how cpg brands are budgeting and organizing...

How CPG Brands Are

Budgeting and Organizing

Around E-Commerce Findings from a Global Study

November 8, 2017

Keith Anderson

SVP, Strategy & Insights

Better Performance Through eCommerce Analytics

What We’ll Cover

1

• The role of strategy & culture in organizational structure

• How brands are budgeting and structuring for ecommerce

• Industry priorities & challenges

• Team size, composition, and talent profiles

• Critical ecommerce roles

• “Dedicated” versus “designated” staff


First, Define Success

Define Success

CriteriaRecognize Upside Opportunity

& Downside Risks of Doing

NothingIncrementality

Growth

Share

Profit

Brand equity

Offline influence

Brand advocacy

Retailer/Supplier

Relationship

Hard

Objectives

Soft

Objectives

• eCommerce is not guaranteed to be

incremental

• But brands on offense will grow

exponentially, increasing their category

share

• Even if shoppers do not buy online, they

may be influenced to buy at brick-and-

mortar


The Primacy of Culture

3

• 99% of companies focus predominately on organizational structure,

but culture really matters

• Executive-level (Board and C-Suite) endorsement and support is key

• Emerging channels need a clear (and appropriate) definition of

success

• Everyone needs to understand their role in the transformation

• Experimentation must be encouraged, but good experiments prove or

disprove hypotheses


In 2017, ~40% Surveyed Said eCommerce will Represent 2-9.9% of Sales

4

22%19%

16%

11%

23%

10%

16%14%

25%

14%

19%

11%

Less than 1% 1 – 1.9% 2 – 4.9% Between 5 and

9.9%

More than 10% I don’t know / I

prefer not to

answer

2016 2017

Q: What percent of your company's 2017 sales is eCommerce expected to represent?

Source: Profitero survey


Sales Targets are Getting More Aggressive

5

7%10%

6%

18%

38%

21%

6%

11%

6%

13%

50%

14%

1-5% 6-10% 11-15% 16-25% More than 25% I don't know

2016 2017

Q: What were your company's eCommerce growth targets for 2017?

CPG: 47%All Other: 52%


Better Performance Through eCommerce Analytics 6

3%

14%10%

29%27%

14%

3%

10%

4% 5%

36%

26%

16%

3%

Attracting,

developing and

retaining digital-savvy

talent

Attribution for online

influence on offline

sales

Building/accessing a

single view of the

consumer from across

all the different touch

points

Establishing a clear

and well-understood

eCommerce strategy

Finding more

effective ways to

partner with retailers

to drive sales

Measuring and

reporting on how

eCommerce is

performing as a

distribution channel

None of the above

2016 2017

Q: What is the single-most important priority for organizing around eCommerce in

2017?

Establishing a Strategy is the #1 Priority…



15%

21%

18%

21%

5%

8%7%

3% 3%

27%

23%

19%

10%

6%

4% 4% 4% 3%

Sales (YoY

growth)

Market share Sales (absolute) Increasing brand

awareness

Profitability Linking online

activity/behavior

to offline

purchases

New customer

acquisition

Search position Brand

compliance

2016 2017

Q: Please select the single most critical eCommerce KPI for your organization

…While YoY Sales Growth is the #1 KPI



22%

17%16%

14%11%

10% 9%

1%

15%

23% 24%

11%

6% 5%

14%

1%

Measuring and

reporting on how

eCommerce is

performing as a

distribution channel

Finding more

effective ways to

partner with

retailers to drive

sales

Establishing a clear

and well-

understood

eCommerce

strategy

Attribution for

online influence on

offline sales

Getting budget

approval

Attracting,

developing and

retaining digital-

savvy talent

Building/accessing

a single view of the

consumer from

across all the

different touch

points

None of the above

Larger than $500M Smaller than $500M/Not Publicly Available

Q: What are the top challenges that you have around organizing for eCommerce in

2017?

Measurement & Reporting Are Key Challenges



2%

46%

22%

30%

5%

13%

18%

64%

I don't know

No

Not now,

however we are likely to add one in the next 12

months

Yes


Q: Do you currently work with a provider of eCommerce analytics to measure your eCommerce

performance?54% of the companies working with an

eCommerce analytics provider consider

themselves as Advanced when organizing

around eCommerce

62% of the companies NOT working

with an eCommerce analytics provider

consider themselves Novice/Amateur

when organizing around eCommerce

Industry Leaders Investing in Measurement & Analytics



16%

26%

44%

7%3% 3%

30%

24%

28%

10%

0%

8%

Novice — we are just

beginning to organize

around eCommerce

Amateur — we are

engaging retailers in joint

business planning that

includes eCommerce

Advanced — all of the

above plus dedicated

eCommerce resources

Expert — all of the above

plus clear objectives for

eCommerce as a

distribution &

marketing/influence

channel

Leader —all of the above

plus we believe we set the

digital standard among

our peers/competitors

Don’t know / prefer not to

answer


Q: Please describe the maturity level of your company in terms of organizing around

eCommerce

Larger Companies Self-Identify as Increasingly

Sophisticated



32% 29% 24%

28%24%

21%

22%26%

24%

13% 13%21%

3% 6% 9%

Bottom 2 Box (Novice/Amateur) Advance Top 2 Box (Expert/Leader)

Marketing Sales eCommerce

Shopper marketing Category management Other (please specify)

Q: Which budget(s) is the company using to support online retail?

