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The key objective of the burgeoning number of food company strategists this year would be to make use of increase of the e-commerce channel, writes Andrew Pearl, Director, Strategy, and Insight, EMEA Markets for e-commerce analytics company Profitero in justfood.com.Apparently, Pearl rolls out four typical trends to observe in the e-commerce channel this year and says 2017 has been another outstanding year in terms of the development of e-commerce and online grocery. Last year, we saw Amazon's $13.37 billion acquisition of Whole Foods Market as part of its strategy to step up its grocery ambitions. Similarly, the robust growth of meal-kit players such as HelloFresh and Gousto has shown steady upward tick. Another import development is the increase of search through mobile phones and voice assistants such as Google Home and Amazon's Alexa. At the same time, grocery majors in the UK such as Tesco and Sainsbury's have enhanced their one-hour grocery delivery, Pearl points out.Four Major TrendsRecently, Profitero did conduct a survey of 134 brands across ten odd industries including CPG brands, aiming at comprehending how brand makers are structuring and planning for e-commerce this year, noted the report.Respondents cited year-on-year e-commerce growth as their most critical KPI, with 47% of respondents from CPG brands particularly stating their e-commerce growth target for this year to be higher than 25%.With respondents to Profitero's global benchmarking study citing year-on-year e-commerce growth as their most critical KPI, therefore, it is clear that online will continue to dominate the agenda. Here are four big trends to watch next year.
Mobile-firstFor instance, mobile transactions now constitute 50% of total e-commerce transactions in the UK. With online becoming the fastest-growth channel for grocery, and as consumers demand an increasingly frictionless shopping experience, grocery and CPG brands will need to optimise their product images, titles, and descriptions to provide a much simpler shopping experience on mobile devices, Pearl writes.“We know that the vast majority of online grocery shoppers do not click through to each product detail page to verify and read all the product information – instead, they simply add to their basket from the thumbnail image. Therefore, mobile-ready hero images are about making the online shopping experience even better”, Pearl continued.Another survey led by Unilever showed sales of Magnum soared by 24% when hero images were used, underscoring why optimising content for mobile can make a big difference to your bottom line.Voice searchWith over 20% of mobile searches conducted via voice in 2016, a focus on optimising products for voice search is no longer a long-term priority, according to Pearl.Morrisons and Ocado both launched Alexa apps earlier this year, enabling customers to add grocery products to their shopping list by voice while a recent study conducted by IGD showed that three in 10 (28%) shoppers are interested in using a voice-activated device at home to add food or grocery items to their online basket.The introduction of Amazon's Choice – a product designation from Amazon that identifies "best fit" products in response to a shopper's search query or voice request – in the US resulted in Alexa voice-activated devices recommending top-selling brands across food and grocery sectors. With other retailers likely to adopt similar capabilities in the near future, achieving this designation is likely to be an increasingly competitive necessity. Amazon has not disclosed how products are included in its Amazon's Choice list but the products tend to be highly rated, well-priced items eligible for Prime shipping, says the author.Competition Mirroring Amazon's private-label launch of its Wickedly Prime range in the US, many established grocery brands are starting to closely analyze these innovations, thanks to the lower (and faster) route-to-market when launching in the online channel, writes Pearl. “In the US, we've recently seen Walmart's Jet.com launch a private-label business called Uniquely J, rolling out dozens of food and household items targeting millennials. We also saw the launch of Brandless, a direct-to-consumer site which sells everyday essentials like coffee, peanut butter, toothpaste and hand soap. All products are organic, unbranded and sell for a single price-point of $3. Could Amazon look to take Wickedly Prime to other international markets? Could concepts similar to Brandless emerge elsewhere? He asks.Online availabilityThe setting up of half-hour delivery as the norm will require the significant optimisation of supply channels. More so, creating specific online replenishment strategies and monitoring performance daily is already providing tangible benefits to many grocery brands. E-commerce data analytics platforms provide access to daily out of stock data, besides allowing brands to react instantly to any issues which ultimately lead to lost sales, both for the brand as well as the retailer, Pearl writes. A cohesive focus on the products driving these lost sales can not only result in ample availability improvements (both in-store and online) but also reduce levels of lost sales, typically accounting for between 3-5% of monthly turnover. The ability to react with speed and innovate accordingly will provide brands with the increased annual growth that is being demanded of them, he concludes.
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