In U.S. Retail, Brand Equity Drives Where Consumers Fill Their Baskets

In U.S. Retail, Brand Equity Drives Where Consumers Fill Their Baskets

Fragmentation is not exclusive to media. People have a wealth of choice in terms of where they shop—more than 24,000 new retail stores have opened in the U.S. since 2009—and retailers are constantly innovating new ways to engage consumers. Improved economic prospects are helping many U.S. consumers feel more comfortable about spending their discretionary money, but access to information has never been greater, which means Americans are savvier than ever when it comes to where and how they shop.

So as channels expand, information levels intensify and new behavioral norms take hold, retailers and consumer product companies need to understand what drives people to stores, how to capitalize on the money consumers spend on each trip, and how to keep customers loyal.

Given the choices and channels prevalent today, Nielsen conducted a recent study across the grocery, mass merchandise, club, dollar, drug and convenience channels to better understand the choices U.S. consumers are making when they shop and what’s driving them to make return trips or try something new. The findings from the survey highlight two related points: there is a strong correlation between brand equity and retailer success; and brands with strong equity command a large portion of shoppers’ wallets.

Understanding the Value of Retailer Equity

To arrive at the findings, Nielsen connected consumer responses about 130 retailers to nine key factors to derive the Nielsen Store Equity Index (NSEI). When analyzed in connection with Nielsen’s Homescan data, Nielsen was able to determine that a retailer’s NSEI score has a 68% correlation with a retailer’s shopper’s share of wallet, and each point of equity within the NSEI results in 8.3 percentage points of market share.

So as retailers strive to increase their share of their shoppers’ dollars, and ultimately grow sales, they should focus heavily on increasing their equity. Equity is based on key familiarity, connection and loyalty.

Assessing How “Local” Resonates with Shoppers

Despite digital trends and consumer desires to stay connected at all hours of the day, shoppers want to have personal connections with the stores and retailers they engage with. And one of the ways retailers are capitalizing on this desire is by developing stores that resonate at a local level. And as stores become more localized, retailers need to know how their brands measure up against others that are taking similar steps. For its recent survey, Nielsen created a list of retailers for each respondent as a way to assess how each operator’s stores resonate with consumers at the local level. Including the local retailers in the recent survey provided perspective on the impact of small, growing local retailers, given that the modern retail landscape is flavored by a range of both national and local-oriented options.

When we look at the local findings from the survey, we see that the list of the top 10 retailers includes a mix of both large and small operators. Some of the retailers are small in scale, like Woodman’s and Mariano’s, which have fewer than 30 locations (15 and 27, respectively). So by including the local lens in our brand equity survey, we gain a more defining measure of the evolving retail landscape—one that includes brands that may not be well known at the national level, but are truly loved by the consumers that visit them.

Top 10 Retailers by Equity Rank

  1. Wegmans
  2. Market Basket
  3. HEB
  4. Publix
  5. Woodman’s
  6. Meijer
  7. Mariano’s
  8. Dillons
  9. King Sooper
  10. United Supermarkets

How Can Retailers Improve their Equity?

As with any list, there’s more to brand equity than a single, placement-deciding metric. In order to derive a retailer’s equity score, Nielsen’s recent survey asked respondents to rate how well they feel each retailer was associated with 25 attributes that drive affinity to stores. Through these associations, we are able to determine the attributes that have the strongest impact on the retailer’s NSEI score.

Each channel and retailer has a unique order of attributes that contribute the strongest to their NSEI score. Most of these coincide with what we know as the channel’s strong points: Drug stores, for example, need to provide their shoppers with good sales to drive equity; prepared foods are critical to convenience stores; and club stores need to have good meat and seafood.

The Top 10 Attributes that Affect Equity – By Channel

C-Store Drug Dollar Club Grocery Mass
Well stocked Good sales Trustworthy company Loyalty program Trustworthy company Trustworthy company
Prepared foods One-stop shopping One-stop shopping Fresh meat & seafood Friendly employees Friendly employees
Trustworthy company Loyalty program Friendly employees Trustworthy company Well stocked Well stocked
Friendly employees Well stocked Well stocked One-stop shopping Everyday low prices Easy to navigate
Community supporter Everyday low prices Easy to navigate Good sales One-stop shopping Store brand
Fresh produce Friendly employees Health & Beauty Fresh produce Fast checkout Prepared foods
Everyday low prices Trustworthy company Grocery selection Everyday low prices Easy to navigate One-stop shopping
One-stop shopping Fast checkout Store brand Friendly employees Fresh produce Clean store
Store brand Easy to navigate Everyday low prices Prepared foods Clean store Fresh produce
Good sales Digital tools Clean store Well stocked Store brand Good sales
Source: Nielsen

Much like the growing prevalence of local-oriented retailers, the market is also seeing an influx of small-box operators. The move to open smaller-than-big-box banners is building to meet consumers’ growing desires to make shopping trips that meet short-term needs. The trend, however, is something that both big and small footprint brands are moving on. For example, while big box retailers are making smaller outlets to meet consumer needs, drug and dollar retailers are creating larger outlets to broaden their ability to serve larger basket routine and stock-up trips.

We also find that being a one-stop shop contributes heavily to the equity of retailers in the drug and dollar channels. Continuing to focus on expanding their assortment will serve to increase their equity as these trends continue.

While small box retailers are improving assortment to meet more needs of their shoppers, consumers are responding by purchasing larger baskets at these retailers. In fact, the trip types that are growing the fastest in both the drug and dollar channel are those considered “Routine” and “Stock-Up.” And these two trip types have much larger sizes than the “In & Out” and “Fill-In” types that are most normally associated with small box retailers.


The insights from this article were derived from a Nielsen survey of more than 40,500 primary grocery shoppers 21 and older between June 15, 2014 and Sept. 2, 2014.

Channel Coverage:

  • Grocery (100 banners)
  • Mass (7)
  • Club (6)
  • Dollar (6)
  • Drug (6)
  • Convenience (8)