Marketing Budgets Are the Largest Source of Funds



Marketing

VP/GM

eCommerce

Sales

Key Customer Team

Team Lead

Analyst

Content Analyst

Marketing

Supply Chain“Brick and

Mortar.com 1”

“Brick and

Mortar.com 2”

“Brick and

Mortar.com 3”

Center of Excellence

Digital

Acceleration

Content Analyst

Search

Supply Chain

Digital

Merchandiser

Finance

Evolving Organizational Structures

MarketingSales/Distribution

In-direct reporting

direct reporting

Commonly outsourced

to agencies and

brokers

Key Customer

Team“Brick & Mortar.com 1”

designated


Attributes of Successful Digital Commerce Leaders

13

• Comfortable with ambiguity

• Prior experience in pioneering roles

• Internally credible and able to translate cross-functionally and

represent the brand externally

• Strong commercial acumen with an eagerness to learn and a passion

for problem-solving

• Ability to lead and set direction versus singular focus on execution


47%

26%

Percent who said they have a dedicated dotcom lead(s) for:

18%

58%

28%

17%

2016 2017+11 PP

+2 PP

-1 PP

Amazon Gets the Most Dedicated Support



18%4%4%

35%

4%2%8%8%

16%

Supply Chain & OperationsStrategyMarketing & MediaDigital Acceleration & InnovationData AnalyticsChannel ManagementCategory ManagementCapability ManagementAccount Management

US Companies That Have Hired From Amazon

15

17%

83%

% of Companies That Hired from Amazon

Did Not Hire from Amazon

Hired from Amazon

18%

4%4%

35%

4%2%8%

8%

16%

Employees Hired from Amazon by Role

35% of employees hired

from Amazon work in

channel management roles;

18% in account

management

16% in supply chain

17% of US companies have

hired an employee who has

worked at Amazon

83% of US companies have

not hired an employee who

has worked at Amazon

Source: LinkedIn and public job postings


Account Management – HQ vs. Field, WMT vs. Amazon

16

30%

70%

HQ vs. Field

HQ Field

65%

35%

Amazon vs. Walmart

Walmart Amazon

65% of Account Managers

in the field are associated

with Amazon


in the field are associated

with Walmart


work in the field


work at HQ



Global, Total Dedicated eCommerce Headcount by

Segment

17Source: LinkedIn and public job postings

EVP 5 6 3 2 2

VP 3 12 13 1 12 3 13

Director 17 39 216 12 131 4 9 17 52 40

Manager 76 95 649 43 335 7 20 44 172 169

Senior 23 7 120 67 1 4 4 1 15

Staff 34 35 319 11 120 2 18 7 42 130

Alcohol

Beauty &

Cosmetics CPG/FMCG Electronics Food & Beverage Home Goods Office Supplies Pet Supplies

Pharmacy,

Health &

Wellness Toys & Games

Number of Companies 10 5 14 3 15 1 1 1 4 3

Revenue / Headcount $104M $103M $3,853M $411M $32M $161M $149M $327M $112M $10M

Total Headcount 149 193 1308 67 667 14 49 75 279 367

Channel Management 68 96 335 23 212 7 11 19 53 105

Account Management 15 43 256 9 70 4 11 20 25 17

Marketing & Media 25 5 127 1 118 1 4 1 14 53

Content & Digital Merchandising 5 7 63 9 29 2 13 5 48 88

Digital Acceleration & Innovation 5 7 66 3 42 4 3 26 63

Capability Management 6 88 3 40 1 39

Strategy 4 5 56 8 25 2 39 4

Data Analytics 4 9 52 3 32 4 9 12 8

Brand Management 2 4 91 1 11 6 7

Supply Chain & Operations 9 8 53 3 28 5 3 6

Category Management 3 40 1 16 1 5 2

Finance 2 1 30 11 4 2

Insights 1 22 12 1 1 3 4

Shopper Marketing 3 2 13 12 4 1 2

Trade Promotion 8 3 2 1 1 4

HR 3 4 5 1

Legal 4 1 4

Retail Search Optimization 2


Content & Digital Merchandising

18


Data Analytics

19


Supply Chain, Logistics, and Customer Service

20


Summary

21

• Structure follows strategy

• You can’t manage what you don’t measure

• Culture counts

• Dedicated > designated

• With increasing stakes and commitment comes

specialization

Questions?

