WINNING IN CPG E-COMMERCE - IRI
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Part March
Discovering Pockets of Demand 26
2021
WINNING IN
CPG E-COMMERCE
EXECUTIVE SUMMARY
While COVID-19 accelerated the growth and adoption of e-commerce to an estimated $175B* in CPG sales in 2020, retention of new
shoppers, increasing comfort buying CPG online and acceleration of investments by leading retailers in online capabilities will drive
expansion of online grocery further in 2021, representing an estimated ~12% of total edible and ~35% of nonedible sales.
CURRENT TRENDS
• E-commerce shopper penetration is broadening across cohorts, categories and channels, and online baskets increasingly
resemble in-store baskets (e.g., fresh), including frequency. Shoppers are proving to be more loyal to brands and retailers when they
shop online, often repeating their list.
• Home shipment (e.g., Amazon.com, Walmart, Target) continues to dominate nonedible CPG but pickup and delivery are
preferred for food and beverage purchases.
• The online shopper journey is complex, with many digital touch points, requiring additional investments in digital marketing.
• Winning the omnichannel shopper is critical as they tend to spend more share of wallet with a single retailer.
• National players (e.g., Amazon, Walmart, Target, major grocers) are winning more share of the online grocery market, which will
likely force industry consolidation, with reintermediation coming from players like Instacart and DoorDash.
• As evidenced by the growth of Instacart, consumers are willing to pay a premium for delivery services. While e-commerce
consumers are less price sensitive than in-store consumers, most services deliver assortment and prices consistent with in-store.
• Most larger manufacturers that have lower share in e-commerce are benefiting from the growth of pickup and delivery. Smaller
manufacturers win in home shipment.
OPPORTUNITIES | Retailers OPPORTUNITIES | Manufacturers
• Continue to invest with speed in digital capabilities • Invest in paid search, social media and shopping apps
and commerce to gain omnichannel share. to build online presence and increase share.
• Consider driving more pricing online vs. in-store for • Build baskets for holidays and events, in partnership with retailers,
convenience and variety, in addition to optimizing to cater to omnichannel shoppers. Product availability needs to
fulfillment costs and media advertising to drive support pickup and delivery as well as home shipment.
profitability. • Offer more personalized solutions and variety (flavors, packs)
• Build unique in-store and online experiences to drive and drive more price / mix in online grocery.
traffic, encourage discovery and impulse and • Engage with your consumers via direct-to-consumer initiatives
increase occasion-based purchases. and social media.
*IRI estimate including untracked categories.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 2
CPG E-Commerce Growth Will Continue in 2021, But at a Milder Pace Than 2020
Share of E-Commerce in Omnichannel
+7.4
EDIBLE CPG +3.5 ~12%
NONEDIBLE CPG ~35%
11.1% 33.4%
31.1%
9.5%
23.7%
21.4%
6.0% 18.1%
4.5%
3.3%
2017 2018 2019 2020 2021 YTD 2021 (F) 2017 2018 2019 2020 2021 YTD 2021 (F)
vs. YA - +1.2 +2.5 +3.5 +3.8 ~+2.5 vs. YA +3.3 +2.3 +7.4 +7.5 ~3.9
E-comm $B $16 $23 $31 $57 $11 ~$67 E-comm $B $46.0 $58 $68 $105 $19 ~$111
E-comm - E-comm -
Contribution 47% 56% 32% 38% - Contribution
to Growth 75% 66% 73% 101% -
to Growth
Omnichannel Omnichannel -
Growth 2.7% 3.0% 15.2% 13.9% ~-3.5% 6.2% 5.5% 17.7% 11.1% ~-7%
Growth
Other areas of retail with higher e-commerce presence saw even greater shifts in 2020: electronics (50% e-commerce share,
+11ppts. vs. YA), office supplies (40%, +11ppts.), toys / hobby (41%, +8ppts.), apparel (38%, +11ppts.) 1
Note: Based on 205 CPG categories currently tracked in e-commerce. Estimated 2020 e-commerce share for all CPG categories is 7.8% for edible and 22.3% for
nonedible, accounting for $175B total CPG ecommerce sales. E-commerce data is based on projected receipt-based sample and reported data with varying levels of
granularity and accuracy available. 1. eMarketer U.S. Retail e-commerce Sales Share, by Product Category: % of Total Retail Sales. Source: IRI Omnichannel, data
ending 2/28/21. IRI Strategic Analytics forecasts.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 3
The Majority of Online Shoppers Will Continue
Their Purchase Habits Post-Pandemic
% of Consumers Who Currently Do This Activity
and Will Continue This Activity Post-Pandemic
January February March
2021 2021 2021
Shops online
for groceries, with 63% 64% 68%
curbside pickup
Shops online for
61% 60% 62%
grocery delivery
Goes grocery
77% 79% 80%
shopping at stores
Slight Uptick in Consumers Increasing Their Usage of Curbside Pickup
Source: IRI Survey collected January, February, March 2021 among National Consumer Panel representing Total U.S. Primary Grocery Shoppers.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 4
For Many Retailers, Digital Sales Now Account for a Significant Portion
of Omnichannel Sales and Have a Strong Contribution to Growth
Walmart, Target, Costco, Kroger, Albertsons, Ahold Delhaize and Dollar General continue to
invest aggressively in online grocery fulfillment capabilities and optimizing fulfillment costs.
