Digital CPG Blog

Visitors to CPG brand Web sites buy 37% more in retail stores than non-visitors to the brand sites. That’s according to a new study from Accenture, comScore and dunnhumbyUSA, which attempts to shed light on the link between marketers’ on- and offline efforts.

“CPG marketers currently invest millions of dollars in their brand Web sites …,” said comScore Vice President Mike Zeman. “Brand Web sites can attract and influence the behavior of the most valuable segments of any brand’s franchise.”

For maximum impact, brands should update their online content regularly, making sure it contains value messaging that engages consumers while providing compelling reasons to purchase products at retail.

The study found that visitors to CPG brand Web sites are valuable and frequent buyers of the brand in retail stores — completing 41% more transactions than non-visitors. As a result, brand Web sites are able to attract heavier-than-average brand buyers.

(via)

Forget Facebook. What are you doing on your brand site to engage visitors?

Companies have been using consumer data for years, but with the advent of the web, more and more consumers are increasingly paying attention. And asking, who controls your data?

“People are getting more savvy about the fact that there is value associated with their data,” said Laura Simpson, Global IQ director for McCann Worldgroup. Ms. Simpson believes there’s an opportunity for marketers that offer deals and discounts in return for personal information and are transparent about the exchange — notifying consumers that they’ll receive a customized newsletter near their birthday if they provide their birth month, for example.

It’s in that context that personal “data lockers,” or online information repositories designed to be the digital equivalent of a bank with security infrastructure in place, are forecasting a marketplace where consumers have considerably more leverage.

Personal is a startup in open beta aiming to recast the consumer-marketer relationship altogether. With $7.6 million in funding and 42 employees, the site works by allowing users to enter their personal information in structured-data fields within individual “gems” — or buckets of data in categories ranging from banking particulars to liquor-cabinet contents to babysitter instructions. They can share gems with selected individuals, and it’s also intended to be a tool to auto-populate forms.

Personal plans to launch an anonymous marketplace early next year, where marketers will be able to target users based on their personal information. It envisions a scenario in which consumers are compensated for buying products or viewing ads for products that are likely to be relevant to them.

New start-up Birchbox delivers beauty samples to a customer’s door… for a fee!

The company curates four-to-five samples monthly and delivers them to every customer who is paying $10 a month. The company also seems to have  a built-in loyalty program for Birchbox fanatics. The site also features rich content including interviews, beauty tutorials and videos.

Of course, any customer can then buy a full-size version of the sample they receive.

It strikes me as incredibly interesting that commerce is to the point where not only are consumers requesting free samples, but are willing to pay for them. However, it doesn’t seem like a particularly good solution to build loyalty among the individual brands as the customer is constantly receiving new items to try. Time will tell, however!

Alex Tosolini, Vice President, Global e-Business, Procter & Gamble shares insights and lessons from their direct-to-consumer effort:

P&G is very focused on consumers—we say the consumer is boss. And we have a go-to-market strategy that openly declares “win wherever people shop.” That’s important to understand, because as more and more people around the world are shopping in different channels, our role is to be present wherever they are.

A couple of years ago we launched the eStore with two objectives. The first one was to learn about this new space. And the second objective was to generate insight that we could share with all our retail partners so that together we can provide the best possible experience for consumers.

We are learning that more and more people are spending time online to interact with the brands, even if they buy offline. Brand-building is becoming a digital exchange, rather than a one-way exchange.

The second thing we are learning is that content is very important to help consumers make a decision. We know that what we call “enhanced content” is very important to establishing an even stronger relationship with consumers. When you go on-shelf, most of your interaction with a brand is through what you remember you saw at home or the packaging you see in front of you.

Online, as you know, you can interact with the brand with two-way, always-on communication. You can upload videos. You can read ratings and reviews from other people and other activities.

U.S. based direct-to-consumer platform Alice recently expanded to Europe (that’s our company), and now Nestle is starting their own direct-to-consumer effort in Germany:

So Nestlé has joined the social commerce movement, launching an innovative new social marketplace (Nestlé Marktplatz), allowing consumers to discover, shop and share 72 Nestlé brands. Piloting in Germany, this direct-to-consumer marketplace showcases Nestlé’s extended brand range.

