Gen Z consumers have been influenced to purchase a scent because it mimics a pricier fragrance. As fragrances continue to capture consumer interest, their presence on TikTok continues to expand. Even beauty influencers who typically focused on makeup or skincare products are now dipping into the fragrance market with genuine reviews and even some brand partnerships. Some of TikTok’s most popular beauty influencers, including Addison Rae and Charlie D’Amelio, have each launched their own fragrance lines within the past year. Several fragrance specific influencers have also capitalized on their TikTok successes and launched their own product lines. Meanwhile, all types of fragrance brands including direct-to-consumer (DTC), designer, celebrity, and artisanal, have elevated their social media strategies around launching new products or reinvigorating excitement for older ones. While TikTok continues to steer consumers towards purchasing fragrances, in-app fragrance purchasing through social media has been adopted by only 2% of U.S. consumers. Most consumers still want to physically try on scents before buying them, so most fragrance purchasing continues to take place in stores. Brands should continue to prioritize and tailor their TikTok strategies to inspire consumers to try new scents, whether in-store or with a sample. Personally, my time on TikTok has not been spent in vain, as there are several fragrance brands that I want to seek out the next time I go shopping. Get insights straight to your inbox

By Randi Kronthal-Sacco, NYU Stern Center for Sustainable Business , and Joan Driggs , IRI IRI and the NYU Stern Center for Sustainable Business have just released a report that highlights key data from the fourth annual CSB Sustainable Market Share Index™ and new survey data on consumer perception and actual purchases of sustainability-marketed CPG products. And the results reveal a growing consumer demand for sustainable products that shows no signs of decelerating anytime soon. In the coming months, we expect ongoing growth in entertaining at home, a desire among a cooking-fatigued populace for more convenient meal solutions, and the ongoing need to solve for more meal occasions at home. Solving for all these shopper needs should be a top priority. Manufacturers have noticed and are working to meet this growing demand. Nearly half (48%) of all new products released in 2021 offered sustainability benefits, up 20 percentage points from 2017. The introduction of more sustainable products, in turn, is creating a kind of virtuous cycle for these products. IRI’s June 2022 OmniConsumer™ survey found that the top reason consumers say they choose sustainable products is for their environmental impact (44% of consumers surveyed). But the second reason is simply that there are more sustainable options available (40%), and the third is that there are more sustainable options that work just as well (34%). This suggests that if you make more sustainable products, market them effectively and don’t sacrifice product performance in making them sustainable, consumers will buy them. And they generally are willing to pay a premium to do so. Among 2021’s sustainability-marketed products, the overwhelming majority of product categories — among the 36 categories included in the study — exhibited price premiums that ranged from 8% to 136% over their conventionally marketed counterparts. Categories commanding high premiums included: Cookies (116%) Dinner entrées (86%) Pet food (82%) Sanitary napkins (60%) Interestingly, all of these categories are also ones in which millennials over-index for sustainable product purchases compared to older generations. While this younger cohort still does not have the purchasing power of its Gen X and baby boomer counterparts, our most recent research shows that the youngest consumers value sustainable attributes more highly and are willing to pay for them. Some of the generational differences in attitudes toward sustainable products are subtle. For instance, 27% of shoppers overall seek out retailers that carry sustainable products, versus 32% of Gen Zers and millennials. And 17% of shoppers overall seek out retailers that are devoted to sustainable business practices, versus a slightly higher 20% of Gen Zers and millennials. But the willingness of younger shoppers to try new sustainable products is much higher. And when we look at online shoppers — a group overrepresented by younger consumers — 84% say that the sustainability of products is important when shopping online. And 50% of consumers say that they want sustainable information that includes a list of ingredients for every item, information on where the item was made or grown, and information about the recyclability of the packaging that will be delivered. The research identified products as sustainability-marketed based on the marketing of one or more sustainable attributes. But as the survey results just mentioned indicated, we are also increasingly seeing evidence that consumers — especially younger ones — are becoming more informed about these products as they become more interested in them. Sustainability has become table stakes in this environment. Letting consumers know about the sustainable aspects of your products can be hugely beneficial. But it must also be more than just a marketing tactic. As consumers become savvier sustainable shoppers, they are also increasingly demanding and choosing products that exhibit proof of sustainability. As the report notes, products featuring third-party certifications represent a growing percentage of sustainable product growth. CPG products that are certified cruelty-free are outpacing products with other health and wellness claims. And carbon-labeled products alone saw their sales increase from $1.7 billion in 2020 to $5.1 billion in 2021. In this sustainability-focused environment, brands that have sustainability at their core and within their value proposition will be positioned best to win over competitors that treat sustainability as a box-checking or risk-management tactic. The popularity of sustainably marketed products among young consumers points to an enduring demand. It’s a demand that every brand and retailer should respond to with true product innovation, authentic communication and a real commitment — because that’s what the most important consumers of the future expect. To learn more, watch our webinar on Sustainability and the Consumer or contact your IRI representative or IRI@IRIworldwide.com .

