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The Future of FMCG:
The Great Disruption
Hamutal Schieber’sExport Institute
Presentation, Dec. 2015
First, a story:
The 1940’s: Car ownership 45% penetration; refrigerator sales in the US on the rise; Supermarket sales 10% of grocery sales
1954Supermarkets: 41% Car ownerships: over 50%1960’s milkman services penetration 30%
1975: The Supermarket EraMilkman disruption is completeCar ownership: 85%, Supermarket market share: 75%Milkmen: 6.9%
How Cars and Refrigerators Disrupted the Milkman
2005
Modern convenience = store format + product format0.4% milkmen service penetration rate (US)
The milkman disruption happened due to: lack of consumer choice, rising penetration of enabling technologies (cars, refrigerators) and as a result, a profound change in retail formats.
You cannot prevent disruption from happening. But you can leverage the next disruption to your benefit, By focusing on the consumer, and adding value through new models. Here’s how…
Where is the Disruption?
Internet Penetration on the Rise(Columino, 2015)
Mobile Penetration on the RiseEricsson 2015
Connected Devices on the RiseEricsson 2015
Wearables on the RiseIDC 2015
Stage 1: responding to consumer needs via products & services mix
Stage 2: innovation in physical retail; opening of online shops
Stage 3: from physical to digital to omni-channel; virtual technology; AR; VR; NFC and mobile payment
As a result, the retail environment has changed radically
Followed by omni-channel commerce
Consumers expect a seamless experience
Electronics (SF, USA)
Fashion, USA
Facial Recognition
Peapod
House of FraseriBeacons Mannequins
2012: more convenience through click & collect
2014
Mobile paymentApple Pay @ Best Buy
Be wherever the consumer is at (Diapers.com + Pampers)
Wanelo – Buy from Image
Shoppable Content
The Amazon “Treasure Truck”
Democratization
Designer furniture direct selling
New models: Rent it, Don’t buy it
New models: Rent it, Don’t buy it
Fresh Organic Food “for everyone”
2011
Activation
2015
Shoppability
Added value: reviews empowerment
Added value: convenience empowermentNespresso Multi-Channel
Added value: Adidas – get it before everyone else
MondelezFocuses on
online for X10 growth ($ 100 million to $ 1
Billion by 2020)…
For example: an immediate
implementation d
Shoes of Prey: online + point of sale shoe personalization
Online personalization: turning everyday goodsto something special
פרסונליזציה
הרפתקאות
Nestle Marktplatz: Bringing global brands to German shoppers
Boxes added value: excitement
Premiumization
Maille (Unilever): products which are only available online
Trust
Google Cardboard + Nescafe Coffee Farmers 360
Try your jewelry before buyingfourmine.com
Warby Parker Home Try-On
B&Q in-store 4-Dimension experience
Carphone Warehouse In-store personalization
Nielsen, Global, 2015
Subscriptions
Subscriptions
ATמקור Kearney 2014 והיופיהטיפוחקטגורייתנתוני
Boxes
Consumer added value: excitement, trialBrand added value: Data
Brand as coach
PlateJoy: manage your healthy lifestyle
Brand as coach
AsosOnline Stylists
Loyalty
Betty Crocker Kitchensfocus on elderly special needs
…To sum upלסיכום
Digital Age Innovation1. Enablers: the technology allows us to
accomplish much more than before2. Immediacy: insight to action3. Shoppability: make yourself available for
purchase where the consumers are4. Democratization: the consumer sets the
stage and calls the shots. Brand should consider platforms for participation
5. Flexibility: Adopt a start up mindset (or adopt a start up)
6. Consumer focus: providing an added value is still the key success factor
Opportunities
• Approaching micro-segments
• Collecting Data
• Introduce various commercial
offers (and test them)
• Build loyalty
• Offer exceptional service
Threats
• A crowded digital shelf• Logistics challenges • Technological challenges• Competing with the retailers –
your customers
Innovation is crucial
for growth!
innovation
Reaching new crowds
Consumer involvement
Brand building
Competitive advantage
Efficiency and cost
reduction
