Food firms miss out on 'millions' of pounds of online grocery sales

By Laurence Gibbons

- Last updated on GMT

Related tags: Marketing

Check this out: online food and grocery sales are set to reach £11bn in five years
Check this out: online food and grocery sales are set to reach £11bn in five years
Food manufacturers are missing out on sales worth millions of pounds by using the internet only to promote their brands and not for direct sales, according to speakers at the grocery think-tank IGD’s Trading in a Digital World conference.

Manufacturers were advised to ensure their products were advertised effectively online, find a way into shoppers’ ‘favourites’ list and to explore new software that allows consumers to purchase products without leaving the brands’ website.

With online sales of food and grocery products predicted to reach £11bn within five years​, it was more important than ever to exploit online sales opportunities, delegates heard.

Lawrence Hene, director of marketing and grocery retail at online distribution channel Ocado, said manufacturers should link online marketing and sales more effectively. “Brand websites are there to educate, engage and get people to remember your product at the checkout," ​he said. "But, people are missing out the option of sales on their sites. You have them there now you need to get them to transact,”​ he said.

Hellman's and Kelloggs

A number of manufacturers including Hellman's and Kellogg have 'buy now' options on their websites that allow consumers to be directed to their choice of supermarkets’ website and purchase the product, delegates heard.

But manufacturers were encouraged to go one step better than this, by installing software on their sites that enabled a product to be added to a shopper’s online basket with one click, while never having to leave the brands’ site.

Mitch Vidler, director of internet software firm Slingshot, said his firm’s software solutions, also known as Slingshot, allowed consumers to place products in an online shopping basket from any website, social networking site or mobile device. The program can take brands out of the confines of their domain, and turn any webpage or advertisement into an extension of their site, he said.

“Brands spend millions of pounds persuading a customer to buy, then, we leave them​,” said Vidler. “Slingshot allows you to keep that consumer on your page once they have added a product to the basket.”

Hene agreed: “There is no reason to be retailer dependent. Why send shoppers away from your site? There is software, like Slingshot, that can enable shoppers to purchase your brand from your site.”

Kieran Shanahan, Asda’s home shopping director, said: “Suppliers should bring sales and marketing together in the same place.”

Lucy Bellamy, category manager at Danone, one of the companies that already use the software, told delegates that Slingshot had helped the brand over perform. Shoppers spend £4M online a month, compared to £2M in store on Danone products, she said.

Coca-Cola Enterprises

But Mark Elkins, commercial director, Coca-Cola Enterprises said that brands could go further than linking marketing and sales, by using social media to advertise 'buy now' and share options.

“Capri Sun [​the soft drinks manufacturer] had an add-to-basket option that would allow the shopper to post on Facebook that they had bought the product,” ​said Elkins. This is creating enhanced sales out of marketing and then extra marketing from sales.”

Manufacturers were also advised to ensure they appeared in shoppers’ ‘favourites’ section. About 80% of all online purchases come from the ‘favourites’ list, with each shopper having about 300 products in these lists, it was claimed.

Shoppers typically choose 40 of these items to buy each week. So, if manufacturers can get their brands into these lists they have a one-in-seven chance of ending up in the shoppers’ online baskets.

The secret to getting onto these lists depended on understanding the market and ensuring that products were displayed in an eye-catching way and in prime locations on retailers websites.

Elkins said: “We used to focus on packaging, so that a product will fly off the shelves. When shopping online, consumers only look at the left hand side of the screen, so your brands need a presence there. You need to fly off the screen.”

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