In 2017 retailers willl face as usual numerous consumer behaviours changes and will need more than ever to focus on new disruptive trends to maintain their position. Herunder is a selection of 5 retailing priorities for 2017 :
1 – Pursuit of the omnichannel quest:
The global retailing landscape is evolving quickly with the rise of omnichannel retailing. Omnichannel retailing is a customer-centric approach to retailing through which retailers provide seamless shopping experiences across all of their physical and digital channels. Shoppers increasingly value convenience when shopping and omnichannel capabilities allow them to seamlessly switch from one channel to another. By the end of 2016, the vast majority of retailers were struggling to be omnichannel. The most common challenges that retailers face include tracking sales, inventory planning. However, retailers will continue their quest to achieve omnichannel proficiency in 2017.
2 – Adapting to the evolution of convenience:
The ways in which retailers are delivering convenience is evolving as demand for convenient retail offerings continue. Drivers of convenience include global urbanization, growth of smaller households, ageing population, and hyperconnectivity.. Retailers from various channels in retailing are adapting to the demands of the modern and digital world to offer convenience, leading to channel blurring as well as advances in various online commerce options. Meanwhile, existing convenience stores around the world are responding by modernising and evolving to become more than a place to buy a quick snack and beverage and aiming to become a key part of the daily activities of shoppers. Retailers will continue to innovate to offer added convenience to shoppers’ daily lives.
3 – Target the conversational commerce:
Chatbots and voice-activated assistants that are designed to work with existing digital devices to perform tasks are on the rise. Although their impact on retailing landscape is still in its nascent stage, they are likely to create new opportunities for retailers in the near future. 2016 was the year of chatbots. Facebook launched chatbots for Messenger and Apple’s iOS 10 gave iMessage an app store in which developers can add chatbots. Google launched its new messaging service, called Allo. Allo uses artificial intelligence, like the chatbots, to respond to a user’s questions. Amazon sold a record-setting number of its Echo devices in 2016, and others such as Google and Lenovo are introducing their own voice-activated assistants.
4 – Continue the efforts on Marketplaces:
Marketplaces continues to experience growth globally, playing a major role in the future of both small and large businesses online. Online retailers that host third party merchants are the leaders of internet retailing and are continuing to gain share. Third party marketplaces enable all types of retailers and tech companies to take advantage of the growing e-commerce through existing infrastructure that is already trusted by shoppers. Despite challenges that marketplaces face like the fight against counterfeit goods and overall quality control, they are expected to continue becoming a larger portion of all online sales.
5 – Focus on Mobile commerce:
In 2016, mobile commerce accounted for US$514 million in sales (approximately 44% of online retailing). The figure is expected to nearly double by 2021 to US$1.1 billion in sales (approximately 56% of online retailing). In addition to retailers making many of their promotions online and on mobile, and making some of these promotions only available through mobile apps, there are larger factors at play driving mobile sales. Smart phones and tablets’ penetration rates continue to rise, smartphones are becoming bigger and easier to use, and retailers and technology companies are investing to improve the mobile shopping experience, such as launching in-app payments. Additionally, with smartphones being the sole way of access to the internet for many households, especially in low income households, mobile commerce is positioned to see continued growth in 2017 and beyond.
To discover more about the 2017 consumer goods trends in general follow the link
Announced on January 20, 2017, the Virtual Dash Button will allow Prime customers to order products directly via their smartphone or from the Amazon site.
Amazon will further simplify access to brands by launching Virtual Dash Button that will allow, via the website or application, to directly order the products with one click only. Concretely, the interface will propose shortcuts (free) that will be added one another. Customers will have 30 minutes to cancel their order. Launched in March 2015, the Virtual Dash buttons are a real success for the American e-commerce giant.
On the most popular products marketed by the platform, they represent more than half of orders made, according to Amazon
VR Buttons yes, but to do what?
First concern: which buttons to choose? If some seem obvious, like the buttons “Pampers”, “Whiskas”, or “Bounty” for example, others are less clear. Who really use the “Doritos” button? Going along with Clorox, Energizer, Gain, Honest Kids, L’Oreal Paris Revitalift, Lysol, Peet’s Coffee, Playtex, Seventh Generation, Slim Jim, Snuggle, Vitamin Water, Zico Pure Coconut Water, not everyone in a household shares the same domestic needs: You may have run out of Doritos, while your kids want the new famous Springles innovation. Users have complete control over the buttons, and can sort (most-needed to least-used), label (“Bran’s favorite”), and delete them whenever they want. As with the physical buttons, customers receive a notification with every order, and can cancel within 30 minutes if they make a mistake.
