How CPG Brands Are Budgeting and Organizing Around E-Commerce

Transcription

1 November 8, 2017 How CPG Brands Are Budgeting and Organizing Around E-Commerce Findings from a Global Study Keith Anderson SVP, Strategy & Insights

2 What We ll Cover The role of strategy & culture in organizational structure How brands are budgeting and structuring for ecommerce Industry priorities & challenges Team size, composition, and talent profiles Critical ecommerce roles Dedicated versus designated staff 1

3 First, Define Success Hard Objectives Soft Objectives Define Success Criteria Incrementality Growth Share Profit Brand equity Offline influence Brand advocacy Retailer/Supplier Relationship Recognize Upside Opportunity & Downside Risks of Doing Nothing ecommerce is not guaranteed to be incremental But brands on offense will grow exponentially, increasing their category share Even if shoppers do not buy online, they may be influenced to buy at brick-andmortar

4 The Primacy of Culture 99% of companies focus predominately on organizational structure, but culture really matters Executive-level (Board and C-Suite) endorsement and support is key Emerging channels need a clear (and appropriate) definition of success Everyone needs to understand their role in the transformation Experimentation must be encouraged, but good experiments prove or disprove hypotheses 3

5 In 2017, ~40% Surveyed Said ecommerce will Represent 2-9.9% of Sales Q: What percent of your company's 2017 sales is ecommerce expected to represent? 22% 19% 25% 23% 19% 16% 14% 16% 14% 11% 10% 11% Less than 1% 1 1.9% 2 4.9% Between 5 and 9.9% More than 10% I don t know / I prefer not to answer Source: Profitero survey 4

6 Sales Targets are Getting More Aggressive Q: What were your company's ecommerce growth targets for 2017? 50% CPG: 47% All Other: 52% 38% 7% 6% 10% 11% 6% 6% 18% 13% 21% 14% 1-5% 6-10% 11-15% 16-25% More than 25% I don't know Source: Profitero survey 5

7 Establishing a Strategy is the #1 Priority Q: What is the single-most important priority for organizing around ecommerce in 2017? 36% 29% 27% 26% 10% 14% 10% 14% 16% 3% 4% 5% 3% 3% Attracting, developing and retaining digital-savvy talent Attribution for online influence on offline sales Building/accessing a Establishing a clear single view of the and well-understood consumer from across ecommerce strategy all the different touch points Finding more effective ways to partner with retailers to drive sales Measuring and reporting on how ecommerce is performing as a distribution channel None of the above Source: Profitero survey

8 While YoY Sales Growth is the #1 KPI Q: Please select the single most critical ecommerce KPI for your organization 27% 15% 21% 23% 18% 19% 21% 10% 5% 6% 8% 7% 4% 4% 4% 3% 3% 3% Sales (YoY growth) Market share Sales (absolute) Increasing brand awareness Source: Profitero survey Profitability Linking online activity/behavior to offline purchases New customer acquisition Search position Brand compliance 7

9 Measurement & Reporting Are Key Challenges Q: What are the top challenges that you have around organizing for ecommerce in 2017? 22% 23% 24% 15% 17% 16% 14% 11% 11% 10% 9% 14% 6% 5% 1% 1% Measuring and reporting on how ecommerce is performing as a distribution channel Finding more effective ways to partner with retailers to drive sales Establishing a clear and wellunderstood ecommerce strategy Source: Profitero survey Larger than $500M Attribution for online influence on offline sales Getting budget approval Attracting, developing and retaining digitalsavvy talent Building/accessing None of the above a single view of the consumer from across all the different touch points Smaller than $500M/Not Publicly Available 8

10 Industry Leaders Investing in Measurement & Analytics Q: Do you currently work with a provider of ecommerce analytics to measure your ecommerce performance? Yes 30% 64% 54% of the companies working with an ecommerce analytics provider consider themselves as Advanced when organizing around ecommerce Not now, however we are likely to add one in the next 12 months No 18% 13% 22% 46% 62% of the companies NOT working with an ecommerce analytics provider consider themselves Novice/Amateur when organizing around ecommerce I don't know 5% 2% Larger than $500M Source: Profitero survey Smaller than $500M/Not Publicly Available 9

