'Treating' market to reach €149.5bn by 2006

Related tags Consumers Marketing Datamonitor

Almost half of all consumers questioned in a recent European survey
cited stress as a motivation for treat purchases. According to a
recent research consumers are willing to spend an average of 9 per
cent more on a treat purchase.

Almost half of all consumers questioned in a recent European survey cited stress as a motivation for treat purchases. According to a recent report from market analysts Datamonitor, consumers are willing to spend an average of 9 per cent more on a treat purchase than its everyday equivalent.

Datamonitor​ highlighted the fact that for manufacturers, the "treatingoccasion" represents an opportunity to capitalise on consumers' desire forquality over value-for-money by focusing new product development andmarketing efforts on the indulgence aspects of products.

The report suggests that as the pace of life accelerates, the role for self-indulgence and "treating" in consumers' everyday lives is becoming more important. Datamonitor has identified over £80.6 billion (€130.4m) of spending on food, drink and toiletries across Europe which consumers regard as "treats".

The report confirms the fact that diagnosed cases of depression across Europe are increasing and suggests that although there are significant differences betweenclinical depression and everyday stress, the prevalence of depression is an indication of the extent of stress in modern life.

Datamonitor'sconsumer survey questioned respondents' motivations for treating themselves.The most commonly mentioned response, cited by 50 per cent of respondents, was "Ijust like it from time to time"​, indicating that regular treating hasalready become part of many consumers' consumption routines. "In response tostress"​, cited by 47 per cent of respondents was the second most commonly mentionedmotivation, showing that some consumers deem this behaviour necessary, the report suggests, fortheir mental well-being.

Food drink and toiletries are at the forefront of everyday treats. Neil Broome,Datamonitor consumer markets analyst and author of the report commented: "Obviously, buying treats is not a new phenomenon, however consumers aremore frequently treating themselves with food, drink and personal careproducts. Research also points to an increasing trend towards 'cocooning',which manifests itself as consumers consoling themselves with 'comfort'products.

Consumers are becoming more adept at discerning which products arequalitatively better than others and this is driving treating culture, inthe sense that consumers are aware that certain brands offer high qualityand other brands offer value-for-money.

This then drives the trend ofchoosing indulgent products for occasional consumption and bettervalue-for-money products for regular consumption."

Research for the report investigated the proportion of food, drink and personal care products that are bought as "treat" purchases: 73 per cent of fragrance purchases are considered treats; 51 per cent of cosmetics purchases, 30 per cent of confectionary purchases and 53 per cent of desserts purchases are considered treats.

Further research found that, on average, consumers spend 9.1 per cent more on products that they consider "treats" than the equivalent product bought within their normal routine. However, this does not always pointtowards consumers buying the most expensive premium products, the report points out. Datamonitor's consumer research highlighted the emergence of the 'affordable premium'sector as the majority of respondents admit to trading up to a moderatelyluxury brand when buying treats for themselves.

The reports suggests that manufacturers and retailers have driven treating through a redefinition of the boundaries between premium and mass market, to create mid-market 'affordable premium'.

Retailers have also played an important part inbringing premium products to a wider range of consumer groups, and driving acultural trend towards frequent self-indulgence and treating, the report continues. Premium foodhas traditionally been associated with grand food halls such as Harrods inLondon. Now supermarkets, long considered the great leveller of foodretailing by selling only commodity items, offer a two-tiered range of foodand drinks by selling high quality food and wine products in addition tostaples like cereals and frozen foods.

The report stresses that one of the most important recentdevelopments has been the introduction of premium private label. Onceconsidered merely a 'me too' alternative to branded food, drinks andpersonal care, private label is increasingly the first choice of manyconsumers and out-performs branded products in many premium categories.

Datamonitor predicts that rising disposable incomes will contribute to an increase in the average amount that consumers are willing to pay in order to trade up to a premium treat product from 9.1 per cent to 9.9 per cent. Rising stress levels will contribute to consumers', on average, buying treat purchases 3 per cent more frequently each year.Together, these two facts will combine to create a total "treating market" inEurope worth nearly £92.4 bn (€149.5bn) by 2006, representing a 2.7 per cent per annum growth in 'treating' expenditure, compared with 1.9 per cent per annum growth in theunderlying markets themselves.

"Consumers are extremely demanding of their treat products and very loyal tothose which meet their requirements, but quick to dismiss those which donot.

Treat purchases are highly impulse-driven occasions and manufacturersneed to take best advantage of it by focussing on instant marketingtechniques such as point-of-sale promotions.

Treating is also an emotionallydriven type of purchase and it is essential for manufacturers to appeal toconsumers' emotional needs,"​ concluded Neil Broome.

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