Significantly, Nestlé is looking to engage Marketplace customers as brand advisors – inviting ideas and suggestions for new products, packaging and usage occasions.  In other words, the marketplace is not only a forum for buying and selling, it’s also a forum for conversations between customers – who can rate, comment, seek advice and share ideas with each other – and a forum for conversations with customers.

Overall, we like the concept of the Nestlé Marktplatz, particularly as an insight and advocacy generator, and as a central e-commerce platform that will be able to power individual Facebook fan-stores for individual brands.  We see the value for Nestlé, but the challenge for Nestlé will be to demonstrate a compelling reason-to-shop on this central marketplace – as opposed to from a brand-specific Facebook fan-store, or from supermarkets offering a far broader range of products. Why shop 72 brands when you can shop 7200 brands on online supermarkets?

The draw certainly won’t come from the Marketplace’s social features – these are increasingly standard hygiene factors on all decent e-commerce platforms.  Instead, we think Nestlé should turn up the volume on the Marketplace’s differentiator – exclusive access to new and non-local products, whilst adding in an enhanced dose of brand utility in the form of exclusive and quality recipe/nutrition guides/apps and a Kraft iFood-style shopping list manager. We’d also integrate the Marketplace with Facebook, if only to do away with the daunting friction-laden sign up form.

CPG Manus are being a lot more direct lately… want to know why? Read on -

Brands have jumped on the e-commerce bandwagon, establishing their own direct-to-consumer domains, not just for the opportunity to sell directly to consumers, but also to engage and understand their shopping behaviours.

As you can see, the lines are quickly blurring between manufacturer and retailer. And there’s no doubt that this will foster accelerated innovation and cooperation.

What’s driving this market shift? I can think of a few initial reasons:

The economic crisis

Simply put, the rise in commodity prices and recent recession have forced us to innovate. The ability to combine advertising budgets to reach the right consumers preserves margins for both manufacturer and retailer.

Access to the consumer

For brands that don’t have their own retail website, this represents an opportunity to get closer to the consumer.

Proximity to the consumer allows a brand to capture more meaningful insights that can then be used for spotting market trends, or uncovering ways to accelerate a brand’s product development.

Lack of effective means to gather customer feedback

Brands that lack the capability to capture these insights may end up using blunt-force consumer surveys, which creates misinformation that results in products like the ‘Homer-Mobile‘.

The convergence of retailers and manufacturers foreshadows a flattening of the marketplace and increased challenges in differentiation.

In case you missed it, General Mills recently launched a new e-commerce strategy for their gluten-free products called Gluten Freely, which is the latest in their direct-to-consumer effort.

Using Windows Azure as a platform, General Mills was able to build a direct-to-consumer online channel in the cloud. While the company isn’t commenting on traffic, they claim a great amount of consumer enthusiasm and positive social media feedback, including more than 90,000 Facebook fans.

The strategy is not integrated with their existing e-commerce sites, BettyCrocker.com and CascadianFarms.com

Dive into these two great presentations on your lunch hour or your mid-afternoon slump:

Never fun to read the bad news, but let’s get it out of the way this week so we can concentrate on more fun stuff later this week–

As shoppers’ economic concerns eased somewhat in the wake of the recession, some industry observers predicted that store brands would give up their recent gains, or even decline as the economy rebounded. The expectation proved without foundation, however, and the return to some kind of pre-recession status quo eluded the national brands. To the contrary, store brands held onto the gains and even built on them.

Sales of store brands saw gains of more than +2% in U.S. supermarkets and nearly +5% in drug chains. Over the past decade, annual sales of private label products have increased by +40% in supermarkets and by +96% in drug stores.

It was highly unusual, if not unprecedented, that in supermarkets national brands were negative (minus 0.1%) in year-to-year dollar sales, while their unit sales were up a by modest 1%.

It’s not surprising that store brands held their ground after recording sales surges the past few years. Recessions often force consumers to test new purchasing habits. What occurs, in effect, is a large scale sampling experience. Good results with store brands during these periods invariably breed consumer familiarity and then loyalty to the products and the stores that sell them. While some consumers do return to brands they had been buying before, a large percentage stay with their new private label choices.

via Consumer Goods.

What do those young’uns want?

Well, as a Gen Yer myself, I can say this recent study is right on:

In general, you can remember that Gen Yers like to shop as an experience, not just a chore and all the things they tend to like fall under that idea. For instance, we love deli counters and prefer brands with a well-developed social and mobile media presence. Is your CPG brand set up to serve and reach the millenial generation?