Profitero customer Ocado’s recent announcement that it has made its first annual profit in its 15-year history highlights the continued channel shift towards online grocery shopping, as more UK consumers choose to drop the weekly supermarket shop in favour of buying online. But how should CPG brand manufacturers prepare for this growth?
According to IGD’s latest ShopperVista survey, over a quarter (26%) of all British grocery shoppers say they shopped online for their groceries in January, up from just a fifth of shoppers four years ago. Added to that, the number of UK shoppers claiming to buy most of their grocery shopping online has almost doubled – 11% in January 2015, compared to 6% in January 2011 – with IGD predicting that online will be the fastest growing segment of the UK grocery market.
Source: IGD. Base: all British grocery shoppers, Jan’15
As click and collect services continue to grow, driven by innovations such as grocery click and collect lockers in tube stations, IGD estimates that the UK online grocery market will more than double in value to £17 billion by 2019.
But what should CPG brand manufacturers be doing to ensure they’re fully equipped to exploit this online growth?
For CPG brands to be successful in the online channel, having visibility into how your products are performing on the digital shelf is critical. Brand manufacturers increasingly need a new level of CPG eCommerce intelligence to truly optimise their brands’ online performance and exploit this online growth.
eCommerce insights that can optimize a product’s pricing, content, search ranking and ratings & reviews are all critical elements to ensure the new wave of online grocery shoppers can easily find as well as choose your product.
Online pricing is dynamic, competitive and ultra-transparent for shoppers – therefore it’s increasingly essential to understand how your products and competitors’ products are priced online on a daily basis to ensure your brand is priced competitively.
High quality, comprehensive product information is key to driving conversion rates online. Product content is your ‘digital packaging’ so you need to be well-presented online. Good product content also influences search ranking at many online retailers, especially on Amazon.
Search ranking drives findability, therefore ranking on page 1 of an online retailer’s search results for key terms is critical for findability. Product titles, keywords in descriptions and sales ranking are often key factors.
Ratings & Reviews
CPG manufacturers need to be regularly monitoring and identifying negative reviews and responding quickly: 64% of consumers say reviews and ratings are important when grocery shopping online (source: Deloitte), whilst 59% of consumers said they trust online reviews as much as personal recommendations (source: Balihoo).
Check out Profitero’s recently launched Amazon FastMovers reports which benchmark your competitors’ products on Amazon UK and Amazon US. These reports across 10+ categories rank best-selling products on Amazon by pricing, pack configuration, ratings & reviews and much more, enabling you to fine-tune your own retail strategies. Request your free Amazon FastMovers report here.
Profitero’s VP Strategy and Insights Keith Anderson will also be speaking at this month’s Category Management Conference taking place in London on February 24th. Featuring new data on retailers including Tesco, Ocado, and ASDA, Keith will share guidance on how brands can adapt their strategies and tactics to maximise the impact of their online presence.