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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 firstname.lastname@example.org email@example.com (269)961-9479 (802) 857-1228 John Burchard Peapod firstname.lastname@example.org (847) 583-6361 11/23/2010 Questions ? ?
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