Confectionery Online. What You ll Gain from this Report ONLINE SHOPPER INTELLIGENCE - UK

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1 ONLINE SHOPPER INTELLIGENCE - UK Confectionery Online What You ll Gain from this Report This report focuses on the online confectionery shopping market in the UK, looking at data from February to July By examining key metrics derived from Kantar Media Compete s behavioural data we ll offer insight into which levers marketers and category teams can pull to increase online sales.

2 How Do People Buy Confectionery Online? UK consumers are spending more time at home and shopping online these days, which is good news for confectionery companies that are benefiting from increased demand in the bite-sized and share bag sub-category. We take a closer look into the behaviours of online confectionery purchasers as they navigate grocery websites in search of a sweet reward. Online Confectionery Purchase is Part of the Overall Grocery Mission Among the 7m online grocery shoppers that visit a supermarket website each month, our clickstream research shows that 12% visit a confectionery-related page. Given that total penetration of confectionery is 91%* and that just half of online visitors make a confectionery purchase online, there is clearly room for growth in this market. Consumers turn to online grocery websites for convenience they can shop at any time of day and home delivery saves them from carrying staples or heavy items back from the store. Moreover, increasing familiarity with online grocery (along with cost-reducing delivery incentives) leads to higher frequency and thus to an expansion of shoppers category repertoire. Coming as it does with growing online shopping penetration and emerging use of mobile apps, products previously thought of as impulse are set to make a greater appearance in online shopping baskets. Overall Characterisation of the Online Confectionery Purchase Session Over 86% of sessions begin with the supermarket homepage Referral to 1 st confectionery page visit Confectionery page visit Destination after 1 st confectionery page visit Referral to shopping basket SUPERMARKET direct Search GO BASKET My favourites OTHER PRODUCTS HOMEPAGE HOMEPAGE OTHER PRODUCTS FOOD / DRINK OTHER PRODUCTS FOOD / DRINK HOMEPAGE FOOD / DRINK Source: Kantar Media Compete clickstream panel (Monthly average: February-July 2013). *GB TGI Q (April 2012 March 2013), All adults: chocolate assortments, other boxed chocolate or other sweets (including sweets for children). 2

3 Confectionery Shopping Patterns Vary by Supermarket Site Analysis of our clickstream data shows that of the top 3 supermarket websites, Tesco.com attracts the highest number of confectionery shoppers with 59% of them visiting the site s confectionery section. Share of Confectionery Visitors among Top 3 Online Grocery Retailers i = Index to share of total grocery visitors i99 i74 i76 Retailer Share of Confectionery Visitors ( % UV s) 59% 42% 19% Tesco.com Asda.com Sainsburys.co.uk Source: Kantar Media Compete clickstream panel (Monthly average: February July 2013). Looking at market share does not of course tell the whole story. And just because Tesco.com is the overall leader, it would be unwise to try and use Tesco.com as a model for the whole market each layer of data reveals important variance which can drive competitive advantage. For example, while this percentage (59%) is in line (i99) with Tesco.com s share of all grocery visitors, its share of confectionery purchasers is 13% greater (i113) than its share of total online grocery purchasers. It is therefore clear that Tesco.com is more effective at converting visitors to buyers within the category. Share of Confectionery Purchasers among Top 3 Online Grocery Retailers i = Index to share of total grocery purchasers i113 i84 i73 Retailer Share of Confectionery Purchasers ( % Converters) 64% 26% 12% Tesco.com Asda.com Sainsburys.co.uk Note: Share percentages sum greater than 100% due to shoppers who visit multiple grocery websites in the same period. Source: Kantar Media Compete clickstream panel (Monthly average: February July 2013). 3