The 2022-2023 academic school year for students in grades K-12 kicked off with nearly 80% of students back in classrooms for in-person learning and approximately 50% of U.S. adults working in a hybrid or work-from-home format. During Q3, the busiest quarter of the year for office supplies, about 70% of consumers indicated they will purchase an office or school supply product at retail, according to NPD’s Future of Office Supplies report. And retailers were ready for the incoming store traffic with many setting up as early as June and holding online sales events in early July. They also generated excitement by merchandising a variety of licensed character supplies, eco-friendly or green products, licensed product bundles, teacher-specific items, and new assortments of store-branded products. This all contributed to a strong start to the quarter with July retail dollar sales growing 4% versus 2021. The return to office, be it full-time or hybrid, and the return to classroom combined with rising average sales prices (ASPs) in the industry has also supported the rebound of the commercial channel. In fact, based on NPD’s Commercial Tracking Service, dollar sales grew 8% year over year in July and August combined after growing 10% in the same period last year. The commercial channel has benefited from sales shifting out of retail and e-commerce and back into the B2B space as employees may secure their supplies in the office, rather than purchasing for their home office use. In office supplies, NPD’s Checkout data reveals that online sales made up nearly 30% of retail sales in the first half of 2022 and 26% during the Q3 period thus far (July and August), which is in line with prior years. Despite some dollars shifting to the commercial channel, e-commerce has acted as a strong contributor to retail growth in 2022 with year over year dollar sales up 19% in July followed by single digit growth vs. 2021 in August and the first two weeks of September, based on NPD’s Weekly Retail Tracking Service. E-commerce unit sales have grown across these periods as well. NPD’s Future of Office Supplies report indicates back-to-school list items are driving the unit and dollar sales growth in e-commerce as nearly 50% of consumers stated that they used a retailer-based app or tool to determine what school supplies they needed to purchase and 30% of consumers stated that they participated in the Clear the List movement held online for teachers. Convenience and digital platform design and integration are key ingredients to creating a seamless omni-shopping experience for consumers. Longer-term the online channel is expected to continue to gain share in the industry as a result of retailer investment and capability enhancements as well as consumers becoming more fluent and comfortable with shopping online. When looking at total retail sales, both in-store and online, overall unit sales were flat year over year in July but began to decline in August and early September. Although the usage of technology for both working and learning has increased, about 10% of consumers indicate buying more supplies and 63% indicate buying the same amount as prior period. In addition, 69% of teachers indicate being provided with money or funds to help prepare lesson plans, and 34% indicate being provided more funds to support their classroom environment. These factors combined with stabilization in consumers activating and completing their home office setups contributed to a softer dollar growth rate in August and September-to-date with both periods landing flat to prior year. Looking ahead to future seasons in 2023 through 2025, the industry should expect less volatility in both dollars and ASPs with unit sales growth remaining a challenge as the new post-pandemic demand levels recalibrate and stabilize.

