SUPERMARKET INDUSTRY Tactics to Target Audiences and Product Categories Key Findings
1. The top 3 supermarkets, Tesco, Sainsbury’s and ASDA, have the highest online population share in the UK, but zooming in to city-level, other supermarkets also compete.
See how to target consumer segments by combining location, consumer type and competitive share
2. Online searches for “gin” have grown rapidly over the year, and were 93% higher at the start of November, compared to the previous year.
See who is winning this product category, and how other supermarkets have benefited from a halo effect
3. Visitors to Amazon Fresh’s site have grown by 16% *, since the acquisition of Whole Foods.
See which supermarkets have the greatest customer overlap with Amazon Fresh, and how they can respond
* Comparing the 9 weeks pre and post-acquisition.
| 2 Agenda
1. Audience Targeting:
How can Iceland attract the Organic Fruit & Veg shopper?
2. Category Targeting:
Who is winning the gin category and why?
3. Competitive Benchmarking:
Who is Amazon Fresh competing against, and for what consumer types?
| 3 1. Audience Targeting
How can Iceland attract the Organic Fruit & Veg shopper?
Tactics to increase market share by location and customer segment
* Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. | 4 Share by supermarket – UK online population
The three largest supermarkets in the UK *, Tesco, Sainsbury’s and Asda, have over double the online population share compared to other supermarkets.
Share by Supermarket – UK Online Population 7%
6% Tesco, Sainsbury and ASDA reach over double the online population in the UK, vs other supermarkets. 5%
4%
3%
2%
1%
0% Tesco Sainsbury Asda Groceries Morrisons Waitrose Amazon Fresh Ocado Iceland Groceries GroceriesAxis Title Groceries
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. The above chart shows results for only groceries, for Tesco, Asda, Morrisons and Iceland. * According to Kantar Worldpanel – total sales. | 5 Share By Supermarket – selected cities
But when we zoom into specific cities and locations, a different set of supermarkets arise. In Manchester, people are most likely to visit Asda, Morrisons and Iceland online. In contrast, Londoners are more likely to visit Ocado and Waitrose.
Share by Supermarket – Selected Cities
Manchester London Over-index in London 160
140 Over-index in Manchester 120
100
80
60
40 Asda Groceries Morrisons Iceland Tesco Groceries Sainsbury Amazon Fresh Ocado Waitrose Groceries Groceries Axis Title
Manchester London
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. The above chart shows results for only groceries, for Tesco, Asda, Morrisons and Iceland. Index to standard online population in the UK. | 6 Audience zoom – In Manchester Audience Zoom Zooming deeper into different types of consumers by location, we can see which supermarkets are Regularly purchases Manchester the following ranges Based attracting which segment. In Manchester, Asda & Morrisons are comparatively more likely to attract the Premium & Budget Range shopper. Iceland largely under-indexes for the Organic Fruit & Veg shopper. Organic Fruit & Veg Premium Budget Range Range Range
106.1 121.2 110.7
Asda & Morrisons attracts both the Premium and Budget Range shopper in Manchester. 95.7 117.5 107.0
82.1 100.5 101.6 Iceland under-indexes, particularly for the Organic Fruit & Veg shopper in Manchester. Most Over-indexed Most Under-indexed
Source: Hitwise Intelligence & Kantar TGI. Period: 4 weeks ending 28-10-2017. The above chart shows results for only groceries, for Tesco, Asda, Morrisons and Iceland. Index to What can Iceland do to win this segment? standard online population in the UK. | 7 Audience targeting – What can Iceland do in Manchester?
If Iceland wanted to conquest the Organic Fruit & Veg shopper and saw Manchester as a strategic location, what could they do? The supermarket could firstly understand the unique interests and needs of this target segment. One such way is through search term analysis.
The Manchester, Organic Range Audience Search Term Analysis
How can Iceland use this insight? Wine & Health Alcohol Treats Foods - PPC targeting - Regional promotions “coconut milk” Food & Drink “zubrowka” “dark chocolate” (e.g. vegetarian chocolate) “somersby cider” “Nutella” “gluten free bread” “multivitamins” Searches “grey goose” “chocolate vegetarian” - Onsite or social content “green tea” (e.g. gluten-free tips)
Delivery Household Seasonal Searches Products Searches - Inform product assortment in Manchester “tesco same “washing up liquid” “wine advent - Potential upsell opportunities Wider Groceries day delivery” “stain remover” calendar” Searches “hello fresh” “nappies” (e.g. basket suggestions online)
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. Selected search terms are over-indexed, compared to the online population. | 8 Audience targeting – What can Iceland do? (cont.)
