Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
FAST MOVING
CONSUMER GOODS
INDUSTRY
Rome, Jan 27th 2017
Part-Time MBA
II Edition
Rachele Soliera
TOPICS
1. MARKET HIGHLIGHTS
• Definition / Features / Characteristics
• Product categories
• Top FMCG Players (Suppliers –...
FMCG Market Highlights
• Fast-moving consumer goods (FMCG) or consumer
packaged goods (CPG) are products that are sold
qui...
FMCG Product Categories
HOUSEHOLD CARE PERSONAL CARE
HEALTH CARE/OTC
FOOD & BEVERAGE
PET CARE
SMALL ELECTRONICS
FMCG Market Highlights
• FMCG companies are behind the biggest brands in the world
• FMCG is all about names, the products...
FMCG Market Highlights
• FMCG companies can beat the recession….
…. Consumers always need to buy products created by
FMCG ...
FMCG Market Highlights
The FMCG industry thinks bigger – and better
• This is an industry that offers things on a whole
ne...
FMCG Main Characteristics
• From the consumers' perspective:
– Frequent purchase
– Low involvement (little or no effort to...
FMCG Top Players
Suppliers Retailers
FMCG Top Players: The Suppliers
The top FMCG companies are characterised by their ability to develop
the strongest loyalty...
FMCG Top Players: The Manufacturers
The top 16 global FMCG brands are chosen by more
than one billion consumers a year
FMCG Top Players:
The number one beverages brand in
terms of reach (over 200 countries)
and sales with more than 500
produ...
FMCG Top Players:
• One of the oldest and most stable consumer
products Company
• One of the most Innovative, visionary an...
FMCG Top Players:
72 Bilion dollar of global sales
16,5 Billion dollar of net Income
20-year of total Shareholder
Return o...
FMCG Top Players:
400 brands; sales in 190 countries
13 brands have sales of more than €1 bil. year
2 bil. people use ever...
FMCG Top Players:
3,5 Billion Euro of net sales revenue
and a gross profit of 430 Million Euro .
Barilla leads the global ...
FMCG Top Players: The Retailers
Top 15 Grocery Retail Markets to 2015
1. US and Europe lost
supremacy, leaving
Asia to drive the growth.
In 2011 China ecl...
FMCG: Top 12 Retailers Worldwide
Source Mediobanca 2015 Global report
The largest Top 12 retailers in the world are in Eur...
FMCG Top Players: The Retailers
• The Top 250 Global Retailers generate revenues approaching $4.5
trillion, with an averag...
FMCG: Top Retailers
• $ 482 BLN in sales revenue
• Over 11,530 stores (discount, supermarket,
department stores, warehouse...
FMCG: Top Retailers
The second largest retail company in the world
• It is a Warehouse Club Chain with
71.2 million wealth...
FMCG: Top Retailers
The third largest retail company in the world
• 104 billion Sales
• Over 380,000 employees worldwide
A...
FMCG: Top Retailers
The forth largest retail company in the world
• € 98.3 billion in sales
• Over 10,000 stores, in 28 co...
FMCG: Top Retailers
An international best
practice
• € 7.3 billion in sales (+4,3% vs py)
• €431 milion operating profit
•...
FMCG: The store formats
Convenience & Discount Store
• 2000-3000 sku’s
• 200-3000 sq mt
• Limited service
Super market
• 2...
FMCG: The Store Format
1. Big Box (Hype+Super) continues to be the key format for modern retail penetration
2. Supermarket...
But all players cannot fail to take the e-commerce’s threats and
opportunities into account…!
Q. When shopping for the pro...
The E-commerce Channel
• Online development is
accelerating and
becoming a more
integral component of
key retailer’s strat...
The Dominance of the Marketplaces is
Growing
*GMV – total sales value of Merchandise sold through a marketplace. GMV (Gros...
KEY TAKEWAYS
For Retailers
• Domestic growth is getting harder to obtain, even for the largest global
retailers. But domes...
KEY TAKEWAYS
For Suppliers
• The biggest opportunities come from BRIC markets: Building regional
expertise, understanding ...
SUPPLIER & RETAIL RELATIONSHIP
…..a love-hate Story ..!
1920’s – ’50s
Local Corner Stores
The Merchant is a small
entrepreneur, owner of only 1
– 2 shops.
