Winning Ahead Online - RetailWatch · 2019-02-06 · • Omnichannel approach essential to...
Transcript of Winning Ahead Online - RetailWatch · 2019-02-06 · • Omnichannel approach essential to...
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Pierluigi Carlini, Solutions & Innovations, IRI
February 2019
Winning Ahead OnlineE-Commerce in FMCG
IRI Point of View
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Agenda
1
2
3
Executive Summary
Context
IRI E-Commerce Spotlight
Targeting European Shoppers
4 How to Win
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E-Commerce: Executive Summary
1 High channel growth continues 2 IRI e-commerce market view 3 Future growth opportunities
• A massive opportunity - Though supermarkets
still dominate, European e-commerce food and
personal care sales are forecast to jump +54% in
the next five years.
• Consumers research here - 61% of European
millennial shoppers do so before purchase.
‘Virtual availability’ needs to be optimised to
avoid losing.
• Omnichannel approach essential to delivering a
seamless brand experience and reducing risk of
fading brand equity.
• Amazon is a huge driving force and influencer,
Google an emerging competitor with scale. Both
have intentions to make their mark in FMCG,
with focus on private label expansion.
• FMCG is booming online - Double digit growth
in Italy (+42%) and Spain (+29% yoy) with
dynamic performances in France and Germany.
• Private label and organic ranges over index
online and outperform in a dynamic ‘Drive’ (click
and collect) channel in France.
• Personal, beauty care and alcohol products
are more dynamic in Italy and Spain while larger
pack sizes favoured versus traditional brick and
mortar stores.
• A level playing field - Big brands are not
guaranteed instant success, speed to channel
and small player agility resets the history books.
• Time saving, flexibility and assortment - Key
enablers for well over 1/3 of European shoppers.
Millennials are the most prolific online shoppers
now and in the future.
• Shortened path to purchase - The consumer
journey will become near effortless and seamless
across multiple ordering platforms.
• Personalisation - Tailored offers in the quest to
drive differentiation, trade-up, loyalty and repeat
purchase.
• Nurture loyalty - European millennials prefer big
brands and shopping online, particularly for
personal & beauty care.
• Amazon - Not just an industry competitor, a key
platform from which to list and exhibit and
partner.
• E-commerce with IRI - The most
comprehensive in-market coverage across
leading European markets.
• CLICK HERE for ‘IRI Future Outlook: 8 key
trends on e-commerce’
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Context
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Supermarkets are still the main destination for groceries in Europe. Online by comparison accounts for an average of 8% of IRI European shopper purchases
% of shoppers who buy products for grocery shopping in these channels – Total Europe
29%
75%
21% 20%
7% 9%3%
10% 8% 10% 5%9% 7%
21% 25%20%
3% 6% 4%
Net: 8%
Note: All channels are not implemented in every country. Channels for personal and home care, make-up/personal care products, perfume shops, sellers of personal care products have
been considered only for personal care macro category. Frozen food stores have been considered for frozen food and beverages macro categories only. Kiosk has been considered for
beverages macro category only.
Q.1 Where do you currently buy products for your grocery shopping?
Source: IRI European Shopper Survey 2018. Respondent’s basis: total sample
Specialised channel
Generalist channels
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E-commerce in Europe is projected to grow strongly across the major industries, none more so than in food and personal care
Online contribution to global food sales also expected to rise over the same five year period
to 2022 from 2.7% to 3.7%
E-commerce sales split by key industry: Sales forecast to 2022 and growth (2018-2022)
+27% +44% +54%+37% +22%
$152bn $64bn$106bn $70bn$90bn
FashionFood and
Personal Care
Electronics
and Media
Furniture and
Appliances
DIY, Toys and
Hobbies
Source: Statista Digital Market Total Europe Outlook 2018
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The traditional grocery landscape is broadening… and is ripe for further disruption online
Rapidly evolving FMCG product
ranges with a firm focus on private
label evolution
New partnerships, new
distribution opportunities
continue to emerge
Specialised players bring
focus, expertise and unrivalled
discounts
Global online non-FMCG
giants with potential to make
further incursion
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Amazon is a powerhouse in the e-commerce space and key catalyst behind FMCG growth in the US retail market – driving 49% of country online retail sales
Source: IRI eMarket Insights and Market Advantage, 2018 Building Calendar Year w/e 8/12/18
Sales are the sum of 150 tracked categories
Up to 7XGreater Share vs.
