E-Commerce Marketplace Part 1: the New Playing Field

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Winning in the E-Commerce Marketplace Part 1: The New Playing Field

In collaboration with:

By Peter Breen The following is the first of two articles examining the emerging Playing for the Future Fitch Ratings estimates that e-commerce e-commerce marketplace for consumer packaged goods. Part 2 will sales currently represent just 1% of the $631 take an in-depth look at winning strategies for CPG marketers. billion grocery industry, and will grow by 10% to 15% annually to reach 3% of to- esidents in Santa Monica, Calif., who 250-store supermarket co-operative with a tal sales during the next 10 years. Although placed orders through the recently in- six-state footprint. other sources are slightly more optimistic, R troduced AmazonFresh grocery deliv- Welcome to the new playing field of gro- projecting annual growth of 20% to 25% ery service this summer received free bottled cery e-commerce. and similarly higher market share, no one is water. It wasn’t a promotional incentive per Granted, at this stage in market devel- predicting a massive overnight shift toward se, but rather a unique way to keep refriger- opment, there still is a lot of empty space online grocery shopping. ated products cold while they were sitting between AmazonFresh and ShopRite from “For most CPGs, e-commerce only repre- on doorsteps. Home, geographically, competitively and cul- sents 2% to 3% of their business right now, Meanwhile, on the other side of the turally. But the divide won’t last much longer so it hasn’t become a financial imperative U.S., New York metro-area residents who because the time has arrived for all consumer quite yet,” says Gregory Grudzinski, director bought $20 worth of back-to-school supplies packaged goods retailers and marketers to of research and analytics at Etailing Solutions, through the ShopRite from Home curbside embrace e-commerce – the industry’s “next Westport, Conn. pickup service earned $10 off a future receipt large growth engine,” as Neil Ashe, chief ex- It nonetheless should be a business impera- – an offer that wasn’t extended to shoppers ecutive officer of e-commerce at Walmart, tive for virtually all CPGs and retailers alike, inside the store. recently proclaimed. however, because consumers are steadily This bicoastal activity was significant for Just one piece of advice: Don’t expect mas- acclimating to online grocery shopping and a number of reasons, not the least of which sive amounts of incremental sales, windfall because – perhaps more importantly at this was the fact that it involves the world’s larg- profits or even very much return on your in- stage – several aggressive companies have est, most recognizable and arguably most vestment just yet, folks. The entire market- identified the marketplace as the next fron- innovative online “etailer” on one hand and, place is in “test and learn” mode, so plan tier. (You can call this the “Amazon Effect.”) on the other, a decidedly more traditional accordingly. Furthermore, debating how quickly online

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TOP ETAILERS sales might grow should be a secondary con- Summit last spring. cern for CPGs because one of the undeniable Ahold understands that a “digitally en- In the past 12 months, facts right now is that in-store sales are being gaged” shopper takes many forms, which from which of the influenced not just by digital shopper market- is why the company is building a channel- following retailers have ing but by straightforward e-commerce activ- agnostic engagement model that lets shop- ity: Whatever you call the opposite of “show- pers buy online for either home delivery or you purchased online? rooming,” it’s happening, even at pure-play store pickup – or keep right on buying in the Amazon.com 68% etailers like Amazon.com. bricks-and-mortar store. “Amazon itself will tell you that it only “While the immediate online sales oppor- Walmart.com 41% makes the sale one out of 11 times, so 90% tunity is there, we see a bigger near-term of the consumers researching product infor- payout” by influencing in-store sales, says Target.com 19% mation either end up buying somewhere else Christine Chun, group manager of e-com- online, offline or not at all,” explains Brian merce at The Clorox Co. “We’re simply look- BestBuy.com 19% Cohen, executive vice president and general ing to provide shoppers with the information manager of Etailing Solutions. “Either way, that they need to make a purchase decision Staples.com 11% Amazon has become a critical shopper mar- – wherever it might take place.” keting tool” in addition to being a potentially “Even if you never sell one dollar online, if Walgreens.com 10% important partner for direct sales. you’re not investing here and getting all the OfficeDepot.com 9% Illustrating Cohen’s point is a case study basics right, you’re eventually going to lose used by the Amazon Media Group, the sales offline,” says Douglas Straton, direc- HomeDepot.com 8% etailer’s ad-sales unit, which boasts that a tor of Unilever North America’s E-Commerce targeted display-ad campaign for Procter & Center of Excellence. CVS.com 7% Gamble’s Crest Whitestrips drove $338,000 in sales through Amazon websites – but $1 A Mutual Migration Drugstore.com 7% million in offline sales. Another significant aspect of the aforemen- “The marketers that are jumping in at this tioned AmazonFresh and ShopRite at Home PetSmart.com 7% point recognize the potential of the space and examples is the way those services address want to take leadership roles in their catego- the main barrier – for both consumers and Lowes.com 6% ries,” adds Grudzinski. retailers – that has hindered the growth of “We believe that our digitally engaged cus- online grocery shopping for more than 20 Costco.com 6% tomers will triple in the next 24 months and years: the costs associated with timely home Petco.com 5% represent well over 50% of our sales,” said delivery. Erik Keptner, executive vice president of sales That logistics issue is largely what has kept SamsClub.com 5% and marketing at Ahold USA, during a key- even successful home delivery operations such note presentation at the Shopper Marketing as Ahold’s Peapod (a $500 million company) DollarGeneral.com 3%