Tiny Products assortment behind some Amazon Dash buttons
The “Bounty” button allows me to choose a Paper Towels Roll, sold in packs of eight, but could also allow me to order paper Napkins. There is some choice, but the range remain tiny and not deep enough. We are very far from the diversity of choice of products available in supermarkets! While target is offering 27 bounty products on its website, I do not see why Amazon, which offers 100 times more references than a supermarket, does not offer the whole range of products of a brand, to be able to associate them with its buttons.
Amazon Dash Button: the beginning of the future
In conclusion: Amazon Dash Button is a connected object that really has chances to be part of our daily, tomorrow. But the lack of references available behind each button disappoints, even though the products are available on Amazon. Despite this, Amazon is serious about its Dash Buttons, and said customers are on board. Last fall, the program expanded in Austria, Germany, and the UK where customer can choose from more than 200 physical Dash Buttons, priced at $4.99 each. With the innovation presented in this article, whenever you register a Dash Button device, Amazon will automatically add a virtual button for the same product.
Burberry; a disruptive brand to reinvent the rules of digital marketing
For more than ten years now, Burberry has reinvented their brand by placing a huge emphasis on the digital aspects of their marketing campaign.
Today, not only is Burberry positioned as the most powerful digital contender of luxury retail brands, but also worldwide. The strategy employed by Burberry is to create a “walk-in-web” mid-way between stores, event spaces and digital sales channels in order to cultivate a uniquely bespoke customer experience. In this way the customer proximity is reinforced. According to the annual report of 2015 / 2016, this strategy has been paying off; the brand witnessed a growth of1-2%, from 7 % just two years ago. Also, the company saw adjusted profit before tax down by 376 million in 2012 to 421 million in 2016.
“This year, the brand took first place in the fashion world’s Digital IQ Index”
Generation Millennials: primary digital target for Luxury and Grocery retailers
As Christopher Bailey, Chief Creative and Chief Executive Officer of Burberry, explains to us; the strategy “togo fully digital”was essentially motivated with the emergence of “the millennial generation” and sourcing new tactics to attract them.
Step by step, Burberry learnt how to speak the language of “Generation Y”, thanks to better appreciation of their interests and attitudes. [‘Millennials’ are a digital native generation with its own behavior in terms of social media usage, gaming and life priorities, using platforms and e-commerce websites]
As a consequence, it lays emphasis on certain keys aspects like product interactions, connection proximity with the customers, innovative social media tactics as well as also bold photography in order to reach the millennial generation.
On the other hand,Nielsen and Forbes reports announced the fact that the millennials are the retail grocery sectors’ most sought after audience, with $200 billion in annual purchasing power. They are currently considered as the most important grocery shopping demographics.
At the moment, grocery retailers are satisfactory with digital marketing strategies, but it could be argued that they are lagging behind luxe fashion retailers.
Digital marketing: support for grocery retailers in order to get up close and personal with customers
Recently, some grocery stores are beginning to understand the value of online life. The objective isn’t to acquire, but rather to earn the respect and loyalty of these new consumers, who are the millennials.
To mention just a few examples, “Lawson”, in Japan, created a humanized communication on its website by inventing a virtual sales promotional character. “Whole Foods”, in the United States, focuses on having conversation with their consumer via twitter; 85 %their tweets are intended as responses to consumer queries.
The most striking example is arguably “Tesco” with the new concept of “frictionless grocery shopping”, which is called “If This, then That”. Technically-minded, the UK supermarket giant allows customers to arrange automatic grocery orders via Tesco.com. [IFTTT conditioning system connects all separate platforms whereby an action on one can automatically influence a reaction on the other].
This enables Tesco to respond better to the needs of its customers by greater proximity.
In this way, a person’s digital footprint can be used to successfully devise a digital marketing strategy. The online presence, personal approach and recipe websites are the most useful factors in achieving this. Besides, it is predicted that the grocery sector is likely to increase it’s advertising spend from over £720m in 2014 to over £900m in 2020. That is why the aim to develop an efficient digital marketing strategy is becoming more and more essential for grocery retailers.
Nevertheless, if they want to close the gap with luxury retailers; grocery retailers must be guided by the most successful brand in the field, such as Burberry.
7 of Burberry’s best digital practices which might be applicable to the grocery retail industry
It is important to ensure continuity between the products offered in grocery stores and those that are available online.
That is why grocery retailers have to pay special attention to post regular photos and videos about the news products or innovations, cross-shared between Twitter, Facebook, Instagram and Pinterest. But also present a great interactive experience, allowing for the customizations of some products offered by the retailer.
Congruence between [Online and Floor]
Online-customer experience has to mirror the experience of being in-store.
In order to achieve this goal, a permanent connection with customers must be created.
One way to do this is the storytelling approach – to present the grocery store environment and products, showcase a romanticized feed of scenic moments with a playful yet elegant tone.