Next “e” Tailer
+57%Total Amazon
Growth vs. YAGO
+193MMUnique Shoppers
Per Month
+100MMAmazon
Members
+3%Total CPG
Omnichannel Sales
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Traditional FMCG channels in Australia are feeling the impact of Amazon’s scale and trading power
Prices are up to 50% cheaper on Amazon’s site for the equivalent product in leading local grocery
stores
Source: www.afr.com/business/retail November 2018
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Traditional grocers continue to evolve online offerings with convenience, speed and ubiquity at the heart of their development
Carrefour evolve click and collect service and
offer pedestrian pick-ups in Paris
Monoprix are one of Europe’s latest grocers to
join forces with Amazon and list thousands of
their private label products via prime
subscription
Albert Heijn and Edeka are pioneering smart
lock technology in conjunction with online
home delivery, allowing shoppers to accept
deliveries to their fridge while out of home
Sainsbury’s roll out same day delivery and
one hour delivery slots in London
Morrisons launch online meal subscription
service to cater for the growing convenient
home cooking trend
Source: Retailer websites November and December 2018, IGD retailer profiles December 2018
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Europe In-Market Overview
IRI E-Commerce Spotlight
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FMCG brick and mortar sales in France are flat overall…
the most compelling volume growth opportunities are evident within a dynamic click and collect
channel
Source: IRI France hypermarkets, supermarkets, discounters, convenience and e-commerce, P8 2018
Year to date P8 2018 MAT to P8 2018
HYPER -1.5% -1.3%
SUPER 0% +0.1%
DISCOUNTERS -5.5% -4.4%
CONVENIENCE +3.2% +3.8%
E-COMMERCE +5.9% +6.6%
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Click and collect channel in France: private label, organic and weekday shops flourish
Organic sales are more prominent in
this channel
6.6%Value share of total organic products in click and collect
…and more dynamic: +32% yoy
With exception to discounters, private
label is strongest here
36.7%Value share total FMCG private label in click and collect
…and more dynamic : +5.6% yoy
A very specific type of profile of
consumer
30%Revenue weight of categories that are ‘sensitive’ to the
click and collect channel versus 18% in hypermarkets
Weekdays carry greater weight for
click and collect spend versus
weekends instore
58.1% (Click and Collect)
54.5% (Stores)
% of spend Mondays to Thursdays versus
total weekend
Click and collect seasonality:
Reduced spend in summer and
Christmas period
Peaks
January-March-September
Downturns
July-August-December
Total FMCG, MAT P8
Categories "Drive permeable" (32) = categories for which ‘Drive’ weighs more than 18% of the HM + Drive package (baby foods, diapers, infant formula, processed meats, frozen ready
meals, compotes, water, cereals, ham, tissues…)
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FMCG online channel sales in Italy reached € 425m in 2018 with nearly 40% growth YoY
30,832,5
40,4
30,232,7
38,1
29,1
20,4
42,5
36,4
41,2
50,8
0,0
10,0
20,0
30,0
40,0
50,0
60,0
Source: IRI Italy online channel FMCG value sales January December 2018. Includes Generalist Mass Market and Pure Online Players. Excludes Vertical Beauty Players.
€425M
+39%
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Health and beauty, pet and household categoriesover index in Italian online FMCG
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
0,0 0,5 1,0 1,5
Index v
s.
