Worldwide e-commerce sales hit $3.53 trillion in 2019, according to research company Statista. And that immense figure represents growth of over $500 billion compared with the previous year.
In 2020, the trajectory for online shopping sales has taken an even steeper curve, becoming the world’s fastest-growing retail channel. At Unilever, we’re evolving our products and plans to make the most of this incredible growth opportunity.
We caught up with the new Global VP of eCommerce, Claire Hennah, to find out more.
Claire, where does Unilever stand right now when it comes to e-commerce?
Looking at our results from the first half of 2020, e-commerce delivered €2.2 billion of sales and underlying sales growth of 49%. More than 8% of our total sales are now coming through e-commerce. At the end of 2019, that figure was just over 6% so the acceleration we have seen is incredible.
What has sparked this year’s increase?
The lockdown caused by Covid-19 and a surge in the number of people shopping online around the world have been a contributing factor. Many people are coming to online shopping for the first time, which is driving up penetration.
But the pandemic is certainly not the only reason for this strong growth. Our cross-functional e-commerce teams have been laying the foundations to build up this side of the business for years. We’ve brought together just over 700 specialists, not just from digital and marketing backgrounds but also Supply Chain, R&D, key account managers who work with our partner retailers, and many more.
An entrepreneurial and pioneering culture has got us off the starting blocks and now we are starting to reap the benefits of growth.
How are our brands adapting to growing and designing for e-commerce?
It’s vital to recognise the nuances for this channel compared with selling through bricks and mortar stores. When designing for e-commerce, we must think end to end. That means we consider the portfolio fit, our content creation and media strategy as well as the executional factors such as supply chain and analytics.
To bring this to life, let’s start with our portfolio. We must spot the demand spaces and trends that people search for online and optimise our product design and content for this. Shoppers won’t be picking products up and reading a label online. They will be searching for it and reading product descriptions or scrolling through images and videos on their mobile phone.
That is why we encourage our teams to ‘walk the store’ online to make sure we deliver the best possible user experience and feel as proud of our brands on the digital aisle as the in-store shelf. New opportunities such as live streaming offer a brilliant opportunity to share the benefits of our brands through storytelling. Alibaba have already told us they expect this model to be around 20% of their turnover by 2021.
For some brands, the right solution is selling bundles, so shoppers can stock up on several of their favourite products or buy the perfect regime kit. For others gift sets work well. And we’re exploring designs that fit through letterboxes and sustainable options such as concentrates, which also weigh less and use less packaging than standard products.
All this offers an opportunity to create differentiation in a crowded and fragmented marketplace, target early adopters and innovate in a way that’s great for consumers and good for the planet too.
Which brands are leading the way?
All of our brands are certainly working on getting what I would call ‘brilliant basics’ in place, but we have seen some great examples come through in China from Vaseline and Omo. Both brands have crafted mixes for the channel, built strong relationships with key opinion leaders and invested on and offline to create a holistic media experience.
We saw great sales across several markets in South-East Asia through Lazada’s ‘Super Brand Day’ earlier this year, too. Lifebuoy’s results were particularly strong.
Love Beauty and Planet have optimised fantastic content on Amazon’s US platform and for Home Care we have just launched tailored bundles in the UK, targeting the demand spaces that over-index online.
In our Foods & Refreshment division, fast delivery models have just exploded for ice cream, so our teams are doing a great job in capturing the ‘in-home’ opportunity that has happened in this category with the likes of Deliveroo and Uber Eats.
What trends are coming up in e-commerce that we need to embrace?
- We need to continue moving fast to respond when we see changes in consumer behaviour. During the Covid-19 pandemic, our teams updated online product titles for many of our brands to highlight their antibacterial properties after data told us this was a priority for consumers at that time. Many products sold out in minutes as a result. This kind of speed and agility is vital.
- Data and artificial intelligence also continue to be extremely important. Amazon, JD.com and Alibaba are built on principles of data-driven merchandising, product recommendations, matching customers with the products they are most likely to buy. So, from spotting product trends to always optimisation, making strides in this space is critical.
- We’re accelerating digital skills. It’s no longer a choice; the future of commerce is here. Four of the world’s current top ten richest people made all their money through digital technology (Amazon founder Jeff Bezos, Microsoft founder Bill Gates, Oracle founder Larry Ellison, and Facebook founder Mark Zuckerberg).
- Recession-proofing is another big trend – from stock agility to ensuring we are aware of pricing sensitivity but overall recognising the need to create a true value exchange. Our prestige brands offer samples if you spend over a certain threshold and we are working with partners outside Unilever to create consumer-centric but differentiated bundles and gifting solutions.
What are the biggest obstacles to success in e-commerce?
We should feel proud of our journey so far, but what has taken us to 8% of company sales will now need to pivot as we start to scale.
We are currently reviewing the interventions and growth opportunities that we need to solve and create, to be able to adapt to the shift in how consumers want to browse and buy.
It is a critical moment in time to be working in e-commerce and our teams are working so hard to build on the opportunity that has arisen – e-commerce is a no longer a channel simply for the future. The future is here and I’m so excited about what the next few months have in store.