E-COM AND THE CRISIS IN THE CPG MARKET - GORDON WADE - FOUNDER/CEO AT COMBINED CONSULTANTS & DIRECTOR EMERITUS, CAT MAN ASSOCIATION
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E-COM AND THE CRISIS IN THE CPG MARKET GORDON WADE – FOUNDER/CEO AT COMBINED CONSULTANTS & DIRECTOR EMERITUS, CAT MAN ASSOCIATION
FLOW OF DISCUSSION • INTRO • WHAT’S HAPPENING IN CPG • THE DIGITAL DISRUPTION • WHAT’S THE FUTURE LIKE • CHALLENGES • WHAT SHOULD YOU DO TOMORROW
INTRO • KENTUCKY, HARVARD, P&G, CONSULTING • CO-CREATOR OF CATMAN 1.0 • LED UPDATE AS CATMAN 2.0 • THOUGHT LEADERSHIP ON “MARKETING ACCOUNTABILITY” • CONSULTING EXPERIENCE GLOBALLY • “HOW E-COM WILL CHANGE CPG MARKETING AND THE RETAIL EXPERIENCE”
WHAT’S HAPPENING IN CPG? • NO GROWTH • 95 OF TOP 100 BRANDS < SHARE • < MARGINS ACROSS THE VALUE CHAIN • >25% LEAKAGE AT RETAIL • EXPANSION OF LOW MARGIN RETAILERS • AN OMINOUS SITUATION EXACERBATED BY E-COM
Buyer Conversion by Largest Food Chains By Category CATEGORY A B C D E F G H I J BREAD AND BAKED GOODS 82.2 75.8 65.5 68.8 72.1 82.3 74.2 77.1 69.5 51.7 CARBONATED BEVERAGES 75.4 67.6 61.4 66.0 66.1 72.5 68.3 71.0 68.4 43.9 PACKAGED MEATS-DELI 74.9 66.3 51.3 63.8 63.8 80.9 69.1 68.8 60.3 46.8 PREPARED FOODS-FROZEN 68.0 60.7 46.8 54.8 55.7 70.2 62.6 64.9 57.1 37.4 SNACKS 77.6 70.3 60.1 63.8 67.5 79.2 73.3 73.4 65.5 43.5 CHEESE 76.4 68.2 55.3 61.9 64.9 80.6 69.3 71.6 63.6 49.3 PAPER PRODUCTS 59.3 56.1 39.6 47.5 46.6 66.0 63.5 56.5 44.6 28.2 CEREAL 66.2 61.6 45.3 50.2 51.2 67.7 60.8 65.8 54.5 28.2 PET FOOD 48.0 47.9 25.5 38.1 40.5 57.5 55.2 50.6 34.5 14.0
THE DIGITAL DISRUPTION • THE EMPOWERED SHOPPER • > COMPETITION FOR EVERYONE • NEW MARKETING OPTIONS • MORE CHOICES = NEW BEHAVIOR=MORE DATA • UNKNOWN ROI OF NEW OPTIONS • IGNORANCE, + > COMPETITION = C-SUITE PANIC
IMPLICATIONS OF THE DIGITAL DISRUPTION • > COMPLEXITY/SOPHISTICATION • > ABILITY TO PERSONALIZE • 360 DEGREE DIALOGUE ENABLED • A DATA TSUNAMI (MORE TO COME) • > IMPORTANCE OF ANALYTICS
USEFUL DEFINITIONS
• THE PTP- THE ACT OF SHOPPING/ I.E. PREPARING TO BUY
• 20TH CENTURY – BRAND /RETAILER DRIVEN
• A PAPER PATH
• 21ST CENTURY
• > DIGITAL/TARGETED/ INTERACTIVE/SOCIAL
PTP e-com
• PTP LEADS TO EITHER B&M OR E-COM
• E-COM- THE ACT OF BUYING DIGITALLY
• DIFFERING MISSIONS (SPEARFISHING/SUBSCRIPTION/FILL-IN/ STOCK-UP)
• MULTIPLE RETAIL OPTIONS (OMAHA STEAKS -KROGER-AMAZON)
• MULTIPLE DELIVERY OPTIONS
WHERE IS THIS ALL GOING? • CONVENIENCE DRIVES > E-COM • NIELSEN PREDICTS E-COM =20% ACV IN 2022 • ‘CLICK AND COLLECT’ HAS COST ADVANTAGES • SHOPPING EXPERIENCE TRANSFORMED • RETAILER DRIVEN SOFTWARE CREATES THE EXPERIENCE • >IMPORTANCE OF “NEED STATES”
WHAT IS A “NEED STATE”
• A PHYSICAL, SOCIAL OR ATTITUDINAL CONDITION DRIVING THE PURCHASE OF MULTIPLE PRODUCTS
AND SERVICES TO MEET THE NEEDS TRIGGERED BY THE CONDITION- EXAMPLES:
• MOTHERS HAVE MULTIPLE “ INFANT CARE” NEEDS
• SERIAL HOME ENTERTAINERS HAVE UNIQUE NEEDS
• TYPE I AND II DIABETICS HAVE UNIQUE NEEDS
• CF. MASLOW, ABRAHAM: A HIERARCHY OF NEEDSDiapers
Toys,
Games, Pharma
Books RX
Entry
Category
Baby Food
Infant Clothing,
HBA Shoes
Cribs,
furniture,
Car seatsWHY NEED STATE MARKETING WILL GROW • HELPS REDUCE RETAIL LEAKAGE • SHOPPERS PLAN AT NEED STATE LEVEL • AI ENABLED SOFTWARE TRIGGERS PROMPTS • IMPROVES SHOPPER EXPERIENCE
NEED STATE MARKETING CHALLENGES • SOFTWARE CAPABILITY • RETAILER INTERNAL SILOS • DATA AND ANALYTICS • NO MULTI-MANUFACTURER PROMO PROCESS
WHAT DO WE NEED TO LEARN? • HOW DOES E-COM CHANGE BUYING BEHAVIOR? • HOW DO BRAND SHARES CHANGE? • WHAT ON LINE SITES DRIVE WHAT BEHAVIOR AT WHAT COST? • WHAT IS ROI OF ONLINE PRICE INCENTIVES ? • HOW DOES E-COM EFFECT “IMPULSE” CATEGORIES? • HOW WILL NEW ITEMS GENERATE TRIAL?
WHAT NOW ? • CREATE A LEARNING PLAN • EXPLORE NEED STATE MARKETING • PARTNER WITH OTHERS • JOIN A SHARE GROUP
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