Digital CPG Blog

Here’s a useful infographic from Janice Diner, summarising the current ‘ecosphere’ f-commerce and the six ways in which vendors are selling with Facebook (see Janice’s full presentation here) (via Social Commerce Today):

Let me guess. Your target demographic is a young mom?

Thought so.

Here’s a refresher on who she is:

She Is Not Paying Attention to Your On TV

“In broadcast primetime, ad recall levels are 8 percent lower among moms 25-54 than non-moms of the same age and the general population. Nielsen has found that the ads that resonate most with moms are often family- and convenience-oriented with relatable characters/situations, sentimental tonality and good natured humor. A heavy focus on products/services tends to reduce ad effectiveness among moms.  For moms, the 30-second sitcom (or drama) might just snag her much-divided attention.”

She Is Paying Attention To You Online

Moms are more likely to become a fan or follow a brand (31% more likely) than the general population and and comment on others postings (27% more likely). “Moms account for one-fourth of all video streams occurring on social networks, and are also more likely to post their own content: photos (37% more likely), links/articles/videos (25%), status updates (33%).”

“Moms make up more than one-fifth of online video viewers and spent an average of 258 minutes viewing online video in March 2011.  Compared to the overall usage in the US, Moms spent 25% more time, about 52 minutes longer on average, viewing online video from Home PCs.”

Five big brand marketing campaigns are betting big on social gaming including Century 21, MasterCard, Psych, New York Public Library, and Expedia.

Big brands are “jumping into the game — so to speak — with branded virtual goods, integrated ads and offers as well as games that combine digital and real-world incentives. For example, marketers like Century 21 have started using branded virtual goods — inexpensive, non-tangible items people buy to use in digital games — in order to gain brand recognition and tap into the profitable social gaming trend.”

This is a huge opportunity for CPG brands as well, particularly national brands who want to build loyalty and show off their couponing offers. Notice it’s all about the branded goods and the cache associated with those. National brands could make a comeback with social gaming to combat private label.

Just remember: “Great social games begin with an obsessive understanding of how people are socializing. The marketers’ task is to translate everyday socializing behaviors into meaningful actions for their brands.”

A recent study on digital lifestyles shows consumers are overwhelmed with data (us too!).

The results prove that “the continued growth of content and data creation, without new ways to manage the consumer experience, will create catastrophic results for business productivity and people’s personal lives and well being.”

The impact is widespread. 48.5 percent of the survey respondents said that they are connected to the Web ”from the moment I wake up until the moment I go to bed.”

“People have reached their capacity to manage data, impacting family, friends, productivity, and even sleep,” says Steven Rosenbaum, CEO of Magnify.net and author of Curation Nation “Algorithmic solutions (better spam filters, smarter search, more connected devices) will in fact expand the problem, creating more undifferentiated data.”

This is important for a number of reasons. Companies thirst for data will only get bigger and thus will continue to drown the consumer, but it will also allow CPG some solutions to make that easier. For instance, instead of offering another coupon, you could run a campaign that makes it easier to connect offline instead of online. Your marketing message could talk about how you can savor your product in real life. Be sassy with it.

Companies that area able to make the human connection with all of this overload will certainly get ahead.

Pepsi is going to try. They just introduced  a “social” vending machine that lets users buy beverages for friends by delivering a code that can be redeemed at any such machine.

“Our vision is to use innovative technology to empower consumers and create new ways for them to engage with our brands, their social networks and each other at the point of purchase,” said Mikel Durham, chief innovation officer at PepsiCo Foodservice. “Social Vending extends our consumers’ social networks beyond the confines of their own devices and transforms a static, transaction-oriented experience into something fun and exciting they’ll want to return to, again and again.”

Hm… perhaps this would work well in schools, but if I were going to buy something for my friends, I don’t know that I would buy them a pop over offering to grab a coffee. Perhaps not every experience needs to be social?

What do you think – is this going too far or is it the next big thing?

Not everyone agrees that social commerce has taken off – or will. We talked recently about how Forrester said that commerce would not be driven by Facebook.

And while we disagreed, we also know that a Facebook like is not social commerce. Here’s another synopsis on why social commerce has not quite made it to the big leagues yet, and what you can do it about, from Ad Age’s Judy Shapiro:

Agree or not — no one can debate that social commerce has not really happened yet no matter how cool Mashable or TechCrunch describe a new marketing technology. Is it too much to ask for these technologies to be designed to sell something — anything? Or, how about, just for a change, we stop chasing the ever elusive “Producers” or “Influentials” or whatever we call them and we get down to the business of actually selling them stuff online? Why does it seem like “cool” marketing technology and “commerce” are mutually exclusive?

I can’t say for sure but here’s an observation — marketing technology is rarely built by marketers. Most often it is built by entrepreneurs who know how to make it cleverly cool, but who don’t get the commerce/ social link yet. This means we end up with technologies which marketers then must contort into measurable programs (a huge challenge right there) that they hope they might actually drive a sale (at some undefined and hard to measure future point in time).

That’s a real pity because, well applied, the real beneficiaries of commerce ready marketing technology are not just big companies, but lots and lots of smaller e-tailers (translate this to lots and lots of market potential).