Digital Share of CPG Omnichannel Sales and E-Commerce Performance
Retailer Reported Digital Share of Sales & Growth Digital Sales Growth
+118% vs. YA +76% vs. YA +129% vs. YA
+9.8 +2.0 +2.6
+69%
22.1% 6.0% 5.5% (Q4, 2020)
4.0%
+42%
12.3% (Q4, 2020)
2.9%
+118%
(Q4 2020)
3 Months Ending 3 Months Ending 2019 2020 Q4 2019 Q4 2020 +225%
February 1, 2020 January 30, 2021 (Q3 2020)
.
Source: Retailer Earnings Reports.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 5
Shopper Adoption of E-Commerce Is Increasing, as
Consumers Across Cohorts Shift to Online Grocery
Grocery Retailer A – Shopper Penetration by Income and Generation / % of Retailer Shoppers Buying in E-Commerce
Income Cohorts Low
Generation Cohorts 19-35
36-45
Middle
3.6% 46-65
1.4% High
26 WE 4.2% 66+
26 WE
2.4% Feb. 22, 2020
Feb. 22, 2020 2.1%
3.6% 0.9% Δ vs. 2/22/20
Δ vs. 2/22/20
+2.1
3.0% +1.6 5.7%
+2.3
26 WE 26 WE 6.5%
4.7% +2.3 +1.9
Aug. 22, 2020 Aug. 22, 2020 4.0%
6.1% +2.5 +2.4
3.3%
4.0% 7.6% +4.0
+2.6
26 WE 26 WE 8.3% +4.1
6.0%
Feb. 20, 2021 +3.6 Feb. 20, 2021 5.3% +3.2
7.5% 3.6%
+3.9 +2.7
Note: Income Levels defined as Low $100k. Grocery retailer A offers pickup and delivery e-commerce services. Source: Grocery Retailer Shopper Loyalty Card Data, Tracked Households.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 6
Low-Income Shoppers Also Migrate Online Due to
Increased SNAP Online Availability and Retailer Efforts
E-Commerce Adoption Among SNAP Households
SNAP Households Account for 12% of F&B Sales Retailers Promote App
and Increased Online Purchasing During COVID-19 Adoption for Pickup
% SNAP HH Purchasing F&B Online / Total U.S SNAP HHs represent 28% of
dollar channel sales & over index.
Launched in 2019, DG Pickup
4 WE expanded to 17K stores in 2020;
9.0%
February 23, 2020 new online capabilities include
shopping in-app to pick up at
+5.2
store, mobile checkout and
4 WE digital coupons.
14.2%
December 27, 2020
Retailers Expanded SNAP for Online Shopping
• Through the SNAP online purchasing pilot, 47
states now accept SNAP payments online through
retailers such as Amazon, Walmart, ShopRite, Aldi.
• In states where Amazon Fresh is available, SNAP
recipients can use the service without a Prime
membership.
Source: IRI Consumer Network™, Total U.S. – Internet 4 WE 2/23/2020- 4 WE 12/27/2020 / https://www.fns.usda.gov/snap/online-purchasing-pilot _as of 01/26/2021. Retailer Websites.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 7
Adoption of
Store Pickup & Delivery Grew Significantly in the
nonedible
Last Year, Driving Adoption of Edible E-Commerce e-commerce
Store Pickup, Delivery and Home Shipment % $ Share of Omnichannel / purchases
Latest 26 Weeks vs. YA accelerated
via home
Edible Nonedible
shipment.
+3.8 +7.7
10.7 Δ vs. YA 33.7 Δ vs. YA
2.7 +0.7
Store 2.8 +1.2
3.6 +1.3 26.0
Pickup
e.g., Walmart 2.0
6.9 Delivery 1.6
e.g., Instacart
2.3
3.6 +1.7
Home 28.2 +5.8
1.9 Shipment 22.4
e.g., Amazon
3.5 +0.9
2.6
YA L26 YA L26
Note: Based on 205 CPG categories currently tracked in e-commerce. Estimated 2020 e-commerce share for all CPG categories is 7.8% for edible and 22.3% for nonedible.
E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available. Source: IRI eMarket Insights, data ending 2/28/21.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 8
Comfort With Purchasing Food, Including
Fresh, Is Increasing With Pickup & Delivery
% $ Share of Category Purchased via Pickup / Delivery / Latest 26 Weeks
Edible Nonedible
18
Pickup / Delivery % of Omnichannel Sales
Shelf-stable Vegetables
17
Shelf Stable Fruit
Frozen Fruits & Vegetables
10
Meals
9 Coffee & Tea Fz. Meals Baby Care
Condiments
8 Produce Baking
Breakfast Juices Average = 7.2% Skin Care
Rfg. Meals Foils, Wraps & Bags
7 Cookies & Crackers Laundry
Snacks Paper Products
Deli Bakery
6
Dairy Meat & Seafood Average = 5.5% Household Cleaning
Cosmetics
Water
5 Candy Nutrition
Personal Cleansing
Fz. Desserts Health Remedies Hair Care
Mouth Care
4 CSD
Pet Care
3
Sports/Energy Drinks
0
Note: E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available.
