AGENDA
CHANGING CONSUMER LANDSCAPE
THE CONNECTED CONSUMER
THE DIGITAL MINDSET
FUNDAMENTALS OF E-COMMERCE STRATEGY
WINNING WITH THE CONNECTED CONSUMER
THE CONSUMER LANDSCAPE:
Dynamic Change, Enormous Opportunity for Growth
SHOPPERS
ARE MORE
DIVERSE THAN
EVER
…WITH
INCREASINGLY
VARIED NEEDS
…IN A
FRAGMENTING
RETAIL
LANDSCAPE
…WITH
DRAMATICALLY
MORE COMPLEX
MEDIA STIMULI
…REQUIRING
PERSONALIZATION
A MULTI-CULTURAL AUSTRALIA
Projected AUS
Population by 2061:
48.3M
2017 EMERGING TOP TRENDS
Atomization of
Personalization
Social &
Cultural
Alignment
Hyper
Localization
Holistic
Health
The Growth of
Ready to Eat
Solutions
Connected
Consumers
THERE IS A VERY COMPLEX JOURNEY THAT SHOPPERS TAKE AND IT IS
IMPACTING HOW THEY PLAN, SHOP AND CONSUME
QSR/LSR
SPECIALTY
STATIONS
SOCIAL/
DIGITAL
VENDING
E-COMM
1:1
PERSONALIZATION
CLICK
PICK
UP
DELIVERY
CHANNEL SHIFTING – DOLLAR SALES
Conv. 17.1%
+1.9%
Mass 26.2%
+1.6%
Total US
+0.9%
Food 37.3%
Dollar 3.4%
-0.1%
+0.4%
Club 10.1%
Drug 6.0%
-1.7%
-0.5%
SOURCE: IRI POS, MULOC by Channel, Calendar Year 2016 Ending 12-25-16
PERIMETER OUTPACING OTHER F&B DEPARTMENTS
OVER LAST 4 YEARS
4-YEAR CAGR DOLLAR GROWTH
3.8%
2.7X
2.3%
2.6%
1.8%
1.4%
1.1%
0.5%
Frozen
General Food Refrigerated
Beverages
Total Food
Total F&B
Fresh
Perimeter
Source: IRI FreshLook POS data, MULO, 52 weeks ending 10/30/2016
INTERNET AND CLUB CHANNELS WINNING PENETRATION, WHILE
COMPETING CHANNELS STRUGGLING TO MAINTAIN GROUND
PENETRATION CHANGE BY CHANNEL 2016 VS 2013
% Penetration
Walmart
1.3
Club
0.9
Internet
0.7
Dollar
0.4
Convenience
0.2
Grocery-X
-0.6
Drug
Mass-X
-5.2
-6.7
81.6
52.3
28.5
59.8
27.5
97.9
68.2
60.4
Source: Kroger_PNL, 2016 vs. 2013, All Households
AUSTRALIAN CHANNEL SHIFTING: DOLLAR SALES
Pharmacy 6.9%
+5.1%
Liquor 17.8%
+3.3%
Conv. 5.5%
+2.8%
Total AU
+2.1%
Grocery 69.8%
+1.4%
**Source: IRI MarketEdge 2016
**The Total AU Growth includes Grocery, Convenience, Pharmacy & Liquor
NEARLY 1/3 AUSTRALIAN ARE SHOPPING ONLINE
MORE THAN LAST YEAR
ONLINE CHANNEL SHOPPING FREQUENCY VS YA
31%
MORE
87%
40%
THE SAME
16%
LESS
Source: IRI ShopperPanel Survey, April 2017
THE
CONNECTED
CONSUMER
EVERYONE IS USING DIGITAL TODAY
6 hrs/day
average time
spent online
48%
45%
29%
52%
say they’re unable
to function without
their smart phone
say they’re early
adopters of
technology
use a mobile
app to pay for
purchases
prefer brand
updates in email
vs. text
WE ARE AT THE CENTER OF A CONSUMER
BUYING REVOLUTION
This year, digital
will influence
77%
76%
of all shopping
trips begin online
71%
of all product searches
begin on retail sites
of all retail sales
(55% on Amazon)
8x CPG Online growth by 2022
IN AN
INTERNET
MINUTE…
701,389
972,222
FACEBOOK LOGINS
SWIPES
150 MILLION
$203,596
EMAILS SENT
IN SALES
2.78 MILLION
527,760
VIDEO VIEWS
SNAPCHAT
PHOTOS
20.8 MILLION+
38,194
MESSAGES
INSTAGRAM
PHOTOS
THE TRADITIONAL SHOPPER JOURNEY
REMAINS RELEVANT FOR CERTAIN
CATEGORIES
PLANNING
pre-store planning
NAVIGATING
in-store
PURCHASING
in-aisle
USING