By Sally Lyons Wyatt, IRI 2022 has felt like a year of constant change for the food and beverage category. We’ve seen rapid shifts in consumer behavior as the industry has faced curveball after curveball — including ongoing COVID-19 uncertainty, shipping and transportation disruptions, unstable commodity prices, ingredient and component shortages, out-of-stocks and more. It can be tempting to come away from these events thinking that the only thing that brands and retailers can expect is the unexpected. But if you look closely and think tactically, you can make the most of this environment and achieve short-term success by focusing on these six areas of opportunity: Make the Most of Travel and Entertaining An IRI survey done earlier this year had found that 23% of respondents planned to travel more this summer, and 27% planned to travel about as much as last summer. Summer entertaining was also expected to be up slightly from last summer, with 70% of those planning to entertain and 69% saying they were planning a cookout or a barbeque. Brands can lean into these entertaining and travel trends into the fall with promotions catering to grillers and people on the go. Collaborate with retailers on packages for grilling, picnics or a pizza night for families of four and communicate the value these fun options offer when compared to foodservice. Encourage the Channel Journey On-premise QSR trips per shopper have declined, while retail food and beverage trips have increased slightly. Low-income consumers, in particular, are planning to eat out less often and cook more meals from scratch. There’s a real opportunity to spur additional grocery sales by executing strongly in-market. Look to expand distribution and assortment, and support these efforts with quality merchandising and promotions. Continue to identify ways to get one more trip or one more product in the basket or cart. Provide “takeout” options that rival those of restaurants at lower prices. As online meal kit companies see slowing growth, retailers have a clear opportunity to package their own convenient meal ideas to customers. Engagement is key for success. Find ways to target and interact with your key consumer cohorts using targeted social and digital media. Be sure to hit today’s winning themes hard — especially in-home and out-of-home convenience and affordability. And make sure you communicate product benefits that align with your key consumers’ needs. Here are four categories that have displayed recent growth, along with the drivers of their success: Pastries/donuts: indulgence, convenience, plastic-wrapped for food safety and freshness Soups: affordability, convenience, sustenance, deeper discounts Frozen appetizers/snacks: value prices on individual packages near $1, sustenance Energy drinks: fun flavor innovations, zero sugar, mocktail possibilities Focus on Affordability As inflation continues to rise, we expect elasticity to bounce back further and promotions to increase later in 2022. Low-income consumers have cut back on prepared entrees and more expensive cuts of meat. As they lean into less expensive foods and beverages, support them with meal ideas that include: Pre-packaged processed dinners or cheaper meals Less expensive cuts of meat Cooking/baking/meal prep items Sides Desserts Drinks Powdered milk Reach Focused Consumer Targets Identify the consumer cohorts that deliver on your priorities, and then meet their needs with custom offerings. Examples include: Investing in advertising and emotive marketing to reach Gen Z consumers with a focus on convenience, energy drinks, ethnic foods and sustainability. Preparing for shrinking family sizes with offerings tailored for smaller households. Prioritizing e-shopping enthusiasts, who spend 70% more on center of store than average consumers. Innovate With a Focus on Customer Needs Continue to work recent product innovation trends such as: Convenient, quick-prep at-home meals, individual portions and easy protein snacks. Premium at-home indulgent treats in unique flavors. Better-for-you foods containing plant-based, sustainable, clean and functional nutrition ingredients. As we experience a period of fast-evolving consumer shopping and consumption behaviors, being agile in meeting customer needs is more important than ever. Responding quickly to today’s trends and anticipating future ones is the best way right now to catapult growth across brands, categories and the entire store. Get insights straight to your inbox

Sales in China’s Luxury E-commerce Market Port Washington, NY, September 20, 2022 – According to The NPD Group , which recently merged with Information Resources, Inc. (IRI®) to create a leading global technology, analytics and data provider, China luxury e-commerce sales increased 1% in the first half of 2022 vs. the same time period last year. China’s luxury products market, which includes items sold in the footwear, jewelry, luggage & bags, watch, and apparel categories, reached $822 million (USD) in the first half of 2022. Apparel and luggage & bags categories both experienced sales increase of 16%. However, while the watch category was one of the best performing in terms of revenue, sales of watches declined 33%. Footwear sales increased 10%, and jewelry and eyewear saw respective declines of 8% and 26%. “Total sales performance for China’s luxury market slowed down in the first half of 2022, especially in the second quarter due to a combination of factors such as the most recent COVID-19 lockdown and logistical issues that limited product shipping,” said Samuel Yan , e-commerce commercial lead, The NPD Group. “Average list price for the luxury market continued to increase in the first half, illustrating how Chinese consumers may prefer to buy less, but when they do decide to purchase, they buy premium luxury products.”

