L2 released the first Digital IQ Index: Food last month, assessing the digital competence of 80 U.S. packaged food brands. Here is a Q&A with study lead Katie Brehm.
This is the first time L2 has done a food study. How was the methodology similar or different from doing a Luxury or Beauty study?
In the Luxury and Beauty studies, a higher penetration of sales are done via e-commerce and the brand site plays a larger role in terms of being the place to go for product discovery. In the food industry, the shoppers’ online research sources are much more fragmented. We put an increased weighting around investments on e-tailer sites and online grocers including FreshDirect, PeaPod, AmazonFresh, and Walmart. Additionally, we looked specifically at food specific resources such as recipe sites, third-party mobile couponing apps, and high-traffic food blogs.
What separated the Genius and Gifted brands from the Average, Feeble and classes? If there is one thing you would recommend brands do to improve their digital competency, what would it be?
Genius and Gifted brands developed a comprehensive digital strategy that spanned all dimensions. Brands in the Feeble class may have had a digital achievement in one area, but failed to translate that into a broader strategy across platforms. Brands need to syndicate their existing content and campaigns for a variety of digital properties, especially e-tailer partners.
Can you tell us about some of the overall trends? Any surprises?
Ninety percent of smartphone shoppers utilize their mobile device while shopping in-store for groceries. More than half of Food brands have a mobile optimized site, yet basic features such as geolocation in the store locator or wish list / shopping list tools were less highly adopted. One of the biggest surprises was how few Food brands are pushing the customer towards e-commerce partners from their brand site. Eight in ten food brands did not handoff to an e-tailer partner or online grocer, whereas 18% of personal care brands and 27% of home care brands did.
Are there any Food brands to watch?
We were impressed that some of the organic market challengers were punching above their weight class, including Kashi, Amy’s Kitchen and Stonyfield Farm. Organic brands had a higher penetration of direct-to-consumer e-commerce and lead in content investments on their brand sites, highlighting their all-natural ingredients and video content about production processes.
The 2014 study was the inaugural. Will you add any other measures to the methodology in future studies?
As the online grocery industry continues to grow and develop, we will look at how brands are further investing on the players – AmazonFresh and Walmart each represent less than 1% of the market so we expect both to develop into key competitors in the future as they have already demonstrated significant investment in test pilots. Additionally, there were a variety of grocery mobile apps that we looked at for loyalty, couponing, and list-making; as the adoption rate grows for these apps, we’ll look for new entrants as well as more sophisticated ways brands can partner with the apps.
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