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October 21, 2011

UK: Online shoppers more brand loyal, says Unilever

Consumers are more brand loyal when shopping online, giving food manufacturers the chance to exploit the growth of the channel, according to Unilever.

By Dean Best

Consumers are more brand loyal when shopping online, giving food manufacturers the chance to exploit the growth of the channel, according to Unilever.

Online shoppers are “up to 15% more brand loyal” and spend more on the Internet than when shopping at physical retail outlets, Unilever e-commerce director Andy Houghton said.

Houghton, speaking at the IGD Online Grocery Retailing conference in London on Tuesday (18 October), said brands can thrive online, even with consumer confidence low and looking for deals.

“In the context of the really deep promotional activity that’s going on at the moment, brands act as a totem of value to the online shopper. We think they spend almost a couple of quid more on the equivalent shopping trip online versus in store,”

Houghton’s belief in online brand loyalty follows comments last week by Sainsbury’s commercial director Mike Coupe that consumers were becoming more aware of the prices charged by retailers, driven in part by the ability to compare prices online. 

However, the Unilever executive insisted price was not the only consideration for consumers and said brands could over shoppers value.

Houghton said: “Shoppers are looking for brands. Brands act as a point of recognition. It’s not just about price. In straitened times, shoppers are looking for value. This is not necessarily about promotions but about products that meet their needs on the first time at a fair price.”

Nevertheless, price and promotions are becoming more important for online shoppers, even if they tend to be more affluent, according to Ben Miller, head of shopper insight at the IGD.

“Online shoppers have a slightly higher demographic profile but it’s nuanced. Over the last year, we’ve seen the quality of products sold, the prices sold and the numbers of promotions all increasing in importance to shoppers when choosing where to shop online,” Miller said.

He added that “many shoppers” told the IGD that they “specifically choose to shop online because it helps them to save money”.

However, Houghton outlined the ways brand-owners could exploit the growth and potential of the UK online retail sector in the UK. He said the evolving technology available online means brand-owners can “engage” with the online shopper in different ways than those in traditional stores.

“A lot of rules for in-store marketing are written. For suppliers, there is a lot of room online for creativity and collaboration with retailers to try different things and work with new technology,” he said. “We enjoyed that element of being slightly away from the traditional, process-driven, execution side of things.” 

Brand-owners should look to develop processes that allowed consumers to buy their products “from almost anywhere online”, he said.

“I see this as the future whereby all of our brand engagement starts to link up with retailers, initially through clever linking or eventually through API, so that the shopper then puts our products into their basket wherever they engage with our brands. Irrespective of where you engage with our content, we want you to be be able to buy something from it,” he said.

Manufacturers also need to improve “the look and presentation of our products in the online shop”, he claimed. “When I looked at our product information at Unilever, much of it had been extracted from SAP systems and was now being displayed with the online retailer.” 

Marketing new products online can be difficult, Houghton said, but working with retailers can lead to the creation of campaigns that educate consumers and encourage them to try products. He pointed to Unilever’s recent campaign for its Flora Cuisine cooking margarine on the Tesco Real Food website, which included video content to show consumers how to use the product, recipe ideas and a trial offer.

Houghton also noted the importance of “brand advocates” on social networks and said the likes of YouTube and Facebook could also be useful even when users are not happy with a company’s products. “If consumers don’t like it, we want to know about that and we want to know about it pretty quickly.”

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