Source: IRI eMarket Insights for tracked categories and Grocery Shopper Loyalty for Fresh, data ending 2/21/21 .
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 9
Edible Aisles Accelerate in Pickup & Delivery, Nonedible in Shipment
Home Shipment & Pickup / Delivery % $ Share of Omnichannel Sales in Largest Aisles / Latest 26 Weeks
62.7
25.6 Edible Nonedible
49.2
46.5 45.9
19.9
2.5 17.6 38.3 38.7
16.7
17.7 Home 55.3
3.9 Shipment
12.7 26.6 25.3
11.3 43.7 37.5
8.9 10.5 40.6
9.7 33.9
4.4 9.2 34.5 17.6
Home 17.4 3.7 0.4 14.1
3.9 2.2 6.4 20.7 20.3 12.5 11.5
Shipment 13.7 6.1 5.2
0.3 10.4 7.1
9.3 0.7 8.0 4.5
7.9 7.8 8.3 7.6 3.5 Pickup /
6.6 7.0 6.1 7.4 9.0 5.8 7.2 7.0 7.0
Pickup / 4.5 Delivery 5.5 5.3 3.8 4.8 5.0 4.5
Delivery 2.7
Laundry
Baby Care
Skin Care
Health
Remedies
Cleansing
Pet Care
HH Cleaning
Weight Loss
Personal
Cosmetics
Nutrition/
Paper
Hair Care
& Bags
Products
Foils, Wraps
Dairy
Coffee &
Baking
Ref. Meats
Tea
Poultry, Sfd
Cookies &
CSD
SS Veg
Breakfast
Drinks
Fz Meals
Snacks
Crackers
Sports/
Energy
Fz Meat,
∆ vs. YA
∆ vs. YA
Total Total
E-comm 6.6 7.5 4.8 4.9 3.9 4.2 3.8 3.4 3.8 2.8 1.9 2.3 E-comm 5.4 10.0 9.5 6.3 9.4 10.7 7.2 8.2 5.6 4.6 6.1 3.1
Shipment 3.4 0.7 0.8 1.8 0.5 1.1 1.1 0.2 0.8 0.2 0.8 0.4 Shipment 2.7 8.5 8.9 4.0 7.9 9.0 5.4 6.3 2.9 2.1 3.4 0.4
P/D 3.2 6.8 4.0 3.1 3.4 3.1 2.7 3.2 3.0 2.6 1.1 1.9 P/D 2.7 1.5 0.6 2.3 1.5 1.7 1.8 1.9 2.7 2.5 2.7 2.7
.
Note: Largest category aisles with tracked e-commerce sales shown. E-commerce data is based on projected receipt-based sample and reported data with varying levels of
granularity and accuracy available. Based on retailers where modality can be determined or assumed to majority classification . Source: IRI eMarket Insights, 26 WE 2/21/21.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 10E-Commerce Shoppers Exhibit a Higher Loyalty to
Their Brands Than Those Who Shop in Brick & Mortar
Grocery Retailer B – Brand Share of Wallet In-Store vs. Online
% $ Share of Category by Shopper Type, L52 Weeks vs. YA
In-Store
E-comm 2x+
+16
68
+7
57 +6
52
49
47
40
Brand A Brand B Brand C
Note: Brands sorted by size, Largest to smallest. Grocery retailer B offers pickup and delivery eCommerce services. Source: Grocery Retailer Shopper Loyalty Card Data ending 2/21/21, Tracked Households.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 11As the Shopper Journey Becomes More Intricate, Retailers and CPGs Must
Establish Strong Digital Touch Points to Attract, Engage and Retain Shoppers
The consumer path to purchase is shifting toward digital discovery and purchase vs. in-store as consumers
prioritize lower prices, faster purchasing, easy access customer service and better loyalty rewards. OPPORTUNITIES
Invest in personalized
and bundled offers
Store Aisle Specialty and solutions (e.g.,
IN-STORE
Store
Product spring color collection
Traditional Packaging Examined Self checkout
Media Word of Product Grocery
selected for you vs.
Mouth In-store Coupons
Store lip, eye, nail and
Club Retailer employee In-store
App return cosmetics messages).
Store checkout in
Employee Mass
Store Ad Retailer C-store store Rewards Target shoppers
Program (e.g., based on
purchase behavior)
AWARENESS / POST-PURCHASE
CONSIDERATION PURCHASE SERVICE via paid search
DISCOVERY LOYALTY
(e.g., sponsored
Product 3rd party App Recommendations results, product
Retailer Online
chat Reviews Online
Online
Member display ads), retail
Brand Direct-to- Website FAQ Page
DIGITAL
Marketplace Saved Rewards media networks,
consumer Site Survey
Social Media Posts e.g. Etsy Home Shipment History
e.g Amazon Delivery delivery/retailer apps.
