30 January 2017
E-COMMERCE TRENDS FOR FMCG
6 FMCG E-COMMERCE TRENDS
2015 was a big year for e-commerce. Going down in history as the year that online shopping truly came into its own with growth outpacing that of in-store shopping, 2015 saw a huge $600 billion being spent on FMCG products online. With explosive growth predicted for the sector in 2016, it is estimated that the value of FMCG e-commerce will double in the next two years.
1. Tablets and Mobile shopping will desktop purchases, putting the focus on app optimisation and website performance
As identified over Black Friday weekend, mobile shopping is set to take centre stage in 2016. More than a third of all sales were placed from a mobile phone or tablet over the festive period, indicating that mobile is becoming the consumer’s preferred way of shopping. Optimisation of the mobile platform, therefore, is of the highest priority for retailers and suppliers; 69% admit that they are working to make their mobile apps and websites more responsive and more intuitive for users. Such is the strength of mobile commerce coming into 2016, that many e-tailers are considering adopting an app-only model for their online sales.
“Omnichannel shoppers spend 71% more on average than single-channel consumers.”
– Bluefin, “Why omnichannel retail is no longer an option“
Retails and FMCG brands should ensure that their mobile presence is not only functional but also aligned with the rest of their branding, be it online or in store. Done right, mobile commerce can be a powerful addition to any FMCG company’s portfolio, endlessly useful in this age of omnichannel commerce. And not only that, but it has also been shown that omnichannel consumers are more likely to spend more when making a purchase.
2. Product Content will become the differentiating factor for retailers and FMCG brands online
With shoppers slowly making the shift from bricks to clicks for their shopping and with mobile the predominant way to browse and buy, product content is now more important than ever. As consumers demand to know what is in their products, extended product information – full ingredient lists, nutritional values, usage instructions etc. – is needed to foster consumer trust and loyalty. As marketing teams turn their attention to addressing suspicions surrounding “Big Food” and big business, e-commerce will soon follow suit. Strong product content works hand-in-hand with optimised website performance to create a seamless online experience, particularly crucial in FMCG sales as retailers and brands must work to stand out in a crowded arena.
“Trust will be the new marketing currency.”
– Jesse Reif, Partner at Aha Marketing
3. The Consumer is King in 2016
“The future belongs to the retailers who engage them by providing value, thereby earning their trust.”
– Ventureburn, “7 e-commerce trends to watch out for in 2016“
E-commerce competition is fierce and consumers’ shopping habits are fickle. Even a slightly negative user experience – be it delays in delivery, problems paying or an unresponsive website – can mean lost revenue as consumers go elsewhere. This is especially true in the realm of online grocery and FMCG, as years of price wars and a similar core product selection means that user experience remains an important differentiating factor for retailers.
As seen by the previous two Cyber Mondays, many retailers’ websites are still not fully prepared for surges in online shopping activity, crashing during peak periods and frequently running low on stock. Ensuring that all websites and apps are fully functional, with intuitive navigation, quick loading times and a very secure payment process, will be key for consumer satisfaction in 2016.
4. In-store shopping will go digital as retailers connect shoppers’ phones to their basket
The development of mobile technology will not only benefit online sales, but its effects will carry over into the physical store, too. Supermarkets have already started introducing various in-store technologies in order to enhance the overall shopping experience. Tesco’s scan-as-you-shop service, for example, allows shoppers to scan their products as they add them to their basket in-store, saving time at checkout. With mobile-savvy millennials a key demographic for grocery retailers, we can expect to see a redoubling of efforts to connect with smartphone-carrying shoppers as they browse in the store.
5. Medium-sized retailers will be challenged on all sides when it comes to home delivery, as both global pure players and local stores look set to soar online
FMCG e-commerce in 2015 undoubtedly belonged to Amazon and its Pantry and Fresh services. Amazon Prime Pantry opened its services to UK consumers in November 2015, allowing members to get everyday household goods delivered to their home. Amazon Fresh, meanwhile, expanded its grocery home delivery services in the US, with plans to expand to the UK and Europe in 2016. This rapid geographic expansion has placed pressure on other grocery retailers to further develop their delivery models.
Up until now the most prevalent delivery model for groceries has been the pick-up model, yet consumers still show an overwhelming preference for home delivery. With the consumer as king and Amazon reigning supreme, we will see retailers testing the possibilities of home delivery throughout 2016. Independent retailers will expand their loyal customer base by building on their experience with local delivery to reach new customers, undercutting existing players with a less flexible infrastructure, while global companies will benefit from their proven delivery expertise. With the threat from global pure players on one side and the potential of smaller more nimble specialist retailers on the other, medium-sized retailers will need to be on top of their e-game in 2016.
6. Personalisation is the name of the game for FMCG companies, as they work to engage with consumers online
The personalisation of products and of content has been tipped as one of the most exciting opportunities in digital marketing in recent years. As the market becomes saturated with companies all offering similar products and services, tailoring the online experience to each user and their preferences is a new way to stand out. Coca-Cola was perhaps the first to really harness the power of product personalisation in 2013, with their “Share a Bottle with…” campaign. Other leading FMCG companies soon followed suit, however, with Mondelez recently profiting from their colour-in holiday packaging and making $2.5 billion from online Oreo sales in 2015. With these two examples leading the FMCG pack, 2016 could be the year that product personalisation truly takes off.