Digital CPG Blog

While this crosses into the food category, I absolutely love this idea of branding, innovation and customer engagement from Chiquita Bananas. They asked, ““How do we leverage the iconic real estate that we already have on all our bananas, throughout the world?” A tiny bit of real estate at that! But a piece of real estate we would all immediately notice if changed. The New York Times reports how they did it:

The campaign involved using this inconspicuous and familiar little bit of branding turf for a visual experiment: instead of the familiar logo, the stickers carried bold and whimsical iconish face imagery — a monkey, a happy Cyclops, a vaguely anime-style girl, a luchador and so on. Using the same colors as the familiar Chiquita logo, the designs were genuine eye-catchers.

And they may have caught even more eyes online than they did in the store: Chiquita set up a Web tool for people to whip up their own sticker drag-and-drop mixes, and an obliging public created more than 25,000 of them in less than five months, according to the company. This enthusiasm has led to a competition — 1,355 entries were submitted over several months, and online voting starts tomorrow at eatachiquita.com to pick 18 designs that will be stuck onto actual bananas.

By actually contributing to the defamiliarizing of something familiar, the contestants layer new “intrigue” onto one company’s supply of what is, after all, a pure commodity.

It’s an amazing campaign of community and letting go of the control of your brand to bring emotion to it. Or as Chiquita reps put it, the campaign is “designed to re-engage that emotional connection with consumers.” So many brands try to this, but with little success. The attempts are usually fairly meaningless, because adding your words to a coffee cup isn’t nearly as interesting as genuinely engaging, re-working and re-imagining an iconic brand to include your ideas, not your ideas of what you think the brand will like. Way to go, Chiquita.

The pizza brand Papa Johns recently released the details of it’s social media campaign, designed to “welcome customers into its R&D and marketing departments via a promotion on Facebook and Twitter.” The impressive contest allows the winner to get one percent of the sales of her creation, up to $10,000, plus $480 worth of free pizza a year for 50 years and a visit to Papa John’s headquarters.

“By mid-June, more than 12,000 recipes were submitted,” Papa John’s reported. “The company chose 10 semifinalists, based on taste, creativity and the quality of the description.”

To pull off such a integrated campaign, Papa John’s admits they had to break through some traditional silos. “The PR and research and development departments are working together with marketing on this,” says Jim Ensign, Papa John’s VP of digital marketing. “Our corporate chef is backing these [customer-created pizzas] as passionately as he backs his own creations.”

Papa John’s insists the campaign isn’t a gimmick, but rather that the social media elements are a “natural evolution of our use of word-of-mouth. The technology gives us more tools,” Ensign says.

And as more companies, particularly CPG brands, are looking to get insight into their customer’s minds and habits, social media holds a particular – and quick – allure. CPG brands have traditionally spent thousands, if not millions, on surveys and sampling without ever having receiving the full picture because retailers have always held onto the majority of data. Now, technology – as Papa John’s points out – is allowing brands to disintermediate and get rid of those layers so they can more effectively have a direct conversation with their customer. Through online marketplaces, social media outlets and more, CPG brands have more options than ever for customer feedback… let’s hope they use it!

BrandWeek reports:

It’s time for brands to bring the commerce experience into their on-  line ecosystems.

How? Companies like Procter & Gamble and Columbia Sportswear are taking the first small steps in this direction by choosing to become e-tailers in their own right, even as they continue to sell their goods and services through their traditional retail partners. They’re linking to products on retail-partner sites, sharing transaction or revenue, and redirecting customers based on product availability. Whatever the tactic, these companies are gaining a first-mover advantage in a rapidly growing trend in online retail. Product brands are wresting control of their customers’ online shopping experience away from the retailers.

Certainly, here at Alice, we’re very cognizant of this trend and the desire manufacturers have to build a more direct relationship with the consumer. E-commerce is one way that manufacturers are going direct in order to gain access to the data that retailers have traditionally held onto to increase brand loyalty and sales.

While non-CPG brands find it easier to go online and direct, CPG brands have it a bit more difficult as the article points out. No one wants to go to ten different sites and ten different checkouts and receive ten different boxes for a purchase that is usually bundled in real-life. Marketplaces like Alice help replicate that real-life shopping experience  for the customer and allows manufacturers access to a shared industry cart. By allowing the manufacturer to hold the relationship with their customer, we also transfer all the benefits and savings to the consumer as well. The direct-to-consumer trend will certainly be exciting to watch as it takes hold of the CPG industry.

Lay’s is offering a taste of farm life with its mobile greenhouse tour, which aims to offer a peek at the “rural farm experience,” reports BrandFreak.