Quote
e-c
om
merc
e S
hare
Category Size(€ Billions)
Household
Health / Beauty
Drinks
Food
Petfood
Source: IRI Italy e-commerce , YTD September 2018
Indice > 150%
Perfumery
Pet care other animals
Early childhood
Health dietetic products
Cosmetics
Pharmaceutical
Mixed gift boxes
Pet care dog
Body cream
Face cream
Ethnic specialties
Prepared hot drinks
Childhood foods
Dishwash detergents
Fresh drinks
Shaving and depilation
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Range management is key and can unlock higher value opportunities; over a third of spend online is placed against higher weight products
Online turnover €296m
Source IRI Italy: YTD September 2018 - Index average format online versus brick & mortar
36%
60%
4%
Larger formats
Equal formats
Smaller sizes
Ground coffee capsules
Diapers open
Still water 101-150 Cl
Italian red wine
Infant milk formula
Gummy candies
Sliced cooked ham
Tuna in oil can
Extra virgin olive oil
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Multi-category, double digit growth outperformance versus brick & mortar is visible across Spain’s e-commerce market, particularly in alcohol, personal and beauty care
Total Categories
DRY FOODHYGIENE WINE SPARKLINGSPIRITUAL
BEVERAGESPERFUMERY FISHEGG FROZEN FOOD
+30.8%+51.9% +36.8% +31.2%+55.1% +36.8% +28.7% +24.6%+39.9%
BEER SOFT DRINKSDISPOSABLECOOKED AND
PRE-COOKED
DISHES
DAIRY
PRODUCTSCHARCUTERIE JUICES
+12.2%+21.3% +19.2% +16.8%+21.4% +19.3% +13.7% +9.4%
WATER
+28.9%E-commerce panel includes
340 CATEGORIES
FOOD CANS
+15.2%
-2.0% 0.0% -0.2% +6.1% +1.1% +4.1% +10.9% +15.1%
CHEESES
+25.5%
+6.1%
+26.8%
HOMECARE
+1.4% +4.5%
+7.4% +5.0%
LAUNDRY
CARE
+21.8%
+1.7% +9.1% +2.5% -3.7%
MILK AND
SHAKES
+15.1%
+0.1%+5.5% -4.2% +2.1% +4.4%
+3.1%
Source: IRI Spain e-commerce panel, MAT November 2018 versus MAT YA, value sales
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Hand Dishwash
+68% Fabric Finisher
+115%
Hair Colourants
+64%
Hard Surface Cleaners
+96% Hair-Styling
+85% WC Care
+121%
Shampoo
+74%
Heavy Duty Detergents
+153%
Online growth for selected home and beauty categories in double digits and beyond
Source: IRI Germany e-commerce panel, category selection. Value 1.000 € development, MAT Sept. 2018 versus year 2016
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Share of market growth: online versus offline in, for example, shampoo
5.3%
94.7%
20.4%
79.6%
Traditionally dominant grocery brands are not guaranteed to automatically replicate their success and stature online
84.3%
73.8%
-1.8%
7.7%
Manufacturer A
Rest of Market
Sales value growth in %,
MAT 2018 versus 2016
Share of market, value 1,000€ in %
Offline Online
Source: IRI Infoscan: total market incl. Aldi/Lidl/Norma, drug markets, perfumery, department stores, MAT Sept. 2018 versus year 2016.
IRI Infoscan: e-commerce panel; shampoo, MAT Sept. 2018 versus year 2016.
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IRI Point of View
Targeting European Shoppers
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Millennials buy more regularly and spend more online than older shoppers
Average number of in-store shopping trips versus Internet purchase (out of 10) – Total Europe
Spending for in-store shopping versus online grocery shopping – Total EuropeQ.23 On average, for your grocery shopping to buy all products for your family, do you spend more in stores (brick & mortar) or online?
