shopper insights

Why Consumer Goods Brands Must Think More Like Retailers

Posted by Sheila Shayon on February 17, 2012 11:07 AM

Consumer Goods companies need to think and act more their retail partners as their participation in social media and online storefronts increase.

An Economist Intelligence Unit report, New Directions: Consumer goods companies hone a cross-channel approach to consumer marketing, sponsored by Oracle, reveals that 41% of respondents surveyed plan to sell products directly to consumers in 2012, a 24% increase over those currently offering direct sales.

“Consumer goods companies can no longer merely push traditional campaigns through new media channels to reach today's more product-savvy consumer. They need to integrate multiple channels to put brands where consumers are, in a way that encourages a more interactive relationship between consumer and producer, not passive consumption of marketing messages.”

Key findings include:

  • The social media opportunity is finally catching the attention of senior management: 74% of CEO-level respondents say social media is a priority for increasing loyalty over the next 12 months.
  • Nearly a quarter of CG executives envisage direct-to-consumer replacing retail.
  • Nearly half of survey respondents and other CG executives see their nascent e-commerce efforts as complementary to, rather than alternatives to, existing retail channels.

Today’s “plugged in” consumer is a part of a complex e-commerce chain that integrates multiple channels for brand engagement.

“Our go-to-market strategy is to win wherever people shop,” says Alex Tosolini, VP of global e-business at Procter & Gamble. “As more people move their shopping habits online, we want to be present when and where they want to make a purchase. The path to purchase is no longer linear.”

The survey was conducted in October, and the respondents came from Asia-Pacific (31%), Europe (28%), North America (27%), Middle East/Africa (10%) and Latin America (3%).

Industries included food and beverages (53%), personal and household products (30%), non-durables (11%), tobacco (4%) and agribusiness (2%).

Forty percent of survey respondents were C-suite executives, and the remainder, held senior management positions in companies with over US$1bn in annual revenue.

Global spirits maker Diageo grew its brands’ collective fan base from 3.5m to 12m in one year, with five of its US brands showing that increased Facebook activity resulted in a 20% increase in sales.

“The rules of engagement are very different,” says Venky Balakrishnan, Diageo’s VP of marketing innovation. “Rather than just talk about it, our actions must reflect what our brands stand for, and we have to give consumers the opportunity to participate and co-create with our brands in a responsible way.”

The study concludes that better measurement begins with better data, and strategic partnerships will continue an important role as CG companies manage existing relationships with their retail partners.

Comments

UMANG India says:

Good I like to add my knowledge from your article.

February 20, 2012 08:25 AM #

Jeff Sable United States says:

This is an interesting topic.  My company Moontoast helps marketers measure the affinity their fans have for their brands, strengthen that affinity, and enable fans of a brand to become brand ambassadors, bringing more fans to the brand.

I like the above title of this article.   It caught my attention because our client base includes both retailers and CPG companies who are successfully leveraging social channels to beat their competition.  We are starting to see CPG companies become "light" retailers, not to compete with their retail channel partners, rather to create excitement and news around new products.

February 21, 2012 08:11 AM #

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