Thank you!
General Session:
Bill Bishop of Willard Bishop Consulting
Drew Schwartzhoff, Director of Marketing at C.H. Robinson
Tony Stallone, Vice President of Merchandising and Food
Safety for Online Grocer Peapod at Peapod LLC
How Food Retailers are Engaging
Shoppers with Digital
Presented by
Bill Bishop
August 20, 2013
What We Believe
Customers are rebalancing their shopping to do more
online but not abandon the store and this is creating a
need for retailers to offer more digital connections.
About the Surveys
45,000 Shoppers
10 Retail Banners
Top On Shopper Wish List
“Time your digital circular to let me get the value.”
“Save me some planning time.”
Make it quicker to find items in the store.
Three Key Questions
Why you need strong digital relationships?
Where else do your customers search?
How can you help customers plan their shopping?
WHY YOU NEED STRONG DIGITAL RELATIONSHIPS
“There is a Gap”
How likely are shoppers to recommend
(% of Total Shoppers)
Going
Online
Shop This
Store
53%
18%
80%
Promoter
29%
15%
Passive
Detractor
5%
WHY YOU NEED STRONG DIGITAL RELATIONSHIPS
NEXT STEPS
Get your customers’ reactions
Identify and fix vulnerabilities
Take advantage of competitors’ vulnerabilities
Are Shoppers Engaging?
What you can do:
• Find out what your shoppers want, but isn’t
available on your site.
• Ensure the site is mobile friendly.
• Look for partnerships.
WHERE ELSE DO YOUR CUSTOMERS SEARCH
WHERE ELSE DO YOUR CUSTOMERS SEARCH
NEXT STEPS
Find out more about why
Decide if you want to provide it
Look for partnerships
Are Shoppers Engaging?
Email
(% of Shoppers Receiving Emails from the Retailer)
100%
80%
60%
92%
40%
20%
74%
33%
0%
Minimum
Average
Maximum
What you can do:
• Make sure your emails are mobile friendly.
• Find ways to increase open rates.
• Be sure that the timing of your emails is right
for your customers.
Are Shoppers Engaging?
What you can do:
• Use it for feedback if you’re ready to act on
the feedback.
• Alert shoppers to events and promotions.
• Make it an integral part of your customer
service.
HOW CAN YOU HELP CUSTOMERS PLAN THEIR SHOPPING
Go Beyond the Circular
Planning Activities
(% of Shoppers)
Look at circulars
70%
Check the pantry
59%
Clip coupons
Plan a menu
Go to websites
49%
23%
18%
HOW CAN YOU HELP CUSTOMERS PLAN THEIR SHOPPING
NEXT STEPS
Start to think like an online retailer
Make it easier to build lists
Highlight promotions on what they buy
Are Shoppers Engaging?
Some Buy Groceries Online
(% of Shoppers Buying Online in the Past 30 days)
14%
12%
10%
8%
13%
6%
4%
11%
8%
2%
0%
Minimum
Average
Maximum
Online Retailers Where Produce is the Lead
What you can do:
• Put more emphasis on requests for items.
• Determine if there are services available to offer your
customers online ordering.
• Evaluate offering your own online ordering service for
stop pickup.
Keep Up with What’s Happening
You can turn to Brick Meets Click to always get clear, commercial-free
guidance on how digital is impacting the shopping experience and what
you can do to build your business.
