Leverage a “Build, Drive, Earn Strategy to Win Across...
Transcript of Leverage a “Build, Drive, Earn Strategy to Win Across...
Leverage a “Build, Drive, Earn” Strategy to Win Across ChannelsPartnering to drive visibility and GROWTH in e-Commerce
January 2017
Copyright © 2017 Information Resources, Inc. (IRI). Confidential and proprietary. 2
Today’s Presenters
Danny is a global CPG / FMCG eCommerce business
strategy and sales expert with over 10 years of industry
experience. Throughout his career, he has helped brands
enhance equity and drive sales at online retailers with data
driven insights and experience informed action.
Danny Silverman
Head of Marketing and Product Strategy, Clavis Insight
Sam has more than +19 years of cross-functional sales,
marketing and digital leadership experience with top FMCG
manufacturers, including Johnson & Johnson, Colgate and
RB. He is an expert in e-commerce strategy, digital
marketing, search engine optimization, media
management, shopper marketing and marketing
management.
Sam Gagliardi
SVP Consumer Shopper Marketing, e-Commerce, IRI
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Today’s Conversation
Introduction
The Potential of e-Commerce
Fundamentals of e-Commerce Strategy
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Executive Summary
THE CPG INDUSTRY FINDS
ITSELF AT A CROSSROADS:
E-commerce is disrupting the Brick & Mortar
channel, consumers are adapting to the new
digital landscape, and traditional retailers are
adapting their strategies and infrastructure to
compete against new entrants (e.g. Amazon,
Peapod, Jet).
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Executive Summary
BUILD, DRIVE, EARN
Despite the newness of the channel, several
CPG manufacturers have developed and
executed strategies to gain a dominant position.
Our experience in this space has led to the
development of a three-pronged approach:
Build, Drive, Earn.
Using IRI’s e-Commerce solutions to uncover
key insights, manufacturers can adopt specific
strategies to build out their Build, Drive, Earn
strategy.
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The Potential of
e-Commerce
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e-Commerce In the News
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We are at the center of a consumer buying revolution
This year, digital
will influence
of all retail sales77%
76%of all shopping
trips begin online
71%of all product searches
begin on retail sites
(55% on Amazon)
50% of CPG category market
growth will be online by 2018
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e-Commerce is a
key driver of sales
growth
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Investment, NOT trends will drive this growth
INVESTMENT TO COMPETE
Consumer Trends
Technology Advancements
Retailer Infrastructure
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Digital Disruption: New Order For CPG Growth Strategy
INVESTMENT TO COMPETE
Consumer Trends
Technology Advancements
Retailer InfrastructureMore investment to drive their
business initiatives.
PREDICTION OF FUTURE POTENTIAL
Amazon
is 85%More valuable
than Walmart
+2.7x Market Cap Increase
Since 2015
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Amazon Arsenal
Amazon Web
Services
+$13B
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Paid shipping for items under $49,
over $49 ships freeNo charge
Free 2 day shipping, access to video
and music streaming services
$99
year
Free delivery in a 2 hour window,
paid delivery in an 1 hour window
$7.99
delivery
Grocery and household products ship
in same box
$5.99
box
$40 and over grocery and fresh
products delivered free
$14.99
month
Amazon creates “stickiness” with different membership levels
HOW IT WORKS HOW MUCH IT COSTSMEMBERSHIP TYPE
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Industry Disruption: Almost
$82B of revenue from PRIME
25M28M
40M44M
54M
63M
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
+$6.2B membership fees
7.6% Gross Margin on total revenue
ANNUAL SPENDING
$1,200
Non-Members Members
$500$1,200
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$2.4
$2.0 $2.1 $2.2
$2.7
$2.2 $2.3 $2.4
PROJECTED 3P SELLER FEES EARNED BY AMAZON (BILLIONS)63M
Q4
2015
Amazon earned up to $9B
in 3P seller fees over the
previous year
we project they can grow
that number to +$9.5B over
the next 12 months
Industry Disruption: Almost $9B of free
cash flow from 3P’s fees
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Q3
2017
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Competitor like no other
with cash like no other
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Brick & Mortar retailers are investing heavily to compete with Amazon
INVESTING HEAVILY IN
ECOMMERCE CAPABILITIES
Walmart plans to spend
$3.3 billion on
eCommerce start-up
Jet.com; acquire their
Software, leadership &
traffic
Albertsons partners with
MyWebGrocer to offer click-
and-collect and delivery
options for online groceries
Target announced plans to
spend around $1.8 billion on
developing a seamless
omni-channel experience in
2016
ACQUIRING/PARTNERING TO
BUILD ECOMMERCE CAPABILITIES
Kroger’s merger with Harris
Teeter and purchase of
Vitacost gives the retailer
access to “Express Lane”
technology, & accelerated
home delivery participation
Delhaize recently merged
with Peapod owner Ahold,
providing delivery service
access to low cost
distribution centers
Whole Foods and Instacart
signed a 5 year delivery
partnership, and Whole
Foods invested an additional
$36 million in September
2016
IMPROVING EASE-OF-PURCHASE
TO “LOCK IN” SHOPPERS
Companies like Walmart &
CPG’s use OrderGroove to
establish lifetime
relationships with their
customers through
subscription and
membership services
Target offers free shipping
and 5% discount with
subscription service, &
recently announced
expanded product offerings
Home Depot’s mobile app is
designed to work like an “in-
store companion,” with
inventory info, and an
augmented reality feature
Source: Secondary Research, IRI Consulting Analysis.
