Shopper Marketing - January 2016 - 69


E-Commerce Is Proving Irresistible

D

isruption is looming, warned Matt Pierre,
who leads General Mills' strategy development, retailer activation and integrated
marketing programs. Most CPG executives
still view e-commerce in terms of a "spearfishing" shopping model, where consumers are
focused on one-off purchases like books, gifts
and clothing. But the game changer for CPG
brands is "full basket" purchasing in the grocery channel.
As external forces coalesce around e-commerce like never before - especially in the
grocery space, which is in a "high challenge/
low growth" mode right now - it has become
"the most interesting time" of Pierre's 25 years
in marketing and definitely "not for the faint
of heart."
Disrupters, he said, are coming from many
directions with heavy funding from the venture capital industry. The grocery business
now faces revolutionary - not evolutionary
- technological change. But at its heart, the
disruption is being driven by consumers who
find the advantages offered by e-commerce
in terms of their planning, shopping and living to be irresistible.
E-commerce can offer a more personalized shopping experience for consumers. The
average grocery store has 40,000 SKUs, and
the average family is buying less than 1.5%
of those SKUs on an annual basis. They spend
a lot of time hunting through things they
don't want, and that problem can be solved
for them online. "They don't want to hunt
for SKUs, they want to buy solutions." Pierre

said. "It's hard to sell solutions in a brick-andmortar environment. It's easy in an online environment."
For the most part, however, the grocery industry is still behaving the way it did 50 years
ago. Only about 35% of consumers presently
have a solid option for a full-basket grocery
shopping experience. And in terms of their
primary grocer, only 10% of consumers have
access to e-commerce. But within the next
24-36 months, Pierre predicts, this figure will
move up to 60-70% as more retailers jump
into the game aggressively. He expects "50%
of the growth in this industry" to move online.
Because of the fixed cost nature of the grocery industry, if a retailer loses 5% of volume,
it can represent a 20-25% profit drain. And
there will be losers. There's a gap between
how retailers play online and how they play
in-store, but they are working to fix it; too
many manufacturers, however, are still thinking about the old game. CPG companies will
need to fundamentally adjust how their organizations operate to compete in this new
space, Pierre told attendees.
"You, as pioneers, will spend most of your
time right now trying to integrate your efforts
internally across your organizations. Silos are
great for farmers, but not for large organizations trying to cope with these changes."
- Bill Schober

Walmart Is the Game-Changer

R

ich Tarrant, CEO of MyWebGrocer, which
he founded in 1999, was an early believer
in the viability of the online grocery business
JANUARY 2016 SHOPPER MARKETING y

69



Table of Contents for the Digital Edition of Shopper Marketing - January 2016

Contents
Shopper Marketing - January 2016 - Intro
Shopper Marketing - January 2016 - 1
Shopper Marketing - January 2016 - 2
Shopper Marketing - January 2016 - Contents
Shopper Marketing - January 2016 - 4
Shopper Marketing - January 2016 - 5
Shopper Marketing - January 2016 - 6
Shopper Marketing - January 2016 - 7
Shopper Marketing - January 2016 - 8
Shopper Marketing - January 2016 - 9
Shopper Marketing - January 2016 - 10
Shopper Marketing - January 2016 - 11
Shopper Marketing - January 2016 - 12
Shopper Marketing - January 2016 - 13
Shopper Marketing - January 2016 - 14
Shopper Marketing - January 2016 - 15
Shopper Marketing - January 2016 - 16
Shopper Marketing - January 2016 - 17
Shopper Marketing - January 2016 - 18
Shopper Marketing - January 2016 - 19
Shopper Marketing - January 2016 - 20
Shopper Marketing - January 2016 - 21
Shopper Marketing - January 2016 - 22
Shopper Marketing - January 2016 - 23
Shopper Marketing - January 2016 - 24
Shopper Marketing - January 2016 - 25
Shopper Marketing - January 2016 - 26
Shopper Marketing - January 2016 - 27
Shopper Marketing - January 2016 - 28
Shopper Marketing - January 2016 - 29
Shopper Marketing - January 2016 - 30
Shopper Marketing - January 2016 - 31
Shopper Marketing - January 2016 - 32
Shopper Marketing - January 2016 - 33
Shopper Marketing - January 2016 - 34
Shopper Marketing - January 2016 - 35
Shopper Marketing - January 2016 - 36
Shopper Marketing - January 2016 - 37
Shopper Marketing - January 2016 - 38
Shopper Marketing - January 2016 - 39
Shopper Marketing - January 2016 - 40
Shopper Marketing - January 2016 - 41
Shopper Marketing - January 2016 - 42
Shopper Marketing - January 2016 - 43
Shopper Marketing - January 2016 - 44
Shopper Marketing - January 2016 - 45
Shopper Marketing - January 2016 - 46
Shopper Marketing - January 2016 - 47
Shopper Marketing - January 2016 - 48
Shopper Marketing - January 2016 - 49
Shopper Marketing - January 2016 - 50
Shopper Marketing - January 2016 - 51
Shopper Marketing - January 2016 - 52
Shopper Marketing - January 2016 - 53
Shopper Marketing - January 2016 - 54
Shopper Marketing - January 2016 - 55
Shopper Marketing - January 2016 - 56
Shopper Marketing - January 2016 - 57
Shopper Marketing - January 2016 - 58
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Shopper Marketing - January 2016 - 60
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Shopper Marketing - January 2016 - 63
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Shopper Marketing - January 2016 - 142
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