Consumer Packaged Goods and the Omnichannel Challenge

Introduction

Omnichannel marketing represents a new opportunity for the CPG industry to build brand loyalty and long-lasting relationships with consumers like never before. This is the first of a three-part series of white papers that aims to help you to demystify omnichannel content strategy.

In part one, we’ll explore the opportunities, challenges and recommended approach to omnichannel marketing for CPG companies. We’ll discuss ways you can increase consumer engagement and advocacy through customer-centric activities that support your core brand propositions, and ultimately help you secure or defend market leadership.

A word from Robert Rose

Developing long-term relationships with today’s consumers is more complex than ever before. There are literally trillions of connected devices coming that enable communication between company and consumer and vice versa. For marketers, it’s simple: business as usual isn’t.

In a world where audiences are increasingly fragmented – it is no longer about developing interactive relationships with audiences, it is about engagement, passion and loyalty. But marketers must do so within limitless contexts. And this is today’s challenge.”

Robert Rose is the Chief Strategy Officer for the Content Marketing Institute. He has written a number of books about content marketing and is considered to be one of the leading voices in the industry.

Contributor

Noz Urbina of Urbina Consulting works with forward-thinking organizations that want to ensure their content consistently delights and can engage customers via any device, channel or format. Noz Urbina founded Urbina Consulting in 2013. His experience covers both pre- and post-sales content from digital marketing to product communications with a focus on futureproof adaptive content. He is recognized within the global content community as an expert content strategist, content modeler and customer experience consultant.

Today’s CPG challenge

Consumer Packaged Goods (CPG) companies are faced with seemingly conflicting trends relating to marketing practices and customer engagement.

On one hand, they need to personalize their communications. On the other hand, there is an ever-growing range of channels on which to distribute content, resulting in an increased number of data sources that must be incorporated and analyzed – social, mobile, wearable devices, augmented reality, the internet of things, sensors, beacons, kiosks and more.

So how do you make millions of customers feel they have a personalized experience with your brand? And how do you deliver that experience via an endless number of channels out there while still keeping your messaging and branding globally consistent, yet localized?

This issue is not limited to CPG; it’s a global shift. For CPG companies, this contradiction is compounded by the fact that personalization needs personal customer data to be meaningful. But CPG companies struggle to get direct access to clients, and few are successful at generating significant sets of contact data, let alone direct customer behavior data. Your retail partners, with loyalty card programs and direct contact at points of sale, have traditionally held the detailed customer behavior data that enables delivery of tailored content and offers.

What can you do?

By personalizing marketing communications, CPG companies could increase conversion rates by 70% and reduce advertising campaign costs by as much as 50%1 . Many already recognize this opportunity: 94% of businesses say that personalization is key to success in their content strategies going forward.

What is omnichannel?

Omnichannel marketing extends the more common term ‘multichannel’. Rather than just referring to delivering marketing content on various channels, it requires increased focus on understanding and optimizing communications for the entire consumer journey, across all channels, in a cohesive way.

A new strategy

An omnichannel content strategy seeks to:

• Develop content that adds value across the entire consumer journey, taking into account all channels, deliverables and touchpoints.
• Help the brand speak with one voice, no matter how, when or with whom the conversation is happening.
• Use channels in concert to mutually reinforce each other, making the whole greater than the sum of its parts.

The difference between omnichannel and other multichannel approaches is in delivering campaigns across a combination of channels that support each other, rather than working in parallel.

Jack Haber, VP of global advertising and digital for Colgate, said: “Now you can’t just do a media plan around TV. You have to have all these new channels play together, both on the planning side and the creative side.

A new interplay of channels

The range of marketing channels available today is huge. The web alone now represents a huge collection of consumer touchpoints.

Research shows that core websites for CPG brands receive little repeat traffic, so rather than focus on this area, many global brands have upwards of 500 owned web properties and create tens of thousands of end deliverables and touchpoints across their range of brands.

Similarly, social media is more than Twitter, Facebook and Pinterest. It now includes channels like Vine and more regional competitors like Renren (China, ~31M users), Orkut (Latin America, ~66M users) and Badoo (Mediterranean Europe and Latin America, ~152M users)4 . There’s also crossover between channels and content types; you can talk about sales versus marketing’s use of web or social, as well as the customer service team’s use of informative content. Complexity can grow quickly.