All Millennials: 7.3
> 35 y.o.: 8.2
All Millennials: 2.7
> 35 y.o.: 1.8
18-24 y.o.: 17%
> 35 y.o.: 8%
18-24 y.o.: 74%
> 35 y.o.: 85%
Q.22 Think about your last 10 purchases of grocery shopping. How many of them took place on the Internet and how many in stores?
Source: IRI European Shopper Survey 2018 - Respondent base: total sample
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Over half of European millennial shoppers start their product and store search online, irrespective of purchase location
The consumer brand journey increasingly starts here
of Young Millennials go online to
find information on products and
stores (versus 43% of older
people)
of Young Millennials use social blogs
and online forums as a source of
information (versus 15% of older
people)
Q.17 Which are the ways you use to get
information about stores and products?
Q.17 And precisely on Internet? Q.19 Which device do you mainly use to get
information on the Internet about products
and stores?
of all Millennials use smartphones to
research product and store
information
Source: IRI European Shopper Survey 2018 - Respondent base: total sample
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Future target audience split by demographic is reflected in the US
Likelihood of buying grocery products online in the next year:
% of consumers very likely or somewhat likely
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Time saving, flexibility and product assortment the most important drivers for Millennials and older age groups to shop online
Key benefits of online versus brick & mortar grocery shopping - Total Europe
Q.21 Which points of difference for grocery shopping online are more relevant to you compared to grocery shopping in stores (brick & mortar)?
Time saving Freedom to buy (time/place) Wider assortment of products
Source: IRI European Shopper Survey 2018 - Respondent base: total sample
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Millennials are more inclined to buy packaged food online, shoppers of all ages more likely to buy personal and beauty care products in this channel
Focus on Internet as purchase destination by macro category – Total Europe.
Split by age group
18-34 y.o.
25-34 y.o.
>35 y.o.
13%
15%
9%
8%
8%
4%
7%
8%
6%
6%
8%
3%
13%
14%
13%
Q.1 Where do you currently buy each products for your grocery shopping?
8%
Source: IRI European Shopper Survey 2018 - Respondent base: total sample
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How to Win
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Future outlook, eight key trends: E-commerce growth is set to continue at a fast pace Convenience, personalisation, seamless ordering and delivery services will prove influential
You may also like…
*Source: Ecommercenews.com Dec 2018
Big data management facilitates
detailed understanding of individual
shopper journeys and buying habits,
leading to personalised
recommendations and design
studios, greater convenience and
loyalty.
Amazon’s one-click ordering patent
expired in 2017. The quest for online
retailers to alleviate shopping cart
abandonment will see players FMCG
and non-FMCG focus on a shorter
path to purchase.
Targeted, instantly redeemable
rewards strengthening the retailer
quest to drive loyalty and win share of
wallet.
Versatility, speed and convenience.
Ability to pivot between click and
collect and home delivery in less time
is high on retailers’ agendas.
Geo-marketing pulls in on-the-go
consumers or encourages impulse
online spend for those in transit.
Promotions to prompt instore footfall
or impulse spend online.
*Over half of UK shoppers prefer
using retailer smartphone apps
ahead of their actual website.
Voice ordering via smart home
devices brings convenience for
shoppers. Integration of new platforms
will be essential to ensure seamless,
omnichannel experience.
Direct to consumer (D2C) delivery
has ushered fast growing FMCG
brands (Graze, Dollar Shave Club).
Start-ups and larger players can in-
part remove retailers in a bid to drive
loyalty, personalised offers and
repeat purchase.
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Why IRI?
IRI E-Commerce is the only solution, based on census EPOS data of
participating retailers, that provides the most accurate read of online
shopping for grocery, including pure players like Amazon.
Combined with the brick and mortar market
read, IRI provides FMCG manufacturers
and marketers the most comprehensive
and granular omnichannel data view
and measurement to uncover actionable
insights that drive growth online and in-store.
*Source: Ecommercenews.com Dec 2018
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IRI is providing the most comprehensive coverage of e-commerce in your key markets
UK projected availability for H2 2019
THANKYOU!
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