Iceland may also want to develop regional promotions or ad campaigns for quick online response. Below is a list of websites that the Manchester, Organic Range audience is most likely to visit. Using this insight, Iceland could then strategically select the best affiliates to partner with.
The Manchester, Organic Range Audience Online Behaviour Analysis How can Iceland use this insight? Online Subscription - Monitor audience share with Alcohol Box Competitors direct competitors - Identify partnership Website Visits Drinks Supermarket Gousto Asda Groceries opportunities with Master of Malt Hello Fresh My Supermarket Food Industry complementary brands
News & Media Social - Develop whitelists to host Manchester Evening Tumblr display ads News Reddit - Identify social channels for Website Visits Channel 4 content/blogs Other Industries Sky Sports Halifax Online
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. Selected webites are over-indexed, compared to the online population. | 9 How to get these insights? Audience Profiler
1. Define your target audience Combine location, consumer type and competitive share to locate your gaps & opportunities
2. Understand their unique interests Delve into the target’s online behaviour, such as search terms and websites to build a wider profile
3. Reach your target audience Link insights to action – feed analysis into PPC, content, display and partnership opportunities
Want to combine online insights with offline purchase data? See link to Hitwise’s new partnership with Kantar Media TGI.
| 10 2. Category Targeting
Who is winning the Gin Category and why?
Tactics to convert high-growth product categories
* Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. | 11 Searches for Alcohol Types Trend over the Past Year The seasonality of alcohol Alcohol searches peak over the festive season
0.04% Online searches for wine & spirits peaked Compared to other alcohols, searches for over the festive season, and remained “gin” have rapidly mostly flat for the rest of the year. 0.03% increased over the year But, compared to other alcohols, searches for “gin” largely differed. 0.02% “Gin” searches and variations of the term
% % SearchClicks 0.01% have rapidly increased since March, and at the start of November, were 93% higher compared to the previous year. 0.00% Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Gin Vodka Rum Whisky Mulled Wine
Source: Hitwise Intelligence. 12 rolling weeks to 5-Nov-2017, over 52 weeks. The above chart includes search variations of each alcohol type. | 12 Top Rising Keywords Around “Gin” 12 weeks to 4-Nov, YoY Why have “gin” searches
Type Keyword Search Share YoY% increased?
Rhubarb 3.82% 173% By comparing keywords around “gin” searches, we Pink 2.28% 175% can see why gin has grown rapidly over the year. Flavours Ginger 1.37% 127% The top rising keywords showed that new products (e.g. advent calendars and baubles), flavours (e.g. Calendar 1.95% 106% pink) and supermarkets (Aldi and Lidl) were trending, in time for this year’s festive season. Baubles 0.99% 14185% Seasonal Advent 2.00% 96%
Gin Baubles went viral last year, with Whitley 0.72% 177% brands like Pickering’s recently releasing their new batch, in time for Manchester 0.59% 66% this year’s festive season. Brands Gordon 0.83% 25% Aldi launched the first Scottish Gin Festival at the start of Nov. Lidl has 323% Aldi 1.52% also just released their award-winning pink gins in-store. 164% Super- Lidl 0.85% markets Tesco 1.72% 28%
Source: Hitwise Intelligence. 12 weeks ending 4-Nov-2017, YoY | 13 The Gin Audience The gin audience Share Per Region Share by region 0.7%
0.6% 70%* 63% Growth in gin searches can be seen 0.5% overall in the online population, but 62% more so in some regions. 0.4% 62%
The chart on the right shows the 0.3% 51% proportion of people within each region searching for “gin”, and how this has 0.2% changed since last year. 0.1% In particular, Scotland saw a 70% rise in October YoY. 0.0% Scotland North East North West South East London
Oct - 2016 Oct - 2017
Source: Hitwise Intelligence. Audience: Top 1000 searches around Gin, over the periods: 4 weeks ending 4-Nov-2017 and 5-Nov-2016. * Relative difference between two time periods. | 14 The “halo” Supermarket Gin Searches Weekly Trend effect of gin 0.0012% Searches for “Lidl gin” and “Aldi gin” had grown 732% and Lidl released their award-winning 133%, respectively, WoW. Christmas gins on 31-Oct. Aldi also launched the first Scottish Gin Festival 0.0008% on 2-Nov. As a result, searches for “Lidl gin” and “Aldi gin” grew by 732% and 133%, 0.0004% respectively, in the week of 04-Nov. These promotions were instore, but others have benefited online. Although much lower in volume, “Amazon Gin” 0.0000% saw a 32% WoW rise, the following week. 14-Oct 21-Oct 28-Oct 04-Nov 11-Nov
“Lidl Gin” “Aldi Gin” “Amazon Gin” The following week, although lower in volume, searches for “Amazon Gin” grew by 32% WoW
Source: Hitwise Intelligence. 12 weeks ending 4-Nov-2017, YoY | 15 Amazon – Internal Searches, Related to Gin Week ending 11-Nov How can others capitalise? Selected Gin Terms WoW % Only 38% of “lidl gin” searches went to their site directly, and 59% for “aldi gin”. The remaining gin miniature 111% traffic went predominantly to news and media sites.
