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					                                              11/23/2010




GMA Shopper Momentum
            November 9, 2010




Dan Cooke   John Burchard      Alec Newcomb
                                           11/23/2010




If you don’t like change
        don’t
     you are going to like
   irrelevance even less.
                  –General Eric Shinseki
                  –General




  US Online Grocery Sales Growth
                                                                               11/23/2010




More Purchase Decisions Made Before Entering Store




                                                           Source: IRI, 2009




    Online CPG Sales Will Hit $16 Billion by 2012
   Online sales of consumer packaged goods are projected to rise from
          $12 Billion to $16 Billion by 2012. A 25% Increase!
                                                                           11/23/2010




        What Consumers Seek

Convenience
    Web grocery buyers agreed that they liked buying groceries online
    because they avoided the hassle of going to the grocery store and
    it saved them time to do other things

Assortment
    Online grocery buyers agreed that they liked buying groceries online
    because they could find products that they might not find in regular
    stores, such as a difficult-to-find flavor or a discontinued brand.

Lower Prices
    Online grocery buyers like buying groceries online because they feel
    they get better prices than at a local store.

                      Source: Forrester Research, Feb. 2010




   Key Touch Points in eGrocery

              Web Based Grocery
                            search

                            mobile &
                        social media


                            e-commerce




                                  $
                                                                     11/23/2010




Many more influence points Pre Shop…




  Why then do Retailers Bother?
       The average MWG online basket size is $165, 4X greater than
                the average in-store basket (approx. $43)
                                                             11/23/2010




                          4 Core Business Models
High Complexity

                      Click and Pull     Captive Network
                  •   ShopRite           •   Safeway
                  •   Sam’s Club         •   Fresh Direct
                  •   Meijer             •   Peapod
                  •   Albertson’s        •   Amazon Fresh




                                         3rd Party Network
Low Complexity




                      Site to Store
                  • Target               • Amazon
                  • Kroger               • Walmart
                  • Food Lion            • Alice


                      Consumer Pick-Up       Home Delivery




                         LOCATION
                                                                             11/23/2010




                 Search Path to Purchase
     Search drove 47% of the unique visitors to Food Products websites.




                                                      Executed a 3 month
                                                         pilot Customer
                                                      Acquisition program
                                                       ShopRite acquired
                                                     1,260 new customers
                                                         and generated
                                                      incremental sales of
                                                       $1.5 million



13




                       Shopping Search
                                11/23/2010




Buy Now




                 Drive
               consumer
             engagement
              from Micro
                sites or
             Creative with
                  the
            “ Buy Now ”
                 Button




Buy Now



           A custom landing
             page includes
            information on
             where to buy
          locally or online &
             enhances the
            experience with
                product
              information
                                       11/23/2010




                Local: Key Takeaways




   9 months
pilot Customer Acquisition program

1,260 customers
new customers acquired
   $1.5 million
incremental sales
   generated




                           Mobile
                                                                                11/23/2010




                 Mobile Path to Purchase
    Projecting Nielsen data out through 2010, we see smartphones crossing 50%
    of the market by the middle of 2011, roughly equal to 150 million users.
                                                                      users




                    Mobile: Key Takeaways



                              $180
                                                              +13%
   7 out of 10
                          Average online basket         Mobile Users have a
shoppers are new
                          size of mobile users is       +13% higher spend
  to the Retailer
                                  $180                  vs on line shoppers


                YTD Mobile Users placed over 10,000 orders,
                    generating over $1.8 million in sales
                                           11/23/2010




     E-commerce




Peapod: “Smart Shopping for Busy People”

• #1 online grocer in US
• $400 million in sales
• $155+ average basket
• Chicago, Milwaukee
• New England, Mid Atlantic
• Baltimore, Washington, VA
• Strong growth and Favorable
  trends
                                                                                                             11/23/2010




          Winning with “Clicks and Bricks”


      Dial-up MS-DOS Client                     Internet / Browser                           &




