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What‟s changing in the world of                                           consumer goods?www.engageconsultants.com   faceb...
Consumer goods is an enormous industry    Top 250 companies turnover                           US$2.8 trillion*    Globall...
How it all startedDeveloping   Drive depth powerful         of  brands     distribution
This model started to get shaky in the 80s                       Post-war scarcity     1950‟s                             ...
Consumer goods is no longer fast moving!                                                        CAGR 2008 - 2010          ...
Today media is personal
84% of people now use the internet for information                                                             about a pro...
Isn‟t this just for travel, auto or electronics?                             Global monthly searches            10 Million...
Not in Asia?                 Facebook Users                                                  Facebook Users               ...
Retail is the biggest business on the planet                           Top 10 retailers sales                             ...
And retail consolidation will continue                                                                   52      50      4...
Shoppers are retailers‟ lifeblood, and have more                                        choice than ever                 M...
In many parts of the region hypermarket growth is slowing         32                                                      ...
Whilst smaller stores are gaining ground                     Convenience stores                              Supermarkets ...
In as a result in Taiwan, Indonesia and Thailand Main                                                  shops are becoming ...
But what happens when 20% of sales are online?
Look whats happening…
Retailers “sell” a „virtuous cycle‟                                          Higher volumes                               ...
This delivers results for big retail
Trade spend has grown from 33% of marketing                                                     spend, to almost 60%      ...
70% of promotions lose money – US$ 196 billion                                                                  could be w...
The consumer goods industry could almost double its                                              profits by investing effe...
A model invented in the 50‟s can‟t be made to work                                                      any longer!       ...
What is shopper marketing?www.engageconsultants.com   facebook.com/engagetheexperts   twitter.com/shopperexperts
Consumers and shoppers are different
Consumer behavior is a cycle             Needs and              desiresExperience                          Occasions      ...
Shoppers make products available to consume    Shopper’s  interpretation                            Needs and             ...
Purchase behavior is linear  Shopper’sinterpretation        Shopper’s needs                 Outlet selection              ...
This not shopper marketing!
What is shopper marketing? “The systematic application ofelements of the marketing mix toaffect positive change in shopper...
True, integrated, shopper marketing creates                          coherent links between the end consumer              ...
Shopper marketing in a digital                                                         worldwww.engageconsultants.com   fa...
Digital has the power to power to personalize                                         consumer marketing                  ...
Digital applications can enhance shoppers‟                                                    understandingConsumer’s dema...
Digital enables shoppers to meet their needs betterConsumer’s                                    Store locations, demand  ...
Digital has the power to influence shopper‟s behavior                                                           in-storeCo...
BUT Integrated shopper marketing is already                                                                               ...
Impacting on 172 different business processes                                                                             ...
In an industry under enormous pressure                  Trade                                 Increased                spe...
Digital seems likely to increase the pressure on                                                                          ...
Five questions that you should ask to drive real                                                           returns        ...
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Whats Changing In The World Of Consumer Goods

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@tobydesforges slide deck from the "Shopper Marketing in the Digital World" workshop on July 5th 2012

Published in: Business, News & Politics

Transcript of "Whats Changing In The World Of Consumer Goods"