gin baubles 68% Amazon, on the other hand, had 100% of traffic from “amazon gin” searches go to their site.
gin advent calendar 2017 59% When we look at searches within Amazon’s site, a number of gin-related products significantly increased. These included: gin glasses, miniatures, gin glasses 51% calendars and baubles.
gin gift 35%
gin 18% The opportunity to benefit from a halo effect So can be direct or indirect. Amazon saw significant rises in searches for gin-related what? products, and not necessarily for gin brands.
Source: Hitwise Intelligence. Searches made within Amazon, as a proportion of all searches over the specified week. * Source: Hitwise Intelligence. 12 weeks ending 4-Nov-2017, YoY | 16 How to get these insights? Category & Product Tracker
1. Track fast moving search terms Monitor what is trending week-on-week by product categories
2. Monitor the impact of competitor campaigns Assess the uplift from competitor events or campaigns, such as searches or onsite conversions
3. Connect with your product and promotions Combat or benefit from a competitor’s campaign - Look at the demand for direct or related products to determine your response
How can we see “inside” Amazon’s website? Contact us about Hitwise’s category and product tracker solutions.
| 17 3. Competitive Benchmarking
Who is Amazon Fresh competing against and for which consumer types?
Assessing competitor audience overlap and product opportunities
* Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. | 18 Weekly Online Visits Amazon Fresh & 1,200,000 60,000 Whole Foods Discounts Passed onto Online impact 1,100,000 Prime Day: Whole Foods: +26% WoW 50,000 +38% WoW
1,000,000 40,000 Amazon fully acquired Whole Foods on 28- Aug, and soon after, Whole Foods
900,000 30,000 announced price cuts of up to 40%. Amazon Fresh and Whole Foods currently 800,000 20,000 service only a handful of locations in the UK (mainly London), so what is their impact Amazon Acquired Whole Foods: +11% WoW online? Visits to Amazon Fresh have steadily 700,000 10,000 grown, with the number of visitors to their site rising by 16% since the acquisition *. 600,000 0 08-Jul 22-Jul 05-Aug 19-Aug 02-Sep 16-Sep 30-Sep 14-Oct 28-Oct
Whole Foods Amazon Fresh
Source: Hitwise Intelligence. * Comparing Pre-Acquisition: 9w to Aug-26, and Post-Acquisition: 9w to Oct-28 | 19 Amazon Fresh Audience – Overlap Amazon Fresh Pre vs. Post Acquisition * Overlap with supermarkets
Who is Amazon Fresh sharing their 6.5% online audience with? 10.5% Since the acquisition, Asda, Waitrose and Ocado have seen a % Difference: larger proportion of their audience % Difference: * shared with Amazon Fresh. +14% +11% In particular, Ocado has seen a significant shift of 17% overlap.
Amazon Fresh Audience Online grocer, Ocado, has seen a 7.0% comparatively large shift of 17% in Asda Audience audience overlap with Amazon Fresh. Waitrose Audience % Difference: Ocado Audience +17%
Source: Hitwise Intelligence. Pre-Acquisition: 9w to Aug-26, Post-Acquisition: 9w to Oct-28. * % Difference: Relative difference in audience overlap, over these two periods. | 20 Audience Comparison – Food Habits Amazon Fresh vs. Ocado Ocado is more likely to attract the Audience food habits regular spirits and 120 Amazon Fresh fresh coffee buyer more likely to attract the regular chocolate shopper To see why there is a shift, we can 110 compare the types of audiences that Amazon Fresh and Ocado draws. Regular buyers of wine and food delivery 100 services are similarly-indexed for both online supermarkets. Ocado is more likely to draw the regular 90 shopper of fresh coffee and spirits, Wine Chocolate Spirits Fresh Coffee Delivery Service whereas Amazon Fresh is more likely to attract the chocolate lover.
