Digital Shopping Statistics 2012

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DIGITAL SHOPPING WHAT YOU NEED TO CONSIDER OCTOBER 2012

Transcript of Digital Shopping Statistics 2012

Page 1: Digital Shopping Statistics 2012

d i g i ta l s h o p p i N gW H A T Y O U N E E D T O C O N S I D E R O C T O B E R 2 0 1 2

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Success in the digital shopping environment requires a deep understanding of shopper needs, how a product category gets shopped and the ability to cost effectively deliver a product to the consumer.

The digital revolution has transformed industries like music, books and travel almost entirely because e-commerce solutions delivered shopper needs in ways that traditional channels couldn’t match. Gone are the days where we had to buy an entire album because of a particular track. With iTunes, it is so much easier and economical to customize a personal music library and deliver it digitally. It is much more convenient to visit travel sites like Expedia or Travelocity to research, compare and make purchases, rather than visiting a travel agency. In publishing, Amazon’s endless book selections, authentic reader reviews, personalized book recommendations and e-book options are hard for brick-and-mortar bookstores to match. Amazon’s edge in giving shoppers tailored and relevant choices as well as highly competitive prices has forced traditional booksellers like Borders to close, and has set Amazon on pace to own more than half of the books business in the United States across all formats by the end of 2012.i

So are consumer packaged goods (CPG) next in line? Is technology a friend or a foe to retailing in CPG? What does it take for CPG marketers to be shopper centric in a digital world? This paper provides a thorough assessment of the impact of digital on the CPG industry, and outlines key principles for marketing success in a world where digital is a new normal.

While we acknowledge that both shopper understanding and economic considerations dictate success in the digital world, this paper focuses primarily on the former: the shopper, their category needs and the digital touchpoints that influence their behavior.

M e e t t h e d i g i ta l s h o p p e rconnected, savvy and actively seeking choice, convenience and value for their dollar.

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

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drivers of success

WHAT categories Matter

HOW touchpoints Matter

WHO shoppers Matter

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER Copyright © 2012 The Nielsen Company

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Digital technology is widely pervasive today and will only continue to grow at a rapid pace into the future. Over 274 million Americans have access to the Internet. ii As of March 2012, 117 million people had smartphones,iii and approximately 80 percent of them were using smartphones for shopping activities like finding stores, making lists, checking prices, researching products, sharing content and purchasing.iv

Amidst these activities, people continue to want to satisfy three fundamental needs when they shop: convenience, choice and value for their money. Convenience is the ability to deliver a shopping solution that requires less time and effort. Choice is simply more variety to cater to a broader set of consumer needs. Price-value is the level of quality delivered at a certain price point. For nearly two centuries now, retail formats have evolved to better address these needs.

s h o p p e r N e e d sfundaMental truths about shopping

CHOICE

convenience stores

dollar stores

warehouseclub stores

hypermarkets/mass merchandisers

natural/specialty food stores

pharmaciessupermarkets PRICE - VALUE

CONVENIENCE

retail forMats evolved around fundaMental shopper needs

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

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Ample evidence suggests that these needs have been responsible for retail evolution. Shoppers who found the need to visit multiple stores to buy consumables and household products inconvenient, migrated to supercenters introduced by Meijer for a ‘one-stop-shopping’ experience. Convenience stores also offered an alternative to supermarkets for shoppers on ‘grab and go’ trips. In recognition of shoppers’ desire to economize, Walmart focused on lowering supply chain costs, increasing efficiency and providing value to shoppers in terms of everyday low prices. More recently, shopper needs for natural or ethnic products have emerged. Retailers like Trader Joe’s recognized this need for choice early on, and implemented a culturally-tailored approach to offer unique product selections to a fast growing multicultural group in the population. They have grown into a $9.5 billion company in a relatively saturated retailing environment and have managed to transform a trip to a Trader Joe’s store into an experience. v

Are clicks, then, destined to replace bricks in CPG as they have in other industries? E-commerce has undoubtedly grown at an impressive rate, but in 2011, it accounted for

shopper needs and retail advantages

just two percent of total CPG sales. We believe that while digital will continue to play an increasingly important role in the CPG industry, online shopping will not completely replace trips to stores any time soon. E-commerce does offer a few benefits and has enjoyed some success, particularly with shoppers in densely populated urban settings that are seeking convenience. However, brick-and-mortar stores also enjoy key advantages over e-commerce and have prevented e-commerce from gaining widespread adoption. As illustrated below, both virtual and physical stores deliver convenience, choice and price-value to shoppers in their own way.