Another idea is to create a “Trench Campaign”. Thanks to a micro-site, existing customers can post their snaps buying their own favorite product. Users could comment, ‘like’ the content and share the snaps on Facebook, Twitter or Instagram. The advantage of this idea is that it makes the customers feel special, as if they are starring in their own personal ad campaigns rather than being mere spectators. Like a blogger, consumers can have the leadership to make discoveries for others customers and showcase personal preferences of products, sharing links to recipes or activities they like. Effectively, the chore of shopping can be transformed into an exciting task. Furthermore, the “Trench Campaign” can enhance the value of grocery retailers, the brands they sell and customer loyalty.
Innovative inventory management sharing across [In store and Online]
Why not go for an automized valuable inventory experience through which customers can order online and pickup in store or order in-store and have their items delivered to their home. This solution seems more convenient than just a simple pick-up grocery. Inventory sharing also resulted in significant decreased delivery times to customers.
Create a strong [CRM omni-channel]
It is crucial to use CRM data to analyse shifts in customer behavior. Catch-up a maximum of people on its CRM database and set-up a program of capturing new data for new customers in order to maximize the success rate of capturing a customer’s data once they enter a store.
Have it owns digital team [ Not outsourcing]
That’s why is necessary to create a strong team who influence the digital marketing way.
Surfing on the wave of [3D experience]
That gives more flexibilities and means to showcase their products on digital without sacrifing image quality.
The focal point to remember that Burberry did the success of its digital marketing will be to : “Not be afraid to usurp well-established traditions and assumptions when it’s the right thing to do for the customer.”
Statista reports that by 2017 over a third of the global population will own a smartphone. This is a huge increase compared to 2011 where only 10% had one. By 2019 half of the population will buy online. People are becoming more and more connected between each other by the use of social networks, sharing platforms and e-commerce websites.
In a world where people can influence each other opinion by a tweet, earning customer loyalty is becoming more difficult and complicated. Retailers and FMCG companies need to become aware of this reality. They must engage online consumers in specific actions, finding the delicate equilibrium of building brands across channels.
The market shows how a clear and decisive online marketing strategy is able to positively influence sales performances, loyalty and increase brand equity. Techingrocery has taken into analysis the online strategy of the Top 5 FMCG brands as ranked by Interbrand. By implementing this best practices into actions every FMCG brand will be able to strengthen their brand equity in the consumers minds.
Gillette brand value is estimated by Interbrand 22 billion dollars. This value is driven also by a very strong online presence. Below are summarised the key learnings from their FB page:
Rate and reviews of all Gillette products made by consumers
Possibility to become an official brand fan
24/7 customer support
Free code coupons
Pampers Twitter page key learnings:
Free discount coupons offers
Users sharing rewarded with brand charity
Kellogs FB page key learnings:
Creation of suspense and anticipation on product launches
Users engagement with games and quizzes
Effective use of the mascot brand
L’Oreal Twitter key learnings:
Free advice to consumers on which product use for specific occasions
Show of positive interest on users blogs/feedbacks
Share of useful knowledge about the brand
Danone FB key learnings:
Creation of fun consumer surveys
Promotion of brand as healthy thorough powerful images
Food delivery is a high growing worldwide market. Due to the fact that a food delivery company needs to have both a strong local network and a local trust is very complicated the globalisation process. For this reason, lots of local players are able to enter it quite easily. Today this market is overcrowded. New entrants focus both on new service offers, such as Freshly, or on an outstanding brand recognition, such as Prime Now, to gain quickly a significant market share.
A delivery leader
The big challenge of this business is the delivery itself. It is costly, complicated and with a lot of time pressure. UBER, notable online transportation company famous for the disruption in taxi business, has decided to enter it. By using its high efficient and organised taxi fleet promises to deliver food as fast as 10 minutes.
The big advantage Uber Eats has is its already well established worldwide car network. The service operates in 34 cities including London, Las Vegas, New York, Tokyo, Paris, Singapore, Sydney. It operates from 11 AM to 11 PM and mainly in city centre areas. In his offer, it includes menus of more than 100 well known local restaurants.
How it works
A consumer has to download UBER Eats app. Choose the preferred meal and indicates a delivery address. The app will give both an expected time delivery and the service’s price. With an indicated average of 35 minutes by delivery, the meal will be shipped directly outside the consumer’s door. During the shipment will be possible to check in real time where the courier is and an up-to-date delivery time. Moreover, to increase the service usage among consumers UBER Eats has started an interesting strategy of code sharing between users. By sharing and using the code special discount credits are earned.
This new platform has a huge advantage against major delivery competitors: thanks to cheap prices, quick delivery and high brand equity. Major challenges it faces now is first to increase its restaurant partners offer. Second to be able to integrate effectively this new service with its main transportation business. Thirdly to gain credibility as a food delivery company among users.
