Homescan Measures

Understanding how consumer behavior drives sales is critical for both Manufacturers and Retailers to succeed. Homescan provides this vital consumer information.

Introduction

Learning Objectives

Measures used to analyze Homescan differ from other data sources. This tutorial will provide you with a basic understanding of these measures and demonstrate how to use them in client situations. Following this training you will be able to:

  • Understand key Homescan measures.
  • Describe key Homescan measures.
  • Apply and interpret key Homescan measures in client data and within analytic projects .

Calculating Panel Volume

How is volume calculated?

Total Sales (also called Total Purchases) =

Buyers or Shoppers                                    X

(Penetration when expressed as a %)

Definition -  Number of Households purchasing

Average Weight of Purchase 

or Buying Rate or Spending Rate

Definition -  How much they purchased

How is Average Weight of Purchase / Buying Rate calculated?

Average Weight of Purchase or Buying Rate is calculated from 2 key components: Purchase Frequency and Purchase Size.
 

Example - How Volume is Calculated?

Assume households purchase 3 cans of cola each time they purchase cola. And, that the average household purchased cola 4 times a year.

This indicates: 3 cans each occasion x 4 occasions per year = 12 cola cans a year or a Buying Rate (AWOP) of 12 cans cola a year.



Assume, 1 million households purchased cola, then...

1 million buyers x 12 AWOP of cola cans = 12 million cans a year

Core Homescan Measures

Buyers

Definition -  The projected number of households who purchased a product at least once during the time period.

  • Also known as Number of Households Purchasing
  • Output in thousands (000) 

Penetration

Definition - The % of Households purchasing a product at least once during a time period.

Also known as % of Households Buying

Calculation:  Households Buying Product x 100

                          All in Universe

 

Example:

Our Universe has 3 households. 

Click 'i' of each product to see the Penetration.

When should you recommend a Penetration Strategy?

  • A Penetration Strategy should be used any time you are trying to bring new buyers to your brand.
  • Example: A manufacturer may try to entice new consumers to buy a product by increasing displays near the registers.

Recommendations to Increase Penetration

Tools manufacturers use to drive
increased penetration
Tools retailers use to drive  
penetration
  • Distribution
  • Advertising
  • Coupons
  • Trial Packs
  • Product Sampling
  • Displays
  • Number of stores
  • Advertising
  • Location
  • Product Mix & Assortment
  • Retail Pricing Stratgey (EDLP- Every Day Low Price, Hi/Lo, Speciality Pricing)
  • Store Format ( Small Store, Hypermarket, Supercenter, COvenience)

Relative Penetration

Definition - The % of Category buying Households purchasing a product at least once during a time period

Calculation: Households Buying Product  x 100
                          All Category Buying Households 

Example:

Our universe has 3 households 

Click 'i' of each product to see its Relative Penetration.

Average Weight of Purchase (Buying Rate)

Definition: The  average volume purchased by buying households during a time period

Also known as AWOP or Volume per Buyer and can be measured in Volume, Packs, Units or Expenditure

Calculation: Total Product Volume
                          Total Product Buyers

Example:

Our universe has 3 households 

Click 'i' of each product to see its AWOP / Buying Rate.

Purchase Frequency

Definition - The average number of times buying households purchase the item.

Also known as Occasions per Buyer

Calculation: Purchase Occasions
                         # of HHs Buying

Example:

Our universe has 3 households. Click 'i' of each product to see its Purchase Frequency.

When should you recommend a Purchase Frequency  Strategy?

  • A Purchase Frequency strategy should be used anytime you are trying to get consumers to purchase the product more often or make the product part of their regular repertoire.
  • Example: An Ice Cream Manufacturer may repackage to include only 6 ice cream bars in a box of 10, to generate consumers return more quickly.

Recommendations to Affect Purchase Frequency

Manufacturer strategies to increase Purchase Frequency Retailer strategies to increase Purchase Frequency
  • Smaller Packages
  • Coupons
  • Displays
  • In-Pack/On-Pack Promotions
  • Sweepstakes/Contests
  • Alternative Use Advertising
  • Frequency Shopper/Loyalty Programs
  • Location
  • Store Hours
  • Product Mix & Assortment
  • Retail Pricing Strategy (Hi/Lo. EDLP, Speciality)
  • Store Format (Small, Hypermarket, etc)
  • Sweepstakes/Contests

Purchase Size

Definition - The average volume purchased each time an item is bought.

Also known as Volume per Occasion

Calculation:  Total Volume Purchased
                          # of Purchased Occasions 

                              

Example:

Our universe has 3 households. 

Click 'i' of each product to see its Purchase Size.

When should you recommend a Purchase Size Strategy?

  • A Purchase Size strategy should be used when the focus is to get consumers to purchase a larger size or greater quantity of the item.
  • Example: A Soft Drink Manufacturer may have a reduced price to influence consumers to make all their purchases for the month on a single trip.

Recommendations to Affect Purchase Size

Tools manufacturers use to drive Purchase Size Tools retailers use to increase Purchase Size
  • Two-For Deals
  • Larger Package Size
  • Bonus Packs
  • Trade Deals
  • Displays with Larger Sizes
  • Multi-Packs
  • Product Mix & Assortment
  • Retail Pricing Strategy (Hi/Lo, EDLP, Specialty)
  • Tie-In Promotions
  • Bonus Packs
  • Two-For Deals
  • Home Delivery 

Analytical Insights

Keep in mind...

