Digital CPG Blog

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.

Consumers are swayed by branding and labeling, according to a new report published in the Journal of Food Quality and Preference. Heavily swayed, in fact.

Labels and brands exert more influence on consumers than price. “Overall, label styles enticed consumer attention on-shelf, according to the study, followed by brand recognition and finally, flavor/taste perception.”

“Younger consumers were said to use multiple factors in their purchase decisions, including product packaging and price; while older consumers were found to be more brand-loyal overall, despite price comparisons.”

Brands that are looking to make the shift online will want to ensure that all the money they’ve spent on their brand and label for the store shelf isn’t wasted once it’s product hits the virtual shelves of shopping.

“The number of special product promotions featuring digital coupons increased 84% between the first half of 2009 and the first half of 2010 — largely thanks to new marketing initiatives via retailer Web sites and social media, according to Kantar Media, which operates a Web site-tracking service called Marx,” reports Erik Sass.

“Focusing in on retailer Web sites specifically, Kantar-Marx found that the number of manufacturers staging promotion events with digital coupons (268) surpassed the number using traditional print freestanding inserts (213) — another sign of their growing popularity.”

Part of the increase of digital coupons is a CPG brand’s willingness to use social media sites like Twitter and Facebook to spread the word and gain exposure. And for consumers who no longer want to take the time and energy to clip coupons, digital coupon events are a great way to increase customer loyalty.

A new brand of fruit and nut snack bar, “Kind,” is trying to live up to it’s name and offer a new twist on cause marketing. Stu Elliot of the New York Times reports:

Kind’s approach to doing well by doing good is a campaign carrying the theme “Do the Kind Thing,” which plans to donate, in stages, $100,000 to organizations deemed worthy of assistance.

“Do the Kind thing” asks consumers to perform acts of kindness — deliberately instead of randomly — that are tracked through Kind cards bearing code numbers. A participant in the “Kind Movement” links his or her card and code to a charitable organization or other “redeeming” cause, as the campaign’s rules describe it; performs a kind act for someone else; and then passes the card and code on to that person.

That someone can repeat the process, and so on and so on and so on — just like in that vintage Faberge shampoo “And they told two friends” commercial. Points accrue for the causes at each step of the pay-it-forward journey, and the causes with the most points receive the donations.

More information about the campaign is available at various Web sites, among them kindsnacks.com, kindmovement.com, kinded.com and the Kind Facebook page .

It’s a race for your favorite charity and word of mouth for the success of Kind’s brand. People want to spread good, but as the founder notes, Kind will have be careful to not over-commercialize the goodness of deliberate acts of kindness for the purpose of selling the brand. And the fruit and nut bars have to be really tasty and good to begin with.

Jack Neff at AdAge recently reported that the CMO of Unilever Keith Weed stated the company will increase digital investment significantly:

Mr. Weed acknowledged there’s a risk in “getting ahead of consumers,” as he describes some of Unilever’s efforts. But he likens investments in emerging media to those in upstream product development — a necessary outlay to ensure long-term growth.

Ad Age: You’ve said you’re going to double digital spending this year, which is really very ambitious. Why?

Mr. Weed: At the end of the day we are a mass marketer. Every day, 2 billion people use our products. So what dictates what we do is those consumers, and I want to be where consumers are. The truth of the matter is we’re seeing this huge migration across the world to digital. We need to be ahead of the consumer, so when the consumer arrives, we’re already there.

We’ve talked a lot this week about being where the customer is, and it looks like Unilever understands that well.

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.

Marketing Daily recently asked Paul Parkin, founding partner of SALT Branding, an integrated brand consultancy in San Francisco, to make sense of Gen Y and brands. Here are two key takeaways from the interview:

1) Gen Y is less loyal. “They grew up in an age when there was always a new site emerging that was better than the old one, and they’re happy to leave it behind. But they are more loyal to channels. They may not be loyal to any brand of shoes or department store, but they are loyal to the Internet channel, and brands like Zappos.com and Amazon”

2) Use Social Media to keep up w/ Gen Y. “The fastest-moving consumer companies, like Virgin, Red Bull and Pepsi recognize that consumers want to engage with brands in entirely new ways, such as through mobile or social media. And they know people want to do it on their own terms.”

In the new digital age, channels and those brands increasingly rule. We’ve seen it in marketplaces like Orbitz and e-Bay where young consumers are given all the tools to find information and make the best decision.

I’m always reminded of the movie Miracle on 34th Street where the fictional Macy’s store opens up the door on pricing and allows their customers to compare prices  to all of their competitors right there in the store. What a revolution that was!

In the CPG sector, sites like our own Alice.com also work hard to bring the power back to the consumer, empowering them with a wide range of unbiased information to find the best products. Such transparencies are surely a big reason why channels are outperforming individual brands.

It’s more likely that consumers interact with CPG manufactures via visits to brand Web sites than of fandom or followerdom via Facebook or Twitter, a 3-country survey by Ipsos Marketing, Consumer Goods, released last week.

When the purpose is to “obtain information about the brand,” 74 percent said they go to the brand’s Web site, 34 percent to its Facebook page and 28 percent to its Twitter page. The numbers were nearly identical when it comes to getting coupons or promotional offers.

But it’s quite different when consumers want to “share opinions/experiences” regarding a CPG brand. When this is their purpose, 57 percent use the brand’s Facebook page, 50 percent its Web site and 38 percent its Twitter page.

Likewise, when they want to “connect with other customers,” 54 percent use the Facebook page, 48 percent the brand Web site and 35 percent the Twitter page.

via Adweek.

General Mills has unveiled a redesigned version of its lifestyle website for Latina women,  QueRicaVida.com. The site now includes health tips, parenting advice and easier navigation tools that allow users to post opinions and upload their recipes.

“QueRicaVida.com has become indispensable for our Latina consumer,” said Rodolfo Rodriguez, General Mills’ multicultural marketing director. “General Mills has invested resources to better understand and serve our Hispanic consumers, and the emotional link we have achieved with our audience has been an amazing result.”

The move towards two-way advertising has been much heralded.  The digital world has allowed advertising to become more participatory, and consumers are starting to demand the ability to interact directly with their brands (great study here).

That is why it is so exciting to see the giant $65 billion television advertising market start to give two-way advertising a spin.  The Wall Street Journal had a great article this week (Talking Back to the TV) about how major players in the television advertising industry are enabling interactive features in tv ads.  

Both Unilever and P&G were featured in the article for their early success with the new features.  Unilever’s Axe brand, for example, had more than 3.5 million users spend an average of 5 minutes playing with their interactive advertisement. 

Even more interesting, P&G’s Charmin advertisement married in a direct response component, allowing tv viewers to request a Charmin coupon through the mail.

I find this tie-in to direct response pretty exciting.  Think about the possibilities of a CPG brand being able to capture an actual sale directly through a tv ad. 

The Charmin advertisement featured in the WSJ piece delivered a traditional paper coupon to the user, but this is just the start of the possibilities.  For example, what if the user could link the coupon directly to a store loyalty card?  Or submit an e-mail address and have a digital coupon e-mailed to them for use at the CPG’s own online store (or a shared storefront like Alice.com).  In these advancements, the CPG company not only captures a sale, it is able to assign an ROI directly to the tv advertisement, and gain rich insights into the actual customer segment responding to the ad.  Accountable television advertising may (finally) be coming.     

The lack of a uniform technology platform will certainly slow adoption, but the possibilities are exciting and the development of this new digital, interactive environment will be fun to watch.