Top Three Takeaways from Digital Food & Beverage 2020

Last week, our team was at Digital Food and Beverage, Europe.  Held in London for the first time, the conference attracted speakers and delegates representing Europe’s leading brands including Carrefour, Ocado, Pernod Ricard, Mars and Pepsico. 

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Last week, our team was at Digital Food and Beverage, Europe.  Held in London for the first time, the conference attracted speakers and delegates representing Europe’s leading brands including Carrefour, Ocado, Pernod Ricard, Mars and Pepsico. 

digital food and beverage pic

I also took part in a fantastic panel alongside Mars, Nomad Foods and Distill Ventures on how to win with Amazon. There was a wealth of insight shared at the event, but my Top Three takeaways are as follows: 

Set a clear strategy and focus on the basics 

In order to win in ecommerce, two key themes emerged from the sessions.  Firstly, the need to set a clear strategy and ensure internal alignment behind ecommerce.  Secondly, you have to get the basics right in terms of optimising search terms, content, images and availability

We know from our research and interaction with clients that it is incredibly difficult to set the organisation up successfully to win in ecommerce.  It has to start from the top though, with buy-in and support from the Board and clear and over-communication of the strategy.  Whatever structure or ownership is right for your business, teams must also have clear KPIs and digital transformation should be a total business responsibility rather than just for the ecommerce team. This requires champions and stakeholders embedded throughout the company.   

Many speakers also highlighted the importance of an agile and risk-taking mentality, with teams needing to test, learn and innovate at speed, particularly leveraging the wealth of data now available.  In a fast growth channel like ecommerce, there are of course multiple opportunities to innovate and experiment but keeping focussed on the basics is critical, whether that is optimising your product pages for search and content or ensuring your products are available. 

The next battleground is speed of delivery 

George Dean, Head of Zoom for Ocado gave a fascinating insight into how Ocado is looking to capitalise on the growing need for delivery within the hour.  Our research shows that globally there are now more fulfilment partnerships than ever, with established retailers teaming up with the likes of Deliveroo, Just Eat, Instacart and Cornershop to solve the last-mile challenge of delivering at speed while minimising last-mile costs. 

Ocado Zoom currently operates in selected postcodes in West London, with delivery in less than 60 minutes across a range of over 10,000 items.  To drive engagement, it is removing potential barriers with £15 minimum spend and delivery for under £3.  It now delivers more than 3,000 orders per week with plans to open eight new fulfilment centres in the next five years. 

George highlighted how not only is the service proving popular with younger shoppers (who don’t always want a large online shop), it is also over-indexing in categories such as crisps, snacks and confectionery.  This therefore represents a significant opportunity for suppliers in impulse categories where it can be harder to drive last minute purchases online. He also urged suppliers to think about rapid delivery as a new channel and to ensure ranges are appropriate for the consumer (e.g. single and smaller pack sizes) and to optimise packaging so it is ‘transport friendly’. 
 

Build a dedicated strategy for Amazon 

The panel focussed on a number of key themes, not least how to prepare and win with Amazon as it gears up for growth in the grocery category.  In a live audience poll, roughly 75% of delegates said they either currently have or plan to build an Amazon strategy, while the remainder said they weren’t planning to.   

I certainly argued that even if suppliers don’t want to trade with Amazon, its growth, extensive (and growing) ecosystem and importance as a search engine means that it has a disproportionate impact above its current (or even future) sales in the category.   

Furthermore, within grocery, Amazon has a number of different (and often confusing) propositions, from Fresh, Prime Now and Pantry. Consolidation and streamlining of these multiple offers look certain in the near future, and I’m also convinced that Amazon needs a store-based retail proposition (ideally via an acquisition of an existing retailer) to gain credible scale in the category.  

However, in the UK, the Competition and Markets Authority (CMA) has decided to investigate Amazon’s potential investment in Deliveroo, and last year prevented the proposed merger of Asda and Sainsbury’s.  As such, perhaps Amazon’s plans for grocery will have to progress a little slower than it would like but winning in grocery is certainly part of its long-term game plan.  

There was also discussion on how to manage and control your brand equity on Amazon and whether the 3P marketplace is an opportunity or a threat for your business.  Of course, this very much depends on your category and your business strategy, but Amazon will add more sales than any other retailer in Europe over the next five years.  Suppliers looking to grow their presence on Amazon will require a dedicated strategy and a very different set of skills in their toolkit. 

 

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Nick Everitt
Article by:
Nick Everitt
Director of Advisory - EMEA
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