Bill Bishop
Chief Architect
Brick Meets Click
Bill.bishop@brickmeetsclick.com
www.brickmeetsclick.com
How Consumer Opinion Leaders Think
about Online Produce Purchasing
Drew Schwartzhoff
Director of Marketing
August 19, 2013
C.H. Robinson in Retail & Produce
Global 3PL leader
– 10+ million shipments handled annually
– 45%+ of these shipments are in the
retail/food & beverage vertical
100+ years of fresh produce
experience
– Leading Producer, Marketer and
Distributor
– 500+ Million cases sold over the last 5
years
– Wide range of products and brands
Fortune 300 company
– Publicly owned and traded on NASDAQ
(Symbol: CHRW)
25
Yesterday’s Supply Chain is linear
Today’s Supply Chain is More Complex
Online Produce Headlines Vary
28
CHR Consumer Opinion Leaders Panel
Background
– Objective
– Methodology
– Panel Composition
– Today’s Results
29
About half of all consumer opinion leaders
have purchased groceries online
Respondents Purchasing Category Online
92.2%
90.2%
Clothing
Books/CD/DVDs
52.9%
Groceries
45.1%
47.1%
Pet Supplies
Flowers
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No more than a quarter have tried any one
type of online grocery service
Tried Online Grocery Service Type
Delivered to home
Same Day: 11.8%
Next Day: 24.5%
Pickup at local store
Same Day: 8.1%
Next Day: 9.8%
Pick-up at separate facility
Same Day: 2.0%
Next Day: 2.0%
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Most opinion leaders who try online do
not stick with it
Still Using Online Grocery Service Type
Delivered to home
Same Day: 4.9%
Next Day: 3.9%
Pickup at local store
Same Day: 3.9%
Next Day: 2.9%
Pick-up at separate facility
Same Day: 1.0%
Next Day: 0.0%
32
Nevertheless, many consumer opinion
leaders remain intrigued with the idea
Finds Online Grocery Service Type
Very Appealing/Appealing
Delivered to home
Same Day: 69.6%
Next Day: 52.9%
Pickup at local store
Same Day: 53.0%
Next Day: 43.1%
Pick-up at separate facility
Same Day: 61.4%
Next Day: 52.9%
33
Opinion leaders think retailers can do the
best job running EVERY service type
What Online Grocery Service Type
They Expect Will Do Best Job
Company specializing
in selling online
A different
retail store
My current
retail store
Delivered to home
21.1
7.0
71.8
Pick-up at local store
10.9
14.5
74.5
Pick-up at separate facility
12.7
27.0
60.3
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About a quarter of opinion leaders have
purchased produce online
Quality & Freshness is
executed well online
Price value is still a
disadvantage for online
produce
Items most often ordered:
–
–
–
–
Apples
Oranges
Full-sized Tomatoes
Bell Peppers
35
For produce shopping, in-store advantaged
in some but not all areas
Shopping
Online better
Shopping
in-store better
• Freshness
• Quality
• Deals, discounts and
promotions
• Finding what I need
• Wide variety
• Overall convenience
• Speed
Shopping/online
about the same
• Brands I prefer
• Hard to find items
• Everyday prices
• Customer service
36
Opinion leaders attitudes paint a
complicated picture
On one hand…
Most like going to the store:
69.8% agree “I personally don’t mind
going to the store to do my grocery
shopping…it’s something I actually
enjoy doing.”
Most are nervous about buying
produce online: 71.6% agree “Of
all the different groceries I purchase,
fresh produce is among those that I
am most nervous about purchasing
through an online grocery service”
…but on the other hand…
Most are open to letting others
select produce for them: 53.2%
indicated they are potentially open to
having someone else “selecting my
produce items in the store.”
Most believe an online service is
capable of doing a good job on
freshness and quality: 53.9%
agree with the statement “If you go
with the right online grocery service,
you can feel confident they will
bring you produce that is fresh and
high quality.”
37
How to make consumers feel more positive
Emphasize New Benefits
Access to:
a wider variety;
specialty items
more local
produce
more complete
line of organics
82.4%
75.5%
68.6%
38
How to make consumers feel more positive
Offer Innovations
Carries a “daily
freshness rating”
so you know quality
before ordering
Product is delivered in
temperature-controlled
packaging and kept
separate from other
groceries
89.2%
89.2%
Comes with a 100%
customer satisfaction
guarantee
88.2%
Offering a strong
quality and freshness
guarantee
89.2%
39
Change is Happening Fast!
Your Supply Chain and your
customers supply chain is
changing - - and faster than
ever before
Your consumers buying
behaviors are changing in how
they purchase goods
Are you doing enough to stay
ahead of this change?
40
Produce Competing in a Digital World
Tony Stallone
VP, Merchandising and Food Safety, Peapod
41
Digital Produce World Agenda
• How it all started
• Reasons to be excited about online grocery/produce sales
• Who is Peapod and the other online players?
• Online produce facts you should know
• How to grow produce sales in the digital world
• Obstacles to growing produce sales
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How It All Started
• The brothers:
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How It All Started
Mom knows best?
or
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How It All Started
Mom knows best?
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Reasons to be Excited about Online Grocery &
Produce Sales
46
Online Is Big Business Today
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Grocery is different than
other Internet retail
You buy a lot of unrelated stuff . . .
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Online Grocery Projected Growth
•
•
•
•
•
2% Percentage of total U.S. consumer packaged food sales
purchased from online grocers in 2012
$6 billion Revenue generated by online grocery sales in 2012
$9.4 billion Predicted revenue in 2017, on an estimated 9.5
percent growth
1,620 Number of online grocery businesses in 2012
8.8% Market share of largest online grocer Peapod, followed by
Fresh Direct with 5.7 percent
Source: IBISWorld
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Who is Peapod and the Other Online Players?
50
Peapod Today
#52 in U.S. Internet Retailer’s Top 500
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The #1 U.S. online grocer (local delivery)
51
Online is not a single commercial
channel
National Ship
Staples and stockables
Weak in perishables
Home Delivery
Closest to
‘online supermarket’
Perishables most developed
In-Store Pickup
Least common
Easiest to establish
Common first step
*Testco online is a billion dollar
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business in UK*
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Online Produce Facts You Should Know
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How do Online Customers Behave?
