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Friday 03 December 2021

IRI – Friction, fragmentation and #fetapasta

23rd November 2021 By Bridget O'Connell | | @foodtickernz

Having an omnichannel strategy for your food product is more important than ever to drive FMCG growth in a border impacted environment, according to IRI.

Debbie Simpson-Pudney

Speaking at the research firm’s annual State of the Industry event last week, IRI’s head of retail, innovations and solutions, Debbie Simpson-Pudney, underlined the value of new digital strategies and practices to stay competitive, given the digital transformation that has occurred during the pandemic.

Total New Zealand online retail sales have grown by 40% over the past two years to hit $8.3bn, and it is those companies that have adapted quickly and found solutions to growing consumer demand in online channels who have benefitted the most, according to Simpson-Pudney.

Countdown, for example, has seen its online penetration double since 2019 to now sit at 13%, which is more than the online share of total retail at 11.4%.

“Having an onmichannel strategy is more crucial than ever,” Simpson-Pudney said.

“Your consumers want a seamless and consistent shopping experience regardless of where they see your products.”

Source: IRI

Despite the fact most purchases were still done in a bricks and mortar environment, some 63% of shopping experiences began online, meaning that customers were researching through their devices before they even entered a store.

For consumers researching online, some 80% of clicks remain on the first results page, with 65% of conversion coming from the top three results.

“If you aren’t investing in your online presence, it is likely that your competitors are outpacing you,” Simpson-Pudney said.

Digital media was part of this, including TikTok which now had more than a billion users globally, with #tiktokfood amassing more than 25 billion views globally.

“The appeal of recipe and meal inspiration to Gen Z on TikTok cannot be underestimated,” Simpson-Pudney said, giving the example of #fetapasta – a simple and easy pasta recipe – which has had more 661 million views and resulted in reports of out of stock of feta cheese from Finland through to Australia.

The phenomenon also reached New Zealand, with a circa 16% increase in feta cheese sales when the video went viral.

Online sales are eating into supermarket share. source: IRI

The trend for online shopping has also resulted in a fragmentation of the New Zealand food wallet with more being spent online – at the expense of supermarkets, according to IRI.

In the year to September 2021 online shopping accounted for 6% of all food purchases, up from 4.2% in the year to September 2019. While food boxes and meal kits climbed from 0.9% to 1.5% over the same period.

“We are seeing that the growth of food purchases online is having an impact on supermarket – their share of the wallet has decreased by three share points [76% to 73%] in the last year,” Simpson-Pudney said.

Digital transformation was also changing the in-store experience, according to IRI, which noted the rise in retailers overseas utilising digital technology to create frictionless shopping experiences.

This included supermarket chain Tesco in the UK trialling a check-out free store in London, and Asda trialling boxes where it could drop groceries off for customers to pick up when they come home, after having issues with deliveries arriving when people were out.



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