Prepared for. 5 th October 2016 Ben Miller, Director of Retail Insight, IGD

Transcription

1 Prepared for 5 th October 2016 Ben Miller, Director of Retail Insight, IGD

2 INTRODUCTION TO IGD IGD s online channel coverage Online grocery retailing hubpage Retail Analysis Extensive shopper insight ShopperVista Channel Focus Online and Digital Convention Customised briefings and workshops

3 INTRODUCTION TO IGD Some of our 1,000+ customers Source: IGD Research

4 How big is the opportunity?

5 The UK has entered a period of uncertainty and significant economic adjustment Mark Carney, Governor Bank of England,

6 Brexit and Beyond Brexit outcomes European political changes Labour movement Trade terms Economic and fiscal effects Regulatory drift

7 Access IGD.com for Brexit and Beyond

8 Grocery retail market size ( bn) YOY Growth (%) Crystal ball time Grocery retail market size and YOY % growth % % 8% 7% % 6% 5% % 3.5% 1.3% 0.4% 0.6% 1.4% 1.8% 2.1% 2.2% 2.1% 4% 3% 2% 1% % Source: IGD Research, Grocery Retail forecast ) IGD 2015

9 Grocery retail market size ( bn) Largest contributor? Population growth Grocery retail market size and growth contributors Inflation Volume 2021 Source: IGD Research, Grocery Retail forecast ) IGD 2015

10 Fastest growing UK channel Channel share 48.4% 44.3% 21.0% 21.3% Change in value +68.3% 9.2% 8.4% 10.0% 12.7% 17.6bn 10.5bn 9.0% 5.8% 5.6% 4.3% bn Change Hypermarkets Supermarkets Convenience Discount Online Other Total Source: IGD channel forecasts 2016

11 Recent performance +8.8% n/a +8% 52 weeks to (Grocery online) Not disclosed 12 weeks to contribution to LfL sales 12 weeks to % +13.8% 26 weeks to weeks to Note: Trading periods vary in their length and dates IGD 2015

12 Global opportunity IGD 2015

13 Key growth drivers Technology Innovation- Test & Learn Innovation- Test & Learn Improved experience Loyalty Innovation- Test & Learn Innovation- Test & Learn Convenience Source: IGD

14 Disruptors

15 Disruptors: Amazon June 2016 In major UK cities including London, Birmingham, Newcastle, Manchester, Leeds, Liverpool and increasing coverage November 2015

16 Amazon: where next? Private label Test & Learn Where next? Amazon s Soft & Cozy, 2015 Happy Belly, Wickedly Prime, and Mama Bear will include nuts, spices, tea, coffee, baby food, and vitamins

17 Disruption drives growth We welcome competition, and they would help to grow the online grocery market. It is not a saturated market where they would have to steal market share and we are very confident about our relationship with our customers Tim Steiner, Ocado, CEO

18 Discounters getting in on the act Source: Retailers, IGD Research and ShopperVista

19 Deliver by box or bike IGD 2015

20 The online grocery shopper

21 How can we grow? More People More Often More Purchases More Money Shopper behaviour/change Penetration Frequency Trip volume Price per pack Source: IGD research

22 More people Source: IGD ShopperVista Channel Focus, past month online grocery shoppers, Nov Jan 16 27% 28% 24% 22% 21% 20% 20% Source: IGD ShopperVista IGD 2015

23 Shopper seek convenience do you help? Main reason All reasons 1 It s easier or more convenient 57% 80% Avoids carrying heavy bags 2 It s quicker 13% 59% If the weather is bad 3 It helps me save money 14% 43% Don t have access to a car 4 It s more enjoyable 4% 20% 5 It s better for the environment 2% 11% Avoids going to the store 6 Other 8% 19% Checkout is quicker Base: all past month online grocery shoppers, Nov-Jan 16

