Digital CPG Blog

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.

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.

Forrester tried to claim last week that Facebook will not drive e-commerce.

Uh… have they been awake lately?

Lucky for Facebook, they were able to show exactly how the site is driving commerce earlier this month. After all, where there is community, there is commerce.  Simple as that.

Facebook has long promoted the value of such social ads, saying that word of mouth from friends is more valuable for users and marketers alike than generic marketing messages. The company now says that, similarly, e-commerce sites are increasingly benefiting from tying their services into the Facebook platform. In other words, Facebook says a purchase shared on Facebook generates more purchases from friends.

“We now have a direct link between sharing on Facebook and revenue generation at e-commerce sites,” said Dan Rose, vice president of partnerships and platform marketing at Facebook. Mr. Rose said that 18 of the top 25 e-commerce sites are using Facebook features like Facebook Connect or the “Like” button. Giantnerd.com, a shopping site for outdoor gear, saw a doubling in revenue generate from Facebook within two weeks of adding the Like button, Facebook said. American Eagle saw users referred by Facebook spend 57 percent more than average on the site, Facebook said.

Nothing like some hard numbers showing your relevance and dominance to prove the naysayers wrong.

The race for who can dominate e-commerce just got heated. Last month saw two significant announcements from major retailers Walmart and Walgreens.

First, Walgreens announced the company was in a deal to acquire Drugstore.com. “Our acquisition of drugstore.com today significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs whether customers shop online or in our stores,” said Gregg Wasson, president and CEO of Walgreens, in a press release.

“This acquisition offers a unique opportunity that will provide us immediate access to more than three million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering,” said Mr. Wasson.

Next, Walmart launched a full-scale, national rollout of Pick Up Today. “The service enables customers to purchase items online and receive free same-day pickup at a local Walmart store, providing even more savings and convenience to customers,” reports CGT.

“Wal-Mart is uniquely positioned to combine the power of e-commerce with our national retail footprint to offer a leading, multichannel experience that delivers the best savings and convenience to our customers,” says Steve Nave, senior vice president and general manager of Walmart.com. “We’ve seen strong customer response from initial tests of ‘Pick Up Today,’ and we’re pleased to expand the program to customers nationwide in the coming months.”

Interesting and different strategies for each retailer. It will be edge-of-your-seat material as to who can win the e-commerce game.

Can your strategy move as fast as technology? Many CPG brands aren’t even online yet, but commerce has moved from online to networks to devices – specifically, tablets.

Some people are calling it t-commerce, and the iPad is now one of the hottest accessories for moms, reports Patti Ziegler.

“However, rather than creating new incremental sales, says Forrester, t-commerce will largely grow by capturing and cannibalizing traditional PC-based retail traffic.”

“And yet, most retailers have a suboptimal multichannel experience that leaves considerable room for improvement. E-commerce is growing at a double-digit pace and many retailers are ramping-up their presences on mobile and online platforms to offset a simultaneous decline of physical store sales. The ‘multi-channel monster’ will continue to grow in 2011, says Forrester, creating opportunities for retailers that create shopper experiences that seamlessly extend across smartphones, laptops, tablets, in-store kiosks and, yes, the iPad.”

Are you keeping up with how the many different ways consumers get information and shop online?

Should retailers offer coupons on their website?

“I think it has a future [because] retailers continue to drive consumers to their websites. I think a brand manager will want to keep in front of their consumers as they plan shopping trips. It really is in early stages,” said Bob Cristofono, vice president-sales at Marx, a Kantar Media solution.

CPG coupons on retailer websites take several forms:

• Links to national coupon sites; consumers can redeem these coupons at any store
• Coupon offers downloadable to loyalty cards, specific to the retailer
• Direct-to-mobile coupon offers, which are also specific to the retailer.

The latter two kinds of digital coupons turn websites into destinations, noted Cristofono, adding CPG marketers that do this “can be key drivers in aligning with key retailers and securing merchandising support. Destination websites provide direct exposure to shoppers when they’re planning trips and making purchase decisions.”

Besides leading consumers to the stores, manufacturers could also use digital offers and coupons to form a direct relationship and hold onto all of the data.

“More than three of four coupon users (77.3%) report that they ‘search the Internet for CPG coupons ahead of their next shopping trip, with7.4% doing so always and 50.6% with regularity,’ details the NCH 2010 Consumer Survey.”

Making those coupons available at the point of sale online would also be a powerful way to build loyalty and more and more manufacturers are going in this direction.

“How fast is e-commerce growing for consumer packaged goods? Fast enough that a new shopper-marketing agency has launched to focus solely on the channel. Packaged goods is now a $12 billion business across a host of pure-play e-commerce players,” reports AdAge.

“Some 10% of consumers bought consumer packaged goods via e-commerce last year, double the amount from 2009. Nielsen Co. projects e-commerce will rise from around 6% of total packaged-goods sales in 2009 to 10% by 2015 in the U.S., surpassing club stores and matching drug-stores’ share.”

So how can shopper marketing help you take advantage of e-commerce market?