  • As penetration declines, typically the Average Weight of Purchase will increase because light buyers are the first to leave the brand, but the heavier core buyers will remain.
  • Alternatively, a large increase in buyers typically will accompany a decline in Average Weight of Purchase because lighter buyers (triers) are entering the franchise.

Knowledge Check

Identification of Product Strengths

Based on below table determine the underlying consumer measure with the most strength for each fruit.

  Share   Penetration   AWOP
Apples 20% --> 20% x 10 Apples
Pineapples 20% --> 50% x 2 Pineapples
  • Apples
    Annual Purchase Rate (AWOP)
  • Pineapples
    Healthy Buyer Base (Penetration)

Product Growth Strategies

Choose the appropriate growth strategy for each fruit.

  Share   Penetration   AWOP
Apples 20% --> 20% x 10 Apples
Pineapples 20% --> 50% x 2 Pineapples
  • Apples
    Gain More Buyers (Penetration)
  • Pineapples
    Get Buyers to Buy More (AWOP)

Penetration

Based on the picture, calculate the penetration for apples, pineapple and the fruit category.

 

  1. The penetration of  apples is  
  2. The penetration of  pineapples is  
  3. The penetration of  the category of fruits is  

Relative Penetration

Based on the picture, select the Relative Penetration for apples and pineapples. 

 

  1. The Relative Penetration for apples is  
  2. The Relative Penetration for pineapples is  

Average Weight of Purchase

Based on the picture, calculate the AWOP for fruit, apples and pineapple.
 

  1. The AWOP for fruits is  
  2. The AWOP for apples is  
  3. The AWOP for pineapples is  

Purchase Frequency

Calculate the Purchase Frequency of fruit, apples and pineapple. 

The Purchase Frequency of fruits is  

The Purchase Frequency of apples is  

The Purchase Frequency of pineapples is   

Purchase Size

Calculate the Purchase Size of  apples and pineapple.

The Purchase Size of apples is  

The Purchase Size of pineapples is  

 

Advanced Homescan Measures

Loyalty

Definition -  An items' share of category sales among buyers of the item

Also known as Share of Requirements  

Calculation: Brand Volume                      .                           x 100
                          Category Volume among Brand Buyers  

Example:

Our universe has 2 households. Click 'i' of each product to see its Loyalty.

What Affects Loyalty?

Loyalty is affected by:

Category Purchase Frequency Time Period # of Competitive Items Penetration Strategies

Low frequency categories have a high loyalty since there are many 1x buyers.

 

Shorter time periods show higher loyalty because consumers do not have enough time to switch.

Fewer items leads to higher loyalty.

 

 

Loyalty may decline as new households try the products.

 

Price and Deal

Panelists record the price they paid for each item, as:

Average Price Average Offer Price /
Average Deal Price
Average Non-Offer Price / 
Average Non-Deal Price
The price panelists paid including offers / deals. The average price paid when an item was on offer / deal. The average price paid when an item was not on offer / deal.

Consumer Perceived Deal/Offer  

Panelists also record the type of offer / deal received with their purchases. Types of Deals differ by country, but can include:

  • Manufacturer Coupon
  • Store Coupon
  • Store Deal
  • Multibuy / Link Save
  • Price Reduction
  • Any Other Offer

Repeat Buyers

Do your buyers return to purchase again?

  • 1 time buyers - Households who purchase a product only once during a time period.
  • 2 or more time buyers - Households who purchase a product at least twice during a time period. Also known as Repeat Buyers.

 

Keep in mind products rely on repeat buyers for long term sales. To gain repeat buyers, strategies should focus on AWOP instead of Penetration.

Purchase Cycle (Days)

Definition: Average # of days between purchases for Repeat Buyers.

Keep in Mind...

Purchase Cycle will differ from AWOP since  AWOP takes into account all buyers, including 1x buyers.Purchase Cycle will differ from Purchase Frequency since Purchase Frequency takes into account all buyers, including 1x buyers.

Example: 

Even though 2 households had 4 purchases, their purchase cycle differs. HH #3 was not considered in purchase cycle for this product since they weren't repeat buyers.
 

Raw Buyers (N=)

Raw Buyers (N=) Definition - The number of unprojected panelists (households) supporting a data point.

Raw Transactions Definition - The number of unprojected items (UPCs) reported as purchased by all panelists purchasing the item.

Note: A minimum number of raw buyers or raw transactions is needed to prove data validity. Check for guidelines in your country.

Knowledge Check

  1. A strategy focusing on increasing loyalty will require Marketing efforts targeting which component of Sales? 
     
  2. Based on the below picture, select the Loyalty of households to pineapples and apples.
     

  1. The Loyalty of HH #1 to pineapples is  
  2. The Loyalty of HH #2 to pineapples is  
  3. The Loyalty of both households to pineapples is  
  4. The Loyalty of HH #1 to apples is  
  5. The Loyalty of HH #2 to apples is  
  6. The Loyalty of both to apples is  

 

Using Homescan

Example

Click the (i)s below to learn about the category and brand purchase patterns.

Knowledge Check

Our family loves Loca-Cola. We buy 2 cases of Loca-Cola on our first shopping trip of the month every month. This is all of our purchases of Loca-Cola during the year. Match the measure with our purchasing.
  • AWOP
    24
  • Purchase Size
    2
  • Purchase Frequency
    12

Summary

With and Without Homescan

Without Homescan... Homescan...
Your consumers are unclear and indefined

Provides clarity around consumer purchase patterns to identify:

  • Who they are
  • What else they are buying
  • When we can reach them
  • Where they are shopping
  • Why they are important to our business

 

Congratulations!

Congratulations!

You have completed the Homescan Measures Tutorial.