It's different this time: Why etail CPG marketing requires new KPIs.

By Gregory Grudzinski, Director of Data Services and Analytics, etailing solutions

“If you’re not measuring, you’re not marketing,” and “measure everything” are marketing mantras that took hold a while back. The principles are valid, but too often the tsunamis of data they created left many marketers searching even harder for actionable insights. In searching for the needle in the haystack, we seem to have made the haystack bigger.

The best practices approach is to isolate the most relevant data, establish KPIs and incorporate them into scorecards, which can be ingrained into the business processes of the organization. This approach has served CPG marketers well in food, drug, mass and convenience channels, and was extended into managing the business in supercenters, club stores and dollar stores. But what about the etail space?

The Etail Space is Different

There’s a land grab taking place in etailing. True, only an estimated 2-4% of offline CPG sales have moved online so far, but it’s the CPG sales that etailers are counting on to drive traffic to their sites day-in and day-out. A generation of consumers who grew up on the Internet is coming online. And they have the discretionary income needed to dramatically reshape the retail landscape. There will be a huge advantage to the brands and etailers who are the first to crack the code on these new shoppers.

Forrester reports that among person who go online at least once a month, 47% are on the online; 69% have purchased goods or services and paid for them online in the past 90 days. Clearly, there’s good reason to be bullish on online sales for CPG companies. But unlike the last new frontier for CPG marketers, which consisted of dollar stores, club stores, and supercenters, the etail space is truly the wild, wild west. The rules are still being written. As such, it requires a different approach to measuring performance.

The New Metrics

Etailing requires a fundamentally different set of KPIs. Online, marketers need to be able to assess the availability of their products. This is the blocking and tackling of etailing: getting the assortment right, monitoring and ensuring there are no out of stocks, and ensuring images, descriptions, pricing are all correct. It’s easy to underestimate the effort this requires, and it’s the reason why leading CPG marketers have dedicated teams to manage this. The cost of neglect is huge. An out-of-date product image on Amazon.com will be seen by more consumer in one day than may see it all month—or year—at the local supermarket.

As important as availability is visibility, having 75 hair care SKUs on a given etail site does little good if they show up on the last page of the site search results for “shampoo”. According to Google, nearly 90% of purchases are made from the first page of search results. If a brand shows up on page two it’s at a distinct disadvantage. If it shows up on page three or beyond, it might as well be invisible. In addition, site search engines can be notoriously fickle. A search for “disinfecting sprays” can yield wildly different results than “disinfectant sprays” on the same site.

Finally, marketers need to have a means of quantifying the overall quality of visibility on a given site--including secondary locations. Etail merchandising offers an array of opportunities on virtual endcaps, category displays, lobby displays, and site navigation graphics. But before an investment decision can be made, marketers need to understand the ROI of each.

The Solution: A Quality of Visibility Index

The solution is to determine a comprehensive visibility index that takes into account availability, visibility, share of visibility, correct brand imagery and secondary presence of brands on individual websites.

For marketers getting started in the online space, this can provide a baseline for strategic account segmentation and inform decisions about where to focus resources. For those marketers further along, it provides metrics that track all the merchandising variables responsible for the success of a brand online.

The New World Order

Big brands have long had numerous advantages in the brick and mortar world. However, the online space is still maturing, and many of the advantages of size and scale are still developing as well. The “infinite aisle” found online can favor the niche brands that focus efforts on obtaining visibility. The tactics they use--paying less attention share measures, and focusing on availability and visibility is a strategy that will work for brands of any size.

It’s clear that the growth in CPG is going to be online, and the CPG industry needs to settle upon an industry standard for measuring online presence. CPG marketers need to decide if they want to play a role designing this industry today, or be content to compete tomorrow in a space defined by their competitors.

Gregory Grudzinski is the director of data services and analytics for etailing solutions. He can be reached at gregorygrudzinski@etailing-solutions.com.

Never Say Never About Buying Groceries on Amazon

According to Louise Tutelian of Yahoo Finance, two of the top four categories of items to avoid buying from Amazon are Groceries and Cleaning supplies. She makes price comparisons between items on Amazon and on other etailers including Peapod and FreshDirect, as well as bricks and mortar stores including Meijer and Alberston's. Unfortunately, Ms. Tutelian made two mistakes; comparing apples and oranges and using the word "never".

Comparing Apples and Oranges
Ms. Tutelian compared purchasing grocery items and cleaning supplies from Amazon.com to Peapod, FreshDirect, Meijer and Albertsons. A more accurate comparison would be comparing purchases from AmazonFresh to these other retailers. AmazonFresh, similar to Peapod and FreshDirect, delivers fresh produce, groceries, and cleaning supplies directly to consumer's homes. AmazonFresh even offers a "Pre-Dawn" delivery, bringing items to the customer's doorstep prior to 6:00 AM so they're there when the customer wakes up. Groceries are kept fresh in temperature-controlled reusable totes. Frozen items stay frozen and chilled items stay chilled.

AmazonFresh is not available everywhere in the US (neither is Peapod or FreshDirect) however, based on Amazon's growing distribution network they will be national relatively soon. Amazon has already been delivering groceries in the U.K. and Germany for the past 18 months.

Using Ms. Tutelian's shopping comparison items on AmazonFresh, this writer found the following:

Prices for Heinz Ketchup 20oz Bottle

• FreshDirect - $2.85
• Peapod - 2.39
• AmazonFresh - 2.12

Prices for Busch Baked Beans 28oz Can

• Meijer - $1.84 per can for a case of 4 (not sold by single can)
• AmazonFresh - $2.11 for 1 can/ $1.71 per can for a case of 12

Prices for Mr Clean Cleaner 40oz Bottle

• Albertson's - 40oz summer citrus all purpose cleaner $3.99
• AmazonFresh - 40oz lemon all purpose cleaner $3.21

As you can see, AmazonFresh compares very favorably against these other home delivery e-retailers. Ms. Tutelian is correct that purchasing certain items from Amazon's Marketplace may result in higher prices. Currently marketplace vendors are free to set their own prices, but Amazon is in the process of regulating Marketplace vendors and working with manufacturers and consultancies such as etailing solutions to standardize pricing. In addition, easy access to online price checking can save consumers from making price purchasing errors.

Never Say Never
In her narrow focus on item prices, Ms. Tutelian has missed the big picture. The home delivery of groceries and cleaning supplies is in the early stages of a growing consumer trend that offers convenience and cost savings far beyond the price of individual items.