  1. 1. What‟s changing in the world of consumer goods?www.engageconsultants.com facebook.com/engagetheexperts twitter.com/shopperexperts
  2. 2. Consumer goods is an enormous industry Top 250 companies turnover US$2.8 trillion* Globally these companies create profits of US$240 billion* Since 2008 the top 250 companies have grown annually by less than 4%** Source Deloittes – “Global Powers Of The Consumer Products Industry 2012”
  3. 3. How it all startedDeveloping Drive depth powerful of brands distribution
  4. 4. This model started to get shaky in the 80s Post-war scarcity 1950‟s Power in the Mass media “Consumer hands of Creation of consumer Marketing” manufacturers brands 1980-90‟s Retail consolidation “Trade Power moves Brand proliferationMarketing/Category towards retailers Media fragmentation Management”
  5. 5. Consumer goods is no longer fast moving! CAGR 2008 - 2010 10% 8% 6% 4% 2% 0% Consumer goods Retail Pharma and Biotech Mobile communicationsSource: Deloiites, Ovum, Imap, engage analysis
  6. 6. Today media is personal
  7. 7. 84% of people now use the internet for information about a product Source used by media type 84% 83% 82% 81% 80% 79% 78% 77% 76% 75% 74% Traditional media Internet sources In-store marketingSource: Google inc. 2011
  8. 8. Isn‟t this just for travel, auto or electronics? Global monthly searches 10 Millions 9 8 7 6 5 4 3 2 1 0 Coca Cola Dove Gillette Colgate Pantene Wrigley ShampooSource: Google inc. 2011
  9. 9. Not in Asia? Facebook Users Facebook Users China (25) Sri Lanka (20) South America, 80,9 Africa, 30,468, 35,080 040 Australia, 12,8 Vietnam (16) 62,760 UAE (14) Sinagpore (13) Europe, 207,4Asia, 166,498, 74,560 640 Hong Kong (10) North America Taiwan (6) , 205,629,460 Thailand (5) Malaysia (4) Philippines (3) Indonesia (1) 0 20,000,000 40,000,000
  10. 10. Retail is the biggest business on the planet Top 10 retailers sales WalMarts sales 1100 450 Billions Billions 1050 400 1000 350 950 300 900 250 850 200 800 150 750 700 100 650 50 600 0 2000 2000 2010 2010Source: Deloittes Global retail report/Wal-Mart annual reports/press reports/& and Iholdign sreports/Trade Insight Trade global spend survey 2010
  11. 11. And retail consolidation will continue 52 50 48 48 47 59 56 54 65 61 48 50 52 52 53 41 44 46 35 39 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Modern self service trade Traditional counter serviceSource: Nielsen “Retail and Shopper Trends Asia Pacific 2010
  12. 12. Shoppers are retailers‟ lifeblood, and have more choice than ever More often More Spendingshoppers more Better returns on capital employed
  13. 13. In many parts of the region hypermarket growth is slowing 32 29.8 30 29.2 28 26 24 22.8 21.7 22 22 21.4 21.2 20.7 20 Taiwan Malaysia Thailand Indonesia 2009 2010Source: Nielsen Asia Retail and Shopper Trends 2011
  14. 14. Whilst smaller stores are gaining ground Convenience stores Supermarkets and minimarts 35 27 26.5 26.1 26 29.8 30 28.8 25 24 25 23 22 20 21.4 18.5 21 16.7 20 15 12.6 18.9 12.2 19 10 18 Taiwan Thailand Singapore Malaysia Indonesia 2009 2010 2009 2010Source: Nielsen Asia Retail and Shopper Trends 2011
  15. 15. In as a result in Taiwan, Indonesia and Thailand Main shops are becoming less frequent Shoppers MAIN SHOP Frequency (% of grocery shoppers) 5 14 15 26 23 36 26 25 22 51 29 55 48 61 23 29 34 64 67 19 24 26 62 54 49 45 28 30 24 21 18 9 Weekly 2 Weeks Monthly Less Often 4%Source: Nielsen Asia Retail and Shopper Trends 2011
  16. 16. But what happens when 20% of sales are online?
  17. 17. Look whats happening…
  18. 18. Retailers “sell” a „virtuous cycle‟ Higher volumes enable lower costs Higher volumes Lower costs for key enable lower suppliers selling prices Lower selling prices drive volume Pitch: this is mutually beneficial (!), driving volume through lowering priceSource: B&Q, Retail Outsourcing Ltd.
  19. 19. This delivers results for big retail
  20. 20. Trade spend has grown from 33% of marketing spend, to almost 60% Expenditure as a proportion of budget Trade Promotion Consumer Promotion Advertising & Media 1978 1998 2005Source: Donnelly Marketing and Accenture Analysis 2006
  21. 21. 70% of promotions lose money – US$ 196 billion could be wasted every year Manufacturer : Lose Manufacturer : Win Retailer: Win Retailer: Win 60% Manufacturer : Lose Manufacturer : Win 15% Retailer: Lose Retailer: Lose 10% 15% 31% of CPG companies cite poor compliance as a key issue*Source: Manufacturer data & analysis, Nielsen Data, (CAS GMBH)/ Analysis/Trade Insight Trade global spend survey/ Deloites
  22. 22. The consumer goods industry could almost double its profits by investing effectively in-store The industry wastes nearly as much money in retail as it earns in profit 250 Billions 200 240 billion 150 100 50 0 Industry profit -50 (198 billion) Wasted in-store expenditure -100 -150 -200* engage analysis based on Deloittes – “Global Powers Of The Consumer Products Industry 2012” 2.5bn 500m