Still a white space to be covered by many [/mks_pullquote]
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The biggest fast Consumer Goods companies focus on design, manufacturing and marketing of new products. Traditional retailers is the main selling channel. However, due to increasing competition, decreasing prices and stronger position of local private labels digital is now being explored. This is the only B2C channel that FMCG companies can enter successfully. Indeed, only few capital expenditures need to be invested when compared to the scenario of establishing a new traditional retailer channel. Moreover, e-commerce cuts the middleman, improves profitability and enables to target a specific consumers’ segment.
However, the percentage sales of this channel is still very low compared to traditional. FMCG companies are struggling to understand how to effectively build, use and attract people to their online platforms. Direct to consumer channel requires a completely different strategy, know-how and skills. Selling online an identical product that a consumer can find in a traditional channel is not enough to win in DTC. From a consumer point of view there are more disadvantages than advantages. A digital consumer cannot see, smell and touch the product is going to buy. This a very important factor to not undervalue. After price, this is very often the critical criteria that steer the final buying decision.
In-store, the ability to influence positively consumers is a very important selling leverage. The best store areas are reserved during product launches. Promoters offers free samples and discount vouchers. High effective shelfs are developed with the purpose of attracting new consumers.
Market shows that the biggest FMCG companies are leaders handling promotional launches and attracting consumers on their shelves. On the other side, they struggle on e-commerce. This channel is lead by startups. Firstly, they have high specialized skills and motivated employees who are able to better detect and satisfy consumers needs. Secondly, they target market niches. Thirdly, this is a very competitive space due to low entry barriers where only the fastest adapting organizations can operate.
2 DIGITAL IS MISSING A BIG OPPORTUNITY
To win in digital customised products are the key. Techingrocery has analyzed major online retailers and found that the biggest FMCG companies are lacking in this aspect.
A) How customised products go online?
Imagine a daily digital consumer. He is surfing the net looking for a ketchup bottle that can satisfy his particular need. This needs to have the exact ingredients, packaging colours & materials that he wants. However, he cannot find it because no digital retailers selling dressings offers this particular service.
There are two levers of personalisation that Techingrocry has identified as core:
The leading in this area is Youbars.com. A consumer customise his bar from the beginning to the end. On the left he choose ingredients. On the right he sees on real time the nutrition chart changing depending on what he has selected. While on the bottom he has a price chart updated after every selection.
Mondelez during Christmas 2015 offered consumers the possibility to customise its own Oreo cookies with different packaging options.
B) Online customised products are a strategic choice
By enabling consumers to decide their own product, companies are able to differentiate their offer significantly. When putting a ketchup bottle on shelf the producer needs to make choices. How many calories? Which flavour? Which packaging? These question are asked preliminary in order to maximise the number of consumers reached. Indeed, products on shelf are limited and put variants it is an expensive bill that sometime will not pay off. On the other side, digital enables a retailer to virtually show infinite product SKUs.
Traditional retailers know very well this big limitation they have. Already numerous personalised stores have opened putting customised products as core focus in their consumer experience. As we already showed in a previous article Magnum is an example. Consumers entering the store can choose ice cream chocolate, toppings & extra features all done on the moment! By opening its own channel retailer Unilever have been able to address correctly to this point.
However brick and mortar channel is expensive. It requires high capital expenditures. It doesn’t reach vastly enough all consumers of one region. For these reasons online customised products is a very hot business opportunity to jump in. By making perceive the final consumers as if he is the own creator of its beloved article companies are able to differentiate successfully from competitors while at the same time legitimate a premium price for it.
C) Successful examples
Online there are already successful examples of big companies who are enabling product personalisation to drive higher their sales. Below we have selected three examples that operates in different markets.
Made by a startup this website is leading the online cereal bar business. Consumer can put in a very fancy box different selection of cereal bars. The model has proved working very well, giving a unique consumer experience and being able to satisfy on demand different needs.
Evian is selling a premium water. Owned by Danone, this company allows digital shoppers to personalise their own bottle label. The service is for the moment available only in France for 75Cl glass bottle.
M&M gives the opportunity to customise its most famous snack. There are three main sections. First colours are selected. Second it is inserted a text or a clipart. Thirdly the desired packaging choice.
3 WHAT IS NEXT
Currently, companies who are selling customised products through digital channel are still low. There are many white spaces to be covered. Consumers want something that can satisfy its needs exactly as he wants. That is the reason why producers need to start implementing this strategy right now.
There are some examples where effectively customised products can be easily put in place. Firstly sauces. A digital shoppers could create its own premium flavored sauce in few clicks. Secondly frozen foods. Thirdly ice creams. By applying the levers explained in this article, a digital retailer will evolve from selling standardised articles to customised products.
Advantages are several. On one side more digital shoppers are reached and attracted. This will increase considerably online sales as Graze.com examples have already highlighted. On the other side the product is sold with a premium price.