Digital CPG Blog

CardSpring, an Accel Partners and Greylock Partners-backed start-up, went live last month with its application platform, which allows developers to create applications that can work with credit cards. Now, the nascent system is getting a huge boost with the help of payment processor First Data. First Data is using CardSpring’s API as the basis for its OfferWise solution, a program that allows publishers to attach offers, coupons and loyalty accounts to a consumers payment cards or mobile wallet. First Data, which serves more than 6 million merchant locations including 4 million in the U.S., is piloting OfferWise with dozens of merchants and will roll out the service to its retail customers starting in May.

The partnership addresses the growing shift toward what First Data calls “universal commerce” as consumers look for a shopping experience that bridges online and offline channels and incorporates personalized deals and product information at all times. Increasingly, consumers are looking for deals online and through mobile channels as they look to save money. But many retailers who conduct outreach and marketing online often run into problems trying to close the redemption loop on offers. With OfferWise, retailers will be to send out a deal through an an offer provider and they can now see which deals are actually redeemed at the store through a debit, credit or pre-paid card. It doesn’t have to be a card transaction either. OfferWise can also connect to NFC-contactless payments and digital wallets like PayPal.

American Express and Visa have also tried similar efforts to connect offers and actions to their cards. AmericanExpress allows deals offered through Facebook, Foursquare and LevelUp to be connected to a card transaction, so a coupon can be processed at check-out. Visa did a test with the Gap , allowing Gap shoppers who sign up, they can get offers pushed out to them when they make a purchase on their Visa card. With OfferWise and CardSpring, all cards are accepted, making it more flexible for consumers. And merchants can also tap into First Data’s analytics engine to improve consumer targeting and get performance analysis of their campaigns.

(via)

Could these initiatives help your loyalty program?

Consumers are bombarded with programs, benefits, points and prizes. According to recent surveys, 1.8 billion loyalty-program memberships exist in the United States, with the average household participating in 14.1 programs. Yet more than half of those memberships are inactive, meaning the customer has stopped paying attention to the program and possibly even the brand itself.

Ouch!

A successful loyalty strategy is underpinned by the consumer’s emotional affinity with the brand, so the goal of should be to create sustained demand. Here are leading factors to consider in determining how best to achieve this:

• The consumer definition of value has changed. The consumer sees the reward program as part of an entire package when purchasing a product. This includes not just functional benefits, but also how he or she feels about the company itself. For example, is your company a leader on environmental sustainability both with your products and within your company? If that’s the case, sharing that information can improve your value to the customer.
• Brand equity-building and preference-building ideas will win against discount- or points-only approaches, and have lasting effect on brand loyalty. Offering customers the opportunity to purchase advance tickets for special events for example, or asking them to participate in a product feedback panel, is valuable in building their loyalty. A points program alone is not a big or unique idea. While it may be a cost of entry, or a tipping point for some segments, there needs to be a “wow” branded idea that sits on top of it. It also must be something that brand stewards and customer relations-management gurus can agree on.
• Complementary companies with shared audiences will increasingly work together. This “consortium” approach to loyalty is a trend. Enfamil and Pampers, as well as General Mills and Nestle, are good examples of companies taking this approach. The Jigsaw Consortium, for example, leverages a shared database between several companies to effectively target like minded-brand loyalists and also reduce their individual costs for data analytics.

(via)

Here are the top new rules of engagement to effectively reach Gen Y moms across digital platforms:

The 24-hour rule: 46% of Gen Y moms expect brands to update their profile pages on Facebook daily, compared to 37% of female consumers. Sixty-four percent of Gen Y moms also expect to hear back from brands within a 24-hour window. Marketers need to make sure that their social networking strategies reflect this sense of immediacy, as well as meet age-old expectations for great, reliable service.

Get your game on: Women, and moms in particular, increasingly lead social and casual gaming. Today, 75% of women (and 77% of moms) have at least one gaming app, compared to 67% of men. Companies like Groupon, Living Social and DailyCandy Deals have effectively tapped into this game mentality, using flash sales and daily deals to build anticipation. Whether you develop a game to build your brand, or reward patrons with virtual currency, this is an opportunity to win big with female consumers.

Rethink loyalty: Loyalty programs are losing significance among consumers as a faster pace online and offline puts a premium on living in the now. With 66% of Gen Y moms claiming that brand loyalty constitutes usage of only six months to a year, brands need to rethink what it means to have “loyal” customers and consider developing a relevancy program instead. Marketers must ask themselves whether their brands are in the right place at the right time with the right information.

