A food manufacturer had ambitious plans to drive 10% of its sales through e-commerce. The client needed to understand how much online growth was achievable and where to focus investment to achieve its goals.
IRI forecasted the future potential in e-commerce for each food and beverage category based on attributes that influence a shopper’s decision to buy in-store versus online through different delivery models (home shipment, click and collect, or home delivery).
Through the analysis, IRI identified categories that were poised to accelerate online. Historically, the most developed online categories were nonperishable pantry stock-up staples like tea bags or spices, which are easy to ship in bulk. However, unlike dotcom, the assortment available through click and collect and home delivery closely mirrors the in-store environment, and attractive service terms make these channels convenient substitutes for the weekly trip. IRI found that the categories shoppers buy every week will rapidly grow online — this includes both perishable and nonperishable snacks, breakfast foods and beverages.
For a manufacturer, knowing which categories are ready to grow online can help to maximize the return on investment. IRI evaluated each category’s potential and then mapped it against the manufacturer’s right to win and current sales position. The result was a comprehensive view of the highest-value opportunities that the manufacturer was best positioned to activate and an objective assessment of how much growth was realistically achievable.
IRI’s Growth Consulting Team identified more than $1 billion in online growth potential over the next five years and prioritized the top investment opportunities for the brand. Additionally, IRI developed a comprehensive set of sales projections by category and customer to guide the manufacturer’s strategic sales planning. Existing investment plans by the manufacturer were insufficient to meet its sales goals, but IRI found that targeted increases could help bridge the gap.
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