The campaign is an effort to spotlight real, local farmers and is an extension of the ad campaign that launched last year featuring the farmers that grow potatoes for Lay’s. Once inside the bus, visitors can meet Lay’s potato farmers and learn about the chip-making process.

“At the end of each visit (the tour includes six cities altogether), Lay’s will donate the mobile farm’s contents to nearby community gardens, to encourage the planting of fruits and vegetables in metropolitan areas. The initiative taps into the localvore craze and offers a less taxing way to get in touch with your food sources than actually visiting a farm,” BrandFreak reported.

From the photo, it looks like Lay’s is setting up shop in Target store parking lots in some areas. In New York, Lay’s rolled into Times Square and not without some dissention. “When Frito-Lay wheeled its new promotion for Lay’s potato chips — a 70-foot long, 10-foot wide traveling greenhouse — into the crowded urban chaos of Times Square today, it became the latest large food company to awkwardly attempt to exploit a food trend that has largely left them out in the cold — the local food movement,” argued Melanie Warner of BNET.

Although I suspect most locavores will see right through this effort, it’s interesting that Lay’s is making the effort to tap into this important trend.

In a twist on finding the golden ticket, Brazilian company Omo Detergent is set to find their customers using GPS-enabled products. Starting this week, Omo is embedding 50 detergent boxes with GPS devices as part of a new video camera giveaway. E-Consultancy reports:

If something goes wrong with the search, or it takes too long, the boxes come equipped with a note explaining the promotion and prize offering (essentially the traditional approach to such things.)

But Omo and their promotions agency Bullet are mostly interested in documenting the entire thing. Omo’s products are already in 80% of Brazilian homes. This campaign is mostly intended to draw attention to the new stain-fighting Omo product.

The brand’s website, with the tagline “try something new,” in August will start documenting the details of the campaign, including a map with rough estimates of where the winners live, their pictures and video footage of the marketing team tracking down the owners of the GPS detergent.

While the company has already taken some flack for privacy concerns, I’m thinking this is a genius mash-up of Willy Wonka’s golden ticket and Ed McMahon showing up at your door. It’s different, whimsical and sure to breed some excitement among already loyal Omo customers.

E-Consultancy reports:

The last eighteen months have witnessed a huge shift in the way that customers seek help for their customer service queries, problems and complaints.

The continued mainstreaming of social media has been catalytic in transforming this once settled landscape from a closed one-to-one transaction to a more open and conciliatory experience characterised by empathy.

The challenge businesses face is that this questioning is taking place at the margins, on independent platforms, where their presence is neither required nor requested. Sites such as ComplaintCommunity, Cofacio, GetSatisfaction, Amplicate, Vark, Plebble, alongside their more established counterparts like Twitter, Facebook, YouTube and TripAdvisor are shifting the power of voice back in favour of customers.

A company’s ability to remain relevant given the changing needs of an increasingly vocal customer, requires companies to actually demonstrate their customer centricity, rather than treat it as a box to tick on a ‘to do’ list.

The drive towards creating a multichannel service experience is now a more complex undertaking. In this new paradigm, customers are bypassing the necessity to engage with a company altogether. Instead, they are turning to each other for help by posting questions on third party sites or simply self-helping through their own (re)search, on forums or via blogs.

Companies now need to be where their customers are, not wait for them to show up. And that now means that everyone in your company is a customer service representative from the CEO to the PR manager to the actual customer service team.

And more than ever, a CPG brand can’t control their word of mouth and are seeping out of the retail channels they have traditionally used to reach customers. CPG brands now need to create direct-to-consumer relationships, because if they don’t, consumers will keep going without them. Multi-channel customer service is a signal of a larger trend that signals a desire to be more directly connected to the brands we bring into our homes and interact with on a daily basis.

Such a relationship requires empathy, which can’t be translated through a middle-man.

P&G went live with their e-store last week. It’s another great example of how CPG manufacturers are selling direct to the consumer online.

“Manufacturers of goods have been facing increased pressure and competition from their retailers for years,” eCommerce provider Shopatron argues.  “Any retailer worth his weight is offering store brands of their most profitable products – competing directly with their suppliers. And because they maintain the customer relationship, they have an unfair advantage.”

And so manufacturers are turning online to sell direct in order to have access to that data, diversify their revenue, optimize their digitial advertising and marketing dollars, and procure insights that help support the retail channel.

Jack Neff of AdAge reports that the CPG industry going direct-to-consumer is a major trend: “P&G’s e-store comes as other package-goods marketers are also ramping up e-commerce efforts. Alice.com is hosting e-stores on its site for about 30 marketers, most of them in package goods.”