Will We Shop Early or Wait Until the Last Minute?

There is some speculation that the 2022 holiday toy shopping season might start early. Why? There are a variety of reasons, as well as some wishful thinking. Consumers might be planning ahead out of supply concerns and expectations of rising prices, while retailers might engage in aggressive promotional campaigns earlier in the year due to excess inventory. And if there is any truth to the rumors, Amazon could very well end up running another Prime Day event early this fall. Amazon Prime Day’s Impact in the U.S. and Europe In the U.S., Amazon Prime Day has a lot of impact on industry sales. In 2020, Amazon Prime Day took place in the last quarter (Q4) for the first time. The event and associated retailer promotions helped increase sales by 56% for the week (week of October 11-17), a gain of over $180 million! That week was also followed by five weeks of consecutive growth, indicating that Amazon Prime Day kick-started the holiday season. In Europe, Amazon’s Prime Day in 2020 saw a mixed bag of sales results and the second COVID-19 wave might be an explanation for some of that. The UK saw an increase in sales of only 4%, which was surprising to me given the fact that U.S. and UK consumers usually share similar shopping behaviors, while France and Germany experienced respective increases of 20% and 33%. While strong, those increases were off a very small base and were not a game changer for the industry. It’s All About Timing NPD’s U.S. toys industry analyst, Juli Lennett , has been saying that she believes the industry will see a jump-start to the 2022 holiday shopping season starting with Amazon Prime Day and, as a result, the industry should expect to see sales decline in the weeks between Thanksgiving and Christmas. She expects strong sales in week 51 (Dec. 17 – 24) where we have an extra shopping day for that week before Christmas. This year, Christmas Eve falls on a Saturday, which leads her to think that many consumers will either get Friday, Dec. 23, off as a holiday, or they will take the day off, delaying a lot of shopping until the last minute. This will be especially true for lower income households living paycheck to paycheck. My opinion on the timing differs. The last time Christmas occurred on a Sunday was in 2016, when U.S. consumers purchased later in the fourth quarter. Back then, the week leading to Christmas (December 18-24) was the largest week of the year, up 28% in the U.S., but this came at the expense of total shopping visits and overall holiday spend. That’s why I think there’s a distinct possibility that an early Christmas season is unlikely to happen this year. In the UK, 2016 and its holiday season were very successful; and these last-minute sales in the week running up to Christmas might have been, in part, incremental. This year, the context is very different. I guess UK retailers are not feeling so upbeat to expect incremental sales, but they need to be prepared for a late surge in any case. And that late surge will be happening in-store as consumers don’t take chances with late online deliveries during that week. Elsewhere in Europe, we didn’t see the same extraordinary sales peak during that very last week before Christmas, but it was critical, nonetheless. As we know, trends from previous years are a good indicator and I believe that we are likely to see industry sales increase 30%-50% year-over-year for that very week thanks to the extra Saturday on the calendar pretty much everywhere. With all of this in mind, I guess I should put away the flip-flops and start my holiday shopping list.