Penetration is a measure of brand or category popularity. It is defined as the number of shoppers who buy a specific brand or a category of product at least once in a given period, divided by the size of the total shopper population.
The higher the penetration rate, the higher the number of shoppers that come into the store buying that brand or products from this category.
🧪 Example of Penetration calculation
Let's say a retail store is interested in analyzing the category penetration of Instant coffee in their market. If 100,000 shoppers visited the store. Out of this, 2,000 shoppers have purchased Instant Coffee products, so penetration of the Instant Coffee category would be (2,000/100,000) 2%.
❓What Penetration is used for
Penetration provides valuable insights into the size and dynamics of a particular Category, which can help both Retailers and Manufacturers make decisions about how to position and market their products.
- To identify trends and shifts in Shopper behavior. If Category penetration is increasing over time, it indicates that more Shoppers are interested in purchasing products in that Category. If Category penetration is decreasing over time, it shows that this Category needs to be reviewed and adjustments need to be done.
- It helps Retailers to target their marketing efforts more effectively. If Category penetration is high among a particular group of Shoppers (Loyal & Non-Loyal). A Retailer may decide to focus its marketing efforts on reaching certain groups of Loyal Shoppers where Category penetration is lower or decreased by sending a Targeted Offer.
- To understand the size of the market for a particular Category. For example, if Category penetration is low, it may indicate that there is an opportunity for a Manufacturer to increase market share by targeting Shoppers who have not yet purchased a product in that category.
- To benchmark their performance against competitors. If a Manufacturer's Category penetration is higher than its competitors, it may be a sign that the Manufacturer is doing a good job of attracting and retaining Shoppers in that category.
🖥️ Make it happen in Ariane
How to access Penetration in Ariane: 3 Simple Steps
Step 1: Select the Basket Evolution Menu in the Shopper Menu Bar.
Step 2: Select Option in the Filter Menu and choose the Basket Penetration (%) Metrics.
Step 3: Select the frequency at which you want to measure your Basket Penetration (%) Metrics.
And here it is