He buys and sells his g...
The Industry organization chart is flat.
Companies are hierarchically organized with a
substantial equilibrium among the d...
1950’s – ’80s
Branded Products explosion!
Suppliers dominate the market
Advertising is completely in the
hands of Supplier...
• It’s a Marketing Centric organization.
•All the other functions are in a subordinate position
General Management
Fnance
...
It’s Store Loyalty time!
1990’s – ’00s
Retailers discover their
big power
Retailers decide on:
Assortment, Lay-out, Space
...
Suppliers move from a Marketing-Oriented organization
to a Customer–Centric organization
The Commercial Evolution
MARKETIN...
Retailer/Supplier Relationship Evolution
The Italian Case History
Italian Case History
Decades 60 - 80: the age of the supplier power
Consumer
Supplier
Consumer
research
Product
flow
Produ...
Italian Case History
Italian retailers’ structure
LEVELS
STORE EXECUTE SUPPLIERS
STRATEGIES
ACTIVITIES
Negotiation is very...
Italian Case History
Consumer
Supplier
Consumer
research
Product
flow
Product flow
Retailer
Context:
-Slow-down of the eco...
Italian Case History
100
64
62
37
34
0 50 100 150
Italy
Germany
Spain
France
UK
Nr point of sales (000) • More than double...
Italian Case History
Physical limitations for a full development of
brands, especially for followers
Italian Case History
ITALIA DISTRIBUZIONE
• 30 decisional points
• All channels
(Modern Distrib. –
Organiz. Trade –
Wholes...
Decisional levels are multiplied: «Who decides what»
Global contract,
List price
Contract, Assortment,
Listing, Special Pr...
• The power is completely in the Retail hands
RetailerSupplier
• Strong Concentration but
• fake alliances
• Negotiations ...
Italian Case History
but the world is going fast … even in Italy
• Economic crisis and new technologies are
changing consu...
Retailer/Supplier Relationship in the
DIGITAL ERA
The Digital Revolution
It’s the age of Consumer Made & Social Marketing
• Shopper is more sophisticated, wants
to interact...
The Digital Revolution
• E-commerce will account for
$48 billion of global FMCG sales
(estimate to triple by 2025)
• 4,4% ...
The Digital Revolution
Price and value continue to top the list but there are other factors, such as
shopping trips are mu...
The Digital Revolution
What encourage you to choose a retailer?
base: 21,788
Top influencers of spending online, global gr...
Click & Collect: one answer to «Omnichannel’s» needs
• A comfortable way to do shopping on line
and collect the goods pers...
The Digital Revolution
Leading Chinese Retailer Alibaba
announced the development of a
new online payment option: simply
s...
KEY TAKEWAYS
• Conflictual time has gone! Digital tools and technologies have
changed the balance of power in retailing, s...
DEVELOP A CAREER IN
THE FMCG INDUSTRY
Develop a Career in the FMCG Industry
Every FMCG business is different, but there are certain functions
that are crucial t...
Develop a Career in the FMCG Industry
Think fast and outside the norms of conventional
thinking. Be constantly curious, up...
Fmcg   jan 27th 2017   2nd edition
Upcoming SlideShare
Loading in …5
×

Fmcg jan 27th 2017 2nd edition

Second appointment with the LUISS MBA Part-Time students, to talk about Fast Moving Consumer Goods Industry, one of the most dynamic and biggest in the world: an enormous global market made up of very famous brands that we use every day, distribute everywhere in the world. A safety bet, even in recession times, such these last years, because the demand for this kind of brands doesn’t fall...!
A world where also career is fast: where you immediately start to think bigger and better, to manage a big amount of money, to cover heavy responsibility and work on big project. that can influence the consumer’s habits and choice.
At the end of the lessons some important top managers of FMCG, joint us in a very impactful and insight roundtable to share their experiences and to answer to student’s questions and curiosities.