Curated serendipity: Offering filtered content is an effective and necessary way to cut through the clutter. But to fully engage moms, there must be room for serendipitous discovery. 87% of women and moms agree that they would rather participate in a one-day flash sale than a weeklong sale. Brands should create the possibility for surprise. E-commerce companies, for example, should take into account the element of spontaneity that happens in offline shopping — the moment of delight when someone discovers or stumbles across a perfect item they weren’t expecting.

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.

Seventh Generation has recently launched a loyalty program that takes in to account how people behave on the Internet:

The Seventh Generation Rewards program lets you earn points for taking actions that help your family and the environment!

You can earn points for reading articles about green and healthy living and for telling your friends to join. You’ll also get points for reading articles, watching videos about Seventh Generation products, and for participating in our fun challenges. Click here to participate in our Naturally Bright Ideas challenge and to see other current Reward Points opportunities. You can also donate your points to charity.

We post new points opportunities each month! You can trade in your points for coupons and free products from Seventh Generation and our partners, or you can donate your points to charity. We hope you’ll start earning points today.

Well, if you’re ever dismayed by a piece of research, just wait a bit and a new study will come out and make you happy again. While last week, we reported that researchers had found decreased loyalty among CPG categories, this week researchers are finding the opposite:

Despite the economy and the growth of private label, brand loyalty has increased in 45 of the top 100 CPG categories over the past three years, according to a new report from SymphonyIRI Group.

Some — like sports drinks — have seen significant gains. Between 2008 and 2010, the percentage of consumers who reported being loyal to a sports drink brand rose by 6.5 percentage points, to 87.6%.

The definition of brand loyalty: More than 50% of the buyer’s total purchasing in the category is of a single brand (not including private label).

Batteries gained 3.9 percentage points to reach a 73.5% loyalty level (as of July 3); cleaning tools/mops/brooms gained 2.8 to reach 72.4%; shelf-stable dinners gained 3.7 to reach 66.9%; shampoo gained 2.8 to reach 65.9%; cat and dog litter gained 2.5 to reach 62.2%; dry packaged dinners gained 3.2 to reach 59.3%; diapers gained 4.4 to reach 58.3%; and household cleaners gained 3.5 to reach 50.9%.

Categories showing the largest losses in brand loyalty include refrigerated salads/coleslaw (-22 points); gastrointestinal tablets (-11); cold/allergy/sinus tablets (-7.2); internal analgesics (-6.9); sugar (-6.5); pastry/doughnuts (-5.2); creams/creamers (-5.2); Mexican foods (-5.1); RTD tea/coffee (-4.9) and butter (-4.7).

We talked yesterday about how Facebook was more of a loyalty program, not a customer acquisiton tool and judging by the latest numbers, more CPG brands should be using it:

The best-selling packaged-goods brands saw the defection of some of their most loyal customers over the past year, per a study by Catalina Marketing, which examined shopper loyalty-card data related to the top 100 CPG brands. According to Catalina, these brands experienced a 46% dip in loyalty among their best customers, although they still managed to grow their sales by an average of 2.2% during the 52-week period examined in the study.

Here’s an interesting new start-up in the CPG space:

Consmr, besides not liking all of its vowels, is attempting to build the Yelp, or Rotten Tomatoes, of consumer packaged goods (CPGs). While at this point Consmr may not be able to offer you a thoroughly detailed treatise on the value of Scope over Listerine, that’s the bent of its long-term goal.

Consmr Founder and CEO Ryan Charles left his full-time job at Zagat (where he was the head of mobile and was responsible for its partnerships with Foodspotting and Foursquare) at the end of March to pursue his new startup. Why?

The genesis dates back to the height of the recession, he says, when a lot of we consumers became more discerning (and price conscious) in regard to their daily product decisions. While there’s been tremendous growth in web research on CPGs, the sources for this information are fragmented. There’s no Yelp or LibraryThing, or sites taking advantage of crowdsourced data or social integration to help you choose which product is right for you. And he has a good point; all-in-one sources for movie, TV, book, and restaurant recommendations (to name a few) are alive and well, so why not for CPGs?

What will motivate people to write reviews on toothpaste? Well, from experience, we know people are pretty passionate about their toilet paper and toothpaste, but Consmr will also be incentivizing users through game mechanics, which will give CPG manus a good opportunity to hook loyalty programs into the platform.

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.