product usage
ACTIVATING
context
DIGITAL, SOCIAL
AND MOBILE PLAY
AN OPPORTUNISTIC ROLE IN FMCG
SHOPPING BEHAVIOUR…
RETAILERS ARE CREATING 1:1 RELATIONSHIPS WITH ANYPLACE CONSUMERS
THROUGH PERSONALIZED CAMPAIGNS LEVERAGING NEW DIGITAL PLATFORMS
STARBUCKS
MOBILE COMMERCE
CVS PHARMACY APP
KROGER APP
WALMART APP
RETAILERS ARE CREATING 1:1 RELATIONSHIPS WITH ANYPLACE CONSUMERS
THROUGH PERSONALIZED CAMPAIGNS LEVERAGING NEW DIGITAL PLATFORMS
MY CHEMIST WAREHOUSE
THE ICONIC
DOMINO’S
46.9%
NEARLY HALF OF ALL CONSUMERS
GO ONLINE TO SEEK COUPONS AND
SALES FROM COUPON, RETAILER
AND MANUFACTURERS' WEBSITES
CONSUMERS ARE
MORE LIKELY TO SEARCH RETAILER SITES THAN
THEY ARE TO VISIT MANUFACTURERS’ SITES
SOCIAL MEDIA IS A LESS
INFLUENTIAL FACTOR IN
SHOPPING PLANNING.
BUT A CRITICAL
PARTNER IN EDUCATION
AND MEAL PLANNING
WHICH SETS THE TABLE
FOR OVERALL
PLANNING.
MILLENNIALS
ARE THE
TRAILBLAZERS
OF SHOPPING
PLANNING.
MORE THAN
25%
LOOK FOR RECIPES
ONLINE; MORE OF A
FACTOR AMONG
MILLENNIALS AND
GENX VS. BOOMERS
35.9%
OVER A THIRD COMPARE PRICES
MILLENNIALS ARE MOST LIKELY TO
COMPARE AT-HOME AND IN-STORE
75%
3 IN 4 SHOPPERS CLAIM TO
USE ONLINE RESOURCES AT
LEAST AS FREQUENTLY AS
THEY HAVE IN THE PAST
80%+
OF GEN X AND MILLENNIALS
ARE USING ONLINE RESOURCES MORE
51.8%
ABOUT HALF OF ALL SHOPPERS STILL USE
NEWSPAPERS, STORE CIRCULARS, AND
MAGAZINES TO PLAN. -SHOWS THE IMPACT OF
"OLD TRADITIONAL METHODS”, BUT FAR
BELOW MEASURES OF JUST FOUR YEARS AGO
THE DIGITAL DIVIDE IS ALIVE
STILL USING THIS YEAR….
TOTAL
MILLENNIALS
GENx
YOUNGER
BOOMERS
OLDER
BOOMERS
82%
90%
84%
84%
69%
USE OF ONLINE/DIGITAL RESOURCES RELATED TO SHOPPING FOR FRESH FOODS VS. LAST YEAR
NEARLY
1 IN 5
ARE THE TRAILBLAZERS, FINDING
IT VERY IMPORTANT TO
PLAN BY SHOPPING ONLINE.
MILLENNIALS AND GEN X ARE DRIVING
THE PIONEERING BY BEING MORE
INCLINED TO FIND IT VERY IMPORTANT
TO GO ONLINE TO PLAN THEIR
SHOPPING.
OVER 60% SAY THEY DO LESS THAN 30 MINUTES OF GROCERY PREP –
11% DO NOTHING AT ALL
Total
Millennials
GenX
Younger
Boomers
Older
Boomers
No planning
11%
9%
13%
9%
10%
< 30 minutes
49%
47%
44%
55%
57%
30 minutes - <1 hour
24%
25%
24%
23%
24%
1 hour
11%
13%
14%
8%
7%
2 hours
3%
3%
3%
4%
1%
2+ hours
2%
3%
3%
1%
0%
IMPACT ACROSS THE STORE
LEVELS OF DIGITAL PRE-TAIL ACTIVITY VARY BY CATEGORY
% USING ANY DIGITAL DEVICE PRIOR TO GOING TO THE STORE
48%
PERSONAL CARE
42%
46%
FROZEN FOOD
36%
MEAT/POULTRY
OTC MEDICATIONS
37%
NON-ALCOHOLIC
BEVERAGES
35%
SNACKS
29%
DAIRY
Significantly
more
Millennials
used digital
pre-tail than
shoppers 35+
26%
BEER/WINE/SPIRITS
Source: IRI Shopper Path research, 2015
List making among
today’s shoppers
81%
OF SHOPPERS MADE A LIST
YET
23%
LIST A BRAND
ONCE PURCHASES
ARE MADE
QUICK FACT:
Across FMCG categories,
Millennials are significantly
more likely to take some
type of post-purchase
action than those
shoppers aged 35+
14%
TALK ABOUT THEIR
EXPERIENCE DIGITALLY
THE
DIGITAL
MINDSET
SHOPPERS VIEWS ABOUT DIGITAL ARE DIVERSE
“We’ve fully
embraced the digital
world!”