Web Tracking Online Follow,
Loyalty Review
Search Delivery Mobile App Program Like Optimize digital
Social Media Site content on product
Targeted Ads Text
Click & Messages pages to drive
Collect Social Media
Retailer site e.g Walmart Pickup from Shopper Post Online shopper conversion.
Influencer review / Tik e.g Shipt Return
Tok Videos
Source: IRI analysis.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 12In Most Cases, Shoppers Can Get Similar Opportunities
Assortment and Pricing Online vs. In-Store
Retailer C Online Assortment
In-Store vs. Pickup and Home Shipment Average Assortment by Category Retailers and
Assortment Comparison In-store, Pickup and Delivery Comparison manufacturers can
Pickup Home Shipment In-store Ship vs.
offer special
Category pickup vs. buy at promotions and build
buy at store store
Select 93% experiences to drive
Soda and Pop 79% 9% Harder-
Edible Sports Drinks 81% 9% to-ship in-store traffic.
Categories 85% categories
Frozen Meals 98% 0%
have less
Ice Cream 98% 2% assortment Create online mega-
Crackers 92% 78% for home
Ground Coffee 97% 227% shipment
shopper marketing
Select 89%
Nonedible Pasta, Rice, Grains 96% 236% events, particularly
Categories
155% Chips 88% 184% around key seasons
Trail & Snack Mixes 95% 143% (e.g., beer, soda,
Pancake Mixes 98% 148% Endless
Toilet Paper 48% 110% aisles are
chips, hot dogs and
100%
• Fulfillment challenges restrict assortment ~-10% in Hand Soap 96% 125% evident in condiments for
shelf-stable
pickup and delivery and -15% for edible in home Toothpaste 99% 154% and Memorial Day parties).
shipment, with endless aisle for nonedible and shelf- Dish Detergent 98% 138% nonedible
stable grocery shipment Cleaning Wipes 86% 118% categories
Dog Food 91% 207% Offer and curate
• In-store vs. first party pickup and delivery pricing is
comparable. In some instances, online shoppers may Cat Food 95% 207% more premium
not have the same in-store promotions. Multivitamins 97% 211% products online.
Source: IRI analysis. / Methodology: Analysis of assortment options by order type on 26 categories on retailer website.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 13E-commerce Shoppers Are Less Price Sensitive, a Segment
of Shoppers Willing to Pay for Shopping Convenience
E-commerce Shopper Price Sensitivity
E-Commerce Shoppers Shoppers Are Willing to Pay Premium Prices, Delivery
Have Lower Price Sensitivity Fees, Membership Fees and Other Fees for Added
Compared to Grocery Channel Convenience and Consolidating Trips
Impact of Everyday Price Change
Instacart Share of Delivery and 2020
on Volume Grocery Channel Click & Collect, Total CPG Gross Bookings
vs. E-Commerce, Edible +7.6
$24.6 B
-1.7 21.9%
+227% vs. YA
14.3%
14.7
13.0
2019 2020
Instacart Pricing1: delivery up to $9 for orders DoorDash Pricing:
% change in volume from $35+, free delivery with annual $99 subscription; • Commission: ~20%
grocery retailers pay +10% per order average.
10% decrease in price • Service Charges:
• Regional Grocer: +15% (incl. fees and 10% ~10-15% (mkt dependent)
tip, consumers can expect +30% premium)
• Delivery Charges:
Grocery E-Commerce • Costco: +25% without membership / +10% $5-$8 per order
with membership • Tip: 15-20%
Note: Price elasticity across products in 30 representative • Drug Retailers: Items reflect average retail
categories. E-commerce based on pure-play e-comm • Small Delivery Fee:
price in the area
retailer. 26 weeks ending 10/6/19 vs. 26 weeks ending $2.00 per order
10/4/20. Source: IRI Revenue Growth Management proprietary • Generally, promotions, loyalty programs and • Dash Pass: $9.99
models. discounts are not applicable
per month
1. Analysis of pricing comparison in select local markets and items. Source: Progressive Grocer, Retailer Earnings Report, IR I analysis.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 14For Retailers, Online Shoppers Become Valuable Heavy Shoppers
Grocery Retailer B – Shopper Migration for E-Commerce Shoppers During COVID-19
Period 2 – During COVID-19 Period 3
Period 1 – Pre COVID-19 26 Weeks Ending 08/22/20 26 Weeks Ending 02/20/21
26 Weeks Ending 02/22/20
43% Returned to
Increase in $
65% Shopped In-store* spend per HH
E-comm 1-3x at retailer
New (omnichannel)
vs. pre-
E-Commerce COVID-19:
Shoppers
17% Shopped
who shopped E-comm 1-3x +14% 50% of new