A majority of leading grocery retailers (including Safeway, Von's, Genuardi's, Safeway, Von's, Meijer) are rolling out home delivery with major incentives such as free delivery and additional home delivery coupons to get consumers on board. Wal-Mart offers home delivery of a limited number of dry goods, including breakfast cereals, beverages, snacks and candy, that it fulfills from warehouses or has drop-shipped by suppliers. Those items are delivered to customers through either Wal-Mart’s own trucks or contracted carriers.

As noted above we are in the early stages of this dramatic consumer trend. Online e-tailers are just beginning to refine the supply chain and home delivery process. They are also just beginning, helped by companies such as etailing solutions, to understand how to market online consumer product goods to consumers. Price will always be an important factor, especially in this economy, however the internet has altered the equation by using technology to save customers time through efficent ordering and money by saving gas.

Ms Tutelian, I do not know where you live or your specific circumstance, however I can safely predict an online grocery shopping trip is in your future.

If you want to read consumers reviews of AmazonFresh check out these reviews on YELP

Amazon Gets It's Way- For Now

Amazon is Able to Delay CA Sales Tax for One Year
California lawmakers approved a last-minute bill this past Friday that delays the state's "Amazon Tax," as it was unofficially dubbed, until September 2012. Amazon.com – chief opponent of the June 2011 California law that attempted to force online retailers to collect sales tax from state residents – has agreed to resume business with its California affiliates in exchange for the temporary moratorium.

Here are the highlights:

• After spending $5 million to gather signatures, Amazon has agreed to drop plans to fight the tax using California's referendum process.
• According to Paul Misener, vice president of global public policy for Amazon, "This bipartisan, win-win legislation will allow Amazon to bring thousands of jobs and hundreds of millions of investment dollars to California, and welcome back to work tens of thousands of California-based advertising affiliates,"
• Amazon now has until September 2012 to try and get Congress to make a judgement on the matter. If Amazon is successful in lobbying legislators to agree that online retailers need not pay sales tax– then California will defer to the federal action.
• If Amazon is unsuccessful at the federal level, California will start attempting to collect sales tax from Amazon, a process that's familiar to Amazon across a number of other states, including North Dakota, Kansas, and Kentucky. 

Interestingly, customers have been required to report a "Use Tax" for tax-free goods they purchase online, (although none ever do) so the entire issue is theoretically moot for an average Amazon shopper. As written in previos posts about this issue, there is an estimated $200 million in tax revenue that California should be earning from online shopping. California has already figured this revenue into its budget, thus collecting is a priority.

CPG Customers- Loyal No Longer

Customer loyalty is about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring even more customers to your brand. However not all loyal customers are equal. Research by Catalina Marketing and Pointer Media Network showed that a surprisingly small number of loyal consumers – just 2.5% of shoppers for the average brand – make up 80% of brand sales. These frequent purchasing highly loyal customers are critical to the sales success of a product. The challenge for todays CPG marketers is that there is a large and increasing erosion of customer loyalty. A study by the CMO Council and Pointer Media Network found:

• Loyalty erosion and consumer defection are pervasive and costly problems for CPG brands, and their impact is increasing dramatically in the current economy.
• For the average brand in this study, 52% of highly loyal consumers in 2007 either reduced loyalty or completely defected from the brand in 2008.
• Only four out of ten brands retained 50% or more of their highly loyal consumers from year to year.
• For the average brand, approximately one-third of all highly loyal consumers in 2007 completely defected to another brand in the same category in 2008.
• The current economic downturn is having a significant impact on brand loyalty. Many leading brands experienced a drop in the total number of highly loyal consumers between 2007 and 2008.
• Loyalty and consumer churn have a huge impact on brand revenue and value. Some major brands could have increased overall revenues by more than 20% in 2008 if they had eliminated churn among high loyal consumers.
• Precision marketing strategies for engaging loyal and high volume brand buyers are now playing a major role in improving consumer loyalty and value.

The cause for loyalty erosion are varied. Many brand marketers and retailers place the majority of the cause on financial strains and economic worries which they believe are driving once loyal consumers away from their brands. These marketers and retailers note that coupon redemption rates, after several years of decline, are now increasing again, indicating consumers have become more cost and value conscious in the current economic downturn. Store brands are also contributing to erosion of loyalty among loyal private brand customers. Store brands prices as well as an improving perception of quality has lead to a steady migration of loyal customers from private brands to store brands.

A new and as yet un-studied factor is customer's exposure to a wider range of brands online. E-retailers, such as Amazon, stock a wider selection of brands in almost all CPG categories than can be found in a bricks and mortar store. These new brands market themselves with defection causing characteristics such as “organic”,“heart-healthy” or “family-size”. These smaller brands, can compete with major brands for page placement, most popular, best selling, and quality reviews. Coupled with convenient and often free home delivery, defection to these brands is just a mouse click away.

Customer churn is a large and growing challenge for todays leading CPG brands. Not only do they have to manager brick and mortar retailers but they need to get ahead of the loyalty challenges connected to e-retailers as well. With consumer's ability to get product ratings, price compare, and order products directly from their mobile phones maintaining loyal customers is changing as quickly as 4G networks can deliver data.

A taxing Question - Update

This is a follow on entry to a previous blog post about taxing online sales.
Amazon has taken off the gloves in its fight to prevent California from collecting taxes on its online sales. Amazon, with a stock market valuation of $100 billion, is arguing that it is a violation of state constitution and is appealing directly to voters arguing that it should not be required to collect taxes. California lawmakers, seeing a large reservoir of taxable dollars, is significantly upping the ante by using an "urgency" clause to go after Amazon and other online retailers. If legislators can get the new measure passed by a two-thirds majority by Friday it will trump Amazon's attempt to get a voter referendum. Here are the salient issues and maneuvers according to the NY Times:

