Nielsen eCommerce Report: Evolution or Revolution in the FMCG World?

September 3, 2014
Profitero
Written By
Profitero

The latest Nielsen Global Survey of eCommerce reveals that whilst non-consumable categories continue to be the most popular eCommerce categories, the online market for groceries and other consumable products is fast gaining momentum.

 

Conducted between February and March 2014, Nielsen surveyed 30,000 online consumers across 60 countries to reveal the most popular product categories for buying versus browsing – and where purchase propensity is leading and lagging.

With eMarketer reporting that global eCommerce sales are set to reach $1.5 trillion in 2014, these new figures show that online purchase intention rates have doubled in three years for more than half of the categories measured between 2011 and 2014.

Despite not quite seeing the same growth as categories such as event tickets and hotel reservations, online purchase intent for buying groceries and baby supplies online is certainly seeing strong momentum – with growth rates of 5% and 12% respectively.

However, what’s most interesting from the survey is that whilst consumable products have lower online browse/buy intention rates than non-consumable products, they boast just as strong browse-to-buy correlations.

For example, one-third of global respondents say they browse and buy personal care products (31% browse/29% buy) – nearly a one-to-one correlation – with groceries almost showing the same correlation (30% browse/27% buy).

 

According to John Burbank, President of Strategic Initiatives at Nielsen: “Strong online browse-to-buy correlation rates for fast-moving consumer goods translates to loyal repeat customers for these categories. While these categories are still in the early stages of online adoption, these correlations signal great news for retailers. Now is the time to create omnichannel experiences for consumers who are actively using both digital and physical platforms to research and purchase, as increasingly, they don’t make a distinction between the two.”

Whilst the online market for buying groceries and other consumable products is comparatively smaller than some of the more mature eCommerce categories, Nielsen believes it is one of the categories that has the greatest potential due to the frequency of purchase. And aside from online purchasing, digital is an increasingly important research and engagement platform.

“The lightning-fast pace of change in the digital landscape has ushered in a consumer mindset that is both adventurous and exploratory when it comes to online shopping,” said Burbank. “Consumers everywhere want a good product at a good price, and the seemingly limitless options available in a virtual environment provide new opportunities for both merchants and consumers. The market for fast-moving consumer goods is no exception.”

Profitero’s View

There are two key implications to Nielsen’s data:

  1. The addressable markets for many categories online are still considerably under-developed, especially grocery and many consumables; and
  2. Once shoppers become aware and engaged online, their browse-to-buy intentions are strongly correlated

The relatively modest growth in “online purchase intentions” for grocery products (from 22% in 2011 to 27% in 2014) in Nielsen’s data suggests that the massive growth in online grocery and CPG in many markets is being driven more by increasing spend per household than by customer acquisition.

While some online grocers are reluctant to invest aggressively in marketing to new customers (fearing cannibalization of their brick-and-mortar business, for example), the rapid expansion of Instacart, AmazonFresh, Ocado, and others in markets like the US and UK is likely to grow the population of online grocery and CPG shoppers considerably.

And as that population grows, the data suggests that online will quickly increase its share of those households’ total spend. While self-reported browse-to-buy intentions don’t tell the whole story, the implication is that households that browse consumables online also tend to buy online.

Perhaps even more importantly, those that browse online tend to make buying choices even if they ultimately buy in-store, underlining the importance of high-quality product content and customer ratings and reviews from a brand management perspective.

Profitero will be speaking at this year’s Shopper Marketing Summit and attending IGD’s Online and Digital Summit. Come and speak to us to find out how Profitero is helping CPG brands and grocers around the world take advantage of the continued growth in eCommerce, or email us at sales@profitero.com.

About Profitero

Profitero collects online data on more than 250 million products every day, delivering global online insights and eCommerce intelligence to the world’s biggest retailers and brands.

We provide both brick & mortar and online retailers with their competitors’ prices, promotions and full product assortment information. More than 50 global retailers, including Staples, Waitrose, Ocado, Morrisons, Walmart-owned Sam’s Club and Worten, rely on Profitero’s accurate and timely competitor price intelligence to make better informed and more profitable pricing decisions, helping them to increase sales as well as margins.

Profitero also supplies brands with critical online insights, helping to enhance their online sales and market positioning. We deliver key online metrics, including share of online shelf, share of voice, pricing, brand price monitoring and new product monitoring, in any country and from any online or multichannel retailer, updated every day.

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