Related Books

Free with a 30 day trial from Scribd

See all

Fmcg jan 27th 2017 2nd edition

  1. 1. FAST MOVING CONSUMER GOODS INDUSTRY Rome, Jan 27th 2017 Part-Time MBA II Edition Rachele Soliera
  2. 2. TOPICS 1. MARKET HIGHLIGHTS • Definition / Features / Characteristics • Product categories • Top FMCG Players (Suppliers – Retailers) • FMCG Store Formats 2. SUPPLIER & RETAIL RELATIONSHIPS • The Evolution • Italian Case History • The Digital Revolution • Suppliers & Retailers in the Digital Era 3. A CAREER IN THE FMCG INDUSTRY
  3. 3. FMCG Market Highlights • Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost • They have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly • A multi-million dollar sector made up of a huge range of famous brand names, that we use every single day, distributed everywhere in the world. • The profit margin is relatively small but the volume made on FMCG products is huge thus, the cumulative profit on such products can be substantial.
  4. 4. FMCG Product Categories HOUSEHOLD CARE PERSONAL CARE HEALTH CARE/OTC FOOD & BEVERAGE PET CARE SMALL ELECTRONICS
  5. 5. FMCG Market Highlights • FMCG companies are behind the biggest brands in the world • FMCG is all about names, the products which everyone recognizes from trips to the supermarket or from ads on television • Things move quickly…. also the brands: 40% of them on the top 100 list twenty years ago, have already been replaced with something new today • The FMCG industry changes fast and is constantly evolving: there is never a dull moment in FMCG  • FMCG firms thrive on employee and customer retention: Customer loyalty can make or break a brand.
  6. 6. FMCG Market Highlights • FMCG companies can beat the recession…. …. Consumers always need to buy products created by FMCG companies.
  7. 7. FMCG Market Highlights The FMCG industry thinks bigger – and better • This is an industry that offers things on a whole new scale. Where else could you find yourself handling $150 million accounts? • Working in FMCG gives you the chance to be part of global success stories and it influences the way consumers shop for products. • FMCG firms always think of the next great discovery or innovation to meet consumers’ evolving needs.
  8. 8. FMCG Main Characteristics • From the consumers' perspective: – Frequent purchase – Low involvement (little or no effort to choose the item) – Low price – Short shelf life – Daily consumption • From the marketers' angle: – High volumes – Low contribution margins x single product – Extensive distribution networks – High stock turnover – High total profit
  9. 9. FMCG Top Players Suppliers Retailers
  10. 10. FMCG Top Players: The Suppliers The top FMCG companies are characterised by their ability to develop the strongest loyalty and trust towards brands that generate a huge demand by consumers
  11. 11. FMCG Top Players: The Manufacturers The top 16 global FMCG brands are chosen by more than one billion consumers a year
  12. 12. FMCG Top Players: The number one beverages brand in terms of reach (over 200 countries) and sales with more than 500 products on offer 150.000 employees all over the world Coca Cola is the most recognized word in the world after OKAY $ 50 billion of revenue and €9 billion of Profit On average, more than 10,000 soft drinks from Coca-Cola are consumed every second of every day
  13. 13. FMCG Top Players: • One of the oldest and most stable consumer products Company • One of the most Innovative, visionary and open-minded Company of this Industry 300 brands, available in 180 countries in the world 24 brands with an annual sales more than 1 million dollars An average American consumer spends $110 per year on P&G products 65,3 Bilion dollar of Net Sales; 13,4 Bilion of operating income (+22% vs py) 125.000 employees all over the world
  14. 14. FMCG Top Players: 72 Bilion dollar of global sales 16,5 Billion dollar of net Income 20-year of total Shareholder Return of 10.6% Johnson & Johnson is one of the World’s Most Admired Companies The United Nations awarded Johnson & Johnson the 2011 Humanitarian of the Year Award for the leading role in its Healthy Mother, Healthy Child initiative. 3 main segments: - MD&D 35% - Pharmaceutical 47% - Consumer 18% 250 operating companies and 128.000 employees around the globe, in more than 60 countries
  15. 15. FMCG Top Players: 400 brands; sales in 190 countries 13 brands have sales of more than €1 bil. year 2 bil. people use everyday a Unilever product Broad brands’ portfolio with a very diversified product range from Food, Beverage and Refreshments to Home and Personal Care 53 Billion Euro of annual revenue with an operating profit of 8 Billion Euro. The logo is designed to include 25 icons, each of them represents something important to Unilever (from an ice cream to a hand, or a fish) 168,000 people work for Unilever 45% of the managers are women
