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The Role of Digital in Shopping Nikhil Sharma VP, Consumer & Shopper Analytics, Nielsen.

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Presentation on theme: "The Role of Digital in Shopping Nikhil Sharma VP, Consumer & Shopper Analytics, Nielsen."— Presentation transcript:

1 The Role of Digital in Shopping Nikhil Sharma VP, Consumer & Shopper Analytics, Nielsen

2 2 Copyright © 2012 The Nielsen Company. Confidential and proprietary. 3 Today’s Agenda 1 2 Fundamental Truths About Shopping Unlocking The Power Of Digital Implications And Guidelines For Success

3 3 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Multiple forces are influencing the way people shop Consumer Trends Retail Evolution Technology Innovation

4 4 Copyright © 2012 The Nielsen Company. Confidential and proprietary. The face of the American consumer is changing Declining birth rates … Urbanization & Industrialization foster … Uneven Population Growth Older Consumers with with New Needs Changes in Per HH Spending Immigration & Growth in Ethnic Families Declining % of HHs with Children And has important implications on the future … Which lead to an aging population

5 5 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Retailers are experimenting to keep up with the trends Winners will align formats, assortment, promotions & communications with shopper demand Food retailers sell more non-food & non-food retailers expand food Big-box add smaller formats & smaller formats add larger Growth in extreme value & premium channels… middle suffers

6 6 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Rapid growth in new devices, ushering in the ‘Post PC’ era 2012 US USERS 2000 US USERS Source: Nielsen NetView

7 7 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Mobile Shopping Activities Among All Smartphone Owners Have Done Mobile Shopping on Smartphone Mobile Shopper Universe Shoppers have found a use for mobile devices in shopping fairly quickly

8 8 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Amidst these changes, three core shopper needs always have and continue to remain paramount… Choice Convenience Price- Value Supermarkets Convenience Stores Hypermarkets / Mass Merchandisers Warehouse Club Stores Natural /Specialty food stores Pharmacies Dollar Stores

9 9 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Need Online Store Advantages Brick & Mortar Store Advantages Convenience Shopping solutions that requires less time and effort No travel Available 24 x 7 Features like automatic replenishment Avoid crowded stores / checkout lines No waiting for delivery Easy to address immediate or special needs Value for Money Higher quality for a certain price Easy price comparison Access to deals and coupons No shipping fees or stringent return policies Ability to inspect products for quality Exposure to promotions, sampling and signage Choice Variety to address more consumer needs Broader product range Access to more retailers Ease of research Ability to seek help or give advice Easy to interact with, evaluate and select products Experience through tailored assortment, layout or prices Interaction with store associates … and unlike other industries like travel, books or music, ‘clicks’ will not replace ‘bricks’ in CPG

10 10 Copyright © 2012 The Nielsen Company. Confidential and proprietary. However, a battleground has definitely emerged in CPG as digital engagement and purchase flourish Digital Engagement Online Sales Minimal High Diapers Diet Aids Vitamins Skin Care Small Appliances Baby Food High Carbonated Beverages Cheese Beer / Liquor Frozen Pizza Fresh Produce Detergents Hair Care Oral Hygiene Pain Remedies Cereal Candy

11 11 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Nielsen believes that three things are critical in order for CPG marketers to succeed with digital Understand your Category (What) Know your shopper (Who) Leverage the Right Touch points (How)

12 12 Copyright © 2012 The Nielsen Company. Confidential and proprietary. 3 Today’s Agenda 1 2 Fundamental Truths About Shopping Unlocking The Power Of Digital Implications And Guidelines For Success

13 13 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Marketers can impact two aspects of shopping with digital: ‘Where People Buy’ & ‘How People Shop’ Where People BuyHow People Shop Role that category plays in e-Commerce Importance of touchpoints in digital shopper marketing Ecommerce Opportunity Marketing Opportunity OPPORTUNITY KEY CONSIDERATION FOR SUCCESS

14 14 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Which category has what it takes to unlock barriers and succeed online? Unlock the link to Ecommerce success Where People Buy

15 15 Copyright © 2012 The Nielsen Company. Confidential and proprietary. High Immediacy Urgent needs Immediate consumption Low delay tolerance Convenience URGENCY BARRIER Where People Buy

16 16 Copyright © 2012 The Nielsen Company. Confidential and proprietary. High inspection Check quality in store Difficult to return Sensory product choice (e.g. smell) Choice INSPECTION BARRIER URGENCY BARRIER Where People Buy

17 17 Copyright © 2012 The Nielsen Company. Confidential and proprietary. High Stock Up Steady Use-Up Rate Willing to stock up STOCK-UP ENABLER Convenience URGENCY BARRIER INSPECTION BARRIER Need update Where People Buy