11 Larger Companies Self-Identify as Increasingly Sophisticated Q: Please describe the maturity level of your company in terms of organizing around ecommerce 44% 30% 26% 24% 28% 16% 7% 10% 3% 3% 0% 8% Novice we are just beginning to organize around ecommerce Amateur we are engaging retailers in joint business planning that includes ecommerce Advanced all of the above plus dedicated ecommerce resources Expert all of the above plus clear objectives for ecommerce as a distribution & marketing/influence channel Leader all of the above Don t know / prefer not to plus we believe we set the answer digital standard among our peers/competitors Source: Profitero survey Larger than $500M Smaller than $500M/Not Publicly Available 10

12 Marketing Budgets Are the Largest Source of Funds Q: Which budget(s) is the company using to support online retail? 3% 6% 9% 13% 13% 21% 22% 26% 24% 28% 24% 21% 32% 29% 24% Bottom 2 Box (Novice/Amateur) Advance Top 2 Box (Expert/Leader) Marketing Sales ecommerce Shopper marketing Category management Other (please specify) Source: Profitero survey 11

13 Evolving Organizational Structures Sales Key Customer Team Team Lead Analyst VP/GM ecommerce Marketing Center of Excellence Digital Acceleration Supply Chain Marketing Content Analyst Sales/Distribution Key Customer Team Brick & Mortar.com 1 designated direct reporting In-direct reporting Brick and Mortar.com 1 Brick and Mortar.com 2 Brick and Mortar.com 3 Commonly outsourced to agencies and brokers Digital Merchandiser Supply Chain Finance Marketing Search Content Analyst

14 Attributes of Successful Digital Commerce Leaders Comfortable with ambiguity Prior experience in pioneering roles Internally credible and able to translate cross-functionally and represent the brand externally Strong commercial acumen with an eagerness to learn and a passion for problem-solving Ability to lead and set direction versus singular focus on execution 13

15 Amazon Gets the Most Dedicated Support Percent who said they have a dedicated dotcom lead(s) for: % 26% 18% 58% 28% 17% +11 PP +2 PP -1 PP Source: Profitero survey 14

16 US Companies That Have Hired From Amazon 83% of US companies have not hired an employee who has worked at Amazon 17% of US companies have hired an employee who has worked at Amazon % of Companies That Hired from Amazon 83% 17% Did Not Hire from Amazon Hired from Amazon Source: LinkedIn and public job postings Employees Hired from Amazon by Role 16% 8% 8% 2% 4% 35% 4% 4% 18% 16% 8% 8% 35% of employees hired 2% 4% from Amazon work in 35% channel management roles; 18% in account management 16% in supply chain 18% 4% 4% Supply Chain & Operations Strategy Marketing & Media Digital Acceleration & Innovation Data Analytics Channel Management Category Management Capability Management Account Management 15

17 Account Management HQ vs. Field, WMT vs. Amazon HQ vs. Field Amazon vs. Walmart 70% of Account Managers work at HQ 70% 35% 35% of Account Managers in the field are associated with Walmart 30% of Account Managers work in the field 30% 65% 65% of Account Managers in the field are associated with Amazon HQ Field Walmart Amazon Source: LinkedIn and public job postings 16

18 Global, Total Dedicated ecommerce Headcount by Beauty & SegmentAlcohol Cosmetics CPG/FMCG Electronics Food & Beverage Home Goods Office Supplies Pet Supplies Pharmacy, Health & Wellness Number of Companies Revenue / Headcount $104M $103M $3,853M $411M $32M $161M $149M $327M $112M $10M Total Headcount Channel Management Account Management Marketing & Media Content & Digital Merchandising Digital Acceleration & Innovation Capability Management Strategy Data Analytics Brand Management Supply Chain & Operations Category Management Finance Insights Shopper Marketing Trade Promotion HR Legal Retail Search Optimization 2 Toys & Games EVP VP Director Manager Senior Staff Source: LinkedIn and public job postings 17

19 Content & Digital Merchandising 18

20 Data Analytics 19

21 Supply Chain, Logistics, and Customer Service 20

22 Summary Structure follows strategy You can t manage what you don t measure Culture counts Dedicated > designated With increasing stakes and commitment comes specialization 21