  16. 16. FMCG Top Players: 3,5 Billion Euro of net sales revenue and a gross profit of 430 Million Euro . Barilla leads the global pasta business, the pasta sauces business in continental Europe, the bakery products business in Italy • 13 Brands exported to more than 100 countries. • 1.7 million tons of goods produced in 30 different sites • More than 8,000 employees • €141 Million invested in Research & Development– 50 new products launched every year The first international center dedicated to awareness, promotion, and development of Italian gastronomic culture in the world. ,
  17. 17. FMCG Top Players: The Retailers
  18. 18. Top 15 Grocery Retail Markets to 2015 1. US and Europe lost supremacy, leaving Asia to drive the growth. In 2011 China eclipsed the US as the leading global grocery market and will be worth over €1,000bn this year. 2. In the last year 83% of the 3.6 billion additional purchases made by households around the world were from Asia 3. The BRIC market (China, India, Russia and Brasil) are the biggest contributors of global growth
  19. 19. FMCG: Top 12 Retailers Worldwide Source Mediobanca 2015 Global report The largest Top 12 retailers in the world are in Europe and North America, even they need New Markets to support their growth. Top 12 key figures • 1.040 Billion Euro total revenues (+8,3% vs py) • 4% total operating profit (+9% vs py) • 211,7 billion s.m. of commercial surface • 5,5 million employees
  20. 20. FMCG Top Players: The Retailers • The Top 250 Global Retailers generate revenues approaching $4.5 trillion, with an average size of more than $18 Billion per company • Only 20 companies exceeded $50 billion in retail revenues, while one quarter of the 250 was less than $5 billion Globalization is a must also for retailers The top 10 Retailers operate in almost 17 countries and nearly one-third of their sales depends on foreign markets Sources: Deloitte Touche Tohmatsu Limited (DTTL) 18th annual Global Powers of Retailing report
  21. 21. FMCG: Top Retailers • $ 482 BLN in sales revenue • Over 11,530 stores (discount, supermarket, department stores, warehouse) in 28 countries, under a total of 65 banners • 2.3 million employees: The biggest private employer in the world The largest retail company in the world The acceleration of Walmart’s e-commerce capabilities and its use of social media data is likely to be more advanced than many of its suppliers “Ecommerce is the next growth engine for Walmart. We want to know what every product in the world is, who every person in the world is, and then connect them.” (Neil Ashe, Walmart’s Global Ecommerce Division CEO)
  22. 22. FMCG: Top Retailers The second largest retail company in the world • It is a Warehouse Club Chain with 71.2 million wealthy and loyal members and 672 warehouses. $100 billion of Sales, with $1.7 billion net profit. The first company to grow from zero to $3 billion in sales in under six years • Despite being a low cost retailer it is the largest seller of fine wines in the US President Barack Obama visiting Costco employees • The 174,000 employees are very loyal and well treated by the Company
  23. 23. FMCG: Top Retailers The third largest retail company in the world • 104 billion Sales • Over 380,000 employees worldwide A multi-local, multi-format, and multi-channel Retailer, with 12,296 stores in 35 countries, Carrefour Market becomes “Gourmet” an experience all Italian To offer a unique shopping experience that mixes taste and convenience to satisfy the new “food-lovers” consumer target. Carrefour pursues a global revival by focusing on price and cost cuts, and expansion into smaller convenience stores, in the meanwhile it renovates its core traditional hypermarket network,
  24. 24. FMCG: Top Retailers The forth largest retail company in the world • € 98.3 billion in sales • Over 10,000 stores, in 28 countries in Europe • Expected to open stores in USA by 2018 Lidl has a no-frills approach of displaying most of its products in their original delivery cartons. Staffing is minimal, so profits can be also made even if prices are low. Lidl takes pride in providing top quality products at the lowest possible prices to its customers across Europe. It is more branded products on offer than the other discount chains (eg: ALDI)
