With online sales growth outpacing bricks and mortar and research showing that up to 70% of in-store sales are influenced by an online retailer search – the so-called ‘e-commerce halo effect’ – FMCG suppliers need to be addressing their e-category management strategy because it influences the shopping experience across all channels not just online. Bridgethorne's new White Paper entitled Winning Online By Embracing E-Category Management also says that not enough suppliers are recognising how much e-category management differs from conventional category management and are therefore failing to build an optimum e-category capability.

1. Winning online by embracing
e-category management

2. © Bridgethorne 2017
Introduction
With online sales outpacing bricks and mortar and with growth expected to be
in excess of 65% over the next five years, in this White Paper, Clare Adames,
Head of Ecommerce at Bridgethorne, explains why it’s key for suppliers to be
addressing their e-category management strategy now. She explains the e-
category management process, including how it differs from conventional
category management and explains why building e-category capability is an
essential tool in creating a better omnichannel and ecommerce shopping
experience.
About Bridgethorne
As specialists in Category, Shopper and Customer Management we build insights
from data and research to understand retailers, shoppers and categories. Our
aim is to deliver profitable growth for our clients, their brands and the categories
they exist within.

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It’s time for businesses to start to embrace e-category management.
Why e-category management?
For some time FMCG suppliers and retailers have been using category
management to grow and add value to a category by delivering better product
assortment, effective promotions, pricing and space. Collaborative planning
between retailers and suppliers based on insight can grow a category and also
deepen retailer relationships.
With online sales outpacing bricks and mortar with expected growth in excess
of 65% over the next five years (Source: IGD), it’s key for suppliers to be
addressing their e-category management strategy now.
Businesses are failing to extend their category management skills to
ecommerce, meaning that they are not building insights from online shopper
behaviour in order to understand shoppers, retailers and categories. Building e-
category capability is an essential tool in creating a better omnichannel and
ecommerce shopping experience.
With e-category management the overall process and principles remain the
same as category management but the rules change. Winning in the
ecommerce space requires adapting to a different selling environment.
Retailers will also be looking to their suppliers to demonstrate a clear
understanding of online insight and shopper behaviour and how to grow their
category online.

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The e-category management process
Our process covers both strategic and tactical activity and below we will take a
look at some of the key differences in an ecommerce approach for selected
steps in the process.
Category definition
Firstly we look at defining the category – as this can be different online
compared with in-store depending on how shoppers access your category, for
example, by retailer search or by a Google search what’s included in your
category and even your competition will be different on the digital shelf.
Understanding shopper behaviour and language used is key and this should
feed into taxonomy (how they are classified) and search. It’s really important to
invest time in researching this.
Branding and internal language are out – shoppers don’t care what you call your
product, it’s all about shopper language and the terminology they use.
Understanding the total category importance for online business will influence
plans and show where there are untapped opportunities.
Category insights
It’s important to invest in ensuring that you have the right data sources in place
across brands, categories, customers and shopper data, specifically for the

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online environment. At the same time ensuring that you can turn this data into
meaningful and actionable insight for this high growth channel.
Such data sources can include:
 Channel sales data
 Google search data
 Social listening
 Usability studies
 Shopper journey - Online Path to purchase research
 Mission modes
Working collaboratively with your key retailer partners can unlock joint insights
to fully understanding online shopper behaviour and truly add value.
Develop Merchandising
Share of space is out, brand block doesn’t exist, you will need to start thinking
‘Digital shelf’.
Developing Digital shelf guidelines will ensure consistency and best practice.
These will focus on discoverability, content, ratings and reviews, assortment
and promotion.
Discoverability is critical – if shoppers can’t find your product they can’t put it in
their basket so share of shelf and how you are placed in navigation will make
the difference between your product being found or not. For ‘search’ being on
the first page is king so understanding how to influence this via description and
tagging is crucial. Two thirds of shoppers now start a product search on a
retailer site rather than Google (Source: Criteo). Many shoppers choose to go to
a retail site as it offers a one-stop platform for researching your purchase
allowing you to compare products and prices, educate yourself on how to use
the product, read reviews and place in the basket and buy there and then.
This also needs to be fed into the NPD process, to ensure you are developing
products that work online.
Retailers are always looking to improve the shopper experience on their site so
partnering on shopper insights, shopper language and how they search, allows
suppliers to really add value in building shopper focussed navigation and
taxonomy.

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Another area where retailers look to partner with suppliers is on content. This
is where a supplier can demonstrate superior knowledge of shopper needs,
purchase barriers and the type of added value content that shoppers require
like educational content, product selectors, tools etc. Lifestyle content can help
to support finding new or different occasions to enjoy the product, from how to
videos to recipes, engaging shoppers with brands by making it easier to use and
buy products.
The growth of mobile (70% of people now access the Internet via mobile and
this is growing at an exponential rate) means we need to adapt to an
environment where the first exposure to a brand or product is as a thumbnail.
Getting the right imagery will support shopper selection i.e. brand, variant, size
etc. and this can increase conversion rates by approximately 30%. If the imagery
and content of your products are not mobile friendly, then you are not ready for
ecommerce.
Having an e-category management strategy in place where you work closely
with the retailer will improve the user experience for the shopper, making it
easier to find, select and buy your products. This will deliver the growth the
retailer is seeking.
Looking at the value this can drive needs to take into consideration the impact
of the ‘ecommerce halo effect’. These are the in-store sales that are influenced
by online. Ecommerce is a part of the shopper’s fragmented path to purchase.
With shoppers researching the product before they buy. Research shows that
56% of consumers have used a mobile device to research products at home,
38% have used a mobile device to check inventory availability while on their
way to a store and 34% have used a mobile device to research products while in
a store. Ecommerce can drive more than just your online sales as up to 70% of
instore sales are influenced by an online retailer search.
The shopper’s behaviour has changed and continues to evolve and this brings
with it a host of new opportunities. Taking a new look at category management
from an ecommerce point of view, developing a clear insight driven strategy
and implementing bespoke ecommerce activation plans will deliver big benefits
for both brands and retailers: a win win all round. Suppliers need to ensure that
they are not late to the party on this, with those who embrace this putting
themselves into the position of gaining an early mover advantage and taking on
an eCaptaincy role with suppliers.

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Bridgethorne 3 Arlington Square
www.bridgethorne.com Bracknell
Telephone – 01344 404620 Berks
RG12 1 WA
Contacts:
Nick Kirby - Shopper, Ecommerce and Analytics Director
Clare Adames – Head of ecommerce
Di Price – Business Development Director