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There are some big issues wrapped in this news. It seems clear that online grocery will stay attractive, especially as social distancing makes shops and supermarkets harder to navigate. But the way it is handled varies. Ocado has no stores and relies on its fulfilment centres so any increase in capacity in the short term is an issue. Tesco and Sainsbury tend to use pickers in their stores and by closing some 24 hour stores early, they convert them into a dark store (for a few hours) with hiring more pickers and having them work through the night. Waitrose also used store pickers but their new centre is coming on stream as their deal with Ocado ends. From September the bulk of non branded food on Ocado shifts from Waitrose to M&S - and many anticipate that will boost the Waitrose delivery business.
The WSJ article gets into the effects throughout the food chain and we see many UK food firms turning to online to replace their old wholesale priorities. Again we think that will endure even when wholesale picks up again.
Action? For any CPG firm it is likely that your sales through online have doubled or tripled. What can you do to maximise the benefits? Smart promotions to get added to favourites can still be effective. And working on the assets so you maximise visibility and clarity of your product is vital. Unilever wrote the book on this withtheir focus on mobile packaging imagery. Lots to learn here.
In the drinks industry the move to online has accelerated - particularly in the US where state by state legislation has made it hard for the incumbents and thus seen many start ups. There are some interesting adjacent business models - I liked this virtual wine tasting - reinventing Tupperware Parties - even if the economics in the thread need some adjustment to get any real scale.
A good piece from Stratechery on Google Shopping - written prior to the Shop launch - looks at the anti Amazon alliance and makes a good case for how Shopify could respond to Amazon. Much of the consternation around Shop hinges on what it could be, rather than what it is now.
I think we should keep watching. Shopify have made few mistakes so far and it’s relatively easy to see how they could fix some of Shops issues. Quite how they see their ultimate role in commerce is the big question.
Action? - stay close to Shop and ensure you are doing everything you can to make your store compatible and suited to it. Shop is only available in the US Canada and Australia, but elsewhere you can get the Arrive app which Shop is based on
When you read that Coke lost 25% of its global volume in recent weeks you understand why they pulled their ad spend. Every business will need to rethink their business and having a direct relationship with your customers will be important for most. This piece looks at CPGs and one area with potential is loyalty - although i think the better term is Dialogue. For example Coke are looking at how they can use Dirty Lemon - a business they have invested in - to sell some products direct using messaging.
Action? How can you think about the future in new practical ways? Ignoring the siren voices preaching IT focused Digital Transformation. Good businesses have banked the benefits of improved efficiencies and seen the banality of Post It note parades in Workshops. What’s next?
Now it’s not a big surprise that people who make money from advertising would like you to keep spending. But there are new potential customers with time on their hands and money to spend. You should be testing whether your product might resonate with this audience.
Action? Experiment with your ads. Test new creative. Test new formats and new platforms with small spends.
Podcast interview with Shopify CEO Tobias Lütke - interesting that the 2008 crisis was key for Shopify as they saw lots of laid off people start new businesses on the platform. Now every 50 seconds a Shopify seller gets their first sale .