  25. 25. FMCG: Top Retailers An international best practice • € 7.3 billion in sales (+4,3% vs py) • €431 milion operating profit • 157 stores only in north – center Italy • 22.000 employees • The first supermarket chain in Italy Founded in 1957 by Bernardo Caprotti and his brothers and N.Rockefeller. • The first to introduce on-line shopping and self produced organic products The best worldwide performance in terms of productivity: € 15.732 turnover per square meter. The double compared the avg top global retailers 20 days in terms of stock turnover rate
  26. 26. FMCG: The store formats Convenience & Discount Store • 2000-3000 sku’s • 200-3000 sq mt • Limited service Super market • 20.000-40.000 sku’s • 20.000-30.000 sq mt Hypermarket • 100.000-150.000 sku’s • 150.000-200.000 sq mt • A combination of Supermarket & Dept store Specialty store • Avg 30.000 sku’s • 500 - 10.000 sq mt • Specialize in a specific range of merchandising Cash & Carry / Warehouse club • 20.000-30.000 sku’s • 100.000-150.000 sq mt
  27. 27. FMCG: The Store Format 1. Big Box (Hype+Super) continues to be the key format for modern retail penetration 2. Supermarkets are squeezed by convenience stores on one hand, and discounters on the other hand, and have to step out of the middle ground 3. Discounters and Convenience are set to remain the fastest-growing bricks and mortar channel 4. Drugstores mission is to offer the grocery fill-in and the health and wellness one-stop shop 5. Opportunities for cash & carries and wholesale clubs still exist in emerging regions such as Africa and APAC where they can exploit the growing traditional sectors Note: f – forecast Source: Planet Retail
  28. 28. But all players cannot fail to take the e-commerce’s threats and opportunities into account…! Q. When shopping for the products you say you currently buy, which of the following do you use? Base 22,006 (Feb-Apr, 2015) The physical store remains the dominant channel globally when shopping for groceries
  29. 29. The E-commerce Channel • Online development is accelerating and becoming a more integral component of key retailer’s strategies. • Key retailers, such as Walmart, are developing greater specialism as they boost their online focus, and m-commerce is an emerging global trend. • Achieving profitability in online food retail will remain the biggest challenge
  30. 30. The Dominance of the Marketplaces is Growing *GMV – total sales value of Merchandise sold through a marketplace. GMV (Gross Merchandise Volume sales are based on Planet Retail estimates. Source: Planet Retail …A new route to market for FMCGs, cheaper and more convenient for consumers.
  31. 31. KEY TAKEWAYS For Retailers • Domestic growth is getting harder to obtain, even for the largest global retailers. But domestic success sustains international expansion. Thus, cost efficiency and format innovation will remain key drivers in mature western European markets • The attractiveness of emerging markets is rising. But it has to be careful in considering “new opportunities "and focused to build scale presence in key markets. • Alliances and Mergers increase buying power and allow retailers to have a stronger negotiating position with suppliers – buying at a greater combined volume, but for a lower unit price • E-commerce is becoming a must to address the new shopper needs, to offer new services and to create added value. Retailers that don’t adopt digital technology are out of the game • Achieving profitability in online will remain the biggest challenge for Western Europe grocery retailers, and they have to find a “smart” solution to pass on some of the ‘additional’ costs to consumers.
  32. 32. KEY TAKEWAYS For Suppliers • The biggest opportunities come from BRIC markets: Building regional expertise, understanding the dynamics of their growth, identifying strategies developed in that markets, are all opportunities for suppliers to improve retailer relationships • But Growth will not just be about BRIC markets; Retailers are looking for suppliers able to support them globally, in both domestic and international fronts. With a better tailoring ranges to meet local shoppers needs • The pace of technological development is leading towards changes in consumer behaviour (eg: the role of e-commerce or m-commerce). This could, in turn, create technologically advanced solutions with global relevance • Suppliers need to become priority partners with leading online players in order to access the wealth of data these operators have • They have to create a dedicated “online channel insight team” to share knowledge and improve skills to operate and take decisions in this very dynamic channel
  33. 33. SUPPLIER & RETAIL RELATIONSHIP …..a love-hate Story ..!
