The Covid-19 crisis is accelerating the transformation of shopping and FMCG brands need to adapt their strategy immediately and for the long run.
During a webinar organised by budgetbox, Unilever and the Barilla Group shared their actions and best practices in adapting to this unprecedented transformation.
With the participation of:
- Carmela Bazzarelli, Director of Category & Trade Marketing of the Barilla Group
- Laurent Kircher, senior E-commerce at Unilever
To get inspired, discover our webinar summary below.
BARILLA GROUP’S STRATEGY IN RESPONSE TO THE COVID-19 CRISIS
Carmela Bazzarelli, Director of Category & Trade Marketing of the Barilla Group
The context for Barilla since the beginning of the health crisis:
The demand for pasta was multiplied by 10 & the demand for bread by 2
→ Productivity needs to be increased for Barilla pasta and Harry’s bread
Measures taken since the beginning of the Covid-19 crisis
Organisation of the teams:
- Employees’ safety: remote working & protective measures in factories
- Establishment of a daily crisis committee to monitor trends and demand evolutions
- Exchanges with Italy
- Agility
Actions:
- Reduction of the assortment by 50%: focus on higher turnover products with a representation of the different segments (gluten-free, etc.), discontinuation of promotional packs and postponement of innovations
→ Simplifies the work of the entire supply chain from distributors’ order to shelf placement
“We changed the assortment and we were able to close codes and open others, of products that were available in stock, in 48 hours, whereas usually these things are done in 2 months. Hats off to the retailers!”
- Optimisation of logistics flows with trucks filled to capacity
- Establishment of quotas per retailer for a balanced distribution
- Reallocation of quantities to e-commerce where demand is growing (traditional distributors and Amazon)
- Postponement of certain in-store marketing and promotional activities
Results:
- +30% increase in productivity
- +50% of pasta produced
The first lessons learned from the crisis?
- Pasta and bread are “essential” categories to feed consumers.
- We are capable of great solidarity between the players in the chain to succeed in bringing these products to consumers: logistics, factories, suppliers of raw materials, retailers.
- We were able to demonstrate agility.
“During this crisis, speed was more important than perfection. We were able to demonstrate speed and agility. It’s a big lesson for the future, we must not forget it.”
What’s next…?
The Barilla Group’s three questions about the future:
- What changes for the assortments at the category level? The objective is to improve the readability and visibility of products on the shelves.
- What will be the role of digital? Future plans will have to be adapted at the same pace as the acceleration of digital.
- What simplifications can be implemented? Capitalise on the agility and productivity gains that the group has been able to demonstrate during this period.
“The situation isn’t over, then we talk about a “new normal” but we don’t completely know what that “new normal” is going to be and for how long.”
Actions to prepare for the aftermath:
- Readjust the plan each month by keeping an eye on developments.
“For me there’s no other solution today than to stay alert, listen, look at the different variables and adapt to the changing situation.”
- Boosting e-commerce: taking care of e-merchandising & product visibility
“Visibility is key when it comes to shelves, but even more when it comes to e-commerce purchases.”
- Supporting consumers during the economic crisis: promotion should be a driving force for the future
- Meeting expectations on transparency and health: well-being, organic, sugar-free, etc.
UNILEVER’S STRATEGY IN RESPONSE TO THE COVID-19 CRISIS
Laurent Kircher, senior E-commerce at Unilever
The context for Unilever since the beginning of the health crisis:
- +99% increase in drive sales
- +98% increase in home delivery sales
- +90% increase in sales on Amazon from April 6th to 12th
- Drive traffic x2.5
- Increased spending on the drive journey: +40% increase in average shopping cart
“Within a few weeks we found ourselves projected into 2022 in terms of growth forecasts, and in terms of the drive’s percentage of FMCGs.”
Measures taken since the beginning of the Covid-19 crisis
Organisation of the teams:
- Reorganisation around e-commerce and removal of silos between teams
“The drive today within the organisation is clearly one of the top priorities.”
- Experience sharing with other countries where the multi-national is present (China, Italy…) to identify the categories and products that have the most potential.
- Agility and reactivity of the teams:
- Setting up an e-commerce “champion” for each category: identifying the products and promotions to be pushed, defining the action plan.
- Keeping a common thread with the supply chain
Actions:
- Ensure product availability everywhere:
- Daily audit of the DN
- Daily trend tracking & data sharing with Amazon: search, visibility, promotion, assortment…
- Reduce assortments (by 50% on certain categories) and postpone innovation launches
- Work closely with distributors to understand the categories that are being highlighted.
→ Increase in demand for Unilever on: hygiene products (hand soap…), home care (Sun, Domestos), dishwasher products (Sun) but also a boom in sales on ice cream (Magnum, Ben&Jerry’s) vs decrease in the demand for hygiene-beauty products (deodorants, shower gels…) - Boosting e-merchandising and adapting product communication:
- Educational content (staying clean, washing hands well…)
- Purchase of the most searched keywords (hygiene, bleach, anti-bacterial…)
- Amplify the media plan on e-commerce to stay on top of mind
- Maintain and amplify e-commerce promotions to support consumers
- Ensure the visibility of products, especially on the search engine
“Do we need to do media? Do we need to do activations? The answer is yes.”
A long-term goal:
- Focus on long-term return on investment and not on short-term ROAS and conversion. But in fact, the short-term ROAS has been “spectacular”!
- “Attract” the large number of new consumers who experience the drive for the very first time (45% of drive users over the first 2 weeks of lockdown)
- Build long-term consumer retention by entering into their shopping lists/habitual purchases
“The challenge for us is to be visible, to be “top of mind” in order to gain the fidelity of these new consumers, since we know that when you have already done your first errands, you generally tend to reuse your shopping list to save time. It’s very difficult to be able to re-reach its customers afterwards.”
Results:
- +51% increase in drive sales
- +90% increase in sales on Amazon
Unfortunately, the overall outcome of the crisis remains negative due to the decline in hypermarkets, which is difficult to offset despite the boom in proximity and e-commerce.
What’s next…?
The challenges ahead:
- A challenge on the assortment, with the restriction of the DN
- The purchasing power of the French consumers has been strongly impacted: private label is likely to be a refuge value
- Meeting new consumer expectations
“We’ve seen an increase in the organic sector during this crisis. Consumers want something good, organic, simple, additive-free, traceable, they want transparency.”
Actions to prepare for the aftermath:
“We don’t know, we listen, we measure, we go step by step, we have experts, we have a lot of energy in place and we’re ready to adapt to the changing environment.”
- Maintain the agility and responsiveness demonstrated by the teams during the crisis
- Pursue investment efforts and remain united among the various players to maintain growth levels in e-commerce channels.
- Continue to accelerate the e-commerce media offer for distributors: visibility, promotions…
- Building consumer loyalty on the drive
“It is expected that among new drive users, 30% will remain on the board. It’s absolutely massive, we’re catapulted two years ahead of schedule.”
How to build loyalty among new consumers on the drive?
- Pay particular attention to e-merchandising and visibility
- Set up retail media actions and amplify the promotion
- Provide transparency via product data and reviews
“It is also one of the new forms of category management, and it is very important to prepare for this new revolution where the consumer gives his opinion. I think that consumers’ feedback is going to have a very strong impact, we really need to be prepared to be able to respond to it and also to be able to share internally and act on the product if necessary.”
