Profitability of the top 50 FMGC giants reaches highest level in 17 years
The profitability of the top 50 global FMCG companies reached 18.2% in 2018, the highest level since the study began in 2002.
Organic growth climbed by 3.2% year on year, up from a growth rate of 2.6% in 2017. The majority of that is now coming from volume growth, which accounted for 1.8 percentage points of growth, with price/mix coming in at 1.4 points.
Deal activity was driven by a desire to shift towards fast growth areas and strengthen existing positions. But with lack of mega-deals, merger and acquisition deal value fell 48% from 2017, to $75bn (£60bn). However, deal volumes remained high at 55 compared, although this was below 60 in 2017.
Chinese spirits producer Kweichow Moutai entered the global 50 for the first time, knocking out Brazil Foods Nestlé; while Procter & Gamble and PepsiCo retained their positions at the top of the list.
Source: OC&C Strategy Consultants
Marketers fail the empathy test
Those who work in the marketing and advertising industry are no better than the average person at understanding other people’s emotions and perspectives, despite this being a key skill for marketers.
Using an empathy scale developed by academic psychologists, a study found that only 30% of people working in the advertising and marketing industry displayed high levels of perspective taking and affective empathy. This is compared to 29% for the ‘modern mainstream’ – the middle 50% of the UK population in terms of household income.
In one scenario, respondents were told they had £50 and could choose to share as much or as little as they want with an unknown partner. Only 69% of marketers would share the money equally, compared to 77% of the mainstream.
Advertising and marketing people are also more politically motivated when deciding how much to share. When Remain voters in the industry were told their partner is a Leave voter, willingness to share dropped to 43%.
Source: Reach Solutions
Half of US consumers buying director-to-consumer brands
Almost half (48%) of US consumers are opting to buy from direct-to-consumer brands, but the audience tends to be younger and have higher household income than for the average brand.
Among D2C shoppers, 84% are under 54 years old (compared to 72% of the overall population), while 31% have a household income in excess of $75,000 (£60,000)(compared to 25% of the overall population).
They are also more likely to use their favourite brands as vehicles for self-promotion, with 53% agreeing with the statement that “when I purchase a new brand I am expressing who I am”, compared to 28% among incumbent brand shoppers.
D2C shoppers are 36% more likely to research a brand pre-purchase, with 33% saying they would go to a store (compared to 18% of incumbent shoppers), 35% saying they turn to influencers (compared to 15%), and 44% saying they check social media posts or YouTube videos posted by customers (compared to 24% and 28% respectively).
And 71% of disruptor brand consumers say they usually share information on companies or brands online, compared to 31% of incumbent shoppers.
High streets and shopping centres suffer in June
The high street has been the worst hit by the relatively poor summer weather, with a drop in footfall leading to a fall in sales figures for the month of June.
Footfall declined by 2.9% in June, compared to a 0.9% drop in the same month last year. For the three months to 29 June, footfall declined by 2.4%, well above the six- and 12–month averages of 1.3% and 1.7% respectively.
High street footfall plunged by 4.5%, following a 0.1% rise in June last year, while retail park footfall climbed by 0.1%, compared to growth of 0.4% year on year.
Shopping centre footfall was the only metric to see an improvement. While it was down by 2.4%, this was better than the 3.4% drop in June last year.
Source: British Retail Consortium
Marketers ‘ignoring’ the value of referrals and word of mouth
Less than a quarter (23%) of organisations currently have referral programmes in place for customer acquisition despite 41% of marketers believing word-of-mouth recommendations are one of the best ways to build trust.
Some 37% of consumers discover new products and services via recommendations from family and friends, but only 21% of marketers think this aspect is important to consumers.
Another 20% of marketers believe reviews add a level of trust to purchasing, but only 12% of consumers agree. And 9% of marketers cite influencers as adding trust compared to just 3% of consumers.
Source: Data & Marketing Association in partnership with Mention Me