,Joan DriggsVice PresidentContent and Thought Leadership,February 2019,click here.,Executive Summary,Consumer confidence has remained favorableover the past several years. Still, 30 percent ofrespondents to IRIs Consumer Connect Surveyreport they struggle financially.,Hand-in-hand with consumer confidence is thegrowing and evolving e-commerce channel.Consumers are increasingly comfortable withonline purchasing and retailers of all stripes areinvesting in their online offerings.,Notably, Gen Xers, followed by Millennials, arethe most likely to report they struggle to affordneeded groceries. But these generations areincreasingly working their way out of debt andinto greater financial stability. Some 55 percent oftotal Consumer Connect Survey respondentsreport their households are in good financialshape, up 4 percentage points from Q3 2018.,Non-food items, particularly personal careand home care products, are tops in onlinepurchases. IRI E-Market Insights reports thatvitamins, pet food and supplies, and skin careproducts are the top selling items.,Pure-play retailers garner well more thanhalf of all online CPG purchases, but traditionalbrick-and-mortar retailers continue to investand win share of the e-commerce pie.,While 2019 is off to a rocky start, with a partialgovernment shutdown and trade challengesattributed to tariffs, consumers at the close of,2018 were buoyed by their strong household,financial health and were spending accordingly.,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,3,Consumer Sentiment Is Up Nearly One Point Versus Q4 2017,However It Inched Up Marginally Since Q3 2017,Consumer Sentiment IndexTotal U.S.,1,00.0%,In Q4 2018, consumersentiment increasedas incomes rose andunemployment declined.,1,00.0%,9,9.5%,9999999,9.5%9.0%8.5%8.0%7.5%7.0%6.5%,9,9.0%,98.7%,9,8.6%,98.2%,9,7.5%,97.6%,9,7.0%,97.3%,9,6.8%,9,6.4%,0.0%,Q1016,Q22016,Q3,Q42016,Q12017,Q22017,Q3,Q42017,Q12018,Q22018,Q32018,Q42018,2,2016,2017,Average = 100Source: Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,4,Fifty-five Percent of Consumers ReportTheir Financial Situation Is Healthy,Especially Seniors and High-income Households,Households Having Good Financial Health% of Households, Total U.S.,>,$100K,82%,Q4 2018Q3 2018Q2 2018,55%,$,55K-$99.9K35K-$54.9K,64%,$,55%,51%,<,$35K,30%,55%,MillennialsGen X,53%,5,6%,Q1 2018Q4 2017,51%52%,BoomersSeniors,5,3%,67%,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,5,Among Generations, Gen X Report Having the Most DifficultyAffording Needed Groceries, Followed by Millennials,34%,of Millennials,3of consumers,0%,3of Generation Xers,6%,have difficultyaffording neededgroceries,3of Boomers,2%,20%,of Seniors,Source: Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,6,Online Shopping to Save Money Is IncreasinglyPopular Among Millennials and Gen X Consumers,Online Shopping Value Perceptionsby Generation,Online order/in-store pick-up,38%8%,4,9%,(,click-and-collect) allows meconvenience without theadded shipping fee,4,8%,3,24%,2,0%,Buying online allowsme to find lower-priced,31%,21%,food and beverage options,20%,12%,Buying online allowsme to find lower-pricedOTC medicationoptions,23%3%,28%,2,2,3%,18%,Buying online allowsme to find lower-pricedbeauty/personal careproduct options,29%7%,45%,35%,2,14%,3,0%,Buying online allowsme to find lower-pricedhome care options,43%,36%,2,7%,1,9%Gen XBoomers,Total U.S.Millennials,Seniors,%,of respondents, Top 2 Box Summary,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,7,In Addition to Convenience, Free and Fast ShippingAre Also Main Drivers for Online Shopping,Capabilities That Drive Channel Selection,5,7%,Online purchasingwithfree delivery,6,8%,69%,56%,43%,4,7%,Online purchasingwithfast delivery,56%,61%,4,5%,32%,4,0%,Online purchasingwithin-store pick up,5,2%,50%,39%,23%,3,0%,Online purchasingof freshlyprepared items,4,2%,42%,2,8%,16%,2,0%,Subscription servicesfor frequently purchasedgrocery items,26%,33%,1,7%,11%,Total U.S.Millennials,Gen XBoomers,Seniors,%,of respondents, Very/Important