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e-Commerce Business Is Different
Many Brand Leaders Are Re-Learning How To Win
Source: IRI e-Commerce Market InsightsTM 52 weeks ended Oct. 2016 (non food) and 52 weeks ended Oct. 2016 (food)
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eCommerce Business Builds Differently Than Brick & Mortar
Consumption Model vs. Ship-in Model
Source: IRI Analysis
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CPG eCommerce Marketing
Digital Assets Should Be Used
to Shorten Path to Purchase
AWARENESS
INTEREST
CONSIDERATION
INTENT
EVALUATION
PURCHASE
• Digital has been re-defined the last 5 years
• Today is less about what you own, but
where you BUILD your brand presence
• It’s not about linking consumers to your
properties, but DRIVING shoppers down the
path to purchase
• Integrating your messaging to EARN
performance On-line and In-store
The New Marketing & Sales Funnel
MARKETING
SALES
MARKETING
SALES
THEN NOW
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Shopper Traffic: Amazon is a Top Media Platform
e-Commerce is a key strategic pillar of CPG Pillar Growth Strategy
Apple Inc.
Turner Digital
AOL, Inc.
Comcast NBCUniversal
CBS Interactive
Amazon Sites
Microsoft Sites
Yahoo Sites
Google Sites 246.2
209.0
205.7
188.7
184.1
167.7
167.4
160.0
151.9
144.2
MOST POPULAR MULTI-PLATFORM WEB PROPERTIES IN THE U.S. IN
NOVEMBER 2016, BASED ON # OF UNIQUE VISITORS (IN MILLIONS)
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
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Fundamentals of
e-Commerce Strategy
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e-Commerce Is an Important Pillar to a CPG Digital Strategy
Execute a Digital Strategy That Is Powered by eCommerce
CPG 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
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e-Commerce Is an Important Pillar to a CPG Digital Strategy
INTERNAL FOCUS & SUPPORT
Dedicated Team
Executive Advocacy
Effective “Startup” Growth Investment
Room to “Test & Learn”
Input Into Digital Brand Strategy
Full Cross-Functional Support
e-Commerce Custom Products
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e-Commerce Is an Important Pillar to a CPG Digital Strategy
OPTIMAL DISTRIBUTION
New Item Setup Process
Full Portfolio
e-Commerce-Optimized Pack Sizes
e-Commerce-Friendly Packaging
Unique Platform Opportunities
In-Stock Availability
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e-Commerce Is an Important Pillar to a CPG Digital Strategy
ENGAGING AND
RELEVANT CONTENT
Build Your Presence on eRetailers
Above & Below the Fold
Search-Optimized
Rich Imagery & Video
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Bringing the
Content Together
“Above the Fold” Content
Drives Conversion
Optimize Basic Content
1. Product title
2. Variations
3. Bullet descriptions
4. Creative assets (product
images/video)
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Bringing the
Content Together
“Below the Fold” Content
Drives Search
Results/Page Views
Optimize A+ Content
5. Product claims/features
and long description
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Bringing the
Content Together
Consumer Reviews
Retailer Reviews ProgramsBrand-owned Reviews ProgramsVideo ReviewsReview Aggregation
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e-Commerce Is an Important Pillar to a CPG Digital Strategy
DATA PARTNERSHIP
Measurement & Tracking
Path to Purchase
Digital Shelf
Shopper Insights
Channel Trends
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e-Commerce Is an Important Pillar to a CPG Digital Strategy
BRAND-OWNED MEDIA
Brand Site Where-to-Buy Buttons
All Media
Branded CRM Programs
On-Line Video Ads
Paid Search
Shorten the Path to Purchase
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E-RETAILER OWNED MEDIA
On-Site Paid Search
Off-Site Paid Search
On-Site Merchandising
On- & Off- Site eRetailer Display Ads
eRetailer CRM Programs
New Shopper Acquisition Programs
e-Commerce Is an Important Pillar to a CPG Digital Strategy
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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)
e-Commerce Is an Important Pillar to a CPG Digital Strategy
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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
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San Francisco Bay is Executing a Best In Class BUILD, DRIVE & EARN Strategy
SAN FRANCISCO BAY IS DRIVING
SHOPPERS TO THEIR BRANDS
eRetailer email campaigns
eRetailer paid search ads
eRetailer display ads
…AND NOW THEY ARE 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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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)
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Recap &
How We Can Helpe-Commerce Data Desert
More of a Data Scavenger Hunt
Data not consolidated in one place
Challenging to gain meaningful insights
Develop actionable strategies and plans to achieve growth
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For Almost 40 years, IRI has been delivering powerful market and shopper analysis
and foresight for the world’s leading CPG, retail and healthcare companies
$1B
Revenue
750+
Clients
Worldwide
3,500+ >$2T 95% >10T
Retailers Globally Tracked
Spend
Top CPGs
ServedRows of
Data Assets
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Global EdgeEcosystem Integration &
Alliances
Solution & Innovation
ExcellenceProven Value Creation &
Thought Leadership
Cutting-edge, comprehensive digital
shelf performance and analytics
Proven processes and deep industry
knowledge to ensure customer success
Thousands of retailers in 40+ markets for
hundreds of the world’s largest brands
Integrations and alliances to generate
more value from the eCommerce stack
Clavis Insight is the Global Hub of eCommerce Intelligence
The Global Hub of
eCommerce Intelligence
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Together We Offer Full Omni-Channel Coverage
250+ million annual transactions
Data from 500+ merchants
40+ global markets
Digital Shelf Data from
1,000’s of retailers
2+ million Total shoppers
100’s of millions
of listings monitored
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For More Information, Please reach out to us
Contact your IRI or Clavis Business partner to set-up a meeting to learn more.
Thank You