The Role of Digital in Shopping
Nikhil Sharma
VP, Consumer & Shopper Analytics, Nielsen
Today’s Agenda
1 Fundamental Truths About Shopping
2 Unlocking The Power Of Digital
3 Implications And Guidelines For Success
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Multiple forces are influencing the way people shop
Consumer
Trends
Retail
Evolution
Technology
Innovation
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
The face of the American consumer is changing
Urbanization & Declining
Industrialization
birth
foster …
rates …
Which lead
to an aging
population
And has important implications on the future …
Uneven
Population
Growth
Older
Consumers with
with
New Needs
Changes in
Per HH
Spending
Immigration
& Growth
in Ethnic
Families
Declining %
of HHs with
Children
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Retailers are experimenting to keep up with the
trends
Big-box add
smaller formats
& smaller
formats add
larger
Growth in
extreme value
& premium
channels…
middle suffers
Food retailers sell
more non-food &
non-food
retailers expand
food
Winners will align formats, assortment,
promotions & communications with
shopper demand
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Rapid growth in new devices, ushering in the ‘Post
PC’ era
2000
US USERS
2012
US USERS
Source: Nielsen NetView
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Shoppers have found a use for mobile devices in
shopping fairly quickly
Mobile Shopper Universe
Have Done Mobile Shopping on Smartphone
No,
16%
Yes,
84%
Mobile Shopping Activities Among All Smartphone Owners
73%
62%
57%
45%
42%
36%
29%
27%
23%
11%
Using store
locator to
find store
Checking
price
Researching Reading
Using lists Using mobile Purchasing Using device Using social Writing a
item before
review of
while
coupon
item on
for payment
media to
review of a
purchase recent/future shopping
device
comment on purchase
purchase
purchase
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Amidst these changes, three core shopper needs
always have and continue to remain paramount…
Hypermarkets /
Mass
Merchandisers
Natural /Specialty
food stores
Choice
PriceValue
Pharmacies
Warehouse
Club Stores
Dollar Stores
Supermarkets
Convenience
Convenience Stores
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… and unlike other industries like travel, books or
music, ‘clicks’ will not replace ‘bricks’ in CPG
Online Store
Advantages
Need
Convenience
Shopping
solutions
that requires
less time and
effort
• No travel
• Available 24 x 7
• Features like automatic
replenishment
• Avoid crowded stores /
checkout lines
Value for
Money
Higher
quality for a
certain price
• Easy price comparison
• Access to deals and
coupons
Choice
Variety to
address
more
consumer
needs
•
•
•
•
Brick & Mortar Store
Advantages
• No waiting for delivery
• Easy to address immediate or
special needs
• No shipping fees or stringent
return policies
• Ability to inspect products for
quality
• Exposure to promotions,
sampling and signage
• Easy to interact with, evaluate
Broader product range
and select products
Access to more retailers
• Experience through tailored
Ease of research
assortment, layout or prices
Ability to seek help or give
• Interaction with store
advice
associates
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
However, a battleground has definitely emerged in
CPG as digital engagement and purchase flourish
High
Diapers
Diet Aids
Vitamins
Skin Care
Small Appliances
Digital Engagement
Baby Food
Minimal
Carbonated Beverages
Cheese
Beer / Liquor
Frozen Pizza
Fresh Produce
Detergents
Hair Care
Oral Hygiene
Pain Remedies
Cereal
Candy
Online Sales
High
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Nielsen believes that three things are critical in order
for CPG marketers to succeed with digital
Know your shopper
(Who)
Understand your Category
(What)
Leverage the Right Touch points
(How)
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Today’s Agenda
1 Fundamental Truths About Shopping
2 Unlocking The Power Of Digital
3 Implications And Guidelines For Success
12
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
KEY CONSIDERATION
FOR SUCCESS
OPPORTUNITY
Marketers can impact two aspects of shopping with
digital: ‘Where People Buy’ & ‘How People Shop’
Where People Buy
Ecommerce
Opportunity
Role that
category plays in
e-Commerce
How People Shop
Marketing
Opportunity
Importance of
touchpoints in digital
shopper marketing
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Unlock the link to Ecommerce success
Which category has what it takes to unlock
barriers and succeed online?
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Convenience
High Immediacy
URGENCY
BARRIER
• Urgent needs
• Immediate
consumption
• Low delay tolerance
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Choice
High inspection
URGENCY
BARRIER
INSPECTION
BARRIER
• Check quality in
store
• Difficult to return
• Sensory product
choice (e.g. smell)
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Convenience
High Stock Up
URGENCY
BARRIER
INSPECTION
BARRIER
STOCK-UP
ENABLER
• Steady Use-Up
Rate
• Willing to stock up
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Price-Value
High ‘cube’
benefits
URGENCY
BARRIER
INSPECTION
BARRIER
STOCK-UP
ENABLER
PRICE
ADVANTAGE
• Price to Weight ratio
• Product margin
(room for discounting)
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Example: Moms research baby food and diapers
digitally, but only purchase the latter online
More/Better Choices
More/Better Choices
Special product/pack size
Access to reviews / info
High involvement decisions
Specialty items / size
Access to reviews / info
High involvement decisions
Convenience
Convenience
Shippable / Storable
Concerns on spoilage / expiry
Superior Value
Superior Value
High “cube”
Online retailer use diaper as
loss leader (e.g. Diapers.com)
Low “cube”
No price advantage vs. offline
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Which categories have what it takes to unlock barriers
and succeed in ecommerce?
