Digital CPG Blog

Pepsi says that marketers have to get into the content business:

Many businesses have failed to keep pace with the growth of smartphone usage, reports eConsultancy.

Mobile is rated the worst of five channels for quality of customer experience, and by some distance. Just 9% of respondents believed that the customer experience offered on their mobile channel was good, and a further 46% said it was just OK. 46% believed it was poor.

As we’ve said before, brands need to get their mobile commerce straight and the numbers continue to show that there is a huge opportunity on this platform.

Digital coupon company Coupons.com recently closed on a $200 million funding round, reports GigaOm.

“Right now we have about 300 employees based in Silicon Valley,” CEO Steven Boal said. With this new funding, the company plans to add 100 new staff members in the next six months and add new sales offices in New York, Chicago and Los Angeles. Coupons.com will also focus on adding new mobile and social networking technologies, he said.

But while Boal was happy to discuss Coupons.com’s consumer traction, he was notably mum in the GigaOm interview on disclosing details about the company’s financial performance. He declined to answer questions about Coupon.com’s sales figures, its prior funding history, whether or not it’s profitable, or who exactly participated in this latest financing round.

Regardless, the news is great for all those involved in digital couponing as this space only gets larger and more profitable.

The State Of Retailing Online 2011: Marketing, Social, and Mobile report conducted by Forrester Research Inc. is out and here are the key takeaways:

- 91 percent of retailers currently have a mobile strategy in place or in development (up from 74 percent a year ago).

- 72 percent of retailers say they will increase their spending on social networks this year over last year.

- Retailers report that 21 percent of all mobile traffic is coming from tablets.

- 48 percent of retailers report having a mobile-optimized Web site; 35 percent have deployed an iPhone app; and 15 percent offer an Android app and an iPad app.

- 62 percent of retailers said the returns on social marketing strategies are unclear, and nearly the same percentage said the primary ROI from social marketing is listening to and gaining a better understanding of customers.

This research begs the question: is your iPad app ready yet?

Groupon is entering the grocery market. But probably not how you think.

Groupon is partnering with a New England supermarket chain to offer deals on groceries. Here’s what will happen – Groupon subscribers will be notified of the deal at Big Y Foods stores — a $39.99 “Shellfish Grill Pack” for $24. But unlike most Groupons that rely on a printed coupon or mobile phone for redemption, those who purchase the deal will have it credited to their Big Y Foods loyalty cards.

“It’s seen as test of whether Chicago-based Groupon can adapt its daily deals to retailers beyond the small merchants that have been its core business,” reports Chicago Business. “One major challenge has been redeeming the Groupon offers. The traditional daily deals require Groupon users to print out paper coupons or use an electronic version on their mobile phones.”

Of course,  if it’s successful, other grocers are lined up to participate. Would your brand want in on such a deal?

Melissa Sowry, Content and Social Media Manager of Burt’s Bees has grown the brand’s Facebook fan base from 98,000 to more than 370,000 by creating compelling content that consumers want to interact with and discuss, reports eMarketer. That content, ranging from quizzes and video to sampling offers and behind-the-scenes access into the world of Burt’s Bees, is helping extend brand loyalty and generate powerful online viral engagement.

Here are some of her insights:

What drives word of mouth?

Beauty is a category where people take recommendations from their friends and talk about what’s new. They also look to experts for suggestions. For example, if we get a placement in Marie Claire or Lucky where they’re raving about the new tinted lip balm, we might share the link to the page.

We also find fans of the brand are recommending products to one another in this space. That’s the normal activity that takes place around beauty products. It’s mostly women talking to other women and finding out what works, but it’s taking place online in social media venues. For example, a mother might ask other moms about products that stop diaper rash: “What works for you?” These are important conversations and I think online social media is a place where people trust one another to get that information.

What’s your Facebook strategy?

Facebook is a channel for us to provide compelling content. When I came on board, we started doing simple things—posting content and behind-the-scenes images on a daily basis and discussing new products coming to market.

We use social media and Facebook in particular as relationship-building tools. We also create opportunities for consumer education around skin care, for example, and sampling offers. We ran successful sampling programs on Facebook for our relaunched body lotions and new tinted lip balm.

We talk about our products on Facebook but we also spend time talking about the culture at Burt’s Bees through our involvement with Habitat for Humanity, sustainability efforts, product ingredients and so forth.

How does your strategy stack up against Burt’s Bees?

Companies are losing out on billions of dollars and pounds in revenue due to a poor online experience, according to research published today by Econsultancy and Tealeaf. A global survey of more than 500 businesses for the Reducing Customer Struggle report found that companies able to quantify site abandonment estimate they are losing the equivalent of 24% of their annual online revenue due to a bad website experience.

Ouch.

