Kantar Ranks Digital Power Players

Retailers and manufacturers are not achieving their full digital potential, according to Kantar Retail’s first-ever Digital Power Study, which benchmarks the digital performances of retailers and manufacturers.

Aiming to provide benchmarks at a much deeper level than the overall digital performance measured in Kantar Retail’s annual PoweRanking survey that’s provided insight into industry best practices for almost 20 years, the new A Revolution in the Making study examines the "now" and "how" of the digital revolution by identifying which manufacturers and retailers excel as best-in-class multichannel digital leaders.

While manufacturers consider Walmart and Amazon to be digital trailblazers, survey panelists believe significant opportunities remain for both companies to further improve their multichannel presence and offer. Meanwhile, retailers named Procter & Gamble (P&G) and Unilever as manufacturing digital leaders, although no company achieved the standards Kantar Retail set for its digital best-in-class status (see below guidance on how to close the gap).

Identifying current industry trends and emerging best practices from both the retail buyer and seller communities, the Digital Power Study results were gathered from feedback by some 400 U.S. retailers and manufacturers to determine current digital leaders in the three disciplines of Strategy, Marketing and Capabilities.

The findings enabled Kantar Retail to group manufacturers and retailers into four tiers of performance and capability based on the views of their trading partners, as well as into a composite to show the overall performers as follows:

1. Best in Class: According to the research, no company reached Best in Class status.

2. Performing: The results found that manufacturers P&G and Unilever and retailers Walmart, Target and Amazon are the current digital leaders, due to the significant investments they are seen to have already made both financially and in dedicated resources.

3. Progressing: This group includes Safeway and Best Buy, which are viewed by manufacturers as aspiring to be a significant multichannel player and are beginning to allocate resources. Manufacturers in the group include PepsiCo and Coca-Cola.

4. Participating: This group is emerging from a bricks-and-mortar approach and understands the importance of digital only in pockets of the organization, allocating only shared resources to digital marketing and e-commerce. Retailers perceive LEGO and Samsung to be in this category, with manufacturers placing Macy’s and Home Depot here.

"Lack of clarity around defining digital is one of the major hurdles for companies, noted Dan Raynak, VP of Kantar Retail’s Wilton Conn.-based North American division and one of the report’s authors. “Retailers believe that General Mills and Coca-Cola are going to become digital Power Players, joining P&G and Unilever.Among retailers, Walmart, Amazon and Target are out in front right now, but manufacturers think that current efforts by Costco and Kroger will help springboard them into the ranks of Performing companies.”

Accordingly, Kantar Retail developed a unique 10:50:100 framework to help retailers and manufacturers understand the true impact of digital on retail and what is required to win, explained Raynak.

Among the recommendations to close the best-in-class digital gap, Kantar Retail suggests five principles for retailers and manufacturers, including:

• Multichannel Strategy: Develop a strategic roadmap that informs the corporate and business unit strategy. Digital is an integral part of the processes of the company.
• Omni-Shopper Path to Purchase: Become experts in behavioral segmentation (rather than just demographic and psychographic segmentation) by identifying and demystifying omni-shoppers' multichannel path to purchase.
• Multichannel Category Leadership: Develop innovative approaches to multichannel by using the real-time store and site POS data that digital allows to test and improve ideas.
• Integrated Campaigns: Create fully integrated merchandising and marketing strategies with a shopper-centric view of the item, brand and category.
• Optimized Supply Chain: Optimize e-commerce packaging, logistics and fulfillment centers to same levels as bricks-and-mortar systems and networks.

The study also highlights the Power Players of the next 10 years while revealing which trading partners are expected to define the future of multichannel retailing.

A copy of Kantar Retail's 2013 Digital Power Study Executive Summary is available here.