  34. 34. 1920’s – ’50s Local Corner Stores The Merchant is a small entrepreneur, owner of only 1 – 2 shops. He buys and sells his goods without any intermediates He is the only one that can influence shopper purchases The Commercial Evolution
  35. 35. The Industry organization chart is flat. Companies are hierarchically organized with a substantial equilibrium among the different functions General Management Production Marketing Sales HR Finance It’s the “Pre-Marketing” Era The Commercial Evolution
  36. 36. 1950’s – ’80s Branded Products explosion! Suppliers dominate the market Advertising is completely in the hands of Suppliers and influence shopping behaviour It’s the Brand Loyalty time! The Commercial Evolution 1920’s – ’50s Local Corner Stores The Merchant is a small entrepreneur, owner of only 1 – 2 shops. He buys and sells his goods without any intermediates He is the only one that can influence shopper purchases
  37. 37. • It’s a Marketing Centric organization. •All the other functions are in a subordinate position General Management Fnance Sales HR Production Marketing It is the “Marketing boom” The Commercial Evolution
  38. 38. It’s Store Loyalty time! 1990’s – ’00s Retailers discover their big power Retailers decide on: Assortment, Lay-out, Space allocation, Promotions. They start to produce goods and to sell advertising to Suppliers The Shelf Space The Commercial Evolution 1920’s – ’50s Local Corner Stores The Merchant is a small entrepreneur, owner of only 1 – 2 shops. He buys and sells his goods without any intermediates He is the only one that can influence shopper purchases 1940’s – ’80s Branded Products explosion! Suppliers dominate the market Advertising is completely in the hands of Suppliers and influence shopping behaviour It’s the Brand Loyalty time!
  39. 39. Suppliers move from a Marketing-Oriented organization to a Customer–Centric organization The Commercial Evolution MARKETING ORIENTED ORGANIZATION GENERAL MANAGEMENT Finance Customer Service Global Marketing Trade Marketing SALES HR Local Marketing Production FROM TO
  40. 40. Retailer/Supplier Relationship Evolution The Italian Case History
  41. 41. Italian Case History Decades 60 - 80: the age of the supplier power Consumer Supplier Consumer research Product flow Product flow Retailer Context: -Economic BOOM ! -Salaries and consumption growth -Wealth continuous improvement -Mass production -Focus on network expansion -Low concentration/alliances -Inconscious of the importance of its role Supplier Retailer The power is in the Supplier hands, but there are high margins and profits both for suppliers and retailers
  42. 42. Italian Case History Italian retailers’ structure LEVELS STORE EXECUTE SUPPLIERS STRATEGIES ACTIVITIES Negotiation is very easy • Few decision levels. • Headquarter take decisions • Stores implement
  43. 43. Italian Case History Consumer Supplier Consumer research Product flow Product flow Retailer Context: -Slow-down of the economic growth -Moderate inflation rate -Pressure on margins -Higher consciousness of their importance -Competencies’ growth -Development of managing skills -Buying groups set-up -Reinforcement of Procurement Function -Private label development Retail marketing Supplier Retailer The power start to be unbalanced in favor of Retailers, but both players begin to lose margins Decades 90-00: the age of the balanced power
  44. 44. Italian Case History 100 64 62 37 34 0 50 100 150 Italy Germany Spain France UK Nr point of sales (000) • More than double # of PoS • The lowest H+S potential • The highest correlation between PoS and thousands of citizens 2,5 1,57 0,78 0,64 0,57 Italy Spain Germany France UK 59 69 80 87 88 Italy Spain Germany France UK Pos FMCG x 1,000 inhabitants ‘01 H+S Potential IRI : Year 2001
  45. 45. Italian Case History Physical limitations for a full development of brands, especially for followers
  46. 46. Italian Case History ITALIA DISTRIBUZIONE • 30 decisional points • All channels (Modern Distrib. – Organiz. Trade – Wholesalers) and formats/stores (H-S) covered • Almost 2000 PoS to serve The first «Centrale d’acquisto» o SUPERCENTRALE are born Italian retailers’ structure becomes more complex and negotiation harder and stronger
  47. 47. Decisional levels are multiplied: «Who decides what» Global contract, List price Contract, Assortment, Listing, Special Project, National Promotional Plan Contract, Assortment, Listing, Special Project, Local Promo Plan, Orders Contract, Listing, Special Project, Local Promotions, Orders, Merchandising Italian Case History
  48. 48. • The power is completely in the Retail hands RetailerSupplier • Strong Concentration but • fake alliances • Negotiations are inefficient, • very expensive and unproductive • Trade investments explode Over 70% of A&P Budget 106,8 117,8 127,4 125,3 136,9 145,8 90 100 110 120 130 140 150 1998 1999 2000 2001 2002 2003 A lot of economic and human resources are dispersed Italian Case History 87% mkt share