Source: Hitwise Intelligence and Kantar TGI. 4 weeks ending 28-Oct-2017. The above chart only shows the most regular consumers of wine, spirits, chocolate etc. Index to standard online population in the UK. | 21 Amazon Fresh vs Ocado - Top Product Pages Amazon Fresh Week ending 28-Oct vs. Ocado Amazon Fresh Ocado Top product pages
1 Wrapped Bumper Retro Sweets Selection 1 Fanta Zero Halloween In the week ending 28-Oct, 4 out of the 2 50 Original Nespresso Coffee Capsules 2 Ocado Magnetic Meal Planner top 10 products viewed on Amazon Fresh were coffee-related. Green & Black's Organic Tasting 3 3 Staropramen Premium Beer 4 x 330ml Collection But, Ocado attracted a higher Fitou Mme Claude Parmentier Cuvee proportion of “fresh coffee” drinkers 4 Indo Mie Mi Goreng 4 75cl (potentially not converting as much as Waitrose Heston Hanger Steak Pie 2 x Amazon Fresh). 5 TASSIMO Costa Americano 16 T DISCs 5 250g To respond, Ocado could then push 6 Nong Shim Shin Noodle Ramyun 6 Offer - Waitrose Duck Leg Confit 500g promotions on coffee capsules the Waitrose Pumpkin, Porcetta & Sage Pizza following week, to secure and convert 7 TASSIMO Kenco Colombian 16 Capsules 7 310g this audience.
8 Tassimo Kenco Decaf Coffee 8 Mr Organic Basilico Pasta Sauce 350g
Aberlour 12 Year Old Single Malt Scotch Amazon Fresh is a growing online 9 9 Ocado Tea Towel Whisky So threat, and Ocado has seen a larger Waitrose 1 Two Salted Caramel Tarts audience overlap with them. To 10 Monin Flavoured Cocktail Gift Set 10 167g respond, Ocado could identify what? product gaps by linking audience data with product insights.
Source: Hitwise Intelligence. Product pages viewed on Amazon Fresh and Ocado’s website. | 22 How can I get these insights? Competitive Intelligence
1. Assess the impact of online disruptors Amazon Fresh is one online disruptor, but others like My Supermarket have grown over the year. Assess their online impact to your business
2. Compare your audience overlap Track the audiences shared with other supermarkets and understand why
3. Identify product opportunities Link audience insight to online product performance. Identify gaps in consumer segments, such as where you don’t convert
Want to monitor your audience overlap with competitors? Get in touch to see Hitwise’s AudienceView platform.
| 23 Summary
Key Takeaways & Hitwise Services
* Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. | 24 Key takeaways
In this report, we covered three actionable tactics for supermarkets that combines online and offline data resources. These were:
- How to grow a consumer segment The Manchester Organic Range Shopper was identified as an opportunity for Iceland. Iceland could then understand this segment’s unique interests to grow engagement, online and offline.
- How to convert in a product category Gin has seen enormous growth this year. Other supermarkets can hop onto the halo effect from Aldi & Lidl’s instore campaigns, such as Amazon, which has seen growing demand for gin-related products.
- How to monitor online threats Amazon Fresh is taking over online audiences. To differentiate, Ocado could then analyse audience breakdown and product performance, to pinpoint gaps and product opportunities.
In summary, these tactics support supermarkets targeting customers and increasing value from each segment.
| 25 Want to get these insights? The following Intelligence Tools & Services were featured in this report:
Audience Competitive Product Profiler Benchmarking Tracker
By combining online metrics and Hitwise’s platform allows This custom tool allows brands and market research variables, the clients to determine what is retailers to keep pulse on which Profiler report identifies the driving competitor success, products are trending on specific demographics, attitudes and by tracking a set of sites. With these insights, brands online behaviours of a target websites and subdomains and retailers can identify product audience. on a daily, weekly or demand and determine gaps in monthly basis. their own categories.
| 26 SUPERMARKET INDUSTRY www.hitwise.com [email protected]