Diapers.com 2%

PetFoodDirect.com 2% E-Commerce = Sales and Marketing The fact that any online communication with consumers can ultimately influ- BJs.com 2% ence a sale makes the difference between “e-commerce” and “digital shopper marketing” a bit murky at times. Safeway.com 2% Unilever’s Douglas Straton makes this general distinction: “E-commerce is Meijer.com 2% getting them to buy. Digital shopper marketing is moving them further down the purchase funnel.” Alice.com 1% Etailing Solutions’ Brian Cohen suggests that the difference largely reflects an old-fashioned way of thinking. “Sales teams are mostly charged with getting Soap.com 1% the product on the shelf, which means mainly distribution. Then, marketing works to get the product off the shelf,” he explains. “With e-commerce, the Albertsons.com 1% two processes are more closely aligned.” “E-commerce is giving us an opportunity to leverage a single platform for Peapod.com 1% both sales and marketing,” adds Christine Chun at Clorox. “We haven’t had that before.” FreshDirect.com 1% “Whatever distinctions are currently being made will most likely go away when the CPG world adopts more of a multi-channel focus” and online sales Other 40% become as common as bricks-and-mortar transactions, concludes Straton.

Source: Etailing Solutions, 2013

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and FreshDirect ($400 million) from expand- popular retailer among respondents to the posed to spend millions to work with a cus- ing beyond a few major metropolitan areas, Ecommerce Study, with 68% claiming to tomer that only delivers a million in sales,” and why newcomers such as AmazonFresh have made a purchase on the site in the past says Danny Silverman, Etailing Solutions’ vice are only testing in other large urban areas. year. Coming in a distant second at 41% was president, sales strategy. “But you have to Costs are declining, primarily because re- Walmart.com. (See chart, page 2.) be willing to spend disproportionately to the tailers have paid attention to the shopper What’s more, 30% of all online product return. In five years, it will be a top-five cus- research and employ free or reduced shipping searches now begin on Amazon.com, com- tomer for any CPG that is willing to make the as the main lure to induce usage – even if that pared with just 13% on search leader Google, investment now.” means operating in the red initially. “Amazon according to Forrester Research. Amazon has been molding its huge audi- is very committed to moving into this space,” It also has purchase and preference data on ence into loyal shopper segments through says Cohen. “They care less about profitabil- more than 200 million U.S. consumers, and its Amazon Prime membership program and ity than they do about global domination.” an ability to exploit that information to drive a growing number of niche offshoots tailor- In fact, Amazon isn’t as interested in selling additional sales that has made it the envy of made for CPG marketers: Amazon Mom, packaged goods as it is using the channel as a the marketing world. And, it really wants to Amazon Student, Amazon 50+ Active & traffic driver to the site overall. “People buy a become a leader in grocery. Healthy Living, Men’s Grooming. TV once every five years, but they buy grocer- “If you follow conventional wisdom, Ama- After operating the AmazonFresh home de- ies once a week,” says Cohen. zon and other pure-play etailers aren’t worth livery service for six years in hometown Seattle, With barriers coming down and U.S. con- the investment right now. You’re not sup- the company rolled out to Los Angeles and sumers getting increasingly comfortable with technology, buying packaged goods online has become a common occurrence. And on- TOP CATEGORIES line shopping is no longer confined to those Millennials who simply can’t comprehend What percentage of your category what life was like before the Internet. Now, purchases are made online?* consumers from all demographic groups are ONLINE OFFLINE doing it. “The conventional profiles don’t ap- Books 84% 16% ply in our space,” says Chun. More importantly, the action is becoming Music 82% 18% habitual: Etailing Solutions’ “2013 Consumer Ecommerce Study” found that, for example, Electronics 78% 22% consumers who bought any health and beau- Apparel 76% 24% ty product online were, on average, making more than half of their category purchases Baby/child products 60% 40% online. Even more surprising is that these consumers profess, on average, to making 15% Of ce supplies 55% 45% to 20% of their food and beverage purchases – even getting 16% of their perishables – on- Health and beauty 51% 49% line. (See chart at left.) Pet food/supplies 41% 59% “Consumers increasingly are going online to find everyday items, especially with low- OTC/vitamins 38% 62% involvement categories and high-volume products for which a brand preference is well Tea/coffee 32% 68% established,” says Angela Edwards, Etailing Solutions’ vice president of marketing. Food (snacks) 23% 77% Household cleaning 23% 77% The Starting Lineup As already implied, Amazon.com is consid- Food (condiments) 20% 80% ered to be the odds-on favorite to lead the CPG industry into e-commerce. But that des- Food (perishables) 16% 84% ignation is based more on the company’s or- Cereal 16% 84% chestrated dominance of other product categories such as books, music and consumer Pasta/sauce 15% 85% electronics. Although undisclosed publicly, Amazon’s CPG sales are generally considered Bottled water 15% 85% to be low. Regardless, Amazon.com attracted 95 020406080 100 million unique visitors in July, according to *Asked of respondents who identi ed themselves as having made online purchases in the category. comScore Inc. It far and away was the most Source: Etailing Solutions, 2013