  49. 49. Italian Case History but the world is going fast … even in Italy • Economic crisis and new technologies are changing consumer paradigms • Supplier and retailers lost sight of consumer that in meantime is finding his own way …it’s time of the new “2.0 Shopper” ! • Brand Loyalty and Store Loyalty are behind us
  50. 50. Retailer/Supplier Relationship in the DIGITAL ERA
  51. 51. The Digital Revolution It’s the age of Consumer Made & Social Marketing • Shopper is more sophisticated, wants to interact and to be co-lead of his purchases • He belongs to a community, exchanges views, asks and gives advices • He is engaged in the production process, giving suggestions or by answering to a survey • He is looking for a Customer Solution Provider that can satisfy his needs/desires • He has at his disposal a wider choice of products and channels both off & on line “2.0 Shopper”
  52. 52. The Digital Revolution • E-commerce will account for $48 billion of global FMCG sales (estimate to triple by 2025) • 4,4% of global FMCG sales Top Product categories in the business of selling on line **Source: Walker Sand’s future of retail Study 2015 BUT
  53. 53. The Digital Revolution Price and value continue to top the list but there are other factors, such as shopping trips are much more purposeful and goal-oriented
  54. 54. The Digital Revolution What encourage you to choose a retailer? base: 21,788 Top influencers of spending online, global grocery shoppers… • Retailers have to provide consumers with the range of products and brands they desire • More personalized online experiences will be necessary to ensure a quick and easy path-to- purchase. • Fulfilment remains a key influencer of spending for grocery shoppers • The “2.0 Shopper” is OMNI- CHANNEL. He wants to shop anywhere and receive goods in the most convenient way possible
  55. 55. Click & Collect: one answer to «Omnichannel’s» needs • A comfortable way to do shopping on line and collect the goods personally, avoiding delay and additional delivery costs • In UK click & collect is used by 35% of on-line consumers, and the forecast is to increase this percentage up to 76% in the next 2 years. In Milan, shopping can also be ordered in the metro 200 meter long visual space The first example of the virtual store has just arrived in Italy with over 1,000 products of the best mass distribution brands, which can be ordered simply by scanning the products with your own mobile phone. In London, ASDA on line shoppers can go to underground stations to collect their goods. The Digital Revolution
  56. 56. The Digital Revolution Leading Chinese Retailer Alibaba announced the development of a new online payment option: simply snap a selfie. Using facial recognition, the aim is to make payment faster, easier and more secure. Walmart’s Healthy Shopping Cart highlights in-store activity These tech-enabled trolleys introduced in Costa Rica count the calories shoppers burnt while they travel round the store, and highlight nearby healthy products. This Swedish retailer has collaborated with the WWF and others to create an app that provides users with feedback on how their lifestyle affects the climate, in areas like food and transport. Alibaba developing smile to pay function ICA launches Climate Right app A wave of new technologies are making their way to the mass market
  57. 57. KEY TAKEWAYS • Conflictual time has gone! Digital tools and technologies have changed the balance of power in retailing, shifting it to shoppers’ hands. … Retailers and Suppliers must start to walk seriously on the same track to succeed • Shopper adoption of digital technologies is fragmenting his relationship with Retailers and Brands. His expectations often exceed retailer capabilities, and the shopper is becoming more selective • Retailers and Suppliers must develop a robust understanding of their targeted shoppers across all touchpoints, to drive distinctive offers and accurate shopper experiences • “Omni Shopper,” interacts with Retailers and Brands that are able to ensure him a quick and easy path-to-purchase, allowing him to buy what he wants, anywhere and to receive goods in the most convenient way possible
  58. 58. DEVELOP A CAREER IN THE FMCG INDUSTRY
  59. 59. Develop a Career in the FMCG Industry Every FMCG business is different, but there are certain functions that are crucial to ensure the Company’s success
  60. 60. Develop a Career in the FMCG Industry Think fast and outside the norms of conventional thinking. Be constantly curious, up-to-speed with what’s going on in your profession and with a thirst for finding out more. Be competitive- You’ll strive to achieve the best results, but not at the expense of teamwork. Your competitive attitude should be focused on pulling together to drive the business. FMCG is a fast moving industry and offers a challenging and rewarding career environment Seek out responsibility- Speak out and take ownership of your ideas – as well as your career. Hit the ground running and you’ll have the freedom to progress your career and to push your ideas. Adapt to change – FMCG market changes so quickly, you’ll have to be ready to adapt to change too, helping your Company transformation with speed and accuracy.

×