While e-commerce may not replace traditional grocery shopping in the immediate future, the reality is that in an industry with modest growth like packaged goods, e-commerce will likely grow at the expense of more traditional channels. More broadly, digital also provides an opportunity for marketers to engage with shoppers ‘everywhere and exactly where’ in order to influence shopping decisions in their favor. Let’s evaluate how you can unlock this opportunity in CPG through the lens of where people buy and how people shop.

• No Travel• Available 24x7• Features like automatic

replenishment• Avoid crowded stores/checkout

• Easy price comparison• Access to deals and coupons

• Broader product range• Access to more retailers• Ease of research• Ability to seek help or give advice

• No waiting for delivery• Easy to address immediate or special

needs

• No shipping fees or stringent return policies

• Ability to inspect products for quality• Exposure to promotions, sampling and

signage

• Easy to interact with, evaluate and select products

• Experience through tailored assortment, layout or prices

• Interaction with store associates

online store advantages

brick-and-Mortar store advantages

need

COnvEniEnCEShopping solutions that requires less time and effort

pRiCE-valuEHigher quality for a certain price

CHOiCEVariety to address more consumer needs

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER Copyright © 2012 The Nielsen Company

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While e-commerce may not account for a dominant share of CPG sales today, it is still the fastest growing retail channel. Less than four percent of people in America buy CPG products online in any given monthii, but we project e-commerce to grow at a 25 percent annual rate through 2015 and more than double its current share of total CPG sales.

W h e r e p e o p l e B U Ythe role that category plays in e-coMMerce

Source: Nielsen NetView Panel and Nielsen Analysis, 2012

1214

1620

25

32

2010 2011 2012 2013 2014 2015

25% Compound Annual Growth Rate

5% of CPG sales2% of CPG sales

online cpg sales will continue to grow at a robust rate

US online CPG sales ($Billions)

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

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Here’s an interesting fact: the mix of product sales in e-commerce is 60 percent non-food to 40 percent food, the exact reverse of the CPG picture in total, which is 60 percent food and 40 percent non-food. Looking ahead, we expect that the acceleration will greatly differ by product category. If CPG marketers want to influence shopper’s decisions on where to buy, the reality is that category matters.

Some categories are better candidates for selling online than others. Categories in the lead are diapers, diet aids, vitamins and skin care with online sales significantly above the average for CPG products. Many of these categories are relatively expensive non-food products with a steady usage rate. In contrast, categories like carbonated beverages, dairy, liquor, beer, produce and frozen food have a very small proportion of sales online. These categories encounter physical barriers to e-commerce due to factors like refrigeration, perishable concerns and weight that are cost-prohibitive for shipping.

In Q2 2012, Nielsen conducted extensive research across 36,000 shoppers of CPG products spanning 18 categories, including both food and non-food items. Based on this research and analysis of online purchase data, we identified two barriers and two enablers that translate into convenience, price-value and choice for a shopper, and collectively determine how successful a category can be in e-commerce.

$8B$6BUS ONLINECPG SALES

($ BILLIONS)

NON-FOODFOOD

the Majority of online sales are for non-food products

Source: Nielsen NetView Panel and Nielsen Analysis, 2012

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER Copyright © 2012 The Nielsen Company

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barriers and enablers to e-coMMerce

Some categories face a pronounced urgency barrier, the overwhelming shopper desire to buy and use at once, without waiting to have the product delivered. For confections, the consumption need is often immediate. Convenience can be paramount and the nearest store suffices for that shopper mission.

This barrier is especially relevant to perishable food such as fresh produce and food requiring refrigeration. Concerns about spoilage can discourage online purchasing because they negatively affect the product value proposition if items get discarded. The need to inspect certain products drives people to a store and they tend to buy other products that they need while they are there. Therefore the inspection barrier has a secondary effect on the entire basket.

Products with predictable consumption rates and a long shelf life such as diapers or dog food lend themselves to online purchasing programs such as Amazon’s Subscribe and Save. Shoppers enrolled in such programs are automatically shipped specific products on a periodic basis, and also provided with other incentives such as preferred customer discounts, coupons and new product information. Meanwhile, retailers and manufacturers enjoy the ancillary benefit of building brand loyalty via these automatic replenishment systems.

As for price factors, online retailers enjoy several cost advantages over brick-and-mortar operations, particularly related to overhead. Lower costs of doing business often convert directly into lower consumer prices or steeper discounts for digital shoppers, which allows marketers to retain price sensitive shoppers in a more profitable way. Considerations affecting the digital investment decision for retailers include how online delivery charges and overall pricing align with offline retail alternatives.