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San Francisco this summer and is San Jose, Calif., test in the last expected to get to at least a few 18 months. The retailer also is more markets by 2014. gradually expanding its ability to “If you ignore Amazon, it’s at ship online orders directly from your own peril,” says Straton. stores to speed up fulfillment. Other national etailers: As far Elsewhere, Walmart.com as the “pure play,” online-only makes packaged foods avail- etailers that CPGs need to worry able through its “Home Free” about, “It’s typically Amazon, service (free shipping in three to and then the ones that are right five days with $45 orders). But for your particular brand and cat- another “unique” concept be- egory,” says Cohen. ing considered – having other Among the ones most often shoppers deliver online orders to discussed are several websites their neighbors – isn’t expected operated by Quidsi, a startup that to reach bright. had launched category-specific In addition to the aforemen- successes Diapers.com and Soap. tioned efforts at Ahold and Shop- com before Amazon bought the Rite (who, not coincidentally, company in 2010. compete in the heavily urban The shortlist also includes Mid-Atlantic states), Safeway has Drugstore.com, which was head- quietly expanded its home deliv- ing toward $500 million in annual ery business for several years and sales when Walgreens scooped it up in 2011, chains such as Target and Walgreens. Both currently offers the service in markets on the and Alice.com, an independent company that services are operating in New York and the West Coast and in the Baltimore, Phoenix and maintains virtual storefronts for roughly 180 Bay Area and are expected to expand soon. Washington, D.C., markets. CPGs (and focuses on shelf-stable products). Both Google and eBay are formidable com- Otherwise, notable examples are scarce. Home delivery specialists: Peapod and panies that, like Amazon, don’t mind sacrific- “Traditional retailers have been worried about FreshDirect (partially owned by UK-based ing profit to get initiatives rolling. Cohen says cannibalizing store sales,” says Edwards. “But grocer Morrison’s) have long been the two it’s “too early to tell” if either endeavor has they have to start focusing on saving their leading players in this segment. While overall strong potential. shoppers, not their stores. If they don’t follow consumer penetration is still fairly low (see Traditional retailers: Although the tide is their shoppers online, somebody else will.” chart, page 26), many experts consider the turning somewhat, many traditional pack- development of efficient home delivery mod- aged goods retailers have been extremely els as the key to future growth. slow to enter the race. “They need to put a “The ability to have your groceries deliv- serious, dedicated infrastructure behind an ered is becoming increasingly relevant, espe- initiative like this, and historically they haven’t Westport, Conn.-based Etailing cially as the ‘Digital Generation’ enters the been willing to say, ‘We’re going to lose mon- Solutions’ mission is to help its brand real world,” says Cohen. “Peapod and Fresh- ey in order to invest,’” explains Edwards. partners understand, navigate and Direct have demonstrated that there’s a mar- Although Walmart’s progress often seems lead in the global online marketplace. ket in major metropolitan areas, which is why largely a reaction to Amazon.com’s maneu- Its clients include many Fortune 50 the major players are moving into the space.” vers (Walmart to Go home delivery didn’t packaged