• Any Californian who buys a book or a DVD player from Amazon is supposed to pay a use tax when filing state taxes. In practice, however, few do. For years, the issue has been simmering. In addition, the state passed a law at the beginning of the summer requiring online retailers with a physical presence in the state to collect sales taxes. Amazon denies that its subsidiaries in the state, which include a unit that designed the Kindle, constitute such a presence.
• To sway legislators, Amazon is trying to head off the urgency measure by drafting new legislation that is more to its liking and pledging, if California drops the tax issue for a few years, the retailer will build two warehouses in the state and hire 7,000 workers. The warehouses would ordinarily be the kind of physical presence in the state that would clearly require it to collect sales taxes, but Amazon’s proposed measure would guarantee the retailer an exemption. Gov. Jerry Brown and the Democrats have already rejected the offer.
• California has already put the the $200 million in tax money into its new budget. (Local communities stand to reap an additional $100 million.) Amazon fears that a defeat in California will sway legislators across the country, and that it will lose a critical pricing advantage. It is fighting a similar measure in New York in the courts.
• Opposing Amazon are traditional retailers as big as Wal-Mart and as small as the neighborhood bookstore. “Amazon is killing our business in bricks-and-mortar stores,” said Bill Dombrowski, head of the California Retailers Association, which was the driving force behind the original law.
• The California Retailers Association will most likely sue to have Amazon’s referendum canceled, arguing that the state constitution forbids using a referendum to tamper with the budget.
• Amazon easily collected the half-million signatures necessary to put the issue on ballots next June. Since people will in essence be voting on whether to pay an additional 8 or 9 percent when they buy online, Amazon could easily triumph among voters who are watching their wallets.
• In the two months since the California law took effect, Amazon has declined to start collecting sales tax in California. Once it submits the signatures for the referendum and they are verified, the law will be suspended until the vote.
• Senator Hancock and other Democrats say they have stopped shopping at Amazon. “This is getting pretty acrimonious,” said the California treasurer, Bill Lockyer, who said he was also boycotting the retailer. “It’s snarly.”

As mentioned above, Amazon is being pressed by a number of states including New York to collect taxes. The tax issue outcome in California will have an impact on how the other states go after this significant tax revenue. In the e-retailing world, the online only retailers such as Amazon and e-bay are opposed by other large e-retailers with large revenues and bricks and mortar locations trying to level the tax playing field. This is a critical issue to e-retailers, retailers, state treasurers and consumers. Stay tuned.

American E-retailing Has Invaded Europe

Four of the top 20 e-retailers in Europe are American companies—Amazon, Staples, Apple and Dell. All told, American companies control an amazing 27% of the European e-commerce market. More important,according to Internet Retailer, American companies grew their online e-retail business in Europe last year by 25%, compared to just 14% for Europe-based e-retailers.

Internet Retailer identifies the following factors for American e-retailers success:

• Unlike European e-retailers American e-retailers do not constrain their e-commerce operations to any one country


• Us e-retailers are building warehouses throughout the Continent to serve the entire common market


• Americans e-retailers are not retail chains managed by executives who have spent their careers running brick and mortar stores


• Big store chains dominate e-retailing in Europe, accounting for 43% of all e-commerce sales in 2010, with web-only merchants, catalogers and manufacturers accounting for the rest


• American e-retailers are not dabbling in e-retailing as European retail chains often do and they are using the same e-commerce technologies that work well in America


• While American e-retailers sites “speak” multiple languages, they are based on a single brand

Given all this, it is no surprise that Amazon is the #1 e-retailer in Europe. Contrast this with Europe's presence in the US e-retailing market. According to Internet Retailer, European companies own only 11 of the 500 leading retail web sites ranked and profiled in their Top 500 e-retailer Guide. Together, these e-retailers account for a diminutive 1.6% of the total e-retail sales recorded by the 500 largest e-retailers in the U.S. last year. And that share is shrinking: Europe’s e-retailers last year only grew their U.S. retail web sales by just 12%, compared to the 18% growth rate registered by the American companies ranked in the Top 500 Guide.

European e-retailers are not letting this invasion go unchallenged and are beginnning to adopt the American e-retailing model. However, it will take 2-3 years of dogged effort for them to catch up and turn around the American e-retailing onslaught.

It’s the Same Online; Girls (and Boys) Just Want to Have Fun

We're more likely to spend money when we're having fun and don’t notice the price quite as much- just ask casinos. There is a trend toward merging e-commerce and entertainment that is increasing sales and helping brands stand out.

Some consumer experts note that we are moving from a consumer economy to an experience economy. People would rather spend money on experiences than acquiring material goods. Marketers and e-commerce retailers are, therefore, looking at ways to provide experiences and at the same time sell products. The earliest example of this merger are home shopping channels that have demonstrated the power of live shows and interaction with consumers in selling products. Now, e-commerce businesses are seeking ways to replicate that experience online. Examples of this include:

• Hosting live shows that feature experts, sellers, producers, and influencers. Natural products retailer Abe's Market, has been hosting live shows intended to entertain and inform, and also to create a sense of loyalty and excitement among consumers. These live shows promote sellers such as soap company Chivas, telling the story of the mother-daughter team behind the company's handmade goat milk soap, the process of making the soap, and the farm where they live.
• “View and click to buy” is a technology driven strategy which is based on the old-standby product placement. With “view and click to buy” a star in a music video might be wearing sunglasses that a consumer can click on and buy in an instant. This has the added fun dimensions of  relating to being a rock star and instant gratification. The applications for this technology is endless with particular application to information or how-to videos where the required tools or products are purchased and delivered with simply a click. Imagine watching a cooking show and immediately ordering all the ingredients and cooking utensils for home delivery. The experience factor becomes even richer when the purchase is then shared on social media sites- friends can now know about ones latest interest, or impulse buy.
• The power of storytelling and minor-celebrities are used to move consumers to buy. The internet enables more in-depth information, inexpensive videos, and the use of local minor celebrities. In the past marketers would use major national stars to pitch products and influence consumers. Now local, more accessible, “minor-celebrities” can be engaged using videos and live shows. These minor-celebrities living in the community are far more accessible and provide a “like me” connection which influences buying choices. The cost of these minor-celebrities enable e-commerce sites to produce content which engages site visitors on a more extended basis.
• People love to earn points and get recognition. E-commerce sites are beginning to reward frequent visitors and more engaged consumers with special recognition including points, special status, and discounts. For example, BuddyBuddyBuddy gives “BuddyBucks” for every friend that purchases the same item as you do three levels out. So, if a friend of a friend of a friend purchases the same product, you get “BuddyBucks”. According to BuddyBuddyBuddy, the average buyer has the potential of two million friends buying the product. The fun is purchasing a product, watching how “viral” it goes, and getting rewarded for each person that buys the product. Now once you have bought the product the interaction does not stop there, it goes on and on.

Jaded consumers are no longer willing to believe advertisers and celebrities that may seem to have integrity today and major personality flaws and marital infidelity tomorrow. In your face advertising and marketing is beginning to shift to informational content and interactions that entertains, informs, engages, and creates loyalty. The degree of entertainment and engagement is measured by how much of the content is shared and ultimately the sales figures. Today’s consumer wants to be entertained and have fun as they are purchasing or being sold on a product or service. E-commerce sites are beginning to up the entertainment and fun factor blurring the boundaries between shopping and experiences. The thinking is- “after all we all could use a little more fun in our lives.”