Some of the cleverest tech companies are recognizing the huge market potential of merging local, mobile and social to drive commerce. Take these two examples. First is the recent deal between Addoway, the online trusted “social” marketplace and Reply/Buy, a mobile platform that lets users actually purchase product via phones. These companies have come together to curate a user experience that makes m-commerce almost frictionless (hooray). Or, take the example of a company called Big Door. This is a tech company that creates mini toolbars based on gaming theory so every action lets visitors earn points redeemable for products. It’s the first toolbar I have seen that drives commerce forward (double hooray since most mini toolbars just enhance the share function).

I agree with Shapiro that it will be the user experience that next defines the next era of the social web, not the utilization of Facebook.

“Betting that parents are less stingy when it comes to junior’s needs, two of the country’s biggest makers of diapers and wipes are pushing through price increases. Kimberly-Clark Corp. plans to raise prices on its Huggies diapers and wipes by 3% to 7% while Procter & Gamble Co. announced a 7% rise in prices for its Pampers diapers and 3% increase on wipes,” reports the Wall Street Journal.

Why such confidence? That’s because:

“Shoppers are less likely to switch to a cheaper brand on a baby product than many other items on the shopping list,” according to a recent survey by Sanford Bernstein analyst Ali Dibadj.

“Just 10% of consumers said they switched to a cheaper diaper brand because “it’s not worth paying more in this category,” and no consumers reported switching baby food. By comparison, nearly a third of consumers said they switched brands of bleach, bottled water and liquid soap.”

Who else can raise their prices?

“Brands that have the highest market share, are purchased infrequently (like sunscreen or lightbulbs), are necessities, have few competitors, or where it would be hard to reduce consumption (like toilet paper) have the most power to enforce price increases.”

“Mr. Dibadj ranks Kimberly-Clark and Clorox among the least able to raise prices, given that they operate in highly competitive categories with high commodity cost pressures. P&G and Colgate, with their exposure to distinctive items like beauty products, pet food and toothpaste, fare better, Mr. Dibadj said.”

CPG manufacturers offered consumers $485 billion in coupon savings in 2010, according to the “2010 Coupon Facts Report” from NCH Marketing Services, a Valassis company. This represents a 13.9 percent increase over the prior year and 47.4 percent growth compared to five years ago.

Here are some more points from the report.

Coupons become more DESIRABLE:

• The average face value of CPG coupons distributed in 2010 increased by 6.6 percent to $1.46.
• The average coupon face value distributed for grocery products in 2010 was $1.24, up 6.9 percent from the prior year.
• The largest growth was in beverages, now averaging $1.52 up from $1.18 in 2009.
• The average coupon face value distributed for HBC products was $1.94, up 6.6 percent from the prior year.
• Over the counter (OTC) and prescription medication coupons carry an average face value of $2.21, up from $2.17 in 2009.
• 26 percent of all CPG coupons issued in 2010 required the purchase of two or more items to obtain the offer discount. 33 percent of the grocery coupons required multiple purchases and only 13 percent of HBC coupons required multiple purchases to receive the discount.
• Consumers now have a week and a half less time to use coupons, compared to the prior year, due to an overall shortening of offer expiration dates in both the grocery and HBC segments. The average expiration is 10.1 weeks.
• 64.4 percent of all grocery coupons distributed expire in eight weeks or less, and 59.6 percent of all HBC coupons distributed expire in eight weeks or less.

Consumers ENJOY the frugal lifestyle:

• 25 percent report that they are clipping more coupons due to their personal economic situation.
• Nearly three quarters of those who made such shopping changes expect to continue their frugal habits in the future, even as the economy improves.
• Among those consumers who reported using more coupons than the prior year, the largest share in 2009, 37.4 percent, explained their reason for doing was so to stretch a limited grocery budget out of necessity.
• Once consumers adopt these frugal habits, they quickly discover that they like the feeling of saving money. Acceptance of these new habits can be seen in the largest share of response for increased coupon usage in the 2010 survey — 29.3 percent of consumers stated they are using more coupons for the enjoyment of saving, an increase of 11.7 share points over those stating that reason the prior year.

Walmart is taking it’s shot at Peapod and FreshDirect.

The “Walmart To Go” test allows customers to visit Walmart.com to order groceries and consumables found in a Walmart store and have them delivered to their homes.

Products include fresh produce, meat and seafood, frozen, bakery, baby, over-the-counter pharmacy, household supplies and health and beauty items.

The online grocery business has proven difficult to succeed in given the perishability of fresh food and the industry’s small profit margins, analysts have said. But this model probably makes more sense with its stores and distribution centers across the country already. They have the infrastructure.

Should be interesting to see how it plays out.

Green may only be the new black when times are good.

“As recession gripped the country,” reports the New York Times, “the consumer’s love affair with green products, from recycled toilet paper to organic foods to hybrid cars, faded like a bad infatuation. While farmers’ markets and Prius sales are humming along now, household product makers like Clorox just can’t seem to persuade mainstream customers to buy green again.”

Sales of Clorox’s Green Works have fallen to about $60 million a year in comparison to its year of launch when sales topped $100 million.

“Every consumer says, ‘I want to help the environment, I’m looking for eco-friendly products,’ ” said David Donnan, a partner in the consumer products practice at the consulting firm A. T. Kearney. “But if it’s one or two pennies higher in price, they’re not going to buy it. There is a discrepancy between what people say and what they do.”

Does this surprise you?