Omnichannel still includes traditional media such as broadcast, outdoor signage, radio and digital, but it also includes many other formats and channels for content delivery, such as:

• Packaging
• In-store kiosks
• Flyers, leaflets and brochures
• Applications and games
• eBooks
• Augmented or virtual reality
• Content embedded in third-party deliverables, such as brand presence inside video games
• Combined “multiscreening” 5 experiences of all of the above, for example using mobile devices and digital while consuming broadcast media on a separate screen

What’s the impact for CPG companies?

For CPG companies and their service partners who have spent years focused around tried and trusted vehicles, like a 30-second media spot or print advertising in national newspapers, this larger scope and integrated approach can feel foreign.

Econometric modeling demonstrates that TV and other massreach channels work. But things are changing. The voice of the CPG industry is being muted, whether though spam filters on our inbox that block marketing emails, or through an increase in digital TV recording devices at home that allow us to skip advert breaks. Companies need to find new ways to reach consumers that complement traditional ones.

In terms of meshing all these online and offline channels together into transformative experiences for consumers, Bain Consulting puts CPG companies 16th out of 22 industries. Besides manufacturing, the only industries slower than CPG are those held back by extensive regulatory and safety concerns like pharmaceuticals, utilities, or oil and gas.

The good news is that, in terms of both content strategy and technology, there are solutions and approaches available to address omnichannel delivery.

Getting omnichannel right

Omnichannel can be seen as a daunting challenge – or as an opportunity for differentiation. A brand doesn’t need to literally ‘be everywhere’. Instead, brands should take strategic decisions and tell unified, coherent, relevant stories. Omnichannel is therefore about making your chosen channels work together for maximum net benefit.

By looking at some of the leading brands that are innovating in omnichannel approach, we can start to identify where CPG companies should be heading with their communication strategy. Although the details will differ significantly from product category to category, these stories contain valuable lessons for any CPG brand.

Case study: Frito-Lay/Walkers drives engagement and sales lift

Frito-Lay is a PepsiCo crisp brand that also owns Walkers Crisps in the UK. In 2012 it launched the “Do Us a Flavor” campaign, which invites consumers to submit new crisp flavors in a contest. Frito-Lays manufacture a range of the suggested new flavors and the public is asked to vote for their favorite. The winning suggestion then goes to market.

The campaign drives multichannel engagement throughout the year and runs annually to this date in the US, UK and Canada. Activities for the campaign launch included:

• A campaign microsite (www.DoUsAFlavor.com)
• TV adverts
• A launch event in Times Square New York
• A contest close-event at the New York Stock Exchange
• Communications, submissions and contest voting on Twitter, Facebook, Instagram, Vine and mobile phone via SMS
• An option for Uber customers to enter a code on the taxi service’s app and receive a basket with the finalist flavors

In the UK, Walkers Crisps also cleverly used social media to further engage customers with a Twitter-activated vending machine. When consumers tweeted @Walkers_busstop, a bag of crisps fell from the machine. The YouTube video of consumers’ reactions has been viewed more than 800,000 times.

The result

Frito-Lay hoped to receive 1.2 million flavor submissions, but the concept was so popular it actually received 3.8 million. During the nearly 10-month campaign, its Facebook page averaged more than 22.5 million visits a week. And year-on-year sales during the campaign grew by 12%, greatly outperforming the expected 3% increase.

Case study: Ragú generates over 380 million impressions

Ragú is a brand of pasta sauces aimed at the general market. Their “Give ‘em Ragú / Long day of childhood” campaign of 2012 involved many channels working together to target ‘American moms’, with special consideration for ‘mommy bloggers’. It involved:

• An “edgy” broadcast TV advert that ran during the Olympics
• A more general-taste version of the TV advert
• Radio adverts
• Web display adverts
• A campaign-specific subdomain on ragu.com
• Campaign-specific Twitter and Facebook pages
• A custom app facilitating user-generated content.
• Native advertising posts on popular blogs such as Circle of Moms
• Real-time monitoring of incoming user-generated content and adaption of content assets for the duration of the campaign

This campaign is a great example of a successful omnichannel strategy. Ragú used its app as a channel-connecting lynchpin. It allowed consumers to blend their own photos and videos from Facebook with the broadcast television spot, and then invited them to share the resulting content on social media. To drive even more engagement, the brand invited users to personalize the lyrics of the advertising jingle, creating a huge range of variations throughout the life of the campaign.