goods companies. Etailing Solutions is part of the Epsilon Agency Two other major online players, Google arrive until several years after AmazonFresh), Services group and the driving force and eBay, are experimenting with same-day the company certainly has the resources behind the Center for eCommerce delivery services, the former with a “Google needed to compete – although not quite the Excellence, a catalyst for global Shopping Express” that sources products same “profits be damned” mindset. learning, collaboration and best-practice from local retailers and the latter with eBay Walmart to Go is currently available in five development. Now, which is working mostly with national markets, having moved beyond its original

4 As seen in

Winning in the E-Commerce Marketplace Part 2: Developing the Game Plan In collaboration with:

By Peter Breen The following is the second of two articles examining the emerging Embracing the Channel e-commerce marketplace for consumer packaged goods. Part 1, A report released last month by investment which examined “The New Playing Field,” is available on p2pi.org. house Sanford C. Bernstein, New York, offered one of the more bullish forecasts to date arget launched a “subscribe and Perhaps even more startling has been the for CPG e-commerce, which it asserts is “fast save” service last month that lets recent decision by several chains to house becoming a significant market that could shift T parents schedule automatic delivery Amazon Locker storage units in their stores, [share] to smaller players and disrupt pricing of diapers, formula and other baby needs. in theory because consumers picking up and other key parts of the industry’s business The service promises free shipping on orders Amazon orders might become incremental model.” The report predicts that online sales of $50 or more and 15% discounts on pur- shoppers. While OfficeMax and RadioShack will account for 25% of all CPG purchases in chases. backed away from such deals in September, a as little as five years. Locking up future purchases is a great idea, number of packaged goods retailers – includ- If that forecast proves anywhere near accu- which is why Amazon.com has been operating 7-Eleven, Albertsons, Safeway and Rite rate, then CPGs and traditional retailers have ing a similar “Amazon Mom” service for three Aid – are still partnering with Amazon. a lot of work to do – and fast. “So far, only years – and why niche etailer Diapers.com Such recent machinations are the latest a select few CPGs have made e-commerce a (now owned by Amazon) has been doing it evidence that the e-commerce marketplace real area of investment,” including Unilever, for even longer. for consumer packaged goods is heating up Procter & Gamble, Reckitt-Benckiser and The It seems almost unfathomable now that as traditional and online retailers solidify their Clorox Co., says Brian Cohen, executive vice Target actually contracted with Amazon to business plans. CPGs who until now have president and general manager of Westport, run Target.com’s e-commerce business for devoted their digital marketing to driving in- Conn.-based Etailing Solutions. 10 years until 2011 – as if no one had even store sales need to develop another plan of “At most companies, e-commerce is rel- conceived of a day when the upstart books attack that builds direct online transactions egated to a specialty sales role, with minimal and music etailer would ever be a competitive into their objectives. funding and little full-time attention,” says threat to other channels. Cohen. “But it’s not just a sales function, it’s