URGENT NEEDSIMMEDIATE CONSUMPTIONLOW DELAY TOLERANCE

CHECk QUALITY IN STOREDIFFICULT TO RETURNSENSORY PRODUCT CHOICE (e.g. smell)

STEADY USE-UP RATEWILLING TO STOCk UP

HIGH PRICE TO WEIGHT RATIO (low shipping costs)

PRODUCT MARGIN (room for discounting)

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

urgency barrier

inspection barrier

stock-up enabler

price enabler

seeking choice

seeking convenience

seeking convenience

seeking price-value

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URGENT NEEDSIMMEDIATE CONSUMPTIONLOW DELAY TOLERANCE

CHECk QUALITY IN STOREDIFFICULT TO RETURNSENSORY PRODUCT CHOICE (e.g. smell)

STEADY USE-UP RATEWILLING TO STOCk UP

HIGH PRICE TO WEIGHT RATIO (low shipping costs)

PRODUCT MARGIN (room for discounting)

Copyright © 2012 The Nielsen Company

keeping the barriers and enablers in mind, we expect personal care categories like vitamins, skin, hair, feminine and baby care; pantry staples like coffee and cereal; and paper products like bath tissue and kitchen towels to win in e-commerce if manufacturers and retailers collaborate to deliver price-value, choice and convenience. Conversely, e-commerce growth in snacks, frozen foods, condiments and beverage will be relatively slow.

IT IS CLEAR THAT CONSUMERS ARE BEGINNING TO EMBRACE THE IDEA OF BUYING SOME PACkAGED GOODS ONLINE. In response, brick-and-mortar retailers, who were skeptical of e-commerce, are increasingly making it a strategic goal. Savvy retailers are expanding their online offerings and experimenting with new ordering and delivery options. They are developing strategies to cater to shoppers that don’t have time to make grocery trips, or prefer to avoid long checkout lines or crowded parking lots. For example, some retailers are allowing shoppers to order online or from an app on a connected device and pick up the products in-store at a convenient time. Others are including ‘did you forget’ style reminders for online shoppers to promote cross-merchandising and build baskets, while performing a service for customers.

Walmart, for instance, stands at the forefront of a vanguard of progressive retailers actively addressing the digital shopping opportunity. The retailing giant is leveraging the advantages of being a multi-channel player, enhancing the benefits of physical store locations with those of the digital environment, and integrating efforts across e-commerce, mobile and in-store initiatives. Retailers have also partnered with manufacturers to drive win-win with key shoppers. For example, Dollar General has recently worked with P&G to offer free samples of Tide Pods to shoppers for a purchase of anything at dollargeneral.com. Several brands, including large ones like Axe and Dove use social networking sites like Facebook as an early medium to distribute product samples, obtain product feedback, optimize their marketing strategy, and use these results as valuable information to collaborate with retailers.

While the vast majority will continue to do a bulk of their grocery shopping in a store, the multi-channel shopping era that combines offline and online shopping is here. There will not be a massive or sudden flight from brick-and-mortar stores to online grocery shopping in the next few years, akin to what has occurred in other industries. However, some categories will experience faster e-commerce growth than others, and if these are trip driver or basket builder categories, then retailers definitely need to find ways to mitigate the loss. We contend the winners will be those who quickly recognize how shopper demand is evolving due to changing demographics and rapid advances in technology, and are able to align formats, assortment, promotions and communication to deliver against the core shopping needs of choice, convenience and value for their dollar.

seeking choice

seeking convenience

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I LOVE RESEARCHING NEW PRODUCTS ONLINE BUT I DON’T BUY MY BODY LOTION ONLINE BECAUSE I LIkE TO SMELL IT IN THE STORE.

inspection barrier

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I SHOP ONLINE BECAUSE THE PRICES CAN’T BE BEAT. I CAN FIND THE BEST DEALS ON MY FAVORITE RAZORS.

Copyright © 2012 The Nielsen Company

price enabler

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I BUY ASPIRIN AT MY LOCAL DRUGSTORE BECAUSE WHEN I HAVE A HEADACHE I NEED IT RIGHT AWAY.

urgency barrier

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I NEVER HAVE TO WORRY ABOUT BATH TISSUE BECAUSE I HAVE MY ACCOUNT SET TO AUTO REPLENISH EVERY MONTH.

