FMCG going multichannel 2012

FMCG Going Multichannel 2012

Release date: November 17th, 2011 (95 pages)
PDF/Powerpoint format. Price: GBP750.00


We understand that Amazon is preparing for a full on push into online grocery in the EU, after having laid the ground and quietly launched the service two years ago, by leveraging their marketplace operation to its fullest potential. The pureplay is undoubtedly pursuing the right strategy, as online grocery is taking off all over Europe, with a renewed effort by the leading retailers in 2010/11 to capture sales migrating to the online channel.

This raises the question of how the FMCG industry should react to these latest developments. After all the internet offers many possibilities to reestablish a meaningful relationship with customers and regain control over pricing, promotions and brand
presentations – without having retailers involved. We believe that the FMCG industry has to become multichannel. Having an online presence also enables manufacturers to engage in market research and launch effective loyalty solutions.

Launching a FMCG online presence now is especially vital, as many retailers have started to use their private label propositions as a key differentiator from the competition, rather than just a way of boosting their margins. This means that repelling the private label push from retailers will only become harder for the FMCG industry in future.

FMCG strategic business model options to exploit the online opportunity, with real live case examples.
How FMCG are going multichannel, taking a leaf out of non food consumer goods companies’ book to go fishing where the fish are
Mobile shopping walls: the arrival of m-commerce, innovative online/offline hybrid models.
Consumers as drivers of change, demanding multichannel capabilities and m-commerce linking off and online worlds.
The emergence of click & collect as an incremental sales driver
Online data revolution and how cutting edge companies exploit the potential of the internet for future growth, leading to a structural shift in retailing.
Discusses whether current FMCG sites are market research projects or a genuine sales drivers.
Explains the significance of online FMCG marketplaces in terms of sales contribution and sales growth driver, data warehouse, range multiplier
Sets out our view that marketplace operations are most suitable to FMCG shoppers’ needs,
In depth profiles of leading marketplace operators in the FMCG space, Amazon, and Rakuten, also discusses marketplace ventures by Carrefour, Ocado and Wal-Mart
Spells out the enormous advantages and benefits third party marketplace operators (such as Amazon) enjoy from offering the solution to sellers
Provides an answer to the question whether the industry should run a proprietary scheme and what to look out for when setting up a FMCG marketplace with a variety of corporate partners


Benchmark your online strategy against leading, cutting edge operators
Find out whether it makes sense to partner or to compete with Amazon,, Rakuten or any other marketplace operator
Understand how to copy the best in class strategies of winning online operators such as ecosystem development and loyalty driver creation

Table of contents

Executive summary p9 Internet impact on the high street, data revolution, retail in structural structural shift. How cutting edge retailers exploit the potential of the internet for future growth in their offline operations p1 4 Using online data sources to determine store locations, sizes and ranges p1 5 The six components of strategic decision making for the future p1 6 Case study: House of Fraser’s new buy & collect store p1 8 Click & Collect as a point of differentiation and incremental sales driver p2 0 Mobile shopping walls: the arrival of m-commerce, innovative online/offline hybrid models, virtual walls for online grocery shopping p2 1 QR walls, Tesco’s trailblazing in Korea p2 2 QR walls, Ocado trial in London p2 3 QR walls, P&G and in Prague p2 4 QR walls, Budnikowsky in Germany p2 5 Recommendations: Do and don’ts of virtual walls, marketing gimmick or here to stay? A placeholder for augmented reality? Food deserts, collaboration potential p2 7 Consumers as drivers of change: evolving mindsets and raised expectations, the demand for multichannel capabilities, m-commerce linking off and online p3 0 The cross border opportunity and shopper, case example p3 1 Multichannel capabilities expectations, the global opportunity p3 2 Every second online shoppers wants click & collect, smartphones driving channel convergence p3 3 The reaction: FMCG going multichannel, taking a leaf out of non food consumer goods companies’ book p3 4 CG companies: going fishing where the fish are, the comprehensive 360° offer, vertical integration, Lego, Zara, Apple p3 5 Building an ecosystem in the FMCG space, Case example Nespresso p3 6 Nespresso – creating perfect loyalty through ecosystems p3 7 FMCG going multichannel, four business models to exploit the online opportunity p3 8 Four strategic options: A diagram p3 9 FMCG: becoming multichannel, the four strategic options, overview of the state of play p4 0 Business model I: forward integration to full scale vertical integration, manufacturing, wholesaling, operating retail stores and online p4 3 Case study: M&M store brand-building in the UK p4 4 Case study: Ritter Sport, Beiersdorf’s Nivea in Germany, creating 360 ° environments through forward integration p4 5 Recommendations: Supporting brands in a channel agnostic way, fighting private label p4 8 Business model II: Outsourcing online operations to a third party p4 9 Case study: DM and Amazon in Germany, DM acting as a supplier, a risky move p5 0 Business model III: FMCG transactional websites, two distinct approaches p5 3 The company based approach Case study: Nestle transactional in Germany, offering non-domestic brands. Brilliant approach but do consumers know who the global and national brand owners are? p5 4 Case study: P&G and the e-store in the US, market research or a genuine threat? Online loyalty through direct B2C relationship building p5 7 The brand based approach Case study: P&G in France, Pantene, Duracell, reaching the true loyals, however this is not how consumers shop groceries online p5 9 Recommendations: Target the replacement cycle for dry grocery products, automatic Deliveries, stored shopping lists p6 0 Business model IV: Marketplaces offer an elegant solution p6 1 The Marketplace option: aggregator function reflects how consumers shop groceries online, Control over brands, prices, promotions remains with FMCG Players, Main operators, p6 2 Case study: Amazon, the ultimate marketplace operator p6 3 The game changer p6 4 The perfect cash cow, marketplace stretching into fulfillment p6 5 Beneficial network effects, price competitiveness p6 6 Facts & figures p6 7 Rapid marketplace expansion financed through marketplace cash flow p6 8 The marketplace contribution, rapid growth driver, more figures p7 0 Free market research p7 1 The one stop shop p7 2 Case study: Rakuten, Asia’s outstanding performer p7 3 Japan’s biggest marketplace, internationalisation on back of Yen’s strength p7 4 Global ambition, English as official language, internationalisation target p7 5 Internationalising fast – now for e-readers p7 6 True cross border marketplace operation up and running p7 7 M-commerce storming ahead p7 8 New markets p7 9 Case study:, the first dedicated FMCG marketplace p8 0 The US operation, couponing, market research and fees... p8 1 ...expanding into the EU, the arrival in Spain, more to come p8 3 Other marketplaces – much more to come p8 4 Overview, multichannel players to leverage their store estates, time to act is now, selling everything to everyone now also online p8 5 Case study: Carrefour Pixmania tie up p8 7 Case study: Ocado and Daylesford Organics p9 1 Case study: Tesco, to enter marketplaces in 2012 p9 2 Case study: Wal-Mart Marketplace as corporate social responsibility tool p9 3 NSM marketplaces, TV shopping, digital magazines p9 4 Sources p9 5