“The Internet?! We
can take it or leave
it.”
Digitize Me!
Technophobes
”We love to browse
and find new ideas”
Inspiration
Seekers
“We’d be lost
without our
smartphones”
Connectors
“Spend
“It’s greatwisely.”
to find the
information we
need”
Information
Seekers
THE MOST DIGITALLY SAVVY SEGMENT,
DIGITIZE ME!, HAS DOUBLED
21%
Digitize
Me!
23%
15%
17%
24%
Technophobes
Inspiration
Seekers
Connectors
Information
Seekers
DIGITALINK SEGMENTATION IS BASED ON DIGITAL OWNERSHIP, USAGE AND LIFESTYLES
THE MOST DIGITALLY SAVVY SEGMENT,
DIGITIZE ME!, SIMILAR TO THE U.S.
22%
Digitize
Me!
21%
16%
12%
29%
Technophobes
Inspiration
Seekers
Connectors
Information
Seekers
DIGITALINK SEGMENTATION IS BASED ON DIGITAL OWNERSHIP, USAGE AND LIFESTYLES
THE DIGITIZE ME! SEGMENT IS AT THE FOREFRONT OF
CREATING A NEW PATH TO PURCHASE FOR FMCG PRODUCTS
PRE-STORE
IN-STORE
AFTER PURCHASE
NOT SURPRISINGLY, NEARLY ALL “DIGITISE ME”
SHOPPERS SHOP ONLINE
% HOUSEHOLDS SHOPPING ONLINE
87%
90%
96%
87%
94%
55%
Total Australia
Connectors
Digitise Me
Information Seekers Inspiration Seekers
Technophobes
Source: IRI Shopper Panel Survey, April 2017
OVER 40% “DIGITISE ME” SHOPPERS ARE
SHOPPING ONLINE MORE
ONLINE CHANNEL SHOPPING FREQUENCY VS YA
More
13%
16%
10%
14%
The same
3%
12%
Less
Do not shop here
13%
17%
7%
17%
45%
40%
40%
43%
31%
33%
42%
49%
28%
28%
17%
30%
44%
8%
Total Australia
Connectors
Digitise Me
Information Seekers Inspiration Seekers
Technophobes
Source: IRI ShopperPanel Survey, April 2017
Digitize Mom seeks help on
Parents.com for fast and nutritious
family meals
Sees ad online while reading
about creative slow cooker ideas
Completes list and chooses
her favorite store because
its own app provided early
notification to upcoming
online specials
Prices are best at her favorite local
store so she heads there
Back to computer to
check retailer ads
Opens the store’s app at
checkout to save on her
purchase
After making dinner, comments
“fabulous meal solution with
flavor’ on Parents.com
Grabs phone to
add items to
shopping list app
THE MOST DIGITALLY ENGAGED SHOPPERS WILL LEAD THE WAY
Make it
simple
Help me but don’t
intrude
Help me balance
convenience
and savings
Let me have
control
Enable me to
bridge digital and
traditional
Don’t clutter
my phone
DIGITAL SHOPPING HABITS STILL DEVELOPING IN AUSTRALIA
Clothing, footwear & accessories
63%
Travel products (e.g. Airline, Hotel, Tours)
50%
Books
46%
Movies, music & computer games
38%
Toys and games
35%
Consumer electronics
33%
Personal care products
32%
Home and garden products
29%
Cosmetics
26%
Pet supplies
25%
Office supplies
25%
Online Staples
Vitamins, supplements & medicines
25%
Non-Edibles
Groceries
21%
Household cleaning products
Sporting and outdoor goods
Alcoholic beverages
Fresh food
Baby products
32%
18%
Edibles
17%
17%
16%
26%
15%
Source: IRI ShopperPanel Survey, April 2017
IN AN
INTERNET
MINUTE…
701,389
972,222
FACEBOOK LOGINS
SWIPES
150 MILLION
$203,596
EMAILS SENT
IN SALES
2.78 MILLION
527,760
VIDEO VIEWS
SNAPCHAT
PHOTOS
20.8 MILLION+
38,194
MESSAGES
