brandcentric blog

As an associate brand manager at ConAgra foods in late 1998, I remember pondering how digital media would eventually impact our overall consumer marketing mix.  With that thought, I did a quick landscape analysis taking note of media opportunities (Yahoo! and Excite at the time), plus the proliferation of direct-to-consumer grocers, including NetGrocer and Webvan.

While the needed scale was probably a few years out from that point (my boss at the time felt that our consumer wasn’t online and might never be online), the market has clearly evolved.  What a telling sign to see ConAgra Foods make a fairly significant  investment in digital media with Yahoo! as outlined in today’s press release.

Here’s a little sneak peek into what ConAgra will accomplish with Yahoo! — a fairly immersive consumer experience overall.

This is a follow-up to Part I on the same topic, which you can find here.

Earlier this month I had the opportunity to catch a live presentation by the founder and CEO of Alice.com, Brian Wiegand, at the Consumer Goods conference in Orlando.  This was a learning experience on many fronts, as my earlier views were based on partial information.

In a word, the best way to summarize Alice.com is PLATFORM.  What Wiegand and team have done is to offer CPG brands the tools and forum with which to sell direct to consumers.  Alice takes no ownership of the product, the data or the consumer.  They have built a nifty e-commerce platform that allows a brand, and really a community of brands, to easily merchandise themselves to a set of engaged shoppers.  Alice does take the burden of financial transaction processing, fulfillment, customer service and data management off the hands of the brands — a welcome proposition for most CPG companies so they can focus on building and marketing their goods.  Their fees are based on the services they provide, not how much volume they move.

This business model puts Alice in a unique position.  Unlike the first generation of selling consumer packaged goods direct to consumers (Webvan, Netgrocer, etc.), Alice can put their focus on three things: building the platform, ensuring excellent service, and working closely with the brands to mine the data.

So while my earlier analysis concluded that this channel may not move tonnage for many brands, it does offer a quick, easy and value-added way to reach a set of high value consumers…efficiently.  And since Alice isn’t directly taking a piece of each transaction, the full retail margin is passed directly to the brand helping to support Alice’s promise of free shipping.  But the real potential boon here for CPG brands are the valuable insights that can be gleaned by interacting with and marketing directly to consumers.   Alice intends to drive a lot of value with this part of the proposition, and rightfully so.

Will consumers habitually buy and replenish non-perishable food, household cleaning and HBA items online, en masse?  That’s the question the founders of Alice.com asked themselves when thinking through their business model.  I think the answer is definitely maybe.

It all comes down to assortment, convenience and price.  Fulfill these three wishes and a segment of the population will happily work with Alice.com as their go-to source for non-perishables.  I honestly can’t see my parents (mid to late 60s) using this service, nor my sister (married w/ 2 kids, but traditional bricks retail shopper) logging onto Alice to reorder some Tide laundry detergent.

But my household (and hundreds of thousands of households like mine) could be all over this.  For example, just last weekend we ran out of diapers for our 6 month old.  Late on Saturday night we placed an order for Pampers diapers and Pampers Sensitive wipes on Diapers.com.  What a pleasant suprise to see the Diapers.com delivery box sitting on our doorstep first thing Monday morning as I left for work.  Talk about convenience.  And it’s tough to beat the price of diapers on Diapers.com.   The assortment of products is good too.  The service works well, is cost-effective and allows us to try new items when we want to.

But how can Alice.com support free shipping for relatively low ticket items?  That’s where the CPG marketer value proposition comes into play.  Reality is that CPGs like P&G aren’t banking on channels like Alice.com to drive big volume today.  The real near-term power of this channel is to establish direct connections with consumers and, more importantly, drive a deeper level of shopper insight.  Behind the scenes of Alice.com, I’d suspect, is a pretty sophisticated set of shopper behavior engines that mine deep, detailed consumer insights and reports.  At scale, these insights could be pretty valuable to big CPG brands to better understand shopper behavior and propensity to buy through a new channel of distribution.  For this insight, consumer products manufacturers may happily subsidize the “free shipping” offer that is so attractive on Alice.com

Should be interesting to see how this service does – both in terms of consumer adoption and CPG advertiser support!

If buzz is what Mars was looking for, then mission accomplished with their Twitter integration on skittles.com.  Social media meets a CPG brand in a really creative, mass-market way.

It will be interesting to see how many other CPG brands discover twitter in the coming weeks and months.  Moves like this will hopefully help Twitter back into a business model for advertisers looking to engage consumers in a new and authentic way.

This is a great presentation on digital promotions and the role they play in the marketing mix for CPG brands.  The key takeaways here that I have also observed from own experience include:

1. Now more than ever, consumers are responsive to online promotions.  All the data I have seen supports this reality.

2. Integration, integration, integration — into the broader media plan, into mobile, via social media, onto packaging.  The digital promotion carries the conversation beyond the initial dialog.

3. Online promotions can be messy and wrought with legal complications.  Hire a good promotion attorney to keep you out of hot water.

Thanks to Team Digital for posting this to SlideShare.