November 8, 2017

Keith Anderson

SVP, Strategy & Insights


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23

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Appendix


LinkedIn Study Scope & Methodology

25

Objective Determine the structure and distribution of companies’ eCommerce staff

Process 1. Identified key global and “tier 1” and ”tier 2” brands in diverse

categories

2. Collected information on eCommerce employees at identified

companies via Linkedin

3. Aligned company data with full 2016 revenue where available

4. Analyzed the full dataset

Result A clearer idea of how companies prioritize and structure their

eCommerce team


• Online survey conducted from July 2017 through September 2017

• Responses from 134 brands across +10 industries globally

• Includes eCommerce, sales/business development, marketing, account management and

other roles

• Responses from current Profitero customers and non-customers

Survey Scope & Methodology


Dedicated eCommerce Roles Overview


Role Description

Yrs

Experienc

e

Yrs

eCom

Experienc

e

Tech AmazonConsultin

g

Channel

Management

• Responsible for overall eCommerce channel sales, performance, and P&L

• Plan and implement digital and eCommerce strategies for new and existing

online channels to drive sales

• Overall responsibility for establishing strategy, organization, and capabilities

13 5 3% 3% 4%

Account

Management• Responsible for business (sales, business growth strategies, KPIs,

capabilities) with one or more customers 10 3 1% 3% 1%

Brand Management• Develop brand strategy and execute digital plans in support of key brands

• Responsible for driving marketing and business growth through the

eCommerce channel for assigned brands10 3 1% 0% 4%

Capability

Management

• Select and implement digital capabilities that drive business results

• Develop, deliver, and provide IT support for Digital and eCommerce

applications, platforms, and portal14 4 13% 1% 6%

Category

Management

• Work with retailer partners to improve category trees to improve shopper

journey and category profiles

• Identify market and category share trends for sales projects11 3 4% 4% 1%

Content & Digital

Merchandising

• Develop, syndicate, audit, and analyze digital product information and content

for brand and retailer websites

• Responsible for developing expertise in content sourcing and driving digital

usability and conversion

12 5 4% 1% 1%


Dedicated eCommerce Roles Overview – Cont.

28

Role DescriptionYrs

Experience

Yrs

eCom

Experience

Tech Amazon Consulting

Data

Analytics

• Track market and organizational sales data to measure digital performance

• Translate data analysis and research into actionable strategies that drive sales, conversion,

and growth9 3 4% 2% 7%

Digital

Acceleration

& Innovation

• Develop and implement innovative digital solutions, delivering sales growth and new

customer acquisition across the eCommerce channel

• Lead the digital transformation internally across organizational systems and externally with

retailer partners

• Implement and share digital best practices throughout the organization

15 5 5% 1% 5%

Finance

• Lead eCommerce financial assessment to make investment decisions and drive future

growth

• Develop financial projections for organizational digital strategies, platforms, and brands

• Manage the financial go-to market development for new eCommerce channels

12 2 0% 0% 8%

HR• Set and drive recruitment strategies to build new teams across all eCommerce divisions

• Develop and implement organizational eCommerce infrastructure

• Manage internal requests and requisitions across the eCommerce team11 1 0% 0% 6%

Insights

• Apply analytics tools and techniques to increase shopper understanding and optimize

operations

• Develop and implement research plans to improve eCommerce performance

• Establish organizational research approach and methodology

12 4 2% 0% 2%

Legal• Ensure internal and external legal compliance across all platforms and processes

• Develop organizational processes that support digital compliance

• Support all company employees responsible for key areas of compliance15 5 0% 0% 0%



Role DescriptionYrs

Experience

Yrs

eCom

Experience

Tech Amazon Consulting

Marketing &

Media

• Plan and execute digital marketing campaigns and strategies in support of the

eCommerce channel

• Align eCommerce marketing plans with overall brand marketing goals

• Determine media investment for key brands

12 5 2% 2% 5%

Retail Search

Optimization• Develop expertise on retailer search algorithms

• Optimize products' performance on retailer websites 10 4 25% 0% 0%

Shopper

Marketing

• Design and execute shopper marketing events and promotions for retailer

customers

• Drive customer engagement via shopper marketing plans that contribute to

organizational, category, and channel growth strategies

12 3 0% 0% 2%

Strategy• Develop measurement and KPIs for key digital initiatives

• Define short-term and long-term strategic goals for the eCommerce channel

• Create new organizational eCommerce teams and divisions14 4 3% 3% 10%

Supply Chain

& Operations• Responsible for eCommerce channel stock management, supply chain logistics

• Prioritize, identify, and resolve daily customer and retailer partner issues 12 3 3% 5% 3%

Dedicated eCommerce Roles Overview – Cont.


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