Local consumer goods companies have seized on e-commerce faster than many other local industries and their offshore peers, a visiting internet researcher says.
AC Nielsen.online managing director John Laroche says the e-commerce enthusiasm of fast-moving consumer goods (FMCG) can be partly attributed to our agricultural business base and established food chains from processor to finished products.
“But there is also a lot of innovation in branded goods companies. In a relative sense, New Zealand is leading even over the US and Australia,” he says. “It is a real statement about New Zealand.”
FMCG covers packaged grocery, supermarket, healthcare and convenience products that “turn over” quickly; that is, move from the distributor to the – in this case virtual - shelf to the consumer quickly and are soon replaced.
Laroche says his service, which launched in Hong Kong, Singapore, Australia and New Zealand in September, “data mines” quantitative data from AC Nielsen’s Netrating service and uses it alongside qualitative data from web clinics, focus groups, email surveys and offline surveys. This provides detailed, attitudinal information – or the who and why behind trends.
He says he cannot name clients but says in New Zealand FMCGs, financial and government clients have used his service to research patterns before their e-strategy launch.
He says the global food industry is also an example of another of his service's key findings about the internet -– the future convergence of traditional retailers and dotcoms.
While traditional clients are looking at building an e-strategy, the most recent trend has been for dotcoms to look backwards, "breaking the dotcom mold", for a fundamental business model because of pressure to deliver real results. This movement will mean the two sides are to meet in the middle, both with a mixed business model, he says. Laroche says it will be “very difficult for a pure play to survive in the long term”.
Laroche says one of his services' main findings is businesses must use different languages and local content in each country. “Even though the internet gives broader access to broader groups of people, localness won’t go away,” he says.
|PharmacyDirect grows both website and store
One such company that fits the early-mover FMCG mold is Auckland-based PharmacyDirect.
Joint managing director Greg Macpherson says just over two years ago his pharmacy, which filled prescriptions for rest homes and hospitals rather than the public, started a website service.
It soon merged with another pharmacy, and four months ago moved into retail health care, personal care and other consumer goods. Non-prescription goods now make up around half of PharmacyDirect's sales and in total, 60% of its total business is done over the web.
Macpherson says FMCG and medicines are easy to sell over the web because they are high-cost, securely packaged, light, and easy to post.
He says the company would never have won a recent supply deal for a company with 14,000 staff if it wasn’t for his move into e-commerce.
But Macpherson's business also follows another of AC Nielsen's key trends - that it has looked back from its web presence to retail, centralising its distribution.
Macpherson expects the balance of the business to swing back to the physical store after he closed the two chemists, based at either end of Auckland, and opened a mega-retail store in Penrose,
Auckland, a few months ago. Staff now number 32 and he says the pharmacy does 10 times the average number of scripts a month an average pharmacy does.
He says having both a web presence and a physical presence is vital.