an enterprise-wide responsibility that affects estimated shares to already be 9% for health The business economics for the pure plays the entire business.” products, 5.9% for beauty care and 5.7% is significantly different than it is for tradition- Acknowledging this fact throughout the for pet care. al retail channels. So just as they did 20 years organization is the first step CPGs need to Selecting appropriate retail partners, ago when warehouse clubs emerged on the take to develop a game plan, industry experts meanwhile, involves analyzing many of the scene, and more recently with the rise of dol- say. The next is to build the team that will same criteria that guides decisions in the lar stores, CPGs need to treat e-commerce as drive the company forward. bricks-and-mortar world: size and growth its own class of trade, with different pricing “The leading-edge companies have cre- potential, category focus, logistical demands, schemes, funding models, margin drivers and ated centers of excellence and dedicated full- shopper alignment and available marketing even packaging needs. time personnel to the effort,” says Angela opportunities. This channel is a little trickier, however, be- Edwards, Etailing Solutions’ vice president of cause the customer universe also includes marketing.” “It should be a separate function Rethinking the Customer Plan traditional retailers whose online needs and that has cross-functional expertise in sales, If the implication isn’t yet obvious, working objectives are often quite different than those shopper marketing, brand marketing, digital with Amazon is a must, even though the of their pure-play counterparts. “Walmart and even logistics.” Currently, “only a hand- world’s largest etailer is still heavy on “po- might not be as worried as Amazon about ful” of CPGs have devoted more than five tential” and light on actual CPG sales – and the [digital] cart-abandonment rate,” says employees to the effort, she says. despite the fact that its reputation as a col- Straton. “The pure plays need to make that Clorox built a central team that is charged laborator isn’t ideal. (See “The 800-Terabyte sale, but the traditional retailers see it more with “building capabilities, testing and learn- Gorilla” on page 3.) as a media channel” to drive in-store sales. ing, and then bringing the learning to exist- Clorox’s e-commerce team is “deeply en- There also may be times when a retailer’s ing teams,” explains Christine Chun, group gaged” with Amazon, says Chun. It also traditional business model conflicts with manager, e-commerce. The long-term goal works with other pure-play etailers, and helps its new – and separate – online strategy: is to help the brand and customer market- the sales and shopper marketing teams run Walmart.com is based in San Francisco, not ing teams develop their own expertise, Chun “test and learns” with “a few bricks-and- Bentonville, Ark. says. clicks that have risen to the top,” she says. Therefore, CPGs need to understand how With a team in place, the go-to-market Most activity at traditional retailers is the re- each of their key retailers operates. Don’t ex- strategy involves two major pieces: picking sponsibility of the account teams. pect Drugstore.com to act like Peapod.com. the brands and retail partners on which to “Beyond Amazon, the health & beauty Don’t expect Walmart.com to act like Safe- focus. marketplace is splintered into a number of way.com. And don’t expect Amazon to act For the time being, not all product catego- niche players,” says Douglas Straton, direc- like anyone else. ries have the same potential online. While tor of Unilever North America’s E-Commerce And, in general, don’t expect good-old online activity generates less than 1% of sales Center of Excellence. “But Amazon is already salesmanship to be as important as it has been for most CPG categories, the Bernstein report starting to pull away.” in the marketplace. “CPGs have to adjust to a

The Product Page Checklist The average shopper probably doesn’t need to sift through six computer screens worth of content before buying a bar of soap – but your average search engine might. The following is a list of product page must-haves (in somewhat-order of importance): n High-resolution packaging images (360-degree viewing is a nice touch) n Prominent price point (with the discount as prominent) n Shipping options (especially the free ones) n Concise product description (attributes, benefits, awards, distinctions) n User-generated rating and reviews (the star scale works nicely) n Alternative SKU options (other sizes, flavors, etc.) n Product specifications (container sizes, weight) n Ingredients (are you healthy?) n Cross-merchandising possibilities (don’t forget the condiments) n Promotional video (hey, everyone says they increase sales)

