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What's Next: eCommerce

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With the proliferation of e-Commerce platforms making it easier that ever to sell products online, it is increasingly difficult for brands to stand out.
In this week's webinar, Ogilvy Consulting's Pierre Kremer will take us through the retailing landscape and how brands can matter in e-Commerce.

Published in: Retail
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What's Next: eCommerce

  1. 1. Powered by What’s Next: Making brands matter in eCommerce
  2. 2. Welcome PIERRE KREMER EMEA E-Commerce Lead Ogilvy Consulting LAURIE CLOSE Consultant Ogilvy Consulting
  3. 3. Tell us where you are dialing in from! What’s the weather like in your city?
  4. 4. Do you want this deck? It will be available for download shortly after the webinar on: slideshare.net/socialogilvy And the recording up on facebook.com/OgilvyConsulting
  5. 5. A Bit Of Context eCommerce Landscape eCommerce Imperatives For Winning In eCommerce
  6. 6. By 2021 $4,8Bin 2018 $2,8B$1,3Bin 2014 eCommerce is on a meteoric rise
  7. 7. % eCommerce sales Source: Nielsen Total Store Report Frozen Foods Alcohol Bakery Dairy Meat Produce Packaged Grocery Household Care Personal Care Health Care Pet Care Beauty Care 49.3% 0.8% 57.0% 67.4% 46.0% 18.4% 41.4% 17.8% 28.7% 27.3% 73.3% 26.9% YOY Growth 0% 5% 10% 15% 20% 25% 30% 35% Value Creation Opportunity: eCommerce has yet to pass the “tipping point” in many categories
  8. 8. 2007 2017 1000 2000 3000 4000 2xin 10 years Total Number of Consumer Products Introduced in the U.S. Market By category, 2007- 2017 Source: Mintel + Wall Street Journal Battling Clutter: more new products being introduced that ever
  9. 9. Global Vs. Local Brand Share of Spend Source: The Nielsen Company, 2018 36.2% 63.8% 35.8% 35.4% 64.2% 64.6% 2015 2016 2017 Global Brands Local Brands Dairy Food Beverages Home Care Beauty & Personal Care 20% 26.6% 38.3% 47% 58.4% Localization: consumer preferences is shifting to local niche brands
  10. 10. Percent of All Autopilot Consumers Who Have Used Autopilot Consumption for each category over the last 12 months. Source: GlobalData Consumer Research, March 2018 Grocery home delivery and automated ordering is enabling eCommerce growth Household Cleaning Toilet Paper Kitchen Paper Dishwasher Products Pet Care Health Products Snacks Diapers Baby Wipes Baby Formula Laundry Products 60.7% 57.3% 55.1% 48.6% 48.2% 40.2% 38.1% 29.8% 24.6% 23.9% 20.1% Innovation: driving consumer buying behaviour change
  11. 11. Small and Medium CPG Businesses Taking Share with eCommerce and Omnichannel InnovationPercent of Global CPG Market 2014 2016 $18Bshift from big to small in just 2 years 54.2% 52.4% Large Medium Small Extra Small Note: Extra small: less than $100M sales, Small: $100M-$1B, Medium $1B-$5B, Large $5B+Source: IRI Data for MULOC Necessary Cannibalization: without eCommerce pay & value capture, brand share will decline
  12. 12. How do I compete with Amazon? How can my brand stand out amongst all this competition? Do I need to sell in marketplaces and if so, how do I do it? Do I have the assets to win? What should my portfolio strategy be? What should my content strategy be? How do I connect with consumers? How can I prevent my brand value from eroding? The opportunity?
  13. 13. Mindset Shift From manufacturer to retailer 1 Strategic Shift From one-size-fits-all to tailored strategies 2 Accelerate Growth From single channel to omnichannel 3 Three imperatives for brands to capitalise on consumer behaviour and technology enablement to accelerate growth
  14. 14. 1 • B2B model • Passive role in retail distribution From Manufacturing… • Consumer obsession • X-channel optimization • Technology savvy To Retail From acting like a manufacturer to acting like a retailer
  15. 15. • Same brands and products across eCommerce channels: DTC brand.com, E-Retailers, and Marketplaces From One-Size-Fits-All… To Tailored Digital Commerce • Brands and products tailored for each channel for optimal channel performance • Creation of Digital Brand Archetypes for each opportunity 2 From one-size-fits-all to tailored strategies for digital commerce
  16. 16. Percentage of Total Brand Revenue from Digital Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce *25%–35% *30–80% *Indicative figures. Derived from Forrester’s, “Assessing The Digital Commerce Opportunity For Branded Manufacturers”, report published inNovember 2018 • 3rd Party eCommerce Selling through online wholesalers • Mono-Brand DTC Pure play direct to consumer brand- owned website • Portfolio-Brand DTC Multi-brand direct to consumer website 3 Retail is detail: follow the money to accelerate growth
  17. 17. 3rd Party eCommerce Mono Brand DTC Portfolio Brand DTC Brand/Product Archetype A Brand/Product Archetype B Brand/Product Archetype C Key digital brand “archetypes” emerge and define how and why consumers engage with the eCommerce ecosystem. Building an eCommerce Strategy with this framework allows for tailored strategies to maximize growth. Introducing the CPG eCommerce matrix
  18. 18. Need Choice Passion 1 2 3 Digital Brand Archetypes