INSTAGRAM
PHOTOS
A SEISMIC SHIFT IN THE
BALANCE OF POWER,
FROM RETAILERS &
MANUFACTURERS TO THE
CONNECTED CONSUMER
31
15
e-Commerce is a
key driver of
sales growth
27
57
4
7
802
787
750
2015
MULO
2020 PROJECTED
Non-Edibles e-commerce
2022 PROJECTED
Edibles e-commerce
e-Commerce In the News
WAR OF THE WORLDS
VS
$100B
+$500B
IN SALES
IN SALES
1% of FMCG Sales
23% of FMCG Sales
+25%
+3%
INVESTMENT, NOT TRENDS, WILL DRIVE THIS GROWTH
INVESTMENT TO COMPETE
• Consumer Trends
• Technology Advancements
• Retailer Infrastructure
Industry Disruption:
Almost $82B of revenue from PRIME
63M
54M
+$6.2B
membership fees
44M
7.6% Gross Margin
40M
on total revenue
25M
28M
ANNUAL SPENDING
Members
DEC 2013
JUN 2014
DEC 2014
JUN 2015
DEC 2015
JUN 2016
Prime Members grew 17% vs. LY
Prime Members spend 140% more than non-Prime
Non-Members
$500
$1,200
$1,200
SHOPPER TRAFFIC: AMAZON IS A TOP MEDIA PLATFORM E-COMMERCE IS A
KEY STRATEGIC PILLAR OF FMCG PILLAR GROWTH STRATEGY
MOST POPULAR MULTI-PLATFORM WEB PROPERTIES IN THE U.S. IN
NOVEMBER 2016, BASED ON # OF UNIQUE VISITORS (IN MILLIONS)
246.2
Google Sites
209.0
Facebook
Yahoo Sites
205.7
188.7
Microsoft Sites
184.1
Amazon Sites
CBS Interactive
Comcast
NBCUniversal
AOL, Inc.
Turner Digital
Apple Inc.
167.7
167.4
160.0
151.9
144.2
Amazon.com is currently the #5
website in terms of unique visitors
Walmart.com and Target.com fall
outside of the top 20 rankings
Traffic and advertisement
potential is another reason
Walmart purchased Jet.com
FUNDAMENTALS OF
E-COMMERCE STRATEGY
TRADITIONAL BRICK & MORTAR ACTIVELY COMPETING TO PLAY WITH AMAZON
INVESTING HEAVILY IN
ECOMMERCE CAPABILITIES
Walmart has spent $3.3
billion on eCommerce
start-up Jet.com; acquire
its software, leadership &
traffic
Albertsons partners with
MyWebGrocer to offer clickand-collect and delivery
options for online groceries
Target announced plans to
spend around $1.8 billion on
developing a seamless
Omni-channel experience in
2017
ACQUIRING/PARTNERING TO
BUILD ECOMMERCE CAPABILITIES
IMPROVING EASE-OF-PURCHASE
TO “LOCK IN” SHOPPERS
Kroger’s merger with Harris
Teeter and purchase of
Vitacost gives the retailer
access to “Express Lane”
technology, & accelerated
home delivery participation to
enhance ClickList expansion
Companies like Walmart &
CPG’s use OrderGroove to
establish lifetime
relationships with their
customers through
subscription and
membership services
Delhaize recently merged
with Peapod owner Ahold,
providing delivery service
access to low cost
distribution centers
Target offers free shipping
and 5% discount with
subscription service, &
recently announced
expanded product offerings
Whole Foods and Instacart
signed a 5 year delivery
partnership, and Whole
Foods invested an additional
$36 million in September
2016
Home Depot’s mobile app is
designed to work like an “instore companion,” with
inventory info, and an
augmented reality feature
Source: Secondary Research, IRI Consulting Analysis.
E-COMMERCE BUSINESS IS DIFFERENT
LEVELING THE PLAYING FIELD FOR “DAVID AND GOLIATH!”