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The 800-Terabyte Gorilla And you thought Walmart was difficult? “Most CPGs find Amazon frustrating to work with,” says Etailing Solutions’ Danny Silverman. “It’s a technology platform, not a relationship- driven company.” That means emails instead of phone calls (and face-to-face meetings only when really necessary). The company wreaks havoc with pricing lev- els, leaves most vendors to manage their own content, doesn’t care what its Amazon Seller retailers do, isn’t all that concerned with brand- level sales (only item-level), and lately has been putting the hard-sell on CPGs to advertise. On the flip side, Amazon has been the para- gon of online retailing since the late 1990s. It’s credited with inventing (and perfecting) product recommendations. It has 90-plus million unique monthly The company is actively recruiting strategic partners, al- visitors, what’s considered to be an unparalleled cache of though typically looking no lower than No. 2 in the cat- shopper data, and proof that 90% of its browsers make egory; at present they’re working strategically with about a purchases at other retailers. dozen top CPGs, Silverman estimates. “Amazon is investing quite a lot in our space and innovat- “If you’re not a strategic partner, then basically you’re man- ing quite a lot,” says Clorox’s Christine Chun. “We’d love to aging your Amazon.com presence on your own” through the see some of our other customers innovate as well.” site’s “Vendor Central” portal, says Silverman. “There are Amazon also fancies itself a strong media play – and with hundreds of large and medium-sized CPGs doing it this way.” those aforementioned statistics, it has a legitimate argu- There have been recent signs that Amazon might be soft- ment. The company is making a major push to act like a ening. It rolled out a Strategic Vendor Services program for media company, boosting ad revenues 45.5% to $610 million strategic partners that provides a dedicated rep (but does in 2012, according to eMarketer. require additional funding). And it recently gave in to per- The drive for ad dollars has had a profound effect on sistent requests and began making its vendor management its dealings with CPGs, who are being told in no uncertain and media teams available for joint meetings. terms that their media spend will be a key driver of any col- “At this point, you never really get to a state of ‘perfect,’” laboration. Amazon has even acknowledged that it hopes says Silverman. “But there’s a learning curve here: Amazon is to use the ad kitty to help drive down prices even further. new to the industry, and the CPGs are new to e-commerce.”

new dynamic that isn’t as reliant on one-to- content – not to mention “strategic partner” according to the Search Engine Journal (April one relationships between buyers and sell- status. (See sidebar above.) 2012). ers,” says Edwards. Etailing Solutions finds that 77% of con- Once she scrolls through that first page, in sumers search for products by category. fact, the typical consumer conducts another Rethinking the Marketing Plan However, being the established category search instead of moving to page two. So be- The good news about securing digital shelf leader doesn’t mean much: Examining sales ing on the second page of search results isn’t placement is that it generally doesn’t require at Amazon on one day in July, the Bernstein like being on the bottom shelf in the store, slotting fees (at least not now.) The bad news report found the top-selling cereal brand to it’s like being back in the warehouse. “No is that it often also has little to do with sales be … Bob’s Red Mill Gluten-Free Whole Grain one is going to scroll through 1,800 SKUs,” volume, category status, brand recognition Rolled Oats. says Gregory Grudzinski, Etailing Solutions’ or any of the measures with which CPGs are “Small brands can look large online sim- director of research and analytics. accustomed. ply because they’re playing where the bigger Thus, the primary goal of an e-commerce Algorithms determine what rises to the top brands aren’t yet,” warns Straton. marketing plan is securing a visible and accu- of category pages and search results. These Moreover, the “infinite digital shelf” is a rate presence on the digital shelf. “You’ve got mathematical equations can vary significantly misnomer. While retail websites have a limit- to get the shelf right, and that means getting from site to site. Amazon’s search rankings, less capacity to list products, online shop- the content right,” says Straton. “You can for example, are based in part on product pers have nowhere near the corresponding spend two years on that alone.” sales and conversion rates, but also on softer patience to search them: 70% of searchers Content should be viewed as both king parameters such as page views and quality of never scroll past page one of their results, and queen, because it doesn’t just influence