24 How to convert shoppers to online in the future? 1. No delivery charges 2. If I wasn t able to get into stores anymore 3. Better / longer use by dates 4. Better picking of quality products 5. Better accuracy of orders Source: IGD ShopperVista, all main grocery shoppers, May 15

25 More often 1. Supermarket 46% carparks 5. Retail parks 32% 2. Work places / 35% business parks 6. Park and ride 23% locations 3. C-store lockers 34% 7. Railway stations 22% 10. More/better 4. evening Holiday meal locations deal 32% offers 8. Fuel stations 22% Source: ShopperVista Online Channel Focus, past month online grocery shoppers, Nov-Jan 15

26 When they come, tend to stay 62% 38% 5+ years ago In the last 2-5 years In the last year In the last 6 months In the last 2-3 months In the last month 19% 43% 17% 8% 5% 8% Source: IGD ShopperVista, all main grocery shoppers, May-Jul 15

27 Doesn t excite everyone I enjoy online grocery shopping and take my time choosing items and searching the site I get bored online grocery shopping and try to finish as quickly as possible Source: IGD ShopperVista, Channel Focus, past month online grocery shoppers, May-Jul 15

28 Help shoppers find new, relevant products I ve STOPPED using my FAVOURITES / previous orders lists as I just end up buying the same products all the time Source: IGD ShopperVista, Channel Focus, past month online grocery shoppers, May-Jul 15

29 Encouraging trial IGD 2015

30 Take 2.5 routes per shop First approach All approaches On last occasion 1 Search function 20% 63% 2 Favourites or previous orders 38% 60% 3 Special offers section 18% 53% 4 Category menus 13% 42% 5 Express shopping list 4% 12% 6 Recipes and meal suggestions 2% 8% 7 Smartphone/tablet scanned 2% 6% IGD ShopperVista Channel Focus, past month online shoppers Nov Jan 16

31 Is there another way? Loblaw, Canada Source: IGD Research

32 Search for profitability

33 Profitability The challenge is significant in markets like the UK, where home delivery is the typical method. Retailers often charge between 1-5 for home delivery, while the actual cost to them is more likely 20. The fact is online is a less profitable channel. Mark Price, MD Waitrose, 2015

34 Retailers evolving their model for and with growth CAPEX/Capacity Online supply chain model Automated Semi automated Dark store Small warehouse In store pick Efficiency/Customer Service levels Source: IGD research

35 Multichannel strategy key to success Source: Tesco analyst presentation Feb 2014 Source: Tesco 2014

36 Unlocking the ecommerce opportunity

37 Start with the basic info and check it Source: Asda presentation to IGD Online & Digital Summit 2015 // Burtons Biscuits

38 Great images make it easier to shop Sales +33% Source: IGD research

39 Once the basics are in place Source: Asda presentation to IGD Online & Digital Summit 2015

40 Partnering with other suppliers: Test and learn + Source: Burtons Biscuits presentation to IGD Online & Digital Summit 2015

41 Co-creation: You can think differently online

42 Future gazing

43 Emotion vs Promotion Emotional engagement Proximity of consumption to purchase Source: Sainsbury's, IGD Research IGD 2015

44 Digital to shorten the path to purchase Amazon Dash Amazon Echo Internet of Things IGD 2015

45 IGD 2015

46 Remote delivery Austria Sweden Source: IGD Research IGD 2015

47 Convenient collection Drive + Automated lockers Taxi home Personal lockers Source: IGD Research IGD 2015

48 Shortening route to market IGD 2015

49 Digital drives engagement Creating your own offers Brand marketing Source: IGD Research, Target, Waitrose, Nike Town (UK), Mondelez and Boomf IGD 2015

50 Make every moment shoppable Virtual shopping walls Virtual Reality Source: IGD Research, Carrefour, Shanghai, China and Tommy Hilfiger, New York, USA IGD 2015

51 Ben Miller, Director of Retail Insight, IGD Source: IGD Research