What is Groupon Up To and Why Should You Care?

Groupon, the daily deals giant, currently employs some 10,000 people all over the globe and has revenues of $878 million(and lost roughly $205 million in the first half of the year). Last week, Groupon registered a gaggle of domain names with ‘groupongoods’ in them (.com, .net, .us, .info, .biz and interestingly, .fr). What's up with that?

Techcrunch is spitballing that Groupon may be planning to use these domains to debut a service by the name ‘Groupon Goods’. Techcrunch wonders if Groupon will start directing its vast sales forces, which are located all around the world, to start focusing on opportunities other than restaurants, spas, massages and pilates classes.

One possible strategy is to establish partnerships with companies like Alice.com (who has recently partnered with a French company to bring Alice.com to France -thus the .fr), Drugstore.com, Pets.com, Overstock.com or Newegg.com and branch out into selling discounted groceries, households items, consumer electronics and so on.

Techcrunch postulates, "Groupon could apply its successful ‘local commerce’ model and leverage its enormous international subscriber base (circa 120 million subscribers and counting) to venture into offering deals for groceries, household items and other goods regularly purchased online." This would be a way for Groupon to diversify its revenue streams and accelerate sales growth as the company prepares to go public, without necessarily adding a lot of overhead costs (especially if they go for partnerships rather than building such a service in-house). Groupon has been scrutinized for its large sales force and its high cost of customer acquisition. This would be a way to leverage its existing sales operation in a new market with the added benefit of holding its vast number of competitors at bay.

Techcrunch n otes that Groupon has made similar moves partnering with juggernauts Expedia and Livenation to offer online deals on travel (Groupon Getaways) and event tickets (GrouponLive), respectively.

Is it possible that ‘Groupon Goods’ could potentially be a challenger to Amazon, which is not only known for its Amazon.com ecommerce business but also for its grocery shopping site Amazon Fresh and (acquired) niche online stores such as Diapers.com, Soap.com, Wag.com and Zappos.com?

This is an unfolding story to which CPG etailers and manufactures should pay close attention. If Groupon is building a strategy to challenge Amazon in the online sales of CPG, online sales will grow rapidly and manufacturers need to position themselves to ride the wave- or is it a Tsunami?

Not All CPG E-Shoppers Are the Same; Do You Know the Difference?

Ecommerce is the fastest growing channel for consumer packaged goods companies and there is an urgency for consumer packaged goods companies to develop sales and marketing strategies to address this rapidly expanding E-Commerce market- or risk losing share and relevance. To maintain share and relevance, CPG companies need to understand their consumers and position their online offerings and strategies accordingly. A new online world with emerging consumer groups and consumer behaviors requires marketing insights. A new study of 21 etailers by E-tailing Solutions and Catapult Marketing provides interesting and valuable insights (full disclosure- this blog is produced and supported by E-tailing Solutions).


The study found the following:

• Younger consumers (under 34) buy across a wider variety of etailers (19 out of 21 etailers studied). Consumers over 35 shopped at half as many eatilers (6 out of 21).
• Across the 21 retailers questioned in the study, households with children were likely to shop at 20 of them, while childfree homes tended to stick to Amazon.com, Drugstore.com, Staples.com, Walmart.com and CVS.com.
• Millenials use online shopping as a typical shopping strategy and they usually use the web as a way of learning about products in addition to purchasing products.
• High-income consumers, earning over $100,000, are among the most active online shoppers.They shop online for the superior selection and the convenience of home delivery.
• Families are shopping online for many consumer packaged goods categories, and they are shopping across retailers at a much greater rate compared to households with no children.
• Key categories for households with children include office/school supplies (50%), facial care (48%), hair care (47%), household cleaning supplies (37%), and oral care (34%), while 26% purchased baby care and 15% purchased baby food.
• Amazon is a key destination retailer for both households with and without children; nearly 60% of shoppers without children shop Amazon, while 69% of households with children shop there.
• Vitamins are one of the most popular consumer packaged goods products purchased online. Other categories with high penetration include body care, hair care, facial care, office supplies, pet food, and teas and coffees.
• There are some categories that have lower penetration but are shopped with very high frequency. Categories that have loyal, high frequency consumers include: wholesome bars (such as protein bars and granola bars), ready-to-drink beverages, powdered beverage mixes, meat/seafood, crackers, and teas and coffees (a category showing high penetration and frequency).
• While Amazon dominates several categories, there are opportunities for other etailers to build their presence as a destination for categories ranging from everyday household goods (cleaning supplies and laundry products), to fresh foods, and to center-of-store grocery staples. Among value shoppers, Walmart.com ranked high especially for grocery items like beverages and snacks. Target.com was a popular destination for new moms who found it to be a great place to shop for baby.

The E-tailing/Catapult Marketing study suggests that in order for CPG brands to establish their etailer presence they need to understand the following:

• How are shoppers buying brands online today and how will that change in the short and long term
• Who are the key retail partners who are selling to the target consumer group
• How can CPG brands partner with etailers to drive traffic and conversion
• What are the key dynamics influencing online shopping and purchasing behaviors
• How CPG Brands Can Get in Charge of Their Online Selling Space

In conclusion, the study states that establishing a baseline and understanding the landscape is the first step that a company can take towards getting in charge of their online-selling space.

To learn more about this study and find out how E-tailing Solutions can help CPG brands establish or improve their online strategy contact:
Angela Edwards director, consulting services, etailing solutions. She can be reached at angelaedwards@etailing-solutions.com

Category Management in the Online World

“Category management is a process that involves managing product categories as business units and customizing them [on a store by store basis] to satisfy customer needs.” (Nielsen – 1992). When Nielsen penned this definition in 1992 they were ahead of the capabilities of the time. Store-by-store customization was beyond the organizational and supply chain capabilities of both manufacturers and retailers. As with many other retail challenges, the internet is enabling a transformation in category management including greater levels of store level customization, let’s examine how.

Bob Wong, Director of Category Leadership at Del Monte Foods identifies mistakes category leaders make in brick and mortar stores. Those mistakes are listed below with connections drawn to challenges in the online world.

