Developing strategies for eCommerce success
While Ireland’s FMCG eCommerce market is not yet in full swing, it is clearly a sector with enormous potential. Here, John Neilson, marketing director, Global Products & FMCG Thought Leadership at Clavis Insight, outlines the factors retailers need to get right to secure online sales
22 January 2016 | 0
As Irish supermarkets look to invest in a more engaging online shopping experience, grocery sales in this ‘virtual channel’ could be set to match the growth rates seen in the UK in recent years.
If so, what should FMCG brands be thinking about to ensure their products and brands stand out and catch the eyes of the online shopper?
The Irish grocery market is finally starting to pull out of the doldrums. The latest supermarket share figures from Kantar reveal a 2.5% year-on-year growth in sales to December – signalling the best performance the market has seen in over five years.
At the same time the entire retail landscape is undergoing unprecedented change driven by technology, shifting demographics and new buyer behaviours. eCommerce has already completely altered how categories such as books, electronics and fashion are bought and sold. Until recently, however, with the exception of a few markets, the FMCG sector had been left relatively unscathed by the internet juggernaut.
This situation can’t last for long. According to a recent report from Kantar Worldpanel (‘Accelerating the growth of e-commerce: 2015 Edition’), online’s share of FMCG purchasing in advanced eCommerce markets is set to double in the next 10 years. The agency expects online to represent 30% of all FMCG sales in South Korea by 2025, 15% in China and over 10% in the UK and France, in the same timeframe.
Currently, with just two major supermarkets offering the ability to shop online – Tesco and SuperValu – Ireland could hardly be termed an advanced FMCG eCommerce market. In fact, eCommerce still only represents a relatively small proportion of overall grocery sales, but the prospect of Dunnes also entering the fray this year (and maybe even discounters such as Aldi and Lidl further down the road) could spark further growth and see online grocery sales in Ireland start to mirror those of more established European or Asian markets.
What do FMCG brands need to do to win online
The growth in online shopping represents both a massive opportunity and threat for brands. Today most suppliers are resourced to deal with the traditional supermarket and convenience channels, but online is different and requires different skills to succeed.
With no aisles, physical shelves or planograms, dynamic pricing that can change hourly or more, shopper-to-shopper ratings and reviews, and the opportunity to bring content that goes well beyond the physical package, the online store is a very different beast. Particularly when viewed through the lens of how consumers navigate the shopper journey online and via mobile devices, it becomes ever more apparent that the virtual store necessitates a new approach.
Even with the expected growth in online sales of groceries and consumer goods, it can be a challenge to get consumers all the way through the path to purchase in the online supermarkets where your products are sold. At every step from demand creation, through research and evaluation to conversion, there is potential for something to go wrong that stops the consumer from adding your product to their basket.
In the bricks and mortar world, your sales teams invest a lot of time and effort into managing shelf-presentment with top retailers and the visibility of your products in leading stores. Similar effort needs to be invested by brand owners when it comes to managing product listings and product information across online and mobile channels.
Where do you start?
To achieve success in a changing marketplace, where online retail stores account for an ever growing proportion of revenue, brand owners and manufacturers need to ensure that:
- You have the right range of products available in the online channel.
- Consumers can easily find your products in virtual stores using a key word search or menus.
- And the information about your products is accurate, complete and properly presented on the supermarket website.
As websites increasingly become the shop window, and shop floor, for a growing band of digital shoppers, search results, landing page content, online availability and ratings and reviews are the vital statistics that generate consumer engagement and sales. Consumers first need to be able to find your products using a keyword search, be engaged by the content on the landing page or perhaps a good review, and be assured of availability when they click to buy.
The brands that succeed online will be those that manage to adapt the techniques and disciplines that have enabled to them to dominate the bricks and mortar world. Off-line sales, marketing and category management leaders in top brands pay close attention to physical store audit results, mystery shopping data, and other analytics to help them plan distribution strategies, execute in-store promotions and collaborate with retailers.
To succeed online, brands need new strategies for the eCommerce channel. Online is all about ensuring your products are in stock in the online store, consumers can easily find them and when they do, are persuaded to buy in sufficient numbers to create demand from the retailer.
Clavis Insight is an industry leader for online store analytics delivering actionable data, analysis and insights to enable consumer goods brands to track and optimise their online channel presence and performance.
The eCommerce intelligence platform analyses everything consumers see in online retailer stores to quickly identify the actions brand owners and manufacturers need to take to drive profitable eCommerce growth, protect their brands and beat the competition online. For more information, visit www.clavisinsight.com.