• Buys more produce than in the store; more organics
• Order larger baskets $160+
• They are brand loyal, often refer to previous orders during ordering
process
• Order today for tomorrow, time starved
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Produce Metrics
• Produce 2012 Metrics
 92% of orders have a produce item
 Almost 700 unique SKUs
Data from Chicago Market 2012
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Produce Top Sellers at Peapod
•Produce Items Make Up Top Sellers
Top Selling Items (Units)
Rank Description
Size
1 Banana Yellow
1 EA
2 Banana Green
1 EA
3 Banana Organic
1 EA
4 Tomatoes Plum Roma
1 EA
5 Corn Bi-Color Sweet
1 EA
6 Strawberries
16 OZ PKG
7 Oranges Navel
1 EA
8 Apples Honeycrisp
1 EA
9 Limes
1 EA
10 Cucumbers
1 EA
11 Avocado Hass Ripe
1 EA
12 Lemons
1 EA
13 Potatoes Baking
1 EA
14 Dutch Farms Rose Acre Eggs Grade A Large 1 DOZ
15 Apples Gala
1 EA
Top Selling Items (Dollars)
Rank Description
1 Strawberries
2 Ground Beef 95% Lean Fresh
3 Bounty Paper Towels Regular Roll 2-Ply White
4 Perdue Fit & Easy Chicken Breasts Boneless Skinless - 2-3 ct Fresh
5 Strawberries Organic
6 Banana Yellow
7 Grapes Red Seedless
8 Sommers Organic Chicken Breasts Boneless Skinless - 3 ct Fresh
9 Coke Diet - 12 pk
10 Blueberries
11 Banana Green
12 Bounty Select-a-Size Paper Towels Giant Roll 2-Ply White
13 Centrella Milk Fat Free
14 Ground Beef 85% Lean Fresh
15 Perdue Fit & Easy Chicken Breasts Boneless Skinless Value Pk 4-5 ct Fresh
Size
16 OZ PKG
1 LB PKG
8 CT PKG
APX 1.25 LB
16 OZ PKG
1 EA
APX 2 LB
APX 1 LB
12 OZ CAN
1/2 DRY PNT
1 EA
8 CT PKG
1 GAL
1 LB PKG
APX 3 LB
Data from Chicago Market 2012
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Produce Organic Growth
•
Organic produce sales continue to grow and in 2012 made up almost 23% of all
produce sales
Produce - Percent Organic Sales
24%
21.6%
22%
21.0%
19.1%
20%
18%
22.6%
18.2%
17.1%
16%
14%
12%
10%
2007
2008
2009
2010
2011
2012
Year
Data from Chicago Market 2007-2012
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How to Grow Produce Sales in the Digital World
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Produce E-Commerce
•
Implications for Produce companies
– Customers cannot feel, touch or smell produce.
– No displays.
– How do we promote effectively?
– How do we build sales?
– How do we help online consumers make decisions?
•
How to work with E-retailers?
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Co-Purchased Items in Basket
• Online allows for complete history of purchases, can determine
categories that are co-purchased with other categories.
• Tomato example: lettuce, cucumbers and onions are more likely to
be purchased with tomatoes.
• Barilla Pasta discovered that cucumbers and tomatoes were likely
purchased with different shape pasta’s during the summer for
pasta salads.
• E-Coupons work great in the online channel, pairing produce with
affinity products. Produce is the Gateway to sales for CPG
companies, because it is so often co-purchased.
• Over 90% of orders online contain produce.
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Creating Meal Idea Bundles
•A coupon was created to buy
one of each of Tomatoes on the
Vine at $3.99, Ovalini Fresh
Mozzarella at $3.99, and
Organic Basil at $2.99, and
receive the Basil FREE
Sales increased on
Tomatoes by 98%, Basil by
323%, and Ovalini by a
whopping 530%
•Produce companies can
leverage CPG’s to help create
additional produce sales
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How to grow produce sales in the digital world
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Online Grocery Apprehension
Source: Nielsen Homescan Survey (UK)
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Best Practices
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Source: Nielsen Homescan Survey (UK)
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Tesco Product Life Feature
Tesco: “Because you can't see our products for
yourself, we've given some items a 'Product Life'
logo to help. This will show you how long the
product is likely to be at its best when it arrives
at your door. But that's not to say all your
products will 'go off' straight after, it just helps
you to plan your meals.”
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Produce Tips
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Philadelphia Interactive Transit
Advertising
Where is Produce?
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Questions?
68
Please join us for
lunch in the Exhibit
Hall at 11:30am