store only
e-commerce
pre-COVID-19
and tried shoppers
23% Shopped 14% Shopped continue to
e-commerce E-comm 4-9x E-comm 4-9x +17%
during buy online,
COVID-19 with ~20%
12% Shopped 19% Shopped +34% becoming
E-comm 10x+ E-comm 10x+ heavy users
ALL SHOPPERS +10%
Note: Grocery retailer B offers pickup and delivery e-commerce services. *7% of period shoppers lost in period 3 (not shown). Source: Grocery Retailer Shopper Loyalty Card Data, Tracked Households.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 15Winning the Omnichannel Shopper Drives
Greater Share of Wallet to Retailers
Grocery Retailer A: Difference in Total Spend by Type of Shopper /
Latest 26 Weeks vs. YA
E-Commerce
In-Store Only Omnichannel Only Shopper
Shopper Shopper (likely 1-2 person
HH, 65+)
29%
100% 100%
% of Retail Spend (Online
(In-Store) (Online)
Average)
% of Shoppers 94% 4.3% 1.7%
Growth in Spend vs. 18% 8%
12%
YA (Δ vs. In-Store) (+6ppts.) (-4ppts.) “Over time, omnichannel guests spend
Increases in Gaps in most
on average nearly 4x more than a
Source of Higher / store-only guest and nearly 10x more
most depts., depts., particularly
Lower Spend vs. N/A
In-Store Shopper
except general nonedible and than a digital-only guest.”*
merchandise impulse
Note: Grocery retailer A offers pickup and delivery e-commerce services. *Target. Source: Grocery Retailer Shopper Loyalty Card Data, Tracked Households.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 16Capturing Lost Impulse Shopping Can Increase
the Value of Online Grocery Orders Up to 1% Lost Impulse
Opportunity
Illustrative Impulse Categories / Pickup / Delivery Presence 0.5-1.0%
of omnichannel edible
Illustrative Impulse Omnichannel Pickup / Delivery Index to F&B
sales at risk due to lost
Categories $ Sales (B) % of Omni $ Average impulse on e-commerce.
Carbonated
$33 4.5% 63
Beverages
Salty Snacks $31 5.5% 77
Chocolate Opportunity
$20 5.8% 81
Candy Manufacturers can
partner with retailers
Energy Drinks $15 2.0% 28 to build baskets on
e-commerce to
Non-Chocolate
$10 4.5% 63 further push
Candy underdeveloped impulse
categories and realize
Sports Drinks $7 4.1% 57 the lost opportunity.
Note: E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available. Source: RI eMarket Insights. 52 WE 2/21/21. IRI analysis.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 17Shoppers Are Consolidating Purchases With Major E-Commerce Retailer
Retailers; Disintermediation Likely By Delivery Services Opportunities
Retailer $ % Share of CPG E-Commerce / Latest 26 Weeks vs. YA
Edible Nonedible
Gains vs. YA Gains vs. YA
17.8% All Other -9.5 Increase flexible
27.5% 26.1% All Other -7.6
Target +2.1 33.7% fulfillment capacity,
3.7%
9.9% Major 4.2%
Target +1.6 e.g., via micro
1.6% +2.2 0.8% Major Grocery +0.2
7.7% Grocery
2.6% 1.0% 0.2%
1.9% fulfillment.
0.6% Instacart +1.0
11.3% 17.7% Instacart +6.5 0.2%
1.9% Amazon Amazon Improve online
2.9% +1.0 0.0
Fresh/Prime/Go Fresh/Prime/Go
profitability, e.g.,
23.6% 20.8%
Amazon.com -2.8 60.5% Amazon.com +3.8 process improvements,
56.7%
other revenue streams
(media, marketplace).
26.5% 27.2% Walmart +0.7
Walmart +1.0 Enhance customization
5.2% 6.2%
/ personalization and
YA L26 YA L26
E-Commerce Share of Omnichannel E-Commerce Share of Omnichannel
shopper engagement.
6.9% 10.7% 26.0% 33.7%
Note: Retailer totals include all e-commerce fulfillment models. Instacart is based on receipts attributed to Instacart; some Instacart sales may fall under the retailer if receipt is attributed to the retailer.
E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available. Source: IRI eMarket Insights, data ending 2/21/21.IRI analysis
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 18Growth of Pickup & Delivery Benefits Large Players,
But Most Large CPGs Are Still Underdeveloped Online
Manufacturer Share of CPG Sales in E-Commerce Modalities vs. MULO / CY 2020
vs. YA vs. YA vs. YA vs. YA
3.2 +0.4
Private 9.3 +2.0
Label 20.0 20.0 +2.3 20.3 +1.3
Extra 26.9 35.5 +0.5
Small 8.2 -1.7 12.7 10.4 -1.0
-1.1
Small 13.8
19.3 +0.1
22.2 -3.1
Medium 18.5 27.0 -2.3
30.5 -1.7 +0.4
14.2
13.7 +1.0
Instacart vs. first party
12.5 +0.9
11.7 +0.8 services have similar manufacturer share.
Large 39.5 -0.7 As pickup and delivery grow, large
31.4 +0.9 35.8
24.3
manufacturers will gain share in e-commerce.