• Forgetting to put things in context. One example is forgetting to account for adjacent categories in the aisle.
  - Online stores are laid out in categories however, moving from one category to another is only a matter of a mouse click and online stores tend to place products in multiple often disparate categories. For example, a disinfectant wipe will listed in health and personal care, electronics, office products and baby care. This makes locating a product easier but more confusing in terms of branding and applications. Online category management requires mapping out a logical and rational product placement schema so customers are clear about a product’s promise and applications. For example, will a consumer purchase a disinfectant wipe to clean their bathroom if it is listed under baby care?
• Not putting yourself in the other person’s shoes. Several examples include looking at things through “our” lens; failing to anticipate their concerns; writing the script according to “our” logic, not theirs. Tip: Find out what’s important to your customer.
  - Product reviews are the ligua franca of customer insights, logic and concerns. Reviews not only inform category management but they also inform other customers. In the online world, customer reviews is a central component of category management.
• Leaving out the “so what?” Data and facts are not ‘insights.” Tip: Look for a triple win for the retailer, manufacturer and shopper.
  - Creating a win-win-win is as important in the online world as the offline world. However, in the online world category management becomes increasingly complicated with additional factors such as thousands of small “affiliate” retailers, proper product listings (planogramming), and delivery as part of customer satisfaction. These additional factors need to be analyzed and included in category management practices.
• Overlooking what you already have. For example, forgetting to leverage data you already have. Tip: maximize existing resources.
  - Online retailing has created more, larger, and more diverse data sources. This has become a challenge for category management that was barely staying ahead of store data. Now category managers have to understand an entirely new path to purchase which includes social media sites and how customers move through online stores. Also, it does not work to simply transfer customer patterns from brick and mortar to e-commerce- it just does not transfer. Good category management requires developing unique insights that come from mining and linking disparate data sources.
• Not recommending practical solutions. Don’t ask: How long before I see a return? Is it worth it? Tip: Do a reality check; for example, how would it be implemented?
  - Implementing and measuring online category management is in its infancy. Methods, measurements, placements, messaging is all being developed and refined on a daily basis. Many manufactures are still struggling to get it correct offline after many years of trial and effort. The online world is so fluid and flexible, implementing effective category management will take innovation and creativity as well as new and yet undefined measurements of success.
• Not getting everyone on the same page. We live in a world of silos. Marketing and sales don’t all agree. Tip: Help others understand how category management can help align objectives and goals.
  - Although the ultimate goal of online and offline category management remains the same, online category management requires new perspectives, new definitions, and new success metrics. This requires aligning marketing and sales around online category management strategies which may be foreign to both marketing and sales organizations. This is both a challenge and an opportunity- challenging because it is new and an opportunity because there is a blank piece of paper to work off of.
• Forgetting the shopper’s perspective. We need to see the shopper’s perspective. Understand the pain points and expectations. Tip: Invest in shopper understanding via loyalty data.
  -Once again, the all important shopper’s perspective is unveiled online through reviews, Facebook Follows/Likes, Google+1, etc. Online category management needs to incorporate these channels into traditional channel management activities as well as Shopper Insights.

A 2011 Category Leadership Study by Kantar Retail concluded “category management needs manufacturer leadership and shopper insights to evolve into a worthwhile process for retailers.” Their conclusion is that current category management is more tactical than strategic and category management requires links that result in real growth solutions and more holistic plans to address joint manufacturer and retailer business issues across the Path-to-Purchase.

The ultimate goal of category management to help manage similar sets of products or categories better with the end goal of driving profitable growth at retail and greater collaboration between trading partners remains a noble and necessary goal. E-commerce presents new challenges, a greater order of complexity and is layered on the older barriers of retailer/manufacturer lack of leadership. As e-commerce expands, manufacturers and e-tailers that get category management right will emerge as the best-of-breed organizations.

The Zagat of CPG?

According to Consmr “Consmr is the fun and easy way to share your opinion on consumer packaged goods. It was founded to help people share and discover great products ranging from frozen foods to skin care to household goods. We encourage a social community where users can share their opinions on Facebook and Twitter and “check in” to share their active usage of products.”

Consmr is an attempt to help consumers manage the often overwhelming abundance of choice they confront both in the supermarket and online. This “tyranny of choice” often becomes overwhelming and consumers typically resort to making a choice based on appearance, brand familiarity, a quick read of the product’s label, or something they read somewhere once and faintly remember. Really, do consumers know the difference between Scope and Listerine, other than one is “sexier” than the other and supposedly better for kissing.

Just how extensive is the choice confronting consumers? A quick search for mouthwash on drugstore.com returns 81 results and on Amazon 1250. How are consumers to cope with 1250 mouthwash choices or even 81? Our free market capitalist society believes competition is good and this writer agrees, but if we’re going to have this level of choice, we need a better way of making an informed choice than eeny, meeny,miny, mo.

Overwhelming choice is the shopper’s dilemma Consmr is attempting to remedy. As an internet startup, Consmr faces a difficult path to profitability and survivability however, Consmr is interesting for the following reasons:

• They are attempting to bring customer generated reviews to CPG which is a far larger and more diverse market than electronics, movies, books, restaurants, and the other categories which have dedicated consolidated review sites.
• They have identified that consumers are willing to spend time writing reviews for CPG products. One would expect consumers to write electronics reviews, book reviews, movie reviews, and restaurant reviews. Consumers interact at length with these products and services and they tend to form emotional ties which lead to strong opinions worth writing about. But mouthwash, toilet bowl cleaners, stain fighters, sexual health products- who knew consumers have strong emotions for these products and are willing to dedicate the time to write reviews for these products.
• Consmr is depending on social interaction and “gamification’ to motivate consumers to write reviews. Consmr will be offering Foursquare type badges for reviewers and the top reviewers will become prominantly displayed category leaders. Reviewers will also be able to amass followers which has the potential of influencing large numbers of consumers to buy Scope instead of Listerine. Lots of “prestige” , an unknown amount of influence, and no compensation.
• Consmr is entirely amateur based. Movies have expert reviewers as does books, restaurants, electronics, appliances, art, etc. There are no expert toothpaste reviewers, with the possible exception of consumers reports. Consmr is hoping to motivated large numbers of everyday consumers to write reviews which will impact other consumers’ choices. This is an emerging trend on the internet where people turn to first the people they know and then strangers to get help making purchasing decisions.
• Consmr is an indication of the emerging presence of CPG e-tailing. Traditionally, consumers walked into their local grocery store and bought their regular brand, which is always in the same location, with little thought. Now with the increased exposure to new and different brands and the convenience of shopping online, consumers are considering a wider range of possibilities based on cost, reviews, and exposure to new products.