Summary,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,8,E-Commerce Sales Are Shining Star of CPG Omni-Channel Universe,$58.9 Billion E-Commerce CPG Sales,52 Weeks Ending 12/30/2018,%,Source: IRI E-Market Insights Dashboard, January 2019; the categories include the 145 releasable E-Commerce categories from IRI E-Market Insights; 52 weeks ending 12/30/2018.,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,9,TOP,Categories: Top, Bottom, and Growing,Top 10 E-Commerce Categoriesby Dollar Sales,Dollar Sales,Dollar Sales% Change vs YA,E-Commerce Share ofOmni-Channel Sales,($millions),Vitamins,$7,410.1,35%,49.956.323.146.018.733.2,Pet SuppliesPet Food,$5,652.7$3,503.7$3,354.5$2,232.9$1,907.1$1,399.8$1,385.1$963.9,44%42%30%26%24%15%21%23%43%,Skin Care,Coffee,Weight ControlCosmeticsFacialFragrancesWomensCosmeticsEyeHair Conditioner,3,9.6,67.431.729.9,$946.3,Source: IRI E-Market Insights Dashboard, January 2019; sales are the sum of 145 tracked categoriesSource: IRI Market Advantage, IRI E-Market Insights, latest 52 weeks ending 12/30/18,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,10,GROWTH,Categories: Top, Bottom, and Growing,E-Commerce Categories With the Most Growthby Dollar Sales % Change,Dollar Sales,Dollar Sales% Change vs YA,E-Commerce Share ofOmni-Channel Sales,($millions),GastrointestinalLiquidHot Cereal,$338.9,310%151%84%81%78%77%74%74%72%70%,23.117.215.82.0,$273.3$359.1$48.9$469.2$48.5$87.8$31.2$62.9$38.4,Adult Incontinence,LunchesRfg.,Cold/Allergy/Sinus TabletsAppetizers/Snack RollsFrozenBreakfast FoodFrozenDough/Biscuit DoughRfg.Baking Mixes,9.1,2.4,2.6,1.7,4.1,Cream Cheese/Cr Chs Spread,2.2,Source: IRI E-Market Insights Dashboard, January; sales are the sum of 145 tracked categoriesSource: IRI Market Advantage, IRI E-Market Insights, latest 52 weeks ending 12/30/18,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,11,Traditional Brick-and-Mortar Retailers Need to Investin Customer Experience Both Online and In-Store,Channel,Dollar Sales ($millions)$58,618.3$32,226.8$11,421.0$4,965.1,% of Total E-Commerce,Total E-Commerce-RMAE-CommerceOnline Multi-Category (ex. Amazon, Peapod, FreshDirect)B&M Multi-Category (ex. Walmart, Kroger, CVS)Online Specialty (ex. Chewy, Birchbox)Brand / DTC (ex. Dollar Shave Club, Keurig, Lindt)B&M Specialty (ex. Petco, Sephora)Pure Marketplace (ex. eBay),100%55%19%8%,$2,439.8,4%,$2,196.2,4%,$894.7,2%,Meal Kits,$9.6,0%,Channel,Dollar Sales ($millions)$11,421.0$4,259.4,% of Total E-Commerce,% of B&M Multi-Category,B&M Multi-Category,19%7%4%3%2%0%,100%37%19%17%11%0%,MassGroceryDrug,$2,120.5,$1,919.4,Club,$1,303.4,Dollar,$54.0,2018 CY, Sum of 145 Tracked E-Market Insights Categories,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,12,E-Commerce Sales Are Evenly Split Between Click & Collectand Delivery Fulfillment Methods,Sales mixes are opposite when comparing edible and non-edible categories, however.,Fulfillment Type Share For Brick & Mortar Multi-Category Retailers,(Walmart, Kroger, Etc.),36,4%6%,54,3%7%,6,3%,3,7%,All Tracked Categories,Edible CategoriesDelivery/Ship Click & Collect,Non-Edible Categories,Source: IRI eMarket Insights 3.0, IRI Market Advantage, 52 Weeks Ending 12/30/18, Aggregate of 145 Tracked Categories, Based on Aggregate of Retailers with Multiple Fulfillment Types,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,13,Reviews and Opinions Posted in Social MediaInfluence Consumers Purchase Decisions,Social Media Influence on Brand Behaviorby Generation,46%,I will switch to anew brand ifIve read a,56%8%,5,good review online,45%,32%,21%,I like to sharemy opinions aboutbrands on,31%1%,3,social media,20%,6%,Total U.S.Millennials,Gen XBoomers,Seniors,%,of respondents, Top 2 Box Summary,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,14,Convenience and Choice Are Key DriversTowards Online Grocery Shopping,Benefits of Online Shoppingby Generation,21%,33%,Online orderingmakes it easier to findneeded grocery items,25%,21%,11%,Total U.S.Millennials,Gen XBoomers,Seniors,%,of