23 November 8, 2017 Questions? Keith Anderson SVP, Strategy & Insights

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25 Appendix

26 LinkedIn Study Scope & Methodology Objective Determine the structure and distribution of companies ecommerce staff Process 1. Identified key global and tier 1 and tier 2 brands in diverse categories 2. Collected information on ecommerce employees at identified companies via Linkedin 3. Aligned company data with full 2016 revenue where available 4. Analyzed the full dataset Result A clearer idea of how companies prioritize and structure their ecommerce team 25

27 Survey Scope & Methodology Online survey conducted from July 2017 through September 2017 Responses from 134 brands across +10 industries globally Includes ecommerce, sales/business development, marketing, account management and other roles Responses from current Profitero customers and non-customers 26

28 Role Dedicated ecommerce Roles Overview Channel Management Description Responsible for overall ecommerce channel sales, performance, and P&L Plan and implement digital and ecommerce strategies for new and existing online channels to drive sales Overall responsibility for establishing strategy, organization, and capabilities Yrs Experienc e Yrs ecom Experienc e Tech Amazon Consultin g % 3% 4% Account Management Responsible for business (sales, business growth strategies, KPIs, capabilities) with one or more customers % 3% 1% Brand Management Develop brand strategy and execute digital plans in support of key brands Responsible for driving marketing and business growth through the ecommerce channel for assigned brands % 0% 4% Capability Management Category Management Content & Digital Merchandising Select and implement digital capabilities that drive business results Develop, deliver, and provide IT support for Digital and ecommerce applications, platforms, and portal Work with retailer partners to improve category trees to improve shopper journey and category profiles Identify market and category share trends for sales projects Develop, syndicate, audit, and analyze digital product information and content for brand and retailer websites Responsible for developing expertise in content sourcing and driving digital usability and conversion % 1% 6% % 4% 1% % 1% 1% Source: LinkedIn and public job postings 27

29 Dedicated ecommerce Roles Overview Cont. Role Description Yrs Yrs ecom Experience Experience Tech Amazon Consulting Data Analytics Digital Acceleration & Innovation Finance HR Insights Legal Track market and organizational sales data to measure digital performance Translate data analysis and research into actionable strategies that drive sales, conversion, and growth Develop and implement innovative digital solutions, delivering sales growth and new customer acquisition across the ecommerce channel Lead the digital transformation internally across organizational systems and externally with retailer partners Implement and share digital best practices throughout the organization Lead ecommerce financial assessment to make investment decisions and drive future growth Develop financial projections for organizational digital strategies, platforms, and brands Manage the financial go-to market development for new ecommerce channels Set and drive recruitment strategies to build new teams across all ecommerce divisions Develop and implement organizational ecommerce infrastructure Manage internal requests and requisitions across the ecommerce team Apply analytics tools and techniques to increase shopper understanding and optimize operations Develop and implement research plans to improve ecommerce performance Establish organizational research approach and methodology Ensure internal and external legal compliance across all platforms and processes Develop organizational processes that support digital compliance Support all company employees responsible for key areas of compliance 9 3 4% 2% 7% % 1% 5% % 0% 8% % 0% 6% % 0% 2% % 0% 0% Source: LinkedIn and public job postings 28

30 Dedicated ecommerce Roles Overview Cont. Role Marketing & Media Description Plan and execute digital marketing campaigns and strategies in support of the ecommerce channel Align ecommerce marketing plans with overall brand marketing goals Determine media investment for key brands Yrs Experience Yrs ecom Experience Tech Amazon Consulting % 2% 5% Retail Search Optimization Develop expertise on retailer search algorithms Optimize products' performance on retailer websites % 0% 0% Shopper Marketing Strategy Design and execute shopper marketing events and promotions for retailer customers Drive customer engagement via shopper marketing plans that contribute to organizational, category, and channel growth strategies Develop measurement and KPIs for key digital initiatives Define short-term and long-term strategic goals for the ecommerce channel Create new organizational ecommerce teams and divisions % 0% 2% % 3% 10% Supply Chain & Operations Responsible for ecommerce channel stock management, supply chain logistics Prioritize, identify, and resolve daily customer and retailer partner issues % 5% 3% Source: LinkedIn and public job postings 29