Winning Ahead Online - RetailWatch · 2019-02-06 · • Omnichannel approach essential to...

© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 1

Pierluigi Carlini, Solutions & Innovations, IRI

February 2019

Winning Ahead OnlineE-Commerce in FMCG

IRI Point of View


Agenda

1

2

3

Executive Summary

Context

IRI E-Commerce Spotlight

Targeting European Shoppers

4 How to Win


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’


Context


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


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


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


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


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

http://www.afr.com/business/retail


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

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwiw_sv2rJjfAhV1u3EKHeIWDOYQjRx6BAgBEAU&url=http://www.carrefour.com/current-news/carrefour-speeds-up-roll-out-of-its-food-e-commerce-stores-in-paris-while-opening-its&psig=AOvVaw0kJFZyezvkbB_fnNrVvcxZ&ust=1544637405494888

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwi1uf_1sJjfAhUiSxUIHeWNDdgQjRx6BAgBEAU&url=http://www.lineaires.com/LA-DISTRIBUTION/Les-actus/Monoprix-aide-Amazon-a-combler-son-retard-sur-le-frais-52239&psig=AOvVaw2lLlfTnqcJ7YEeKu-FhV7-&ust=1544638477414082

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwiG5OyFipjfAhV-SRUIHegECZ4QjRx6BAgBEAU&url=https://ecommercenews.eu/albert-heijn-is-testing-smart-door-lock/&psig=AOvVaw1N0tX5EBgRbV-bJpM3-GxZ&ust=1544628033932264


Europe In-Market Overview

IRI E-Commerce Spotlight


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%


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…)


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%


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


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


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


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


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.


IRI Point of View

Targeting European Shoppers


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


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



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


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



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%



How to Win


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.


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


IRI is providing the most comprehensive coverage of e-commerce in your key markets

UK projected availability for H2 2019

THANKYOU!


For More Information, Contact Us…

IRI

1 Arlington Square, Downshire Way, Bracknell, Berkshire, RG12 1WA

[email protected]

+44 (0) 1344 746000

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Winning Ahead Online - RetailWatch · 2019-02-06 · • Omnichannel approach essential to...

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Transcript of Winning Ahead Online - RetailWatch · 2019-02-06 · • Omnichannel approach essential to...