E-commerce presents a far different landscape for shopper marketing than offline retail. For one thing, growth in e-commerce is coming largely from stockup “trips,” with the average online cart about three times the value of an offline cart, largely because of free or reduced shipping incentives for bigger purchases, Mr. Katz said.

Store navigation is another key factor. About 30% of online packaged-goods shoppers go through online “aisles” in a fashion similar to offline shoppers — 40% primarily use the online search box to look up categories or brands and another 30% work off auto-replenishment lists or saved shopping lists, Mr. Katz said.

Search and auto-replenishment offer the biggest opportunities — and challenges — for brands. Etailing Solutions research finds that among those 40% of shoppers using the search box, 95% of sales go to products that come up on the first page of search results. And it’s not always the market leader that comes out on top, particularly with “virtual shelves” often being much more crowded with also-rans.

Among those 30% of shoppers using auto-replenishment or saved lists, Mr. Katz said, winning offers huge and potentially long-lasting rewards.

“There’s a sense of urgency when you think of auto-replenishment,” he said. “If you’re Colgate, and Crest gets on the auto-replenishment list, that’s instant loyalty. It’s very hard to get a product off an auto-replenishment list and a new product on. It’s kind of a race to get on the auto-replenishment list right now.”

Yesterday, we talked about Kleenex using the inherently social nature of the internet to spark a social sampling campaign that increased it’s market share. Today, we’re reporting on a similar initiative by Heinz – this time on Facebook.

“Heinz has opened up a pop-up ‘tryvertising’ f-store on Facebook (tryvertising = advertising by sampling designed to create word of mouth, pop-up = temporary), making an initial 3,000 bottles of its latest tomato ketchup (with Balsamic Vinegar) exclusively available to ketchup fans – before the new product is launched in traditional stores.  The f-store is slick, simple and smart.  Kudos Heinz, for smart social commerce,” reports Paul Marsden.

Similar to Kleenex, Heinz hasn’t tried to move an existing campaign online, but rather has created an online social event that uses the best of the web to spread the word about it’s new product.

“Rather than simply mirror your traditional web-store with an f-store selling all your wares (à la Asos), instead use Facebook to create word of mouth advocacy for your new product launches by rewarding brand fans with an exclusive trial designed to stimulate word of mouth (a variableknown to accelerate product uptake). The combination of exclusivity, scarcity with experience is a proven technique for stimulating word of mouth, combined with the Facebook platform – which is essentially a word of mouth platform – with a differentiated rationale versus web stores.  In other words, use Facebook for retail events. In our book, the future of f-commerce lies in retail events, not stores that simply replicate what is sold elsewhere.”

Too many brands are trying to replicate existing experiences instead of building experiences suited towards the medium. And especially with Facebook, you can’t simply just plop your site into the iframe and expect results. You need to look at Facebook as the social platform it is, and strategize and execute accordingly.

Usually freebies are geared towards and redeemed by you and you alone. But Kleenex has tried it’s hand at social sampling, encouraging visitors to it’s site at kleenex.com to send a free pack of tissues to a friend or family member during the cold and flu season, reports AdAge.

“They could also send virtual Kleenex tissues to Facebook friends, but the million were all actual tissue packs,” said Amy Popp, Kleenex brand manager.

“People can track online how their samples inspire others to follow suit or how many samples have been sent or received by state or ZIP code. So far, 1.5 million people have done so, Ms. Popp said, and the longest ‘chain of sharing’ so far has involved 34 cycles.”

I think this is a very smart way for Kleenex to use the inherently social and sharing nature of the internet to its advantage as a brand. Instead of transferring their sampling campaign online, they came up with an innovative way to connect its customers with other customers. Ultimately, that is what every brand should be doing – not attempting to connect customers with the brand, but enabling connections and conversations between customers.

Very smart, Kleenex. And the results proved it:

“The Kimberly-Clark Corp. brand last week sent its millionth requested mini-box of tissues in North America. And the ‘Softness Worth Sharing’ campaign, aimed at introducing a new softer version of the tissue, has lifted market share 1.7 points since October, said Kleenex Brand Director Craig Smith. Nielsen data from Sanford C. Bernstein show Kleenex share up 3.9 points to 49.9% for the four weeks ended Feb. 19 vs. the period before the campaign began.”

Something I’ve noticed on our own Facebook and Twitter pages is that Facebook is more useful. In talking to other Community Managers it varies, but e-commerce brands typically find Facebook to be superior. New research backs this up.

“Using data from the sites that it powers daily deals for, ChompOn examined the conversion rate and action for deals shared on Facebook and Twitter,” reports Tech Crunch.

According to the startup, the value of a Facebook share is $14 and the value of a Tweet is $5. By comparison, ChompOn says the value of a Facebook like is $8 and the value of a Twitter Follow is $2.

“We’ve seen other data that shows the higher value of a Facebook share over a Tweet. Eventbrite recently reported that a share with Facebook friends results in $2.52 worth of ticket sales whereas a Twitter share is only worth $0.43.”

“As we wrote back then,” Tech Crunch reminds us, “Facebook and email most closely match your real friends. In the context of events, this produces better conversions. But it’s interesting to see that in terms of commerce, Facebook again provides a higher value than Twitter in terms of conversions.”

Sure is. So, where are you putting your resources?