Source: IRI e-Commerce Market InsightsTM 52 weeks ended Oct. 2016 (non food) and 52 weeks ended Oct. 2016 (food)
E-COMMERCE IS AN IMPORTANT PILLAR TO A FMCG DIGITAL STRATEGY
EXECUTE A DIGITAL STRATEGY THAT IS POWERED BY ECOMMERCE
FMCG MARKETING: DIGITAL HAS TURNED THE TABLES
Today is less about what
you own, and more about
where you BUILD your
brand presence
It’s not about linking
consumers to your
properties, but DRIVING
shoppers down the path
to purchase
Integrate your
messaging to EARN
performance online and
in the store
SAN FRANCISCO BAY IS EXECUTING A BEST IN CLASS BUILD, DRIVE &
EARN STRATEGY
SAN FRANCISCO BAY
CONTNUES TO BUILD BRAND
PRESENCE ON E-COMMERCE
SITES
Offering a full assortment of offerings
(flavors and pack sizes)
Rich, engaging & search optimized
content to maximize their search engine
rankings
Building consumer reviews
BRANDS THAT DEPLOY AN E-COMMERCE STRATEGY ARE WINNING ONLINE
TOP COFFEE BRANDS
TOP SELLING IN-STORE COFFEE BRANDS, SINGLE SERVE
COFFEE BRANDS: SHARE OF AMAZON’S TOP-40 SELLERS
Source: IRI Market AdvantageTM, IRI Analysis (12/16/2016)
SERVICE DELIVERY OFFERS ALSO CONTINUE TO EVOLVE DIGITAL SHOPPING
AU vs US
Add Hello Fresh
to US
SHOPPERS USE CLICK-AND-COLLECT TO SAVE ON DELIVERY FEES AND
PERSONAL TIME. ONCE THEY TRY, THEY ARE HOOKED.
WHAT ARE THE REASONS YOU USED
'CLICK AND PICK UP‘
(% of Respondents)
Did not want to pay for
shipping/delivery
69%
Saves time because I don't have to
shop the store aisles
51%
More convenient because I can shop
online at night and pick up the next
day
45%
Saves time because I don't have to
wait at the register/check-out
44%
Needed items quickly and did not
want to wait for shipping/delivery
82%
Would definitely or probably use the
service again for everyday items
37%
Source: IRI Click and Collect Survey, Jan
2017
WHILST NOT SURPRISING, BARRIERS TO ONLINE GROCERY
SHOPPING DO VARY BY SEGMENT
I prefer to inspect and select
products myself
69%
I enjoy shopping in a physical
store
56%
33%
Delivery fees are too high
I am concerned about the
freshness of products
30%
I am concerned about the quality
of products
27%
I am concerned product prices
may not be as good as in store
19%
Delivery slots/times are
inconvenient
Delivery times are too long
I find it difficult to use online
grocery websites
I am concerned about the security
of online transactions
12%
7%
6%
Connectors
Digitise Me
Information Seekers
Technophobes
5%
Source: IRI ShopperPanel Survey, April 2017
“DIGITISE ME” SHOPPERS ALSO LEADING THE ADOPTION OF
ONLINE GROCERY
% HOUSEHOLDS PURCHASING GROCERIES ONLINE
32%
21%
18%
17%
15%
6%
Total Australia
Connectors
Digitise Me
Information Seekers Inspiration Seekers
Technophobes
Source: IRI ShopperPanel Survey, April 2017
WINNING WITH THE
CONNECTED CONSUMER
E-COMMERCE IS NOT JUST AN ALTERNATE CHANNEL:
Leverage sites as marketing, education and engagement platforms.
Collaborate to build brand experiences on retail sites.
DIGITAL SHOPPING BEHAVIOURS ARE IN FORMATIVE STAGES
FOR MANY, PROVIDING OPPORTUNITY TO SET STAGE FOR LONG
TERM SUCCESS:
Develop a clear understanding of how your shoppers’ journeys are
evolving over multiple platforms.
Align your brand with key online influencers/bloggers.
LIMITED PLANNING TIME REQUIRES COMPELLING DIGITAL
CONTENT TO ENGAGE CONSUMERS AND SHOPPERS:
Minimise “friction” online through:
Ensuring online presence facilitates the shopper discovery process
Delivering the right message at the right time
THANK YOU!
E-COMMERCE IS AN IMPORTANT PILLAR TO A FMCG
DIGITAL STRATEGY
AWARENESS, CONSIDERATION,
CONVERSION & LOYALTY
•
eRetailer Search Results
•
Google Search Results
•
Increased Impressions
•
Increased Awareness
•
Referrals (Reviews)
•
Shopping List Purchase History
•
Subscriptions
•
Sales (On-line & In-store)
SAN FRANCISCO BAY IS EXECUTING A BEST IN CLASS BUILD, DRIVE &
EARN STRATEGY
SAN FRANCISCO BAY IS DRIVING
SHOPPERS TO ITS BRANDS
eRetailer email campaigns
eRetailer paid search ads
eRetailer display ads
…AND NOW IT IS EARNING SUCCESS
Most sales and views of all coffee brands
#1 Coffee best seller on Amazon.com
Strong ratings, 4.6 stars with +26K reviews
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