  23. 23. A model invented in the 50‟s can‟t be made to work any longer! Post-war scarcity 1950‟s Power in the Mass media “Consumer hands of Creation of manufacturers Marketing” consumer brands 1980-90‟s Retail consolidation“Trade Marketing Power moves Brand proliferation /Category towards retailers Media fragmentation Management” Personal media 2010 Channel Power in the hands “Shopper proliferation of shoppers Marketing” Globalization
  24. 24. What is shopper marketing?www.engageconsultants.com facebook.com/engagetheexperts twitter.com/shopperexperts
  25. 25. Consumers and shoppers are different
  26. 26. Consumer behavior is a cycle Needs and desiresExperience Occasions Availability to consume
  27. 27. Shoppers make products available to consume Shopper’s interpretation Needs and desires Shopper’s needsExperience Outlet selection Occasions Solution location AvailabilitySelection Product to consume Purchase Availability to consume
  28. 28. Purchase behavior is linear Shopper’sinterpretation Shopper’s needs Outlet selection Solution location Product Selection Purchase
  29. 29. This not shopper marketing!
  30. 30. What is shopper marketing? “The systematic application ofelements of the marketing mix toaffect positive change in shopper behavior in order to drive consumption of a brand”
  31. 31. True, integrated, shopper marketing creates coherent links between the end consumer and the in-store environmentConsumer Shopper Channel In–store Investmentpriorities behavior priorities marketing in customers
  32. 32. Shopper marketing in a digital worldwww.engageconsultants.com facebook.com/engagetheexperts twitter.com/shopperexperts
  33. 33. Digital has the power to power to personalize consumer marketing Needs and desiresExperience Occasions Availability to consume ZMOT proves this potential
  34. 34. Digital applications can enhance shoppers‟ understandingConsumer’s demand Search, ratings, revie Shopper’s ws, friends and interpretation family opinion. Shopper’s needs Outlet selection Solution location Product selection Purchase
  35. 35. Digital enables shoppers to meet their needs betterConsumer’s Store locations, demand price points, offers Shopper’s and coupons. interpretation product availability – buy now or buy Shopper’s needs later? Outlet selection Solution location Product selection Purchase
  36. 36. Digital has the power to influence shopper‟s behavior in-storeConsumer’s demand Shopper’s interpretation Shopper’s needs Outlet selection Find products, check Solution recipes, review price location points, seekalternatives, download Product coupons, PAY, and selectionexchange loyalty data Purchase
  37. 37. BUT Integrated shopper marketing is already complex Consumer insight Portfolio strategy Brand Brand Brand Brand priority priority priority priority 1 2 3 4 Shopper insight Customer plan In-store In-store In-store In-store Channel Channel blueprint blueprint blueprint blueprint planChannel understanding Customer Customer insight plan In-store In-store In-store Channel Channel blueprint blueprint blueprint plan Customer plan In-store In-store Channel Channel blueprint blueprint plan Customer plan In-store In-store In-store Channel Channel Customer blueprint blueprint blueprint plan plan
  38. 38. Impacting on 172 different business processes In–store Consumers Shoppers Channels Customers Marketing Customer and Consumption drivers Channel dynamics Insight and trends Path to purchase and trends Purchase drivers distributor drivers and trends Key customer and Portfolio and brand Channel and route Strategy strategy Shopper strategy to market strategy In–store blueprints route-to-market strategy Brand investment Shopper investment Trade investment Trade investment Trade investmentInvestment framework framework framework framework framework Annual Brand plans and Shopper plans and Channel plans and In–store activity plan Customer and forecasts distributor plans plans forecasts forecasts Channel Brand expenditure Shopper expenditure In–store activity Customer and Budgets budgets budgets expenditure budgets distributor budgets budgets Product and ATL Path to purchase Channel plan In–store marketingExecution execution execution execution execution Selling and negotiation Review execution and Review execution Review execution and Review execution and Review execution and Review portfolio and brand shopper strategy and channel progress towards customer and route-to- strategy strategy blueprints market strategy
  39. 39. In an industry under enormous pressure Trade Increased spend out competition of control Media Raw Material fragmentation inflation Massive Trade pressure on Talent scarcityconsolidation margins and inflation
  40. 40. Digital seems likely to increase the pressure on marketing budgets Forecast global spend Global Spend (US$ Billions) 600 500 400 Non- Non- digital, $382. 300 digital, $335. 06 47 200 100 Digital, $117. Digital, $195. 87 0 94 2010 2015Source: PWC 2012
  41. 41. Five questions that you should ask to drive real returns Which Where What is What shoppers can you required Whatconsumption will influence to investmentopportunities support these influence is needed? exist? these? shoppers? behavior?

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