  19. 19. What Consumers Are Seeking eCommerce Purchase Occasion Where Consumers Find The Brand Illustrative Examples of Each Archetype Need Brands/Products “Solve My Problem” Reactive Amazon Choice Brands/Products “Validate My Choice” Routine / Restock Google / Amazon Passion Brands/Products “Enrich My Life” Impulse Vs Trial Google, DTC.com & Links In Digital Brand Archetypes Illustration: the consumer
  20. 20. Brand Imperative Business Imperative Breadth & Role of SKU Assortment Role of Content Need Brands/Products Solve Problem • Be Top-of-Mind • Focused proof • Be easy to buy Narrow Demonstrate Choice Brands/Products Reinforce Choice • Maintain relevance • Expand brand role • Demonstrate leadership Broad & Deep Engage Passion Brands/Products Build Relationship • Scale usage to larger segments • Drive repeat purchase • Acquire efficiently Narrow & Deep Entice Digital Brand Archetypes Illustration: the brand and business
  21. 21. What Consumers Are Seeking eCommerce Purchase Occasion Where Consumers Find The Brand Illustrative Examples of Each Archetype Need Brands/Products Choice Brands/Products Passion Brands/Products Mapping Brands: brands can cross-over archetypes
  22. 22. 3rd Party eCommerce Mono Brand DTC Portfolio Brand DTC Brand/Product Archetype A Brand/Product Archetype B Brand/Product Archetype C Today’s Discussion The Making Brands Matter eCommerce Matrix
  23. 23. eCommerce Strategy POV 3rd Party eCommerce Mono Brand DTC Portfolio Brand DTC
  24. 24. May 7, 2019 1. 2. 3. 4. 5. 6. Allows manufacturers to distribute products via wholesalers online 3rd party sellers can sell manufacturer goods without their consent Platforms (e.g. Amazon) launch their own products to compete with CPGs Main consumer destination for online purchases globally First touch in shopping lifecycle (Amazon search beats Google) Algorithms drive customer experience which damages brands Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce3rd party eCommerce and why it is important
  25. 25. May 7, 2019 Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce North America Europe Asia Pacific Latin America 3rd party eCommerce and why it is important
  26. 26. May 7, 2019 Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce The Top Four Countries Where Consumers “Shop Less Often” at Retail Stores Due to Amazon.com Retailers are competing with Amazon for market share Source: PwC, Total Retail 2017 Japan United States Brazil 39% 37% 35% 34% 28% Germany Global 3rd party platforms drive consumer to shop less at physical retail
  27. 27. May 7, 2019 Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce 0 18 35 53 70 China USA France UK Germany Japan LATAM Column1 MercadoLibre & Amazon Source: Econsultancy Alibaba (Taobao, Tmall) Amazon 61% 54% 56% 56% 56% 54% 48% 3rd party eCommerce platformed first touch in product searches globally
  28. 28. May 7, 2019 Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce Source: Econsultancy 4.3% 9%4% Low Cost Trackable 14% 17% 7% Multiple options 49%Free Fast Same Day Amazon introduced Prime in 2005, introducing free delivery as a viable option when purchasing goods online. Because of this customer expectations have changed. 3rd party eCommerce platforms have set expectations
  29. 29. May 7, 2019 Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce Discover Explore BuyUse Ask EngageDiscover Explore BuyUse Ask Engage From To Shopping and buying journeys merged, now 3rd parties play a role in every stage of the lifecycle
  30. 30. May 7, 2019 Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce Consumer Facing Price Product Title Product Description Visual Assets Ratings & Reviews Purchase Options Logistics Stock Availability Fulfillment Options & Performance Purchase Options Search Results Performance+ = Algorithms drive 3rd party search, not brands
  31. 31. Need Choice Passion 1 2 3 Digital Brand Archetypes in 3rd Party eCommerce Case examples
  32. 32. Case Examples How a “Need” Brand Behaves in 3rd Party eCommerce • Where do consumers engage with the brand? • Primarily through product-type searches on eCommerce platforms • Consumer Cycle Touchpoints • Buy, Use, Ask, Engage • Business Imperative • Control the channel • Adapt product portfolio to combat low-frequency usage • Demonstrate product superior performance and drive product consideration • Role of Content • Focus on performance, providing the most useful content on how to use the product and solve the problem • Expertise, endorsement and consumer generated content to validate product performance “Need" Archetype
  33. 33. Case Examples How a “Choice” Brand Behaves in 3rd Party eCommerce “Choice” Archetype Where do consumers engage with the brand? • Primarily through category-type searches on eCommerce platforms Consumer cycle Touchpoints • Discover, Explore, Buy, Use, Ask, Engage Business Imperative • Demonstrate category leadership by driving awareness of product portfolio • Address unmet consumer need by developing new consumer- centric product portfolio and increase reach within category • Drive routine behavior to reinforce buying frequency Role of Content • Address category-type search queries by being as relevant as possible to consumer touchpoints needs • Immersive and engaging content to drive emotional connection with the brand and routine behavior
