On average, retailers are failing to return 92% of qualifying products on their e-commerce sites, meaning for every 10 products that could be returned, today, retailers are only returning one. This gap is due to incomplete, siloed, and poor quality data. With over 200 million shoppers adhering to a diet or health-related eating program and nearly as many indicating food allergies and intolerances affect the way they shop, inaccurate and incomplete data is not only costing retailers billions of dollars, but also damaging shopper trust and loyalty.
Today, search and discovery is broken in online grocery. A search for “peanut free” returns peanut butter, peanuts, and ice cream with peanuts in it. The search for “egg free” returns a carton of eggs. For millions of consumers suffering from allergies, getting this right has potentially critical consequences. The list of searches that return significantly limited to zero results is just as dire. This is a huge shortcoming in the CPG industry.
This week we've got a bit of a deep dive video. Titled: "Tomorrow's Category Management Today, The Future of Online Category Management", the video makes the argument that most growth in the foreseable future is going to come from online channels and that this is going to change the way we think about Category Management. “e-commerce is shopped one item at a time; every product detail page must stand on its own" – Danny Silverman, Clavis Insight The video is a deep dive, lasting 45 minutes, but is worth the time if you have any interest in the future of grocery, and in particular if you are in the category management function. Of particular interest, I found the way the video discusses the difference in customer needs between the "Push" of Brick and Mortar versus the "Pull" of e-commerce, and also how Brick and Mortar is more of a compromise for customers who take the brand that is available on the shelf, whereas e-commerce becomes a more discerning environment. If any of this is true, the demand for transparency and experiences that support better decision making is only going to increase. Hope you get out of it as much as i did. Have a good weekend.
We wrap up this week with a video that discusses the evolution of Category Management practice over the last 3 decades, and explores whether Category Management is working presently. “If all you have is a hammer, then everything starts to look like a nail" – Marc Childs, principal of Childs Davidson Limited The high level coverage of the evolution of Category Management is very helpful context for those that may not be aware of how we got to where we are. The second part of the video discusses Category Strategy, and how this, in differentiation from category management, can help to move retailers and brands forward more productively by giving category management some focus and guidelines, therefore aligning category captains and insights within a framework. It seems clear that to get to the future of grocery retail, there needs to be significant further evolution of the category management practice. It's fascinating to watch this space to see those changes coming. I hope this helped give you a slightly new perspective. Have a good weekend.
Another video about Alibaba's Freshippo (formerly known as Hema) shopping experience in China. I'm a little obsessed about the new ideas and the connectedness of these stores. “If I have any questions at all about a product, I just scan and get the full ingredient list on my phone." – Alibaba I continue to get excited about the level of data competency that Alibaba displays in the Freshippo execution. In this video in particular the host talks about the importance of freshness using the example of how some fresh produce has a large "3" printed on the packaging so that you know it arrived and was packaged that day (Wednesday in the video) and is therefore fresh. The bringing forward and connecting of data competency, logistics innovation, and a digital shopping experience can truly change the way we shop. As you can tell, i remain very excited about the future of grocery. Have a good weekend.
In last weeks post of "video of the week" we introduced a video about the "Hema" shopping experience - a new concept in grocery retail that is growing rapidly in China. This week we follow on from that with a video from Alibaba, the leaders in online commerce in China and their explanation about what the "Hema" stores are all about. “For Alibaba, the future isn't total domination of e-commerce, rather it is the complete digitization of ALL commerce that could be the key to saving retail. We call this NEW RETAIL" – Alibaba It is exciting to see this holistic vision being executed. It's also eye opening when we think about Omni-channel, and Transparency, and Digital Commerce vs Mobile Commerce, each individually as hurdles to overcome, we aren't really seeing the forest for the trees. A vision like Hema, takes complete, and connected data and systems to execute. No matter which way you look at the future of grocery commerce, it is, in the least, going to be interesting!! Hope you had a good week.
This post was supposed to go out last friday but there was an outage with our Content Management System, so only able to get it out today. So a video, to start the week. We have often looked to China, in this blog, to learn about the future of Grocery as the "blank slate" approach they are taking to addressing grocery challenges is serving up some incredibly futuristic solutions. One of the most comprehensive solutions being Alibaba's Hema stores. “There are three pillars to its strategy, serving as a place to shop, a distribution center for online orders, and a robot powered restaurant" – Uptin Saiidi, CNBC These stores combine the grocery store with a distribution center for 30 minute online delivery, as well as automated robot delivery restaurants to pull in visitors. The experience is connected across all stages of the buying process through the Hema app, which enables the shopper to get information about products and supply chain, navigate the store, place orders, as well as to pay. It's a pretty fascinating to get a real life view into what the future of Data and AI powered shopping experience can lead to. The shopping experiences in 10 years time could be very different from they are now. Hope you enjoyed this one.
The video this week is an introduction to some of the challenges around shelf space. It's indicative of the hidden complexity in the grocery industry that is a real barrier to disruption, potentially protecting the incumbent players from some of the early digital disruption taking place in other industries. “behind each freezer door is a secondary market that determines what you have the option to buy." Phil Edwards, author There are pros and cons associated with slotting fees, but no matter which side of the fence you are on, there is no doubt that they have a significant influence on what products end up on the shelf. Not a new video, but a good one to think about when reflecting on how the industry may evolve as digital disruption and transparency take hold. Hope you have a good end to your week.
This week we had a team representing at the Category Management and Shopper Insights Conference in Las Vegas. It was an exciting conference with lots of talk of innovation and creative ideas about how to leverage technology across the category management process. It was great to be reminded, at the core, what a fundamental role Category Management plays in the growth of the industry. “Strategic choices made by suppliers across the 4 P's will usually affect the 4 P's for the retailer," – Sue Nicholls, Category Management Knowledge Group The video below highlights the 4 P's of Category Management: Product, Placement, Price & Promo. Given all the exciting talk of technology and innovation at the conference among industry leaders, we thought it relevant to keep our feet firmly based in the fundamentals of the discipline. We also liked the fact that this video demonstrates how inherently collaborative the category management process needs to be. Hope you have a good end to your week.
I loved this new video. Malcolm Gladwell brings his engaging story telling to the story of customer preference clustering 1.0 which took place in the food industry several decades ago and gave rise to the explosion of SKU's across every category that we now see today. A must view for anyone who has a curious mind. “There's no perfect Pepsi, only perfect Pepsi's " Howard Moskowitz This story highlighted how clustering of early customer preferences lead to a revolution in how we as an industry sold and marketed products. We, at Label Insight, believe we're experiencing the beginnings of a new type of revolution led by clustering 2.0 that will take place in relation to the new attribute driven market. Good video and exciting times.