“This focus on understanding customer acquisition and giving less emphasis to the rest of the sales and marketing cycle mirrors the marketing bias towards acquiring customers which has been a feature of the business landscape over the last few years,” the report argues.

I believe that user interfaces and experiences, not data will redefine online commerce in the next wave. I would love to see an interface that allows me to see what strangers and my friends are browsing in real-time. I’d really love to invite my best friend in Madison to go on a shopping date while I’m in DC and browse a site simultaneously while I glance at her and what she’s browsing.

If you try to imagine these experiences in the web’s current architecture, it seems clunky, unrealistic even, but I assure you, the interfaces that use the data of web 2.0 will evolve and become increasingly important in web 3.0. And that’s what will define social on the Internet.

Common predictions are that “the first phase of e-commerce was the utilitarian hunt for staples, the next phase of e-commerce will be about recreational shopping where the merger of social and interest graphs will drive buying decisions,” but here’s my prediction: after the data, it’s going to be the experience. Data is useless without a meaningful experience to plug into. How the interface and experience of social is formed will drive the next evolution of online commerce.

This is the kind of graph we all like to see:

For CPG manufacturers, going online enables a deeper, more personalized relationship with the shopper, reports Nielsen.

Five things to know about online grocery shopping:

1. Consumers love online grocery shopping, but it takes time getting used to. You can simply the process by improving the online experience with navigation, search, online help and porting over shopping lists. Deliver a better time-saving experience and consumers will hang on.
2. Online baskets are different than offline baskets. The average transaction size is much larger for food and beverages ($80 online / $30 offline) and health and beauty purchase ($30 online / $10 offline). And online shopping offers a greater mix of pack sizes and categories.
3. Consumer perceptions and purchase behaviors are affected in important ways. The interactions with the online ‘store’ environment are fundamentally different than an in-store experience. The online experience is fueled by a needs-driven experience as a greater variety of options are made available on screen.
4. Online shopping “levels the playing field”. Big brand ‘physical’ advantages do not translate online. With universal distribution and search functionality an inherent bias toward niche players is created. Ultimately, price transparency, connectivity and open content favor a purely ‘rational’ market.
5. Large and small brands can win online by combining marketing savvy with digital capabilities to add value. With interactive websites, smartphone applications and social media connections, expanding your brands in new and innovative directions is virtually limitless.

Last week, we talked about how consumers are more likely to buy a product if a company answers their question on Twitter. So it follows this week that shoppers want to buy via Facebook and Twitter period. This according to the “2011 Social Commerce Study”, a joint research project by Shop.org, comScore and Social Shopping Labs. Key insights from the report include:

- 42 percent of online consumers have “followed” a retailer proactively through Facebook, Twitter or a retailer’s blog, and the average person follows about six retailers.

- 58 percent said they follow companies to find deals, while nearly half (49 percent) say they want to keep up to date on products. More than one-third also follow retailers for information on contests and events (39 percent).

- 56% of Facebook users say they have clicked through to a retailer’s Web site because of a Facebook post, while over two-thirds of Twitter users (67 percent) say a post has spurred them to click through to a Web site.

- Additionally, the appetite for buying directly through social networks appears strong: one-third of shoppers say they would be likely to make a purchase directly from Facebook (35 percent) or Twitter (32 percent).

- 42 percent of Twitter users access the site on their mobile phone at least once a day, while the same is true for 34 percent of Facebook users. In addition, about one-third (32 percent) of people view YouTube clips daily from their smartphones.

We all care about privacy, but many of us don’t do much about it. That’s because there’s not much to do. But privacy uproar has given some advertisers cause to self-regulate… but so far, consumers aren’t responding. From AdAge:

Since last year, ad organizations in the U.S. have been running a campaign meant to stiff-arm regulatory efforts of the sort that went into effect last week in Europe, where companies will now have to get permission from consumers before dropping cookies onto their computers. The centerpiece of the campaign to convince Congress and the FTC that self-regulation is good enough is the “Ad Option Icon” placed in some ads, pointing to information about behavioral targeting and offering a way to opt out of it.

Thus far it’s received relatively low response, a rare case where low click-through on an ad is positioned as a positive thing. The click-through rate is just 0.002% and of those people who do follow the link, only 10% opt out of the ads, according to DoubleVerify, which recently won a contract from the industry trade group to license the icon for ad clients. Two other companies, Evidon and TRUSTe, also provide the service. Evidon, which has the longest set of data, is seeing click-through of 0.005% with only 2% opting out from 30 billion impressions.

But the low rates alone don’t mean consumers aren’t interested in the issue of how companies are monitoring and using their online behavior. After all, click rates on display ads are generally low, often well under 1% depending on the product category, the audience and the kind of website.