Nielsen Asks: Are You Maximizing Your 'Omnishoppertunity'?

Rosemont, Ill. — To maximize their success, CPG marketers need to follow their shoppers across platforms – from brick-and-mortar to e-commerce to the blend known as omnichannel – while also keeping up with the consolidation of retailers that’s shifted the balance of power.So says Christina Spizzirri, Nielsen vice president of client development who leads a team in the beauty and personal care market. Speaking at the Path to Purchase Expo in September, she shared research her company has conducted on emerging trends and industry challenges in seizing the “omnishoppertunity.”The retail landscape faces an onslaught of change unlike any seen in decades, with 50 retailers representing about 80% of sales and 90% of sales growth in the past year occurring on digital channels, Spizzirri said. “The balance of power is shifting from brands to retailers. This has opened the door to store brands.”The shift also has opened the door to medium-sized and smaller brands, leveling the playing field among CPGs. “Small brands are not only able to establish themselves but establish distribution much sooner than before,” Spizzirri said. “That’s even more true online, where distribution costs are nearly zero. And private label is evolving into true store brands.”Digital sales are still in the single-digit percentages across many categories, but they’ve risen to more than one-quarter in areas like beauty and pet care, and more than 10% in health, personal and household items. E-commerce might be growing off a small base, but it’s becoming a meaningful base. “There has been a seismic shift in where we are seeing growth,” Spizzirri said. “It feels like the early days, but the landscape is evolving so rapidly, it’s getting a little late to be early. We are at a tipping point, and you can’t wait any longer.”For brands to find that growth, Spizzirri suggested experimenting with new technology but added that Nielsen can’t predict precisely which vehicle is the right one to “test and learn” for any brand. She did have a few words of general advice, however. “Value and convenience will continue to be the catalysts to drive change. That’s where you should focus,” she said. “We need to evaluate our strategy based on which needs we’re trying to satisfy.”Nielsen’s shopper research shows that trust, value and experience – a product arriving on time, undamaged and with digital information kept secure – are “table stakes” in the omnichannel world, while assortment, convenience and personalization are how brands can best differentiate themselves from the pack.The growth in the meal-kit market, both online and at grocery, provides an excellent case study of the paramount importance of convenience, as well as a personalized experience. “It’s about saving time, and shorter prep times, but also the curation, new and healthier recipes, and cooking with family and friends,” she said. “It starts to become about having an experience. … This aligns well with today’s consumer.”Amazon is changing how consumers shop across channels, increasing the opportunity for smaller players like Dollar Shave Club who engage in “spearfishing” select purchases rather than building broader baskets, Spizzirri said. “The importance of Amazon is undeniable, but you don’t have to be No. 1 to win on Amazon,” she said. “How do you start developing a strategy to win online? How are you making products available, accessible and automated?”Other questions brands should be asking include: “Is your product or category likely to be bought on replenishment? Can you deliver the right selection of products, conveniently, to the shopper? And does the product require extensive research?” Spizzirri said. “Take all your digitally enabled data and use that to tailor the content you put in front of [shoppers]. Click-and-collect is a natural opportunity here.”Online “disrupters” have achieved great success in recent years, including subscription services in areas like diapers, pet food, vitamins and razors. “What if I told you [Dollar Shave Club was] successful not because they were selling razors but because they were selling a service,” Spizzirri said. “They are selling auto-replenishment. Their razors are not necessarily better.”

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