4 Sainsburys.co.uk, conversely suffers from a double blow. As well as overall attracting a relatively low number of visitors to confectionery, a benchmarking of conversion rates shows that this is compounded by its relatively poor performance in encouraging these visitors actually to make a purchase. Online Confectionery Conversion Rate INDEX among Top 3 Retailers i = Average Conversion Rate (Index = 100) i107 i87 i79 Tesco.com Asda.com Sainsburys.co.uk This has two implications. Firstly that the value of any investment to drive traffic could result in a 28% variance in effectiveness depending on where it is allocated and which retailer it directs customers to if based on current metrics. Secondly, of course, it offers brand and communications teams as well as category managers the opportunity to drive change provided they know precisely what levers to pull to affect sales. As we know, in addition to the profile quality of shopper attracted to the site in the first place, overall category prioritisation, inventory and navigation contribute to each retailer s performance within a category. Once shoppers arrive on a grocery website, site design and configuration of shopping tools also influence how consumers manoeuvre their way toward the check-out process. Retailers can offer some insight based on their own data, but they miss the wider picture and have no read of best practice the traditional role of the manufacturer being to gain this insight through greater market knowledge. We observed some notable differences in how confectionery shoppers use these site features across supermarket websites: Usage of Online Grocery Shopping Tools among Online Confectionery Shoppers 97% 42% 38% 90% 17% 25% 71% 42% 4% Percentage Use (% UV s) Tesco.com Asda.com Sainsburys.co.uk Special Offers Page Favourites Internal Search Note: Share percentages sum greater than 100% due to shoppers who visit multiple grocery websites in the same period. Source: Kantar Media Compete clickstream panel (Monthly average: February July 2013). 4

5 Special offers are a key driver, much more so than Favourites. But although internal search is at a reasonable level at Tesco.com, it would be wrong to conclude that search is important to Sainsburys.co.uk or, in the same way, Favourites to Asda.com. Tesco.com s confectionery visitors are the most engaged in using different site features to aid in the shopping process. While retailer engagement is certainly likely to drive higher conversion, it would be too simplistic to assume that visitors should be encouraged to engage more with multiple site features to encourage sales. Sainsburys.co.uk visitors are less likely than those on other sites to visit special offers or use internal search for confectionery. Instead, they opt to click on the Snacks & Treats button on the navigational menu which is clearly differentiated from the broader Food categories that confectionery falls under on the other sites. Sainsburys.co.uk Grocery Category Menu 71% of confectionery visitors click on Snacks & Treats Visitors to Sainsburys.co.uk do not seem to need to use internal search for confectionery because they are able to find what they want more quickly and easily through other means (alternatively consumers find the search function less effective so rely more on navigating through clicks). Either way the implication is that there is not necessarily one right blueprint for how a retailer site should be configured as long as different site elements work seamlessly together to meet shoppers needs. Internal search is popular when shopping for confectionery. What types of terms are shoppers using? On Asda.com and to a lesser extent, Tesco.com, shoppers are more likely to type in generic search terms when looking for sweets. Sainsburys.co.uk visitors seem to have less of a problem accessing the confectionery pages they want through other means their search activity is more heavily weighted to brand names. Across all sites, it is clear that chocolate is by far the most searched for confectionery. Tesco.com BRANDED 58% UNBRANDED 62% CHOCOLATE 92% SWEETS 10% MINTS 3% GUM 2% BRANDED 53% Asda.com UNBRANDED 62% CHOCOLATE 94% SWEETS 8% MINTS 2% GUM 2% Sainsburys.co.uk BRANDED 67% UNBRANDED 39% CHOCOLATE 93% SWEETS 6% MINTS 0% GUM 2% 5