13Copyright © 2012 The Nielsen Company

stock-up enabler

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E-commerce in the CPG industry is in its nascent stages. However, digital technology does present significant potential for timely and personalized marketing. Shoppers do engage in other activities like checking prices and researching products online. Moreover, rapid proliferation of technology certainly provides marketers with a myriad of ways to interact with shoppers.

Amidst this increasingly complicated marketing landscape, where should you invest in digital? Are websites more effective than coupon sites? Should you prioritize social media engagement over developing mobile apps? These are indeed difficult questions to answer.

Nielsen’s recent research in Q2 2012 set out to answer these questions in the CPG industry. Our results illuminated the role that various digital touchpoints (websites, social media sites, blogs and coupon sites) play in influencing shoppers’ purchase decisions for various CPG products. We discovered that shoppers often default to only using certain touchpoints depending on what they are purchasing. It is important for marketers to understand what the relevant touchpoints are for their products, and the specific shopping decisions they influence.

There are interesting differences across categories and people in terms of whether emails, blogs or websites work best. Based upon our analysis, several key principles emerged:

• People utilize a variety of media and sources of information, and these vary by category and demographics.

• An integrated approach, leveraging traditional and digital touchpoints, is most effective. Focusing solely on a social or mobile strategy is not prudent.

• Strategies must recognize which digital touchpoints are effective. Using them judiciously in concert with traditional marketing efforts is key to success.

h o Wp e o p l es h o pthe iMportance of touchpoints in digital shopper Marketing

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

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Ranking

MOST USED DIGITAL TOUCHPOINTS FOR

CPG CATEGORIES

ALL

SHOPPERS

HISPANIC

SHOPPERS

AFRICAN AMERICAN

SHOPPERS

1 Coupon Website 1 1 2

2 Social Network 2 1 1

3 Brand Email 3 3 4

4 Store Website 4 5 2

5 Store Email 5 6 5

6 Blogs 6 3 8

7 Brand Website 7 7 9

8 Mobile Apps 8 8 5

9 Media Website 9 9 7

10

Online Retailers 10 10 10

prefereNce for digital toUchpoiNts Varies across shoppers

15Copyright © 2012 The Nielsen Company

Highlighed touchpoints indicate a disparity between shoppers.

Source: Nielsen Digital Shopping Study, Q2 2012

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shoppers preferdiffereNt toUchpoiNts for differeNt categories% shoppers utilizing digital for category shopping

top 3 digital touchpoints for High Digital Usage Categories

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

Carbonated Beverages

Source: Nielsen Digital Shopping Study, Q2 2012

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Intuitively, one may think that categories more suited for e-commerce also do a better job of marketing digitally to shoppers. We, however, uncovered a different reality. Categories are currently at very different stages of establishing and engaging an online audience. The level of e-commerce development is not always a good indicator of how effective these categories are in digital shopper marketing.

Marketers that are able to prioritize the right touchpoints across digital platforms to reach, engage and influence shoppers have significant upside. Effective digital shopper marketing requires that marketers identify decisions shoppers make along the path to purchase when they intend to buy specific products, and then determine the right mix of digital touchpoints to influence those decisions.

digital engageMent aligns with e-coMMerce for Most, but not all categories

DIGITAL ENGAGEMENT

ON

LIN

E PU

RCH

ASE

LOW

HIGH

HIGH

Baby Food

Small Appliances

Diet Aids Vitamins

Diapers Skin Care

Pain Remedies Cereal, Hair Care, Oral Hygiene

Carbonated Beverages

Laundry Detergent

Copyright © 2012 The Nielsen Company

Source: Nielsen Digital Shopping Study, Q2 2012 Source: Nielsen Digital Shopping Study, Q2 2012

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WHEN PLANNING A TRIP TO THE STORE, CONVENIENCE, CHOICE AND PRICE-VALUE ARE ALWAYS TOP OF MIND.

PLACEPURCHASE

PLAN

path to purchase

use Media to influence shopping at key decision points along the path to purchase

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use Media to influence shopping at key decision points along the path to purchase

Make purchase

access deals/ bargainsplan

shopping trip

access feedback/reviews

gather product information

obtain ideas on usage

discover a new brand or product/

reconfirm prior purchase

Copyright © 2012 The Nielsen Company

BUY

PLANPURCHASE

PLACE

EVALUATE

DEMAND

TRADITIONAL AND DIGITAL INFLUENCES

TRADITIONAL AND DIGITAL INFLUENCES

CONSUMEENGAGE

TRIPS & MISSIONS

CHOICE DRIVERS

PURCHASE DRIVERS

MEDIA & SOCIAL

SATISFACTION DRIVERS USAGE & OCCASIO

NS

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2020

An examination of the path to purchase for diapers versus baby food provides an interesting perspective into the different role of digital technology for two seemingly related categories. At first glance, more shoppers use digital media when shopping for diapers (62%) compared to baby food (54%). This suggests that diapers are more successful in digital shopper marketing.

