Info
Published on: October 5, 2015
Social media pitch
Retailers and FMCGs need to reshape their business models as online grocery evolves globally, says Rabobank. http://pr.co/p/002f00
Summary
With the online grocery channel evolving on a global scale, Rabobank foresees the need for both food retailers and fast-moving consumer goods (FMCG) producers to significantly reshape their business models. Rabobank believes that, should they stay as they are, many classic food retail business models won’t survive this ‘modern’ age, and both retailers and FMCG producers need to adjust their go-to-market and supply chain tactics to incorporate big data and associated media strategies, if they wish to remain relevant.
Details

“To stay in the ‘major leagues’, companies will need to invest heavily in technology and human capital,” says Rabobank F&A Analyst John David Roeg. “However, to mitigate the increasing risk of investing in the wrong, outdated or difficult-to-control systems, choosing a partnership with a cutting-edge provider is a good strategy.”

After making strong inroads in China, France and the UK in recent years, online grocery growth is gaining momentum worlwide. This is taking place at the expense of more traditional grocery shopping channels, most notably hypermarkets and supermarkets for example, in the case of China, many retail stores will likely never be built due to this phenomenon.

In this fast-growing environment, producers will need to make decisions based on a vast number of variables that influence online product sales performances, such as impulse factor or product name. These variables should be combined with a variety of external and internal data – FMCG groups may be required to pay for access to the latter.

Rabobank identifies web browsing data analysis as the next evolutionary step for companies in trying to understand grocery shopping behaviour: how long customers take to decide before making a purchase or how they react to pop-ups, promotions and reviews can be key factors in finding patterns. Some of the data available might seem irrelevant, but with the use of the right algorithms and powerful technology, it could provide ground-breaking insight.

Price differentiation is a dead-end street for food retailers looking to stand out from the crowd, but big data offers various possibilities for differentiation, including personalised offerings, dynamic pricing, flexible stores and predicting trends. Furthermore, food retailers whose earnings are hurt by fierce competition and declining property values can generate new income streams by monetising data and media services.

For more information please contact the report’s author:

John David Roeg, johndavid.roeg@rabobank.com, Tel: +31(0) 30 71 21572

For other information, please contact Rabobank press office:

Madelon Kaspers, Madelon.kaspers@rabobank.com, Tel: +31(0) 610 8872 44

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Quotes
“To stay in the ‘major leagues’, companies will need to invest heavily in technology and human capital. However, to mitigate the increasing risk of investing in the wrong, outdated or difficult-to-control systems, choosing a partnership with a cutting-edge provider is a good strategy.”

— Rabobank F&A Analyst John David Roeg