As mentioned above, Consmr has a long road to profitability with a lot of challenges. One of the big challenges is to amass reviews of enough products to be a valuable resource. However,there are at least two factor in Consmr’s favor. First is Consmr Founder and CEO Ryan Charles left his full-time job at Zagat (where he was the head of mobile and was responsible for its partnerships with Foodspotting and Foursquare) to pursue his new startup. Second,they have forged a partnership with Gary Vaynerchuk, the popular author, business guru, and “sommelier of social media”. Veynerchuk told TechCrunch. “I’m thrilled to speculate at times with new platforms and Consmr hit my radar as something that was worth trying”. Vaynerchuk’s partnership is a strong endorsement which is bound to make that all-important first round of investment easier to land.

Here is a question to contemplate, if Consmr becomes influential, how will this impact CPG manufacturers’ traditional marketing and advertising strategies?

Another Mashop Species Located in the WWW (Wild Wild Web)

Cisco Internet Business Solutions Group defined Mashops as “Virtual Shopping in Physical Stores”. A mashop combines web-like and in-store shopping experiences and gets their name because they "mash up" the virtual and physical worlds to create a new way to shop. Turns out that Cisco's definition is a little limited.

Quidsi (parent company Amazon.com)-owned BeautyBar.com is mashoping with Allure to provide e-commerce on Allure.com, the online arm of Conde Nast's Allure magazine. The mashop will allow users to buy health and beauty products featured in articles and reviews throughout the site through BeautyBar.com rather than linking to manufacturer sites.

The Mashop will have the following convenience and etailing functions:

* Pricing information and a "buy it now" button will appear on product pages that come up when users click on branded items mentioned within articles.
* In a tabbed format, product pages will include basic information, including what it does, key ingredients, and why it is recommended.
* All products on Allure's site will be researched and tested by its editors and vetted by the magazine's expert panel of cosmetic chemists, dermatologists, makeup artists and hairstylists.
* Users can save products to a favorites list or click the "buy' button to begin filling a shopping cart that will follow them through the site.
* At checkout, customers will be taken to a co-branded page on BeautyBar.com, which sells high-end brands including Bliss, Philosophy and Dermalogica.
* Beauty-Bar.com will offer mass-market beauty products through its Soap.com sister site.
* If not already registered on BeautyBar.com, Allure.com, visitors have to do so before making a purchase.
* The site promises all products will arrive in one or two days, with same-day delivery for New York City orders and free shipping on all orders over $39.
* The new e-commerce component will be accompanied by a refreshed design for Allure.com, which says it averages 21 million page views and 1.2 million unique visitors per month.

Quidsi's mashop with Allure provides a seamless integration of editorial content, product information and vetting, etailing convenience, and home delivery of Consumer Package Goods. Now Allure readers can shop from the friendly confines of Allure Magazine without having to leave the pages of the magazine or their houses. One wonders where the next mashop species is hiding!

A Taxing Question

Online shopping is about to get more expensive. Currently, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. For the past seven years, online sellers have argued successfully that bizarre distinctions between definitions of taxable and non-taxable items as well as the existence of more than 7,000 different tax agencies is why online sales should not be taxed. Pro-tax officials and state governments have been pressing Congress to enact online taxes arguing that reduced sales tax revenue threatens budgets for schools and police, and say that, as a matter of fairness, online retailers should be forced to collect the same taxes that brick and mortar retailers do. If online retailers were, like their land-locked colleagues, required to collect the taxes at time of purchase, tax collectors would unlock a virtual flood of cash to support strapped state finances. According to an estimated by University of Tennessee researchers in a 2009 report, state and local governments this year will lose $10.1 billion to $11.3 billion in sales taxes not collected by Web retailers. Taxes are coming to the Internet!

As of July 1, 2011 California enacted a state law that requires large out-of-state retailers to collect sales taxes on purchases that their California customers make on the Internet. "Getting the taxes, which consumers typically don't pay to the state if online merchants don't charge them, is "a common-sense idea," said Gov. Jerry Brown, who signed the legislation into law. The new tax collection requirement is expected to raise an estimated $317 million a year in new state and local government revenue.

However, there is another law which also came into effect in California, the law of unitended consequences. The new California tax law applies only to online sellers based out of state that have some connection to California, such as workers, warehouses or offices there. So, in response to the new law, both Amazon in Seattle and Overstock in Salt Lake City have told affiliates that they would have to move to another state if they wanted to continue earning commissions for referring customers. As an unintended consequence, many of approximately 25,000 affiliates in California, especially larger ones with dozens of employees, are likely to leave the state, said Rebecca Madigan, executive director of trade group Performance Marketing Assn. According to Madigan, the affiliates combined paid $152 million in state income taxes last year.

California is the seventh and largest state in the country to pass a law to collect taxes on out-of-state Internet sales. Illinois, Arkansas and Connecticut acted earlier this year, North Carolina and Rhode Island in 2009 and New York in 2008. Amazon sued to overturn the New York law and lost in the lower courts. The company is paying sales taxes into an escrow account pending an appeal.

Taxing internet sales is bad news for online sellers, who’ll lose a 5 percent to 10 percent pricing edge over their brick-bound competitors, which helps to offset shipping costs, and it’s good news for conventional retailers, who won’t be hampered by that pricing burden. As you might expect, Amazon is leading the fight against collecting taxes using all strategies at their disposal including declaring the law unconstitutional and counterproductive and collecting signatures on a petition to overturn the California law. Credit Suisse recently estimated that if Amazon were forced to collect sales taxes in all states, it would lose as much as $653 million in sales this year, or 1.4% out of an estimated $45.5 billion in revenue. Amazon's Mr. Bezos has said he established the company in Washington partly because it has a tech-savvy but relatively small population, so state taxes wouldn't affect many potential customers.

Online auction giant EBay Inc. is taking yet another anti tax approach claiming it would "harm small Internet retailers" that sell products using the EBay website. "Forcing small businesses to take on the same costs and tax burdens as national retail businesses is unrealistic, unfair and will unbalance the playing field between giant retailers and small business retailers on the Internet," said Brian Bieron, EBay's senior director of federal government relations and global public policy.

States have responded with the Main Street Fairness Act, which would require states to sign a Streamlined Sales and Use Tax Agreement before they could require retailers to collect the Internet sales tax. That agreement, signed by 24 states so far, would create a uniform national standard for collecting state and local sales taxes. Such simplification is aimed at satisfying the Supreme Court's concern that requiring Internet sellers to collect sales taxes is a burden that unconstitutionally interferes with interstate commerce.

Even as Amazon and other mega online retailers try to hold back the oncoming flood of online taxes, the desperate need for additional state revenue appears to be too much for the etailers to overcome. The next question is how the taxes will impact ecommerce sales.

