E-Commerce Opportunity

IRI uncovered a $400+ million online opportunity for the client, including which brands to focus on first.

 

ISSUE

A large food and beverage manufacturer wanted to better understand the impact of e-commerce on its business, quantify the e-commerce opportunity, and develop a comprehensive and winning e-commerce strategy in a market that is relatively new and lacking historical data.

INSIGHTS

 
IRI worked with the manufacturer to implement an approach to focus on the brands with the largest potential size of prize at the optimal retailers. As CPG e-commerce is relatively immature, current category performance is not the best indicator of future performance. To get a clear picture of the opportunity, IRI analyzed a list of attributes that help to determine the e-commerce propensity of each category in the client’s portfolio. IRI and the manufacturer used these attributes to calculate a category e-commerce propensity score that assisted in accurately projecting e-commerce growth for the manufacturer.

 

By predicting the evolution of the e-commerce models going forward, IRI determined that while Amazon is the optimal e-commerce platform for the client today, the brand will need to focus on click and collect to reach suburban/rural shoppers and on home delivery to reach urban shoppers going forward, since the brand has high distribution nationwide.
 

IRI also worked with the manufacturer to identify how shoppers were interacting with the brand along key touch points. Through a survey and an in-store versus e-commerce product assessment, IRI identified that the shoppers on Amazon were looking for new products and flavors, while Walmart.com and Peapod shoppers wanted the same product but wanted the convenience of not going to the store. With this knowledge, the brand was able to optimize its distribution strategy, pushing all SKUs on Amazon and using it as an “innovation playground,” while pushing the top SKUs at Walmart.com and Peapod.
 

Finally, IRI determined that, versus a prior study where shoppers were very engaged with discovering new products and researching product characteristics, shoppers of this brand were no longer actively seeking information. Instead, they were passively interacting with the brand through social media. This highlighted the importance of leveraging social platforms to interact with the most loyal shoppers and the need to synchronize social posts with innovations launched on Amazon.

IMPACT

IRI’s findings demonstrated that the manufacturer had an untapped $400 million to $450 million opportunity online, and identified the brands, retailers and marketing levers to prioritize and leverage.

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FACTS ABOUT US

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