P&G relied heavily on social media to launch the e-store, which is meant to be a ‘living learning lab’ for e-commerce in which the company will share what it learns with other retailers.

For this latest venture in e-commerce, P&G is adding social features such as “product ratings, shopper feedback forums for users to share tips and links to its Facebook brand fan pages, through which consumers can buy products directly.”

Two big announcements this week that present more evidence of a growing trend in the Consumer Packaged Goods industry towards direct to consumer sales online:

Tuesday, January 12, 2010-Alice.com announces a new eCommerce platform that enables manufacturers to launch their own branded webstores that tie into the Alice.com retail experience (full release here and coverage in the Wall Street Journal here)

Today, January 14, 2010-P&G announces that it is testing a new “eStore” to sell its products directly to consumers online (news here)

CPG manufacturers have been talking about selling direct for years; 2010 is shaping up as the year that we finally see an aggressive move online.

For all you CPG veterans out there, did you ever think you’d see the day when major retailers would open up their stores to competitors?  A day, for example, where a small retailer could waltz into WalMart and put an identical product up on the shelf?

It’s happening online.  Today Sears joined WalMart and Amazon as the third big boy to launch a “marketplace” that opens up its online store to third party sellers (see news here, here and here).  eCommerce is certainly changing what it means to be a retailer.

For these big retailers, I can see how the marketplace concept makes sense, namely, by allowing them to leverage the power of their brand to expand their product selection for customers and gain incremental revenue without disrupting their own customer fulfillment costs (Sears, for example, charges each seller a listing fee and the seller drop ships products directly to buyers).  In many ways, it seems like a win for everyone involved.

Can this work for CPG manufacturers that are interested in selling direct to consumer?

In my humble opinion the answer is no for a very simple reason:  Shipping fees.

The mainstream CPG shopper expects to fill her basket with dozens of items from multiple manufacturers and take one bundled basket of goods home in a single trip.  That same shopper is not going to be excited about shopping online for these goods in a marketplace in which she has to pay shipping fees for 10 different manufacturers to drop ship a standalone box to her door.  10 boxes with 10 shipping fees doesn’t seem to work.

Is there a way to drop the shipping fees?  One method Amazon uses with their Subscribe and Save program is bulk CPG buying.  So instead of buying a four pack of bathroom tissue, I have to buy 48 rolls in order to get free shipping.  But is this really mainstream?  And even without the bulk, do I want a stand alone box on my door for bathroom tissue, toothpaste, trash bags, pain reliever and the dozens of other products I stock in my home on a regular basis?  That’s a lot of cardboard.

We’re taking a different approach at Alice.com, which like the marketplaces mentioned above, is open for manufacturers to sell direct to consumer.  But instead of consumers getting multiple boxes, they receive one Alice box of bundled goods from multiple manufacturers shipped free to their door.  By sharing the box and shipping costs (rather than drop shipping), the manufacturers can offer consumers the convenience and free shipping they demand.

Bottom line for CPG manufacturers?  The lines of what it means to be a manufacturer and a retailer are blurring online, and opportunities abound to innovate in how you get your goods into the hands of the consumer.

As we’ve mentioned previously, manufacturers in non-CPG industries are increasingly using the online channel to sell direct to consumer (for example, Internet Retailer recently announced that manufacturers selling direct to consumer is the fastest growing online retail category in this year’s Top 500 Guide).

Mattel, the largest U.S. toymaker, made news this week with a new direct to consumer website that offers all of Mattel’s well known brands under one eCommerce site.  The site, located at Mattelshop.com, includes a number of innovative social features (full coverage here).

It is very interesting to see a manufacturer combine its broad brand portfolio into a single eCommerce effort.  But what I find even more interesting is the analogy to the CPG industry.  Both the toy industry and the CPG industry have a retail landscape that is dominated by a few giants.  Mattel, for example, generates approximately 1/2 of its revenues from three big retailers, Walmart, Target and Toys “R” Us.  The national CPG brands have similar distribution among a few retail giants.

The takeaway for me?  A big national manufacturer like Mattel can take bold steps to go direct to consumer online without disrupting  its traditional retail relationships.  

Shouldn’t the CPG industry be in the same position?  CPG manufacturers have an assortment problem in going direct on their own (something we are trying to help solve with our shared platform at Alice.com).  Are there other pitfalls to a CPG manufacturer going direct that aren’t present for Mattel?  If not, I think Mattel is leading the way in what is sure to be a bigger trend online.