respondents, Top 2 Box Summary,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,15,Nearly 54% of the Younger Generations Feel TheyAre Less Likely to Make Impulsive Purchases Online,Propensity to Make Additional Purchasesby Generation,50%,5,4%,I am less likely to makeimpulse purchaseswhen buying online,54%,49%,44%,Total U.S.Millennials,Gen X,Seniors,Boomers,%,of respondents, Top 2 Box Summary,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,16,Many Consumers, Especially Seniors Clip Coupons andLook to Retailers Circulars During Their Shopping Trips,Circulars/Coupons Behaviorby Generation,6,7%8%6%7%9%,6,Compare prices inretailers circulars,6,6,6,6,0%8%9%9%,5,Clip coupons fromcirculars/newspapers,5,5,66%,35%,51%,Download coupons fromonline deal sites,43%,34%,18%,Total U.S.Millennials,Gen XBoomers,Seniors,%,of respondents, Frequently/Occasionally Summary,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,17,Download of Coupons and Price Comparison on RetailerWebsites Tops Among the Money-Saving Opportunities,Purchase Behavior in the Coming Year,Download coupons from aretailer/manufacturer website,54%,Compare prices on arearetailers websites to find thelowest prices on needed items,53%,Order online andpick up in store,23%,Order online forhome delivery,22%,Use online subscription servicesfor some of my grocery items,11%,Use online meal kitdelivery services,5%,%,of respondents, Frequently/Occasionally Summary,Source: IRI Consumer Connect, Q4 2018,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,18,In 2019, More Grocery Spending Will Happen Online,OnUli.nSe. GSrhoocpepryinCgoVnasluemPeresrcWephtoioSnhso, pbyOGnleiner(a%ti)on,59%,While online shopping still represents a small part of theoverall grocery market, KPMG reports a growingnumber of consumers plan to shift more of their foodbuying online in 2019.,48%,In an effort to remain relevant with shoppers, moretraditional brick-and-mortar retailers, including grocerychains, mass merchants and drug chains, are investingheavily in their online shopping offerings. Theseretailers face the double challenge of improving theshopper experience both online and in-store.,Look for more retailer investments in mobile interfaces,such as payments and endless aisle assortment, asthey work to catch up with consumers alreadycomfortable using their mobile devices to manageroutine tasks.,2018,2019 (projected),2018 Grocery Retail Consumer Perception Survey,Source: digitalcommerce360/2018/10/26/more-grocery-purchases-will-move-online-in-2019/,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,19,Highlights: E-Commerce Sales Benefit From ConsumerComfort With Technology and Financial Health,Even shoppers working to stay within budgets are turning to online shopping;,they leverage ability to make price comparisons and download coupons.,An increasing number of consumers look for reviews and recommendationsfrom online sources to help them make buying decisions.,Home care items top the list of online purchase categories, followed by,beauty/personal care products. However, vitamins rank as most purchased item.,Fifty percent of consumers report they are less likely to make impulse purchaseswhen shopping online; highest among high-income groups and millennials.,Online orders with free/fast delivery are gaining traction among high-incomeconsumers and those with kids.,Online shoppers appreciate delivery options, easy ordering, andlower-priced options.,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,20,iriworldwide/en-US/Insights/Publications/Consumer-Connect,iriworldwide/en-US/News/Press-Releases/IRI-Announces-Enhancements-to-Industry-Leading-E-Commerce-Measurement-and-Insights-Solution,©2019 Information Resources Inc. (IRI). Confidential and Proprietary.,21,Joan.DriggsIRIworldwide,THANK YOU,Vice President, Content and Thought Leadership,Sam.GagliardiIRIworldwideSenior Vice President, E-Commerce,©,2019 Information Resource©s I2n0c1.9(IRInIf)o. rCmoantfiiodnenRteiasloaunrdcePsroInpcr.ie(tIaRrIy).Confidential and Proprietary.,22,