18 18 Copyright © 2012 The Nielsen Company. Confidential and proprietary. High ‘cube’ benefits Price to Weight ratio Product margin (room for discounting) STOCK-UP ENABLER INSPECTION BARRIER URGENCY BARRIER PRICE ADVANTAGE Where People Buy Price-Value

19 19 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Example: Moms research baby food and diapers digitally, but only purchase the latter online Concerns on spoilage / expiry Convenience Specialty items / size Access to reviews / info High involvement decisions Low “cube” No price advantage vs. offline Superior Value Shippable / Storable Convenience Special product/pack size Access to reviews / info High involvement decisions More/Better Choices High “cube” Online retailer use diaper as loss leader (e.g. Diapers.com) Superior Value More/Better Choices Where People Buy

20 20 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Diapers Hair Care Vitamins Small appliances STOCK-UP ENABLER INSPECTION BARRIER URGENCY BARRIER PRICE ADVANTAGE Which categories have what it takes to unlock barriers and succeed in ecommerce? Feminine Care Medication Coffee Skin Care Body Wash Lotion Oral Care Where People Buy

21 21 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Media need to influence shopping by targeting key ‘decision points’ along the Path to Purchase Obtain ideas on usage Plan shopping trip Access deals / bargains Make purchase Gather product information Discover a new brand or product / Reconfirm prior purchase Access feedback/reviews How People Shop

22 22 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Digital touch points preference vary by shopper types Most Used Digital Touch points All Shoppers Hispanic Shoppers African American Shoppers Coupon Website 112 Social Network 211 Brand 334 Store Website 452 Store 565 Blogs 638 Brand Website 779 Mobile Apps 885 Media Website 997 Online Retailers 10 Ranking of Digital Touch points How People Shop

23 23 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Shoppers prefer to use different touch points for different categories Baby Food Brand s Coupon Sites Social Net. Marketing Small Appliances Store Website Online Retailers Search Engines Diet Aids Brand s Brand Website Social Net. Marketing Diapers Coupon Sites Brand s Blogs Top 3 Digital Touch points % shoppers utilizing online info for category shopping How People Shop

24 24 Copyright © 2012 The Nielsen Company. Confidential and proprietary. More shoppers use digital when shopping for diapers, but baby food utilizes multiple digital touch points more effectively 62% DiapersBaby Food 54% Websites Social Network Blogs Path to Purchase Decision Points Websites Social Network Blogs ▼▼▼▼ Discover new brand/product ▲ ▼ Reconfirm prior purchase ▲▲ ▼▼▼▼ Obtain ideas on usage ▼ ▼ Gather product information ▲▲▲ ▼ Access feedback/reviews ▼▲▲ ▼▲ Plan shopping trip ▲ Access deals/bargains 1 Shoppers acknowledge the role of a digital media in the helping them on a specific path to purchase decision points (index vs. other CPG categories) ▼ ▼ Index <50, ▼ Index 51-79, ▲ Index , ▲ ▲ Index 150+ of shoppers use digital How People Shop

25 25 Copyright © 2012 The Nielsen Company. Confidential and proprietary. 3 Today’s Agenda 1 2 Fundamental Truths About Shopping Unlocking The Power Of Digital Implications And Guidelines For Success

26 26 Copyright © 2012 The Nielsen Company. Confidential and proprietary. ‘Typical’ American families ‘Typical’ American families More Rural / Physical Locations Concentrated / Target Many / At Home & In-store Concentrated / Target Many / At Home & In-store Today Diverse, multi-cultural families Diverse, multi-cultural families More Urban / Virtually More Urban / Virtually Multi-platform / Personalized / On-the-Go Multi-platform / Personalized / On-the-Go Future WhoWhereHow Driven by Shoppers’ demand for more Choice, Value & Convenience. Driven by traditional mass marketing efforts. CPG marketing will be significantly different in 10 years

27 27 Copyright © 2012 The Nielsen Company. Confidential and proprietary. The Call To Action Understand Shopper Needs I Recognize The Role of Categories II Optimize Digital Touch Points III Shoppers seek new ways to achieve convenience, choice and value for money. Leverage digital to personalize and shape offers to be aligned with shopper needs and preferences. Leverage online opportunities to target specific segments, offer niche products and innovate. However, recognize that ecommerce may not be viable for every category. Leverage digital to tackle the most important issues for retailers, improve the shopping experience and eliminate unnecessary subsidies.

28 28 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Potential Ways To Engage With Nielsen Understand your Category (What) Know your shopper (Who) Leverage the Right Touch points (How) A White Paper B Syndicated Report C Custom Study Understand the digital shopping landscape and implications/opportunities in more detail Available immediately (complimentary) High level assessment of best digital touch points on the ‘path to purchase’ for 18 CPG categories Available immediately ($5K) Detailed assessment of best digital touch points along ‘path to purchase’ Opportunity to customize for specific brands, products, channels, retailers or shopper segments 6-8 weeks / $60K+


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