+1.1 19.1 0.0
Home shipment is a prime
area for niche manufacturers.
MULO Total E-Comm Home Shipment Delivery Store Pickup
Shoppers seem to purchase private label for
Large Manufacturer 75 55 83 92 pickup and delivery on par or slightly higher
Index to MULO Within the categories they play in, large manufacturer share is on average than in-store within the same retailer.
55 index to total in-home shipment, 83 in delivery and 92 in pickup.
Note: Manufacturer Size calculated with MULOC 2020 Sales as XS$100M, Medium>$1B, Large>$6B. /
E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available. Source: IRI POS Data. IRI eMarket Insights. 52 WE 12/27/20. IRI analysis.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 19Direct-to-Consumer Sites Also Play a Role in Building Loyalty,
Customization and Understanding Consumer Demands
Direct-to-Consumer $ Share of E-Commerce ($M, %), Largest Categories & Brands
Edible Nonedible
$1,752 $1,648 $6,767 $7,198 $6,808 $7,270
$1,359 $1,511
$297 $804
2017 2018 2019 2020 2021 YTD 2017 2018 2019 2020 2021 YTD
• Collect and integrate data Coffee & Tea • Enable CPGs to serve consumers in Skin Care & Cosmetics
from own brand website and a personalized manner, catering to
mobile apps to engage with increasingly complex need states
consumers and understand Frozen Food (e.g., different beauty products for
their preferences. different occasions, generations)
• Enable a test platform for via expanded assortment, tailored
innovations within and communication, diverse price points.
Shelf Stable Shaving, Fragrance & Lotion
beyond the category. • Build brands outside the store
and capture consumers along the
digital journey.
.
Note: E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available.
Source: Growth Leaders Webinar Panel Discussion, IRI eMarket Insights, data ending 2/21/21. IRI analysis
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 20EXAMPLES OF E-COMMERCE WINNERS
Ben & Jerry’s Pivoted Quickly
to E-Commerce Investments
Ben & Jerry’s Pivots
to Meet On-Demand
At-Home Consumption
With Delivery Apps
• Created “Ice Cream Shop”
store via DoorDash, Uber
Eats, and Grubhub to serve
Featured on Target.com: 30% share as unique provider vs.
of ice cream sales (vs. 13% in total restaurants.
market) gaining +3.5pts. vs. YA • Tripled collection points
(e.g., added freezers in
convenience and liquor
stores), aiming to facilitate
delivery within 30 minutes.
• Researching formulations
less likely to melt and/or
refreeze better.
New Products Appeal to
Consumers Stuck at Home
Source: WSJ “Ben & Jerry’s in Winter? If You’re Home Anyway, Why Not?” 12/12/20. Retailer web sites.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 21EXAMPLES OF E-COMMERCE WINNERS
Hint Shifts Its Direct-to-Consumer Success to
Mainstream E-Commerce and Brick & Mortar
Hint In-Store and E-Commerce Launch driven by success
through drinkhint.com (now
(excluding drinkhint.com) Sales / $M, 52 WE 02/21/2021 vs. YA 50%+ of sales) and social
$ Sales % media marketing
E-Commerce Change vs. YA
Brick & Mortar $137 53.8%
$31
(22%)
110.4%
$90
Drinkhint.com
$15
(16%) Subscriptions, Special Deals,
Early Access to New Flavors,
$106
42.0% New Product Categories
(78%)
$75 (e.g., Personal Care)
(84%)
YA Current
Note: E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and
accuracy available. Source: IRI Omnichannel Model, eMarket Insights. 52 WE 2/21/21. Brand Website. Forbes
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 22EXAMPLES OF E-COMMERCE WINNERS
Kiss Drives Growth Through Personalization
via Its DTC Site and Increased Availability
in Amazon and Mass Retailers Direct-to-consumer site
enables personalization and
expanding consumer base
Kiss Omnichannel Sales and Category Share Performance
(excluding Kissusa.com) / $ Sales (MM), 52 WE 02/21/2021 vs. YA
E-Commerce $ Sales %
Change vs. YA
Brick & Mortar
$845 46.3%
Kiss $
Channel / Share of Share PPT
$202 143.6% Retailer Cosmetics1 Change
(23.9%)
Omnichannel 8.8% +2.2
$578 Target.com features imPress
$83
B&M 12.7% +3.7 on its “at-home beauty page,”
(14.3%) encouraging product
E-commerce 3.9% +1.8 discovery for consumers
29.9% Amazon.com
looking to bring the salon
6.6% +2.6
experience in home.
$643 Walmart 6.8% +1.9
$495 (76.1%)
(85.7%)
Target 4.9% +2.3
Instacart 5.2% +3.5
Major Grocery 1.7% +1.0
YA Current 1. Cosmetics include Nail, Eye and Accessories
Note: IRI Consumer Panel, E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available.
Source: IRI Omnichannel Model, eMarket Insights. 52 WE 12/27/20. Retailer & brand websites. IRI analysis.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 23EXAMPLES OF E-COMMERCE WINNERS
Shea Moisture’s E-Commerce Success is Due to
Optimized Product Pages, Curated Content Engaging
With Consumers, Expanded Product Availability Shorter Path to Purchase and
Ease of Discovery vs.
