brandcentric blog

My friends over at CPGMatters published a roundup perspective of what’s important for industry trade and marketing strategists in the new year.  They were also kind enough to quote me several times, alongside folks from McKinsey, PWC, Adesso and Synectics Group.

Not surprisingly, the list of themes is fairly consistent with many of the issues I have written about over the past few quarters.  Some of the highlights include: pricing as a strategic lever, planning price and promotion strategies together, co-opetition with private label and maintaining a total category view when selling to retailers.

All in all, an on-target story that frames up some pretty important industry issues for 2010.  You can access the full story here.

Hard to believe, but it’s been a year plus since I launched the brandcentric blog.  Many lessons learned about the art and science of blogging (mostly positive), and still a lot more to discover.

On the content front, this has been a fantastic opportunity to refine my focus in this bold, new era of CPG marketing.  A few of the more meaningful themes from the past year include:

• The expanding share-of-wallet that digital media has claimed from traditional media vehicles.  CPG was slow to adopt, but quick to catch up to (and potentially surpass) other industries.
• The coming-of-age of social media and marketing for CPG brands.  Word-of-mouth makes a lot of sense for considered purchases, even in the world of fast-moving consumer goods.
• Leveraging applied math and modeling techniques to achieve superior merchandising strategies.  The data is available, the science is mature and business-user applications are available through a browser.
• The relentless pursuit of developing, nurturing and monetizing direct-to-consumer relationships.  Alice.com was unexpected, but is exciting to watch.

As I look forward to 2010, a few early focus areas bubble to the top:

• Shopper centricity.   This will be huge across several fronts, including in-store marketing, trade planning, and broader merchandising strategic planning.   Retailers are ready to unleash the data and shopper segmentation, and manufacturers need to step up to the plate.  Collaborative planning has made a comeback.
• Pricing.  Commodity and ingredient cost volatility is expected to rear its ugly head once again.  The focus on promoted shelf price is more important than ever, especially when considering issues like gap to private label and the incredibly elusive consumer.  Expect manufacturers to funnel more marketing dollars to price as a strategic marketing lever.
• Digital integration.  Will this be the year that digital media and marketing shifts from a “center of excellence” service to a brand-driven strategic capability?  For some brands not quite yet, but for others absolutely.

There are many more themes that are percolating.  I’d love to hear what’s on your mind as you look forward to the coming year.

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.

Next Tuesday (April 7) I will share the stage at the Grocery Manufacturers Association conference in Miami with two DemandTec customers — Kraft Foods and Safeway — to discuss the business benefits of collaborative deal management.  We’re expecting more than 250 attendees including CPG manufacturers, a few grocery retailers and a smattering of technology vendors, consultants and media pundits to join us for this session.

So what is deal management?  In a nutshell, it’s how manufacturers and retailers agree to which in-store promotions make the calendar, at what terms, for which products and during which time periods.  The traditional deal management process is pretty inefficient involving a combination of paper deal sheets, spreadsheets, faxes, courier deliveries and phone calls…resulting in a lot of wasted time and energy.  Each retailer uses a proprietary deal sheet and deal term nomenclature, forcing the vendor community to adapt to 20+ unique processes.

Online, collaborative deal management offers a more efficient way for big retailers (like Safeway) and their entire ecosystem of manufacturers (including Kraft Foods) to bring sanity to the process.  Paper deal sheets are now a thing of the past.  Deals are submitted and negotiated online with deal status and comments fully visible to both parties.  No lost deals, and no anxious vendors.  Meaningful efficiency gains are realized by both parties, allowing everyone to focus on more strategic activities.  DemandTec’s Deal Management software service leads the industry, with retailers accounting for roughly 33% of US grocery ACV using (or deploying) the software service.

So collaborative deal management is definitely a good thing for the industry.  As more retailers migrate to an online, collaborative process life gets a little easier for everyone.  And this is ultimately a good thing for consumers.  As trade plans are entered and negotiated more efficiently, more working dollars can flow to the shelf to support an incremental program or two.

If you plan to attend the GMA conference, we’ll see you in Miami!