The result

The Ragú campaign engaged consumers intimately. It drove 450,000 app downloads12 and over 384 million impressions,13 as well as earning many hundreds of thousands of additional impressions through user generated content. The campaign was an earned media hit, with mentions on several talk shows, radio shows and third-party sites.

Key learnings What can CPG companies take away from this discussion? Here are some lessons that relate across the industry.

1. Sell by not selling

By creating personal connections, brands can establish engagement and opt for more direct communications or offers later. The case studies we explored earlier were pure brand relationship plays and had no offer components. Instead of going straight for the sales transaction, the brands created relationships, making it more likely for a consumer to choose their brands over the competition in the longer term. The journey in the Ragú story was especially simple, but the short loop between awareness and advocacy proved effective. Both campaigns are in categories that are approaching commoditization, where traditional differentiators like price and taste are less powerful. True engagement is therefore vital.

2. Own your audience

By creating a direct, intimate connection with consumers that is supported by technology, brands can move beyond advertising and build a long-lasting relationship. Not many brands have taken this step yet – most still use paid advertising to effectively ‘buy’ consumers’ attention. But that is not a cost-effective strategy in the long term.

3. Make channels work in harmony

Omnichannel requires you to approach the market with unified communications. It’s no longer simply about choosing between digital channels and broadcast media. Instead, look for opportunities to add value throughout the whole journey. The secret ingredient in omnichannel is alignment. A successful omnichannel campaign uses content and calls to action to support the consumer’s personal motivations – in Ragú’s case, to share memories of their children with friends and family in an amusing way. These calls to action should point to each other and encourage the consumer to be an active part of the developing story.

4. Adapt around your fundamentals

Omnichannel doesn’t deemphasize fundamentals. A strong brand identity, clear messages and a well-constructed value proposition become more important, as they become the foundation for adapting messaging. Omnichannel is specifically about retaining cohesion across channels. To successfully scale your communications across channels, you need a stable base. CPG is a mass market, large-scale industry, which means delivering one version of content to your audience is challenging enough for most brands. To make an omnichannel strategy work at scale, you need to create adaptive content that can feed various channels from the same source with minimal or no human intervention.

The CPG opportunity: differentiate through engagement

Consumers live across multiple channels every day. By embracing omnichannel, you adjust your communication strategy to fit consumers’ reality. In turn, you open the door to deeper relationships with those individuals and drive advocacy.

Here are some practical steps you can take to turn an omnichannel strategy into a reality for your business and benefit from greater engagement with your consumers.

• Pick category-appropriate approaches
  • It’s important to create branded content that is enchanting, engaging and differentiating, but be prepared to adapt your approach depending on the product category. A campaign for cleaning products may be more indirect than a campaign for personal hygiene brands. For example, consumers may not search online for stain removal spray, but they will look for “ways to remove red wine stains”.
• Remember that engagement trumps impressions
  • Content that engages the audience adds more value to users than traditional marketing. This type of content will have a more profound and long-lasting effect than a simple advert, even if that advert gets a lot of views.
• Don’t try to own the consumer journey
  • Put the consumer first in your communications, otherwise your audience will find ways to simply avoid your message completely.
• Move from isolated campaigns to agile, continuous improvement
  • CPG companies needs to move at the consumers’ rate of change. Brands that diversify their approach will increase engagement and will become known for more than just their products.
• Break out of channel or media comfort zones
  • Adopt a future-ready model that embraces your consumers’ omnichannel journey and optimizes brand engagement. Success is about more than generating a large number of impressions.

The last word

Building and managing a coherent omnichannel consumer journey is one of the greatest opportunities available for CPG companies to influence ongoing engagement and advocacy. Your consumers are already living across channels, and the tools to execute omnichannel already exist. Embrace the challenge and turn it into an opportunity. Customers will love you for it.