  34. 34. Case Examples How a “Passion” Brand Behaves in 3rd Party eCommerce “Passion” Archetype Where do consumers engage with the brand • Primarily through brand name searches on eCommerce platforms Consumer cycle Touchpoints • Discover, Explore, Buy, Use, Engage Business Imperative • Maintain engagement with consumers and continue driving loyalty and evangelism • Develop and/or adapt consumer-centric product portfolio to maintain brand leadership in category and increase reach • Reinforce routine purchase behavior Role of Content • Immersive and engaging brand purpose content to create and maintain emotional connection with the brand and its values • Highlight what makes the product special • Consumer generated content to drive sense of community, belonging and positivity
  35. 35. May 7, 2019 1. 2. 3. 5. 6. 7. Serves very specific consumer demand space with continuous innovation Defines every part of business to deliver the best customer experience Smart product development with varied distribution models Personalization at scale: product, package, communications Purpose and community to drive continuous engagement/growth Brand is a bespoke and authentic destination 4. Accommodates single purchase and subscription autopilot models Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerceMono DTC and why it is important
  36. 36. Need Choice Passion 1 2 3 Digital Brand Archetypes in Mono Brand DTC Case examples
  37. 37. Case Examples “Need" Archetype How a “Need” Brand Behaves in Mono-Brand DTC • Business Imperative • Strong brand awareness to be the first choice when wanting to resolve a problem • Very easy to buy, very easy to find • Business Imperative • Primarily though unbranded search in Google • Role of Content • Focus on performance, providing the most useful content to solve the problem • How to and daily hack content to solve problems quickly • Expertise and influencer content to validate product performance
  38. 38. Case Examples “Choice” Archetype How a “Choice” Brand Behaves in Mono- Brand DTC • Business Imperative • To be the best performance-wise • Very easy to buy, very easy to find • Business Imperative • Primarily though unbranded search in Google • Role of Content • Focus on performance, providing the most useful content to solve the problem • How to and daily hack content to solve problems quickly • Expertise and influencer content to validate product performance
  39. 39. Case Examples “Passion” Archetype How a “Passion” Brand Behaves in Mono-Brand DTC Business Imperative • Amplify brand purpose and drive usage to a larger customer base Business Imperative • DTC.com and links in from social Role of Content • Pull commerce to attract new users to the brand • Content needs to amplify purpose and develop sense of community • Importance of authenticity and innovation narrative • Bespoke in the way the brand behaves and interacts with audiences, developing a sense of community that drives purchase • Personalization of content key to delivering brand experience
  40. 40. May 7, 2019 Mono Brand DTC Portfolio Brand DTC 3rd Party eCommerce 1. 2. 3. Portfolio Brand DTC is a multi-brand digital marketplace Portfolio Brand DTC enables the development of category, brand, product, and lifestyle content Allows for entire portfolio to be sold and provides opportunity for new SKUs to be introduced Leverages innovative technology to simplify consumers’ lives and create new value propositions Enables collect ion of consumer data for development of meaningful personal relationships 4. 5. Defining portfolio DTC
  41. 41. Need Choice Passion 1 2 3 Portfolio Brand DTC Encompasses All 3 Digital Brand Archetypes All 3 digital brand archetypes exist in portfolio brand DTC experiences
  42. 42. CRM Drive consumer engagement, brand affinity and brand loyalty Content Creating authentic bespoke content and UGC. Innovation Create new products and brand. Commerce Provide consumers with purchasing choices that simplify their lives Concept The main reason ‘why’ people will interact with & buy from a multi-brand digital marketplace Portfolio brand DTC success depends on a powerful concept
  43. 43. Case Examples Content – To address consumer intent and their interests
  44. 44. Case Examples Commerce – Portfolio bundling and autopilot shopping
  45. 45. Case Examples CRM – Consumer engagement, UGC & loyalty
  46. 46. Case Examples Innovation — Being part of everyday life
  47. 47. Mindset Shift Strategic Shift Accelerate Growth 3rd Party eCommerce 3rd party eCommerce is a must for “Need” and “Choice” brands 1 Mono-Brand DTC "Choice” & “Passion" brands are a selective fit for Mono-Brand DTC 2 Portfolio Brand DTC Portfolio brand DTC allows you to behave like a retailer with omnichannel strategies 3 Three implications for CPGS
  48. 48. 3rd Party eCommerce Mono Brand DTC Portfolio Brand DTC Brand/Product Archetype A Market to the algorithm No Yes Concept-driven multi-brand, multi-purpose DTC Brand/Product Archetype B Market beyond the algorithm to demand drivers Selective New news + innovation to drive relevance + Seasonality Brand/Product Archetype C Market beyond the algorithm to people’s passion points Selective Personalization + innovation Authentic + bespoke + Seasonality The End Result
  49. 49. Questions? PIERRE KREMER EMEA E-Commerce Lead Ogilvy Consulting LAURIE CLOSE Consultant Ogilvy Consulting
  50. 50. Thank you.

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