Shopper Marketing - July 2018 - 8
SHOPPER MARKETING JULY 2018
How to Consider a Direct-to-Consumer Model for E-Commerce
By Chris Gelbach
Schaumburg, Ill. - Should your brand
build a direct-to-consumer e-commerce
model? During a Path to Purchase Summit
presentation in March, Kellogg Co.'s Chris
Perry gave those in attendance some advice.
Perry, senior director of e-commerce at
Kellogg, noted that in his last three CPG
roles, as well as in a consulting role he had
engaging Fortune 500 CPG companies, the
question of direct-to-consumer (D2C) continually came up. "It was often about how
do we do it? It was not always why should
we do it, or what should we actually do?" he
said. "But the why and the what are more
important than the how, because that's ultimately going to determine its success."
Perry noted that CPG companies have
five strategic options for responding to a
changing e-commerce environment of extensive sales growth, retail store closings
and rampant M&A activity accelerated by
Amazon's acquisition of Whole Foods.
One is to fail to respond to these market
dynamics and die. Another is to sell or exit
A third is to join forces by partnering
with and selling through existing e-commerce retailers. That option is a viable one,
but it requires conformity to others' models
with limited control.
A fourth is to launch your own "me too"
D2C model in competition with existing ecommerce retailers. "But I would argue that
if you just play the game that's already been
defined for you, you might be a pirate and
you're going rogue, but you're going to lose
an eye," Perry said.
The fifth option is to change the game by
launching a truly differentiated D2C value
proposition. "And that's where I'd say you
can be captain of the seven seas if
you pivot in the space and differentiate what you offer," Perry said.
Kellogg Co.'s Chris Perry
He recommended options three
and five as the best strategic responses in this environment.
As part of a successfully differentiated D2C launch, marketers must consider five elements of
what Perry called the D2C value
equation. "At some point you need
table stakes in all of them, but you
have to differentiate in a meaningful way in at least one of them," he
said. The five elements are:
n expertise, embodied by things
like online educational content,
customer reviews, consultation
and customer service.
n solutions, including elements
such as web-only exclusive
brands, products, packs and
n convenience, which is delivered
through services like expedited
and immediate delivery, subscription services and other easy-order "6S" idea filter by asking these questions:
n Does it solve an actual consumer problem?
n Will it be different and better than the
n price, including options such as special
pricing, deals of the day, free shipping
and charitable donations with every pur- n Is it strategic to the business/brand?
n How will success be measured? What
n the x-factor, encompassing other eledoes that look like?
ments such as social community or n Is the approach scalable across our business?
membership, special rewards or loyalty
programs, unique customer service or n Will this be sustainable after the initial
"Get a cross-functional team together
To determine whether a D2C approach
is right for a brand, Perry recommended [comprising] the appropriate people to
putting the idea through what he called a come up with a neat idea," Perry said of
companies that are considering D2C. He
suggested that the team then come up with
five to 10 propositions of things that the
company could do that would be theoretically superior to the competition in at least
one of the five elements.
"Then you want to take that and pass
that through the six filters," he said. "And
you want to be thinking about these questions as you do it. Because there are a lot of
cool ideas out there that don't actually solve
problems. Even if you're not owning the
actual launch of the program, be the voice
of reason in the room."
Mobile Marketing Association Helps Brands Get Granular
By Chris Gelbach
Schaumburg, Ill. - According to Mobile
Marketing Association CEO Greg Stuart, until recently there was no accurate
method for measuring the ROI of mobile or
its subcomponents compared to any other
media choice a marketer could make. "This
device that you carry with you every single
minute of the day - the single greatest tool
we've ever had to get close to consumers -
has gone completely unmeasured."
In response, the Mobile Marketing Association created SMoX, a research methodology designed to isolate and measure the
ROI of TV, radio, print, internet and mobile
marketing, along with subsegments that
include mobile video, display, audio, social
and other segments. Stuart described it as
a real-world, in-market campaign measurement that looks at the investment value of
each dollar by placement and channel.
"What SMoX is doing is that we collect
all that information either mid-campaign or
at the end of the campaign and we go back
through and we say, 'What's the most effective unit within that campaign?'" he said.
As of March, the Mobile Marketing
Association had measured 11 in-market
campaigns using the methodology for
companies including AT&T, Mastercard,
Unilever, Allstate, Walmart, Wendy's and
Coca-Cola. The results have shown that
many companies are underinvesting in cer-
Mobile Marketing Association CEO Greg Stuart
tain marketing channels while overinvesting in others.
"What you see is that they were overspending on FSIs," Stuart said. "How many
retailers are overspending on FSIs? Everybody." The research also indicated an underinvestment in broadcast TV advertising.
"So, you have the head of the MMA telling
you broadcast TV is not dead," Stuart said.
"According to our studies, broadcast TV
should be 38% to 70% of your total campaign spend."
The studies also showed an underinvestment in mobile, with SMoX patterns in optimized marketing mixes suggesting that
mobile should represent 15% to 20% of the
total media budget. According to Stuart,
the studies showed that when mobile is
optimized in the budget, it results in gains
of nearly 20% in brand metrics and of 7%
to 60% in sales.
But the research also showed, according to Stuart, that the biggest potential ROI
could come from looking at granular results.
An example would be examining the value
of an ad on a mobile audio channel targeting
women who have commuted regularly by
a QSR over the last month. He noted that
multi-touch attribution (MTA) is the only
method to get this kind of granular data.
"Ninety percent of marketers use media
mix modeling, and we don't think that can
do it anymore," Stuart said. "And would
you raise your hand if I asked if you use
last-touch attribution or click as one of the
elements of your campaigns? Because, by
the way, you should be fired for that. Clickthrough is an absolutely worthless measurement. It has no relationship to sales."
One issue that has prevented more widespread MTA adoption is that today's MTA
providers have a dismal -31% net promoter
score among marketers. According to Stuart, part of the problem is that many companies have adopted MTA without having
their data organized first. "Because if you
don't have your data organized, MTA is
worthless," Stuart said. "Or at least complicated. Or at least you'll end up hating it."
Stuart noted that MTA projects start as
"big data" projects, but that marketers are
not data architects. The data quality is not
validated. Data completeness is needed,
making the "walled gardens" of companies like Google and Facebook a problem.
And marketer expectations are higher than
what providers can deliver when data assets are not in shape.
To tackle these issues, Stuart noted that
the Mobile Marketing Association has
launched the Marketing Attribution Think
Tank (MATT), with the mission to support
marketers to select and apply MTA solutions with confidence.
"We know that the potential is there,"
Stuart said. "But this is going to be a long,
hard road. So make sure you manage your
manager well. Tell your CFO that we're getting something that will change the game,
but it is going to be a bumpy ride to get
there. And that's our biggest advice for it:
2018 is not the year of mobile; it's really the
age of reshaping marketing."
Table of Contents for the Digital Edition of Shopper Marketing - July 2018
Shopper Marketing - July 2018 - Intro
Shopper Marketing - July 2018 - 1
Shopper Marketing - July 2018 - Contents
Shopper Marketing - July 2018 - 3
Shopper Marketing - July 2018 - 4
Shopper Marketing - July 2018 - 5
Shopper Marketing - July 2018 - 6
Shopper Marketing - July 2018 - 7
Shopper Marketing - July 2018 - 8
Shopper Marketing - July 2018 - 9
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