However, a closer look reveals baby food utilizes multiple digital touchpoints more effectively compared to diapers. It suggests that marketers of diapers have room to further optimize their digital strategy, either by trying to make certain touchpoints, e.g. websites and social networks, work better for their products, or by focusing on a smaller set of more influential touchpoints, e.g. blogs. Similarly, baby food marketers that have evidently enjoyed some success in digital shopper marketing might have even more opportunity to influence certain decisions or activities along the path to purchase, e.g. planning trips and accessing deals.

diapers vs. baby food

More shoppers use digital when shopping for diapers, but baby food utilizes Multiple digital touchpoints More effectively

62% 54%ofcategory

shoppers that use digital

diapers BaBY food

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

Source: Nielsen Digital Shopping Study, Q2 2012

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pat h to p U r c h a s e d e c i s i o Np o i N t s

PATH TO PURCHASE DECISION POINTS EMAIL WEBSITES SOCIAL

NETWORK BLOGS

Discover new brand/productReconfirm prior purchaseObtain ideas on usageGather product informationAccess feedback/reviewsPlan shopping tripAccess deals/bargains ▲

PATH TO PURCHASE DECISION POINTS EMAIL WEBSITES SOCIAL

NETWORK BLOGS

Discover new brand/product ▲

Reconfirm prior purchaseObtain ideas on usageGather product information ▲

Access feedback/reviews ▲

Plan shopping tripAccess deals/bargains

diapers

BaBY food

Copyright © 2012 The Nielsen Company

*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 80-119, ▼ Index 120-149, ▼ ▼ Index 150+

Source: Nielsen Digital Shopping Study, Q2 2012 Source: Nielsen Digital Shopping Study, Q2 2012

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A similar analysis of the diet aid and skin care categories suggests that a good barometer of success in digital shopper marketing is the extent to which marketers influence key decisions along the path to purchase, rather than penetration alone.

Diet aids (53%) trump skin care (42%) in terms of the percentage of overall shoppers that use digital touchpoints while shopping for these products. However, skin care products utilize digital touchpoints more effectively to engage shoppers. Marketers of diet aids can potentially learn how to make websites more influential by analyzing how skin care marketers use websites to engage with shoppers. They could also improve on helping shoppers to make better decisions earlier along the path to purchase, e.g. discovering new products.

We live in a digital world and digital marketing can provide significant opportunities to connect with shoppers on a personal and relevant level. However, the increasingly complex multi-platform retail environment requires mastery of online, mobile, social, traditional and in-store media vehicles and the ability to assemble the right tactical mix. Marketers tuned-in to the digital advantage will bolster consumer engagement and involve shoppers in a more vital, authentic way at every decision point along the path to purchase. In the future as shoppers begin to want continuity between the online and offline experience, they will exercise their online expectations in offline environments.

diet aids vs. skin care

though diet aids has More digitally engaged shoppers, soMe touchpoints are not as useful to shoppers

22

53% 42%of

category shoppers that

use digital

diet aids skiN care

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

Source: Nielsen Digital Shopping Study, Q2 2012

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pat h to p U r c h a s e d e c i s i o Np o i N t s

PATH TO PURCHASE DECISION POINTS EMAIL WEBSITES SOCIAL

NETWORK BLOGS

Discover new brand/productReconfirm prior purchaseObtain ideas on usageGather product informationAccess feedback/reviewsPlan shopping tripAccess deals/bargains

▲▲

▼▼

▼▼

PATH TO PURCHASE DECISION POINTS EMAIL WEBSITES SOCIAL

NETWORK BLOGS

Discover new brand/product ▲ ▲ ▲

Reconfirm prior purchase ▲

Obtain ideas on usageGather product information ▲

Access feedback/reviews ▲

Plan shopping tripAccess deals/bargains

diet aids

skiN care

*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 80-119, ▼ Index 120-149, ▼ ▼ Index 150+

Copyright © 2012 The Nielsen Company

Source: Nielsen Digital Shopping Study, Q2 2012 Source: Nielsen Digital Shopping Study, Q2 2012

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hoW to Be as digitallY saVV Y as YoUr shoppers

DIGITAL SHOPPING | WHAT YOU NEED TO CONSIDER

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The message to retailers with regard to e-commerce and digital shopper marketing is clear—embrace the trend and make digital a core element of your overall strategy. In order to succeed, retailers should:

RECOGNIZE SHOPPER NEEDS: Online shopping and digital shopper marketing are changing shoppers’ expectations and behaviors. keep in mind that shoppers will continue to seek convenience, choice and price-value, and they will find the channel that best delivers against these needs. Don’t let the fear of cannibalization dissuade digital shopper marketing efforts as your shoppers may switch to competitors if you do not offer a complete shopping experience.