         Shopping In-Store                          Warehouses
                                                                                      Full Store
                                                                                         and
                                                                                      Customer
                                                                                     Integration

         Delivering in Cars                    Delivering in Trucks




                            Types of Online Grocery

   ONLINE-                        LOCAL                    CPG-DIRECT                    ONLINE
COMPLIMENT TO                   WAREHOUSE                                               GROCERY
 RETAIL STORE                    MODEL                                                   DEPOT




                                                                                       HOW IT WORKS
    HOW IT WORKS                HOW IT WORKS                HOW IT WORKS
Supplements brick-and-      Serves densely            Online interface allows   Distributes groceries
 mortar grocers               populated urban areas      consumer to buy direct     nationally from a
A personal shopper          Order from a website       from the manufacturer      centralized location.
 hand-picks the order        Groceries are packed at   Eliminates the retail     Popular for APO/FPO
 and packs it                 a warehouse and            level of the supply        and overseas shipping
Pick up & pay curb-side      delivered to your door.    chain                      of hard-to-find items.
 or opt for delivery                                    No perishables            Limited selection of
Largest growth                                         Shipping                   perishables
 opportunity and $ profit                                                          Shipping
                                                                                         11/23/2010




   Consumer Profile and Benefits of Online
Over 13 Million Consumers
Visit a Grocery Site Monthly
What Else Are They Doing?

Those who buy groceries online are
more than twice as likely as the average
Internet user to go online to read/post
product reviews, download coupons and
search for recipes. These shoppers are
using the Internet as a food resource,
from product selection through meal
preparation, pointing to a clear
opportunity for online grocers to make
their Web sites a comprehensive
destination.

(source: Nielsen @Plan, U.S., 18+, Fall
2009 Survey).




                                                   Source: Nielsen Fall 2009 US Survey




                 Shopping on the Web: Who?
                                                                       The List
                    Peapod Demographics

        - 50% Married with Children

        - 80% Income above $60,000/yr

        - 85% are female

        - 56% are dual income households

        - High index of College Graduates & Post Grads


                            Customer Proposition

Convenience, quality, good value. Best of the store to your door.
              “Smart Shopping for Busy People”
                                                                                     11/23/2010




 Current Regional Online Grocery Penetration
  “I have purchased food and beverages/groceries online in the past
                           three months.”




                                                   Base: Online US adults n=37,877

Source: Forrester North American Technographics Benchmark Survey, 2009




               The Importance of “the List”


  A mid-September report from the Chicago-based market
  research company NPD Group found that 94% of U.S.
  households prepare a written shopping list before
  grocery shopping and 72% shoppers said they never or only
  occasionally buy items not on the list.


  “younger moms turn to the Internet first to look for
  help in finding food solutions.”
                                                        11/23/2010




              Digital influenced consumer &
                    getting on “the List”
• Peapod customers are particularly influential in
  Ahold’s markets (“good lifers”, affluent consumers,
  prone to loyal shopping)
• Representing a large percent of AUSA’s Primary
  customers
• “List-making” customers will grow even faster
• Peapod offers direct, targeted communication to
  these customers
• Work with digital mediums to influence consumer’s
  “list” (email, social, website, etc.)




                    Why Should You Care?

•   Because you need to be on the “list”
•   Once you’re on, you’re on!
•   Over 50% shop off their previous lists
•   Tech-savvy customers shop differently
•   Online-influenced sales will be big!
                                                                      11/23/2010




                            In-store
                           Technology                    Circular
     E-Commerce




                         Industry Need
                       for Quality Images                    Shelf
                                                         Management
                        and Accurate Data                 Planogram
     Nutrition
     On-Shelf Tags



                             Mobile




                       Thank You!


Dan Cooke                               Alec Newcomb
Kellogg Company                         My Web Grocer
daniel.cooke@kellogg.com                anewcomb@mywebgrocer.com
(269)961-9479                           (802) 857-1228




                     John Burchard
                     Peapod
                     jburchard@peapod.com
                     (847) 583-6361
                11/23/2010




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