6 Mapping the Path to Purchase to Increase Online Sales A Deep-Dive on Asda.com If online confectionery purchases are made as part of the overall supermarket website visit and shopping patterns differ by retailer, then a drill down of how confectionery fits into the overall grocery purchase visit on specific retailer sites is important to identify opportunities to boost online sales among site visitors. As we ve seen above, consumers shopping behaviour varies across the top 3 supermarket websites, meaning that marketers must treat each site and the promotion of their products differently to achieve maximum impact. Here we take a closer look at the behaviour of confectionery purchasers on Asda.com and what brands can do to improve their visibility and sales on the site. The data reveals that 80% of sessions on Asda.com that include a confectionery purchase are fairly straightforward, including visits to food pages, confectionery and 1 or 2 other product categories. The majority of these sessions begin with a visit to the homepage, before shoppers proceed to various food pages or engage in search to find a specific brand or product they are seeking. Shoppers may spend time visiting different pages and site sections but they eventually arrive on the confectionery sub-category via internal search or by navigating through another food-related page. The visit to the confectionery product pages typically occurs mid-way through the shopping session, but can also occur prior to entering the final check-out process. Example of the Asda.com Confectionery Shopping Session SUPERMARKET direct Search GO BASKET My favourites AVERAGE BASKET 80% OF CONFECTIONERY SHOPPERS AVG. # OF STEPS PER SESSION: 15 SUPERMARKET SESSIONS PER MONTH: 3 31% ASDA GROCERY 31% HOME PAGE FOOD OTHER PRODUCT PAGES Characteristics of the Average BASKET Purchase Session: Shopping session mainly includes visits to confectionery, food and 1 or 2 other categories Primarily reliant on internal search; internal search used to navigate to confectionery pages and directly after 41% OTHER PRODUCT PAGES CONFECTIONERY 45% 20% 21% CONFECTIONERY 30% FOOD 20% SHOPPING BASKET 6

7 RECOMMENDATIONS The Asda.com grocery #1. homepage is prime real estate to feature your brand / product. Among different website #2. tools, internal search results are most important in driving confectionery purchases. Cross-promotions on #3. other food pages. Homepages are generally prime real estate on any site, and this is no less true on Asda.com. As 90% of site visitors enter through the homepage, visibility is key to driving brand choice and encouraging grocery shoppers who hadn t included confectionery on their shopping list to make an impulse purchase. Two-fifths of visits to confectionery product pages are driven by search on Asda.com s website. Ensuring that the retailer site is optimised to prioritise your brand above the fold on search results pages increases the likelihood that shoppers will not only see your products, but are primed to select them for purchase. Confectionery is classified as a Food sub-category on the navigation menu on Asda.com, meaning it makes sense to cross-promote confectionery products on other food pages: Online grocery shoppers primarily shop online for food products, making food pages the area to achieve greatest reach on the supermarket website to drive more traffic to the confectionery section. Favourites and special offers are more popular among a subset of online confectionery purchasers who shop online less often, but shop for a greater variety and number of products during each session. Due to the size and breadth of the shopping basket, they rely more heavily on Favourites to help facilitate the shopping process and are likely to be more interested in special offers to reduce the cost of the overall basket. How should favourites and special offers be used to increase online confectionery sales? SUPERMARKET direct Search GO BASKET My favourites 14% 38% ASDA GROCERY HOME PAGE 26% 46% 20% FOOD LARGE BASKET 20% OF CONFECTIONERY SHOPPERS AVG. # OF STEPS PER SESSION: 45 SUPERMARKET SESSIONS PER MONTH: 2.6 OTHER PRODUCT PAGES 28% CONFECTIONERY 46% CHARACTERISTICS OF THE LARGE BASKET PURCHASE SESSION: TOILETRIES, HEALTH & BEAUTY DRINKS LAUNDRY, HOUSEHOLD, PET FOOD ASDA GROCERY HOMEPAGE All shopping sessions include visits to confectionery and food, and more likely to also include drinks, health & beauty and household goods SHOPPING BASKET OTHER PRODUCT PAGES Twice as likely than Average to visit special offers and favourites pages 7

8 We help the world s top brands, agencies and publishers improve their performance based on in-depth insights into consumers online behaviour. Clients in the retail, FMCG, Telecoms, Travel and Media markets rely on our insights and expertise to create engaging online experiences and highly effective advertising campaigns. Our solutions cover the entire digital marketing spectrum, including audience segmentation, competitive intelligence, market sizing, and marketing and online channel effectiveness. With our behavioural panel of over 300,000 UK online consumers and industry expertise, we deliver custom solutions that match your exact needs. Only with our granular data is it possible to uncover new metrics and insights that chart the entire path to purchase, monitor how key metrics change over time and attribute ROI to marketing campaigns. LEARN MORE For more information about our role in advancing your online marketing effectiveness, please contact: Jeremy Radcliffe UK Managing

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