Price of Gas Drives Shoppers Online

There are a number of factors driving the dramatic growth of e-commerce including broadband penetration, convenience, mobile, value, ease of use, improved marketing, social media and so on. One, perhaps less obvious driver, is the cost of gas. Recent research has identified the cost of gas as a prime motivator for people staying home and shopping online.

According to a survey conducted exclusively for Internet Retailer by Synovate, a global market research firm, more than 28% of U.S. consumers say they are shopping online more because of rising gas costs. National average gasoline prices have jumped $1.07 per gallon in the last year to an average of $3.703 Regular and $3.953 Premium, according to the U.S. Energy Information Administration.

Synovate's survey of 1000 US Adults found:
* 28.2% said recent rise in gas costs had led them to do more shopping online rather than travel to stores.
* Consumers in the Northeast and Midwest stated they did more shopping online (each at 31.5%) while fewer consumers in the South (26.8%) and West (24.5%) answered the same. These numbers reflected the price of gas in the area with the price of gas varying between $3.70 and $4.14 per gallon.
* 35.1% of consumers living in areas with a population density—defined as the total population of a defined metropolitan area and its adjacent counties—of 50,000 to 100,000 said they were shopping more online because of higher gas costs.
* Fewer shoppers but still significant in numbers, 26.3%, living in extremely rural areas said they were shopping more online because of higher gas costs.

The impact of high gas prices may have shown up in e-retail sales as early as April where online retail sales were up 19.2% year over year. Michael McNamara, vice president, research and analysis for MasterCard Advisors SpendingPulse, says higher gas prices will likely boost online sales. “We can expect consumers to make fewer shopping trips, especially on weekends, and this may contribute to an ever stronger growth for e-commerce,” he says.

The price of a gallon of gas tend to fluctuate at the pump and drivers focus on the cost of a purchased gallon of gas. However the true price of a gallon of gas is hidden from drivers and is dramatically higher. According to the International Center for Technology Assessment, the true cost of gas includes:

* Tax Subsidization of the Oil Industry
* Government Program Subsidies
* Protection Costs Involved in Oil Shipment and Motor Vehicle Services
* Environmental, Health,and Social Costs of Gasoline Usage
* Other Important Externalities of Motor Vehicle Use

Together, these external costs total $558.7 billion to $1.69 trillion per year, which, when added to the retail price of gasoline, results in a per gallon price of closer to $15.14. If consumers knew the true price of a gallon of gas is five times what they are paying at the pump, how many more would be parking their cars and shopping online?

From Mashups to Mashops

In Web development, a mashup is a Web page or application that uses and combines data, presentation or functionality from two or more sources to create new services. The term implies easy, fast integration, frequently using open APIs and data sources to produce enriched results that were not necessarily the original reason for producing the raw source data. The main characteristics of a mashup is that it makes existing data more useful for personal and professional use.
Cisco Internet Business Solutions Group has recently defined Mashops as “Virtual Shopping in Physical Stores”. A mashop combines web-like and in-store shopping experiences and get their name because they "mash up" the virtual and physical worlds to create a new way to shop. Cisco views creating mashops as critical to the future success of retailers and will lead retailers to introduce technologies such as interactive digital displays, video assistants, social networking technologies and Wi-Fi networks that enable shoppers to remain connected with trusted people and information while they are in the store.

Through Cisco’s research involving 1,000 shoppers from the United States and United Kingdom, two distinct groups of technology-savvy shoppers emerged:
- Extreme shoppers (11 percent of the general population, with high representation from Generation Y) use the web and smartphones to find the lowest possible price.
- Calculating shoppers (56 percent of the general population) use the web to inform their buying decisions and has the greatest impact on retailers' revenues and margins
Among calculating shoppers:
* Most prefer to research products online rather than speak with store staff
* One in three use retailers' Facebook pages and coupon-sharing sites.
* One in four use web-based group buying sites such as Groupon.
* More than half (54 percent) wanted to try a mashop-type service in the store. Most of these (73 percent) preferred access to mashop-type services using a touch screen at the shelf edge.
* More than half (54 percent) wanted product and price comparisons, and peer reviews on touch screens in the store.
* More than four of ten (44 percent) wanted a virtual video adviser with web content on a large screen or tablet service in the store and expect to increase their value-seeking behavior over the next two years, further accelerating margin pressures.

According to Cisco, by combining the best of both worlds, mashops create a win-win situation. Shoppers receive the information and convenience of web-based experiences while, at the same time, being able to touch, feel, and see the products they want to buy. For retailers, mashops promise to preserve margins and increase sales. Shoppers are also more likely to upgrade their purchases and increase the basket size when factors other than just the best price influence their buying decisions.

Homeplus ups the Mashop Ante
Homeplus has taken mashop to the next level. Homeplus’, Korea's number 2 retailer, challenge was to become number one without adding a large number of new stores. Their solution, virtual stores in physical locations. They installed displays that look like physical stores in subways. Subway riders shop by using their smart phones to read QR codes on the products in the displays (View a video of this Mashop). Once their shopping cart is filled and paid for electronically, the purchases are delivered after they arrive home. For busy Korean families, this is a tremendous time saver and avoids what Korean’s consider to be an onerous task-grocery shopping. Using this Mashop, Homeplus’ online sales increased 130 percent and they are now the number one in online sales, although still the number two retailer.

The Research Needs Some Refinement
In their research, Cisco concluded that “by combining the best of both worlds, mashops create a win-win situation. Shoppers receive the information and convenience of web-based experiences while, at the same time, being able to touch, feel, and see the products they want to buy.” Homeplus has demonstrated that, at least for Koreans, being able to touch feel and see products comes in second to convenience and efficiency. The salience of convenience and efficiency is something retailers need to pay strict attention to as etailers increase their online offerings of CPG products, expand their distribution/delivery capabilities, and smartphone usage increases in the United States.

(Image from www.retailcustomerexperience.com)

Why Are More Consumers Going to the Web for School Supplies?

It’s a big market
Back-to-school represents the largest surge of consumer spending outside of the holiday season with U.S. Consumers spending more than $68 billion on books, apparel, paper, pencils, backpacks and other sundry classroom supplies. According to PriceGrabber, clothing and basic school supplies are at the top of online shoppers’ lists in 2011 with 79% of consumers indicated that they will shop for general school supplies such as notebooks, binders and pencils, compared with 76% in 2010. According to the National Retail Federation (NRF) a down economy will benefit online retailers over brick-and-mortar stores this back-to-school season.