URGENCY
BARRIER
STOCK-UP
ENABLER
INSPECTION
BARRIER
• Skin Care
• Oral Care
• Hair Care
• Body Wash
• Vitamins
• Small appliances
• Diapers
PRICE
ADVANTAGE
• Lotion
• Medication
• Coffee
• Feminine Care
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Media need to influence shopping by targeting key
‘decision points’ along the Path to Purchase
Plan shopping trip
Access deals /
bargains
Access
feedback/reviews
Gather product
information
Obtain ideas
on usage
Make
purchase
Discover a new
brand or product /
Reconfirm prior
purchase
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Digital touch points preference vary by shopper
types
Ranking of Digital Touch points
Most Used
Digital Touch points
Coupon Website
Social Network
Brand Email
Store Website
Store Email
Blogs
Brand Website
Mobile Apps
Media Website
Online Retailers
All Shoppers
Hispanic
Shoppers
African
American
Shoppers
1
1
2
2
1
1
3
3
4
4
5
2
5
6
5
6
3
8
7
7
9
8
8
5
9
9
7
10
10
10
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Shoppers prefer to use different touch points for
different categories
% shoppers utilizing online info
for category shopping
Diapers
Baby Food
Diet Aids
Small Appliances
62
Top 3 Digital
Touch points
Diapers
Coupon Sites
Brand Emails
52
Vitamins
Skin Care
Carb Bev
Hair Care
Oral Hygiene
Pain Remedies
Laundry Detergent
Cereal
43
Blogs
Baby Food
Brand Emails
Coupon Sites
Social Net. Marketing
Diet Aids
Brand Emails
34
Brand Website
Social Net. Marketing
Fresh Produce
Frozen Pizza
Beer
Liquor
Cheese
30
Small Appliances
Store Website
Online Retailers
Search Engines
24
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
More shoppers use digital when shopping for diapers, but
baby food utilizes multiple digital touch points more effectively
Diapers
Baby Food
62%
Email
Websites
▼
▼
▼
▼
Social
Network
▼
▼
▼
▼
▼
▼
1Shoppers
of shoppers
use digital
54%
Blogs
Path to Purchase
Decision Points
▼
Discover new brand/product
Email
Obtain ideas on usage
Gather product information
Access feedback/reviews
▲
▲
Websites
Social
Network
▲
▼
▲
▲
Blogs
▲
▲
▲
Reconfirm prior purchase
▼
of shoppers
use digital
▼
▲
▲
Plan shopping trip
Access deals/bargains
acknowledge the role of a digital media in the helping them on a specific path to purchase decision points (index vs. other CPG categories)
120-149, ▲ ▲ Index 150+
▼ ▼ Index <50, ▼ Index 51-79 , ▲ Index
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Today’s Agenda
1
Fundamental Truths About Shopping
2
Unlocking The Power Of Digital
3
Implications And Guidelines For Success
25
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
CPG marketing will be significantly different
in 10 years
Driven by traditional mass marketing efforts.
Today
Future
‘Typical’
American
families
More Rural /
Physical Locations
Concentrated /
Target Many /
At Home & In-store
Who
Where
How
Diverse,
multi-cultural
families
More Urban /
Virtually
Multi-platform /
Personalized /
On-the-Go
Driven by Shoppers’ demand for more Choice, Value & Convenience.
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
The Call To Action
I
Understand Shopper Needs
Shoppers seek new ways to achieve convenience, choice and value
for money. Leverage digital to personalize and shape offers to be
aligned with shopper needs and preferences.
II
Recognize The Role of Categories
Leverage online opportunities to target specific segments, offer
niche products and innovate. However, recognize that ecommerce
may not be viable for every category.
III
Optimize Digital Touch Points
Leverage digital to tackle the most important issues for retailers,
improve the shopping experience and eliminate unnecessary subsidies.
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Potential Ways To Engage With Nielsen
Know your shopper
(Who)
A
B
C
Understand your
Category
(What)
Leverage the Right
Touch points
(How)
White Paper
• Understand the digital shopping
landscape and implications/opportunities
in more detail
• Available immediately (complimentary)
Syndicated Report
• High level assessment of best digital touch
points on the ‘path to purchase’ for 18
CPG categories
• Available immediately ($5K)
Custom Study
• Detailed assessment of best digital touch
points along ‘path to purchase’
• Opportunity to customize for specific brands,
products, channels, retailers or shopper
segments
• 6-8 weeks / $60K+
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.