Leverage a “Build, Drive, Earn Strategy to Win Across Channelsgo.clavisinsight.com/rs/573-RCS-461/images/Future... · Head of Marketing and Product Strategy, Clavis Insight Sam

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


Today’s Conversation

Introduction

The Potential of e-Commerce

Fundamentals of e-Commerce Strategy


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).


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.


The Potential of

e-Commerce


e-Commerce In the News


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


e-Commerce is a

key driver of sales

growth


Investment, NOT trends will drive this growth

INVESTMENT TO COMPETE

Consumer Trends

Technology Advancements

Retailer Infrastructure


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


Amazon Arsenal

Amazon Web

Services

+$13B


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


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


$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


Competitor like no other

with cash like no other


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.


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)


eCommerce Business Builds Differently Than Brick & Mortar

Consumption Model vs. Ship-in Model

Source: IRI Analysis


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


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

Facebook

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


Fundamentals of

e-Commerce Strategy


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



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



OPTIMAL DISTRIBUTION

New Item Setup Process

Full Portfolio

e-Commerce-Optimized Pack Sizes

e-Commerce-Friendly Packaging

Unique Platform Opportunities

In-Stock Availability



ENGAGING AND

RELEVANT CONTENT

Build Your Presence on eRetailers

Above & Below the Fold

Search-Optimized

Rich Imagery & Video


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)


Bringing the

Content Together

“Below the Fold” Content

Drives Search

Results/Page Views

Optimize A+ Content

5. Product claims/features

and long description


Bringing the

Content Together

Consumer Reviews

Retailer Reviews ProgramsBrand-owned Reviews ProgramsVideo ReviewsReview Aggregation



DATA PARTNERSHIP

Measurement & Tracking

Path to Purchase

Digital Shelf

Shopper Insights

Channel Trends



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


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



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

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


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


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)


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


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


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


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


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

Documents

Leverage a “Build, Drive, Earn Strategy to Win Across Channelsgo.clavisinsight.com/rs/573-RCS-461/images/Future... · Head of Marketing and Product Strategy, Clavis Insight Sam