UNDERSTAND THE ROLE OF CATEGORIES IN THE DIGITAL ERA: Online shopping provides opportunities to up-sell and grow the basket. Free of physical or temporal barriers, online shopping environments can provide an expansive product assortment and unexpected items (treasure hunt), incentivizing shoppers to check-in and check-out the merchandise on their own time. Protect categories that drive trip count and basket size by unlocking the barriers and enablers of e-commerce success:

• Urgency Barrier• Inspection Barrier• Stock-Up Enabler• Price Enabler

OPTIMIZE DIGITAL TOUCHPOINTS:

Digital affords new opportunities for personalized shopper communications enabling special offers appealing to unique interests via relevant, resonant messaging. Enjoy a boost in ROI on promotional spending by extending offers to price-sensitive shoppers only, avoiding unnecessary subsidies and precisely calibrating offers to shopper needs and wants.

R E TA I L E R S

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Manufacturers can benefit from joining the digital vanguard as well, developing a loyal following among key constituencies through frequent communication and feedback with shoppers that helps shape and tailor offerings. Factors influencing digital marketing success for manufacturers include:

IMPROVE ENGAGEMENT WITH YOUR SHOPPERS:

Understand evolving consumer trends and the optimal way to reach your most valuable shoppers, leveraging personalization afforded through digital platforms. Shape offers that reflect the usage patterns and product preferences of your shoppers, like automatic replenishment programs, in order to influence purchase decisions and drive long-term brand loyalty. Create a multi-platform campaign that influences the consumer along the path to purchase by offering more value than strictly promotional offers.

INNOVATE TO DRIVE GROWTH: Leverage e-commerce as a channel suited to certain shopper segments, niche product assortment and new product introductions. Understand the new rules of engagement as this channel introduces new competition, but affords the opportunity to maximize new product innovation. Solicit immediate feedback on new formulas and programs, tweaking winners and cutting losses on unsuccessful products; query customers as to pack size and form preferences to create virtually customized offerings.

DIGITAL SHOPPER MARkETING:

Leverage digital to proactively tackle the most important issues of your key retail partners. Online engagement with brands can trigger new trips, expand baskets and influence store choice. Ideas include ‘buy it now’ links in digital ads, digital shopping lists pre-populated with common purchases, and pop-up stores driving product or retail trial.

M A N U FA C T U R E R S

1

2

3

1

2

3

Copyright © 2012 The Nielsen Company

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For the CPG industry, digital shopping represents an evolutionary, not a revolutionary development, that will bring manufacturers and retailers closer to the consumer. Success in the digital shopping environment requires a deep understanding of decisions that different shoppers make along the path to purchase at both the trip and product level, the types of information they seek to inform those decisions, and where they choose to purchase.

Manufacturers and retailers should measure the impact of digital shopper marketing programs, understand the drivers of success or causes of failure, and continuously adjust these programs to better align with core shopper needs.

By leveraging digital and its distinct characteristics, retailers can complement brick-and-mortar operations rather than replace them, building sales on both fronts. Stores will thrive because of technology, not in spite of it.

For manufacturers, digital is no longer optional. know your shopper. Engage her through digital media to influence relevant decisions on the path to purchase. Drive her to purchase—wherever that purchase might be.

ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands.

For more information, visit www.nielsen.com.

Copyright © 2012 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies. 12/5455

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c o N c lU s i o N

i “Amazon Positioned for 50% Overall Market Share by End of 2012”, Seeking Alpha, February 2011. http://seekingalpha.com/article/250507-amazon-positioned-for-50-overall-market-share-by-end-of-2012ii Nielsen NetView, 2012iii Nielsen Mobile Panel, 2012iv Nielsen Mobile Shopping Report, Q1 2012v “2012 Power 50: No. 23 Dan Bane”, Supermarket News, July 2012. http://supermarketnews.com/trader-joe039s-market/2012-power-50-no-23-dan-bane

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