Competitive Brands
Shea Moisture Omnichannel Sales and Category Share Performance 2 to 3 clicks from Google search to
“add to cart” vs. other competitors
(excluding Sheamoisture.com) / $M 52 WE 02-21-2021 vs. YA that require more than 4 clicks.
E-Commerce $ Sales % Optimized Product Page Content
Change vs. YA Descriptions highlight natural and
Brick & Mortar $473 sustainably sourced ingredients.
30.9%
Shea $ Empowering, Engaging Website
$118 Share of and Social Media Video Content
Channel / Share PPT
(25.0%) 78.0% Retailer Hair Care1 Change SheaMoisture TV with product
$364 “how to” tutorials and
Omnichannel 2.8% +0.7 #Mystorymypower stories.
$66
(18.3%) B&M 3.3% +0.9 Social Impact Through a
Program That Invests Proceeds
E-commerce 1.7% +0.4
From Every Purchase Into
$355 19.3% the Community
Amazon.com 1.8% +0.5
$297 (75.0%)
(81.7%) Walmart 1.6% +0.2
Target 6.0% 0.0
Instacart 3.3% +1.9
Major Grocery 1.3% +0.4
YA Current 1. Hair Care includes Shampoo, Conditioner, Hair Styling
Note: E-commerce data is based on projected receipt-based sample and reported data with varying levels of granularity and accuracy available.
Source: IRI Omnichannel Model, eMarket Insights. 52 WE 12/27/20. Brand Website, IRI analysis.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 24EXAMPLES OF E-COMMERCE WINNERS
Target is Winning via a Physical
Store-Centric Omnichannel Platform
Results
• 145% digital growth,
• ~1,900 Target stores pull their weight as show rooms, service 18% digital penetration in
centers and a hub for digital fulfillment. FY 2020
• Suite of same-day fulfillment for digital orders from store inventory • CPG market share gain
handling 95% of sales: of ~+0.25% in
− In-Store Pickup FY 2020
− Drive-Up
− Same-Day • 2021 YTD highest in-
Delivery Shipt store CPG trip growth
− Shipped to Home ~18%, more than 2x of
from Store Inventory any other CPG retailers
• Costs 90% less than
shipping from a
warehouse*
• Drive-up +600%*
• Shipt +300%*
*Per Target fiscal year, 4 quarters ended January 21, 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 25Retailer Implications Manufacturer Implications
Continue to invest with speed in digital capabilities Improve online channel profitability via careful revenue
and commerce to gain omnichannel share. management with price / mix and unique assortment; monitor
competitive price position across online and in-store channels.
Consider driving more pricing online for convenience, variety, Track and optimize digital marketing and digital trade /
and unique products, in addition to looking to optimize shopper spend in real-time against most responsive
fulfillment costs and enhance media advertising to drive digital properties (e.g., retail media networks,
profitability. walled gardens, delivery apps, etc.).
Segment omnichannel users to target Track and balance marketing and promotion
products, solutions and services, in-store and online to greatest returns.
to meet a variety of consumer needs. Optimize omnichannel supply chain to
Particularly with SNAP shoppers, reduce shipping and warehouse costs. Work with
online price / pack assortment retailers to forecast and meet consumer demand.
should be a priority. Prioritize investments with top retailers in-store and online.
Build unique in-store and online Earn your spot on shopping lists, which are often repeated.
For impulse items, leverage “buy again” and automated
experiences to drive traffic; encourage recommendations to drive purchase.
discovery, impulse and occasion-based purchases
(e.g., bundled solutions for holidays and events, including Leverage direct-to-consumer sites to drive
Independence Day celebrations with packaged snacks, loyalty and gain inputs to consumer tastes.
beverage alcohol, hot dogs, condiments and more). Inroads made by small manufacturers is a call to action for larger
players that risk longer-term omnichannel loss, particularly in
e-commerce, where brand loyalty is higher. Consider investments
in online, social and direct to consumer.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 26IRI Offers Solutions and Services to Help
Brands and Retailers Grow E-Commerce Initiatives
eMarket eCapability Online Demand
Insights Development Analytics
• Provides online sales and share • Benchmarks current e- • Calculates e-commerce- specific
information for a holistic view of commerce capabilities against price elasticity and assortment
the digital marketplace and leading and lagging competitors incrementality for refining online
shopper journey within the same category or pricing and assortment
• Capitalizes on e-commerce as department • Assesses pricing leverage and
both a sales channel and a • Prioritizes capability investments portfolio gaps vs. traditional
powerful marketing tool where they will drive true brick-and-mortar shopping, to
• Compares online and in-store differentiation or close critical refine offering sets
sales data to understand gaps • Identifies points of differentiation
purchase dynamics of key • Builds a quantified business in the online space to mitigate
shopper segments case to strengthen specific e- cross-channel cannibalization
commerce capabilities
Action and Impact
Identifies how shoppers are Drives the most effective and Builds significant online market
behaving online to know where to efficient capability build, often share in what is often the fastest
invest to drive incremental growth saving tens of millions of dollars in growing channel while also gaining
of tens of millions of dollars achieving e-commerce potential 2-5% in margins
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 27IRI Offers Solutions and Services to Help
Brands and Retailers Grow E-Commerce Initiatives CONTINUED
Omnichannel E-Commerce IRI
Strategy Portfolio Audiences
• Sets a specific role and growth • Overhauls existing offerings to • Activate E-Comm ProScores
strategy for online vs. traditional build a differentiated online across advertising ecosystem to
brick-and-mortar channels, to assortment, meeting unique reach households likely to
meet different needs and demand occasions and required purchase CPG products online.