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consumers but also drives search results. So ing their ranks. One OTC brand audit found “We’re looking for a way to do it consistently, the requisite skill set requires more experience that “70% of the products being offered on and tie it back to the offline.” with SEO than TPR. Amazon were unfit for retail sales” and an- “For now, you can’t look at e-com- Success begins by cracking the code on the other that “the No. 1 product wasn’t even merce as a route to incrementality, algorithms, which etailers often keep close to supposed to be available in the U.S.,” explains but as a way to hold onto share,” says Co- the vest “because they don’t want them to Cohen. hen. “You have to look at it as a media play get manipulated,” says Danny Silverman, vice Naturally, pricing also is important, and right now,” which means measuring your president, sales strategy, at Etailing Solutions. requires the same mutual understanding spending by the same media metrics used But it also requires an understanding of con- of consumer thresholds and retailer needs to evaluate spending on People.com or even sumer search behavior. as in the traditional world – except when it CBS, for example. While older consumers often utilize pre- comes to Amazon, which takes the matter Cohen also suggests tracking overall sales pared left-column category links to search for entirely into its own hands: The Bernstein growth and share of category rather than di- products, younger shoppers rely on search. report found that, over a two-week period, rect correlations. “Measure the impact across But search behavior, too, differs from site to the price of a four-pack of Cheerios fluctu- all vehicles, not just through the individual site. “The words people use in the search box ated by $12.76. etailers,” he suggests. “It’s not just direct ROI. are different on Google.com than on Drug- Thus, there’s a lot of blocking and tackling It’s about being available for today’s fickle store.com,” explains Straton. “You can’t just to be done before a CPG even begins to con- shopper.” think about keywords, but also about need sider promotions. “Our e-commerce tactics The term “omni-channel retailing” has states – like ‘How do I fight dry skin.’” focus on building a strong presence, driving been revived as an industry catchphrase in The requisite content comes in two buck- traffic, and ensuring that the content is ac- recent months. But a better term to discuss ets: the internally generated materials that curate and helpful,” says Chun. the future might be “uni-channel,” to reflect include product imagery and information, There’s a clear distinction between etailers a retail strategy that lets the shopper decide and the user-generated reviews and ratings and traditional accounts when it comes to when and where to make the purchase. that, at least for some shoppers, are far more promotion, with the former group far more “Online sales can be material, but it’s a important. (See “The Product Page Check- interested in conversion and the latter much fraction of the impact right now,” concludes list” on page 2.) more content to win over shoppers – and in Chun at Clorox, whose proprietary research Unfortunately, there are no industry-wide most cases still just as happy to drive sales to proved that “there is a very real impact in- standards, and some etailers desiring unique the store. store. And that provided the data we needed content to help themselves stand out in And since even visits to Amazon.com can to get the whole organization behind e-com- search engines are tackling the work on their influence in-store sales (see part 1), Straton merce.” own – which can make it hard for brands to offers this advice: “Your e-commerce needs The industry line should begin here. retain control of their message. to align with your offline activity because “Simple digital asset management can be it can have such a strong impact on offline a nightmare,” says Cohen. “Even replacing sales.” your old packaging graphics is impossible if Westport, Conn.-based Etailing you don’t have a comprehensive inventory of Rethinking the Measurement Solutions’ mission is to help its brand where they are.” Plan partners understand, navigate and Or whom to call: There are an estimated Direct sales are still pretty low, indirect sales lead in the global online marketplace. 2 million third-party “retailers” operating are hard to correlate, and there is no IRI or Its clients include many Fortune 50 packaged goods companies. Etailing through the Amazon Seller program, ac- Nielsen to aggregate data. That leads Straton Solutions is part of the Epsilon Agency counting for about 40% of the total product to admit, “Measurement is brutal. Services group and the driving force “There is no one way to effectively, effi- inventory. behind the Center for eCommerce Such “alternative” retailers basically pres- ciently and consistently measure share, for ex- Excellence, a catalyst for global ent products in whatever manner they devise, ample,” he continues. “The pure plays don’t learning, collaboration and best-practice and marketplace aggregators like Amazon, want to provide that information,” which development. Google and eBay aren’t concerned with polic- makes it extremely difficult to ascertain.