Some interesting statistics
* Overall, 31.7% of consumers buying supplies for K-12 students will shop online this year, up from 30.8% last year (NRF)
* For college supplies 33.4% of consumers plan to purchase on the web, up from 28.6% in 2010 (NRF)
* Nearly 30% of consumers buying for K-12 students say the economy will lead them to rely more on comparative shopping on the web (NRF)
* Almost 31% of consumers buying college supplies will more often comparison shop on the web, up from 23.2% in 2010 (NRF)
* 50% of consumers say they’ll shop for sales more often to compensate for the economy and over a third will be using coupons more often (NRF)
* Foot traffic to retail stores during this year’s back to school shopping season will decline 2.9%, thanks to relatively high gas prices (ShopperTrak)
* 69% of shoppers say they will use online comparison shopping sites for back-to-school shopping, up from last year, when only 23% of consumers said the same ( PriceGrabber)

Why the trend?
It’s all about the deal and the cost of gas. With a slow economic recovery, many consumers are increasingly cost conscious and use the web more often to make sure they find the best prices and values. While they are performing price/value comparisons online, purchasing online becomes easier and a central strategy of their shopping process. In addition, retailers in general are beginning their back to school sales earlier with etailers leading the way because of their easier product setups and online displays.

According to a report released by MasterCard Advisors, the consulting arm of MasterCard Worldwid, e-commerce sales increased 15.2% year over year in June, the eighth straight month of double-digit growth, and the 23rd month in a row that online purchases have grown. According to Michael McNamara, vice president, research and analysis, for MasterCard Advisors, total retail sales—this includes purchase made inside physical stores—continued to be hampered by high gas prices and persistent unemployment. Also according to MCNamara, exceptionally wet weather in some parts of the country might also have kept consumers from travelling too far to make purchases. “On the other hand,” he says, “unfavorable weather and high gasoline prices appear to have helped e-commerce to its eighth consecutive month of double-digit growth.” Supporting MasterCard’s research are results from a survey conducted for Internet Retailer by Synovate, a global market research firm which found more than 28% of U.S. consumers say they are shopping online more because of rising gas costs.

No More Old School
It should be no surprise that the increasing trend for online shopping impacts purchasing school supplies and the important back-to-school shopping season. After all, shopping at brick and mortar stores is becoming “old school” for many internet savvy consumers.

New Player in Pet products online

Amazon.com bought the Diapers/Soap site in March. It is looking like a solid move in continuing to build business - expanding their portfolio of sites and expanding economies of scale in categories they already sell.

Last week Wag.com launched part of the Diapers/Soap.com site adding a tab dedicated to Pet products. My dog was very excited about this and appreciated my first order of dog treats, which came with products from the other parts of this site (snack bars, razor blades etc. ), allowing a convenient purchase across multiple categories.

This new entrant in the online Pet supplies category is another sign of the growth of Ecommerce and Pet products category online. This category had 3 dedicated Pet product sites in the top 300 Internet retailers in 2010*. Those sites sold $257MM in Pet related products in 2010, +10% over 2009*. In addition Etailing grocers, Amazon.com, Walmart.com & others are vying for their share of this growing market. While the Pet products sales are hard to quantify from those sites, this could easily be a half a billion-dollar business online and growing double digit.

Not hard to understand why Wag.com just launched!


* from Internet Retailer Top 500 Guide

Another Big Month for Etailing

Mastercard reported this week that Ecommerce sales for June 2011were up 15.2%.

Like we have been saying for many months “ the growth has left the building “.

Bricks and Mortar retail sale continue to show little if any growth as Etailing marches forward with double digit growth month after double digit growth month.

Gas prices have been debated in their impact on Etailing- at what point does the price of a gallon of gas impact consumer decisions about buying online ?

Well, gas have eased a little in recent weeks but consumers continue to shift purchasing habits, driving the 8^th straight month of double digit growth for Etailing.

Perfect Peppers

Buying groceries online makes many think of bulk items that are convenient to have delivered so you won’t have to cart them around a store, or load & unload them into the family car. Or it might bring to mind pantry items like crackers, cereal, and other non- perishable grocery items.

But a recent visit to a Peapod Chicago warehouse that serves the area for online grocery delivery was an experience that radically changed our view. For those who don’t know, Peapod has been around perfecting the art on online grocery business for over 20 years and by far the biggest online grocer. We saw at their warehouse a very organized and well designed space, with racks & racks of all items we would find in a grocery store. We saw totes for delivering groceries, pallets of beverages, trucks delivering, trucks leaving. But the thing that caught our attention, was their extreme attention to detail, when it comes to produce.

What we saw were four ( yes, four ) refrigerated walk through cooler rooms with different temperature settings. It was explained that many fruits and vegetables ( i.e. Peppers ) require a tight temperature range for optimum storage. The result of this attention to detail and quality was the most perfect Peppers, Strawberries, Zucchini… this consumer has ever seen.

For those who have never ordered fruits & vegetable online, maybe it is time to give it a try. From what we saw, it may be some of the best produce you have ever seen or tasted.

UK Online Grocery Sales to Double in Five Years

In an article published in the British Newspaper, The Telegraph, Britain’s internet grocery market will double to £9.9bn by 2015, research group IGD forecast. This report corresponded to the report that Morrisons, the fourth largest grocery retailer in the UK, and the only top four not offering online sales, became the latest supermarket to make a move into online sales.

IGD monthly ShopperTrack survey in the UK found that 13 percent of Britons expect to use online grocery shopping more in the next year, rising to 24 percent among the heavy shopping 18- to 34-year olds. The online grocery market, which accounted for 3.2 percent of total grocery spend in the UK last year, is projected to increase to 5.4 percent by 2015, IGD forecast.

This strong growth trend underscores the value of online shopping for the Shopper, Retailer and Manufacturer. For the Shopper, it is about convenience and the ease of online shopping and home delivery or store door pick-up. For the Retailer, it is about controlling costs and minimizing real estate holdings and leveraging the value of multi-channel (online/offline) Shoppers who can be up to 60 percent more loyal to the chain. And, the manufacturer who can stock a virtually unlimited line of products and communicate the brand attributes in a more comprehensive fashion.

This strong growth trend, being demonstrated in the United Kingdom, is a global phenomenon that is reaching into North America and the BRIC countries. It will accelerate as broadband penetration continues to increase and Generation X and Milleniums move into the key grocery buying age group. Remember, these people do not know a time without online buying opportunities.

Online sales is to great an opportunity for all parties not to continue to demand focus and investment.