occasions price points • Identify and activate publishers,
• Shifts e-commerce from • Introduces new items, pack platforms, networks, dayparts,
cannibalizing traditional sizes, and deals better tailored etc. where online purchases
channels to expanding shopper to the online shopper, specific to engage with media.
footprint each brand • Highlight attributes and craft
• Pre-empts competitive growth in • Builds pricing leverage in a messaging that resonates and
e-commerce, maintaining and channel known for the ease of prompts action.
strengthening overall share cross-shopping and price
comparisons
Action and Impact
Avoids up to 50% of cross-channel Grows online sales by Reach high-propensity shoppers at
cannibalization while driving as much as 3x, while also scale, deliver 50%+ higher return
stronger loyalty and repeat increasing margins and reducing on ad spend vs. competitive
purchases across online channels cross-channel cannibalization purchase-based targets
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 28Mark Clouse Stuart Aitken Vivek Sankaran
President and CEO, Campbell Soup Company Chief Merchant & Marketing Officer, The Kroger Co. President & CEO, Albertsons Companies
November 10, 2020 September 3, 2020 August 25, 2020
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 29IRI’s Latest CPG and Retail Insights Reports to Manage
the Impact of COVID-19 (click to see full report)
The Changing Shape of Discovering Pockets COVID-19 Emerging Recession Proof IRI COVID-19 Impact
the CPG Demand Curve of Demand Point of View Your Business Assessment Reports
14. Vitamins, Minerals, Supplements 3. Innovation for a Post- 5. COVID-19 Vaccine Update: 7. Defending and Recapturing 5. Anticipating Life After
13. America Is Ready for Football Pandemic World Impact on CPG Industry the Shelf COVID-19
12. Revenue Management 2. Harness Growth in 2021 4. Anticipated Vaccine Adoption & 6. Innovation Lessons From the 4. Consumers Provide a
Opportunities in a Pandemic 1. The Premium Opportunity Impact on the CPG Industry Great Recession to Apply Pessimistic View of Coming
11. Home for the Holidays 3. Potential Impact of Reduced Today Months
10. Powering the Future of Unemployment Benefit 5. Building Brands During 3. Tracking the Dramatic Pivot
Convenience Retail Changes on F&B Spending Recessionary Times of U.S. Consumer and
2. Consumer Stimulus, 4. Recessionary Lessons to Shopper Behavior
9. Reignite In-Store
Merchandising in Grocery Unemployment Benefit Apply to Private Label Today 2. Then and Now: Consumer
8. SNAP Benefits Spending & Shopping Behavior 3. How Big Brands Performed CPG Behavior During
1. The Impact of a Second Round During the Great Recession Economic Downturns
7. U.S. CPG Growth Leaders
of Stimulus on the CPG 2. Maintaining Pricing Discipline 1. COVID-19: Impact on CPG
6. E-Commerce
Demand Curve During a Recession and Retail
5. Boomers
4. A Global Perspective 1. How the Great Recession
Reshaped CPG Demand Curve
3. Tracking Transformation
2. Meat and Millennials
1. Anticipate the Future
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 30CPG Economic Indicators
Access IRI’s industry-standard metrics for consumer product demand and supply
during the pandemic, our CPG inflation tracker and the latest data on category
trends, out-of-stock levels, consumer sentiment and more.
U.S. Demand Channel Shift E-Commerce
Demand Index™
Index™ Forecasts Index™ Demand Index™
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Tracker™ for Subcategories IRI Social Pulse™
The IRI CPG Demand Index™ provides a standard metric for tracking
changes in spending on consumer packaged goods.
U.S. Demand Index™ Forecasts are delivered through a proprietary,
fully automated forecasting solution that anticipates consumer demand.
Channel Shift Index™ provides a standard metric for tracking changes (migration)
in spending on consumer packaged goods across select channels.
The IRI E-Commerce Demand Index™ provides a standard metric for tracking changes
in spending on consumer packaged goods purchased online.
Inflation Tracker™ provides the well-known price per unit metric for tracking changes in pricing of consumer packaged goods.
Supply Index™ provides a standard metric for tracking changes in product availability (i.e., in-stock rates) in stores for consumer packaged goods.
Out-of-Stock Levels for Top-Selling Subcategories by Market Area in the U.S.
Top U.S. Topics from IRI Social Pulse™
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