Posts tagged "e-commerce"

Stark reality of rapid change mandates marketing shift

March 24th, 2020 Posted by brand marketing, brand strategy, consumer behavior, Consumer insight, e-commerce, Higher Purpose, Marketing Strategy, Supermarket strategy 0 comments on “Stark reality of rapid change mandates marketing shift”

Guidance as new voice required in the face of cultural upheaval

Whatever the marketing plan looked like four months ago, it’s changing now in the face of a new reality and shifts in consumer attitude. Here we will chart the conditions and explain an enlightened approach.

So you understand what sits underneath the shifts:

Awhile back when we were engaged in the home safety products category, we had access to reams of quantitative and qualitative research to help us understand what the barriers were to purchase of potentially lifesaving products. The primary hill climb can be summed up in six words: “It will never happen to me.” Home fires, carbon monoxide incidents and other similar close-to-home threats happen to “other people,” consumers believed. This complacency could only be disrupted when confronted with real people stories of loss and tragedy.

The self-assessment people made was, never in my backyard. Now that sentiment has broadly shifted.

The unfolding events around us all has created a new reality. The change can be summed again in a statement, only modified as “it CAN happen to me.” We are witnessing the emergence of primal fear, anxiety nourished with uncertainty, multiplied by the speed of change going on and accelerated by public policy moves in an effort to flatten the curve of pandemic impact.

People believe they are truly vulnerable, while news reports of continued escalation in COVID-19 cases operates as confirmation of that view.

What does this mean to you? There is a rapidly increasing need for emotional support and preparedness. If you’re wondering whether or not consumers are paying attention to your behaviors and communication, a new research report suggests they are closely watching your moves.

  • Gfk research has been tracking the changes and in a recent report said that 73 percent of consumers say how companies react and handle the unfolding crisis will have an impact on future purchase decisions. No surprise, 85 percent of Gfk respondents indicated the virus is impacting their shopping behaviors, presaging a significant, and likely lasting, migration to e-commerce channels.

Primary call to action: consumers are looking for “a brand I can trust to guide me.” Thus, it’s time to step back and take a hard look at what initiatives and outreach in your current efforts are specifically addressing the need for trust creation.

Trust and safety are paramount

  • How are you expressing and addressing empathy and support for the lifestyle upheaval and anxiety people are experiencing?
  • Can you help people answer and manage the emergence of ‘family cabin fever’ conditions in the home?
  • Can you provide lifestyle encouragement, advice and ideas to help home-bound families continue healthy living regimens and behaviors?
  • Of note here, the more ‘unexpected’ it is from you in the areas to try to be helpful in, the more unselfish and trustworthy you appear.
  • Time to enable and encourage community conversation of shared experiences and events in your social channels. People need a place to engage and share.
  • Reveal details of your ingredient safety and testing standards in product creation. In fact, generally there has never been a better time than now to be transparent about everything.
  • What are your manufacturing hygiene protocols and safety procedures?
  • For emerging brands, communicate your supply chain integrity and ability to continue the regular flow of products to distribution. If there are limitations in this area, explain them openly and honestly.
  • For food retailers, your customers are going to hit exhaustion with home meal preparation 24/7. How can you amp up your prepared meal solutions business to bring some welcome relief for home chef monotony syndrome?

Engagement likely to be at an all-time high

With fewer distractions and a feast of extra time on their hands, people will be more open to engagement and have the bandwidth to pay attention. Content creation strategies can help fill the void. That said, it’s important to observe the rules of being helpful and useful over product promotion hype.

In 2008 and 09 when the economy tanked, a great lesson was served to businesses everywhere. Companies that continued to invest and communicate experienced share gains over rivals who answered the soft economic conditions by going into a fiscal fetal position.

You have the chance now to be seen and heard. What you say will impact perceptions of your ability to be trusted and of value to consumers’ rapidly changing lives.

If you need help navigating in this time of great change, please let us know.

Looking for more food for thought? Subscribe to the Emerging Trends Report.

Bob Wheatley is the CEO of Chicago-based Emergent, The Healthy Living Agency. Traditional brand marketing often sidesteps more human qualities that can help consumers form an emotional bond. Yet brands yearn for authentic engagement, trust and a lasting relationship with their customers. Emergent helps brands erase ineffective self-promotion and replace it with clarity, honesty and deeper meaning in their customer relationships and communication. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

Coronavirus Call to Action for CPG and Retail

March 13th, 2020 Posted by Agency Services, CMO, consumer behavior, e-commerce, Emotional relevance, food retail strategy, Human behavior, Insight, Retail brand building, Social media, Supermarket strategy, Validation 1 comment on “Coronavirus Call to Action for CPG and Retail”

Your next moves to retain trust and reputation

Right now, your consumers are worried, bewildered, concerned and uncertain about what shoes might drop next. They are being sent home from the office, schools are shutting, sports and entertainment events are gone, Spring break vacations are upended, and the future impacts of the pandemic are hard to predict.

We know you equally have concerns and are working hard to address any uncertainties. We’re with you and know your heart is in the right place.

This is a significant moment on the continuum where brand trust and reputation can be secured or injured. What you do next will matter, and it’s important to note that communication may be one of the most important assets at your disposal.

  • Honest, transparent messaging breeds trust and feeds patience, while silence will fuel uncertainty and dilute confidence.

Number one: communicate early and often

This is not the time to be quiet. If you make or sell a consumable product, especially food, beverages or pet food, people are worried about what comes next. Here’s what they want to know, right now.

For CPG

  1. Is there anything going on in your supply chain that will negatively impact the availability of your products? You may not have all the answers but it’s better to communicate current status than to stay silent. What you don’t know you state as such.
  2. What’s happening in your manufacturing, whether that be your own facilities or co-packers, with respect to employee activity, plant hygiene, and mitigation plans should people be sent home?
  3. What are your standards, methods, procedures on maintaining vigilance over ingredient integrity and safety, and testing for same through the product creation process?
  4. How can they get your products and services online? We know that feels like a ‘water is wet’ type question but it’s important and should be addressed in these conditions.

For retailers

  1. Are you able you keep customers apprised of out-of-stocks and shelf replenishment schedules?
  2. Can your pharmacy experts set aside scheduled time for by-phone consultations or online Q&A’s?
  3. Are you signaling home delivery wait times when capacity is stretched?
  4. What are your food handling an on-premise hygiene policies and procedures to help avoid any contamination?

The message matters

Your voice in this moment will impact the outcome. It’s important to avoid corporate speak, industry jargon and complex, “inside baseball” forms of messaging that only an employee can unravel.

A human, approachable voice including information that is presented with clarity and transparency will resonate with those you wish to reach. People routinely ignore dense, complex, analytical-style messages. Simple is better.

This is not the time for grand standing, self-promotional and brand-anthem style outreach that attempts to pass over the reality of what’s happening. Instead, empathy and care for the health and wellbeing of your users should ring through everything you release or post.

Next steps

  • Publish updates and trust-enhancing content at your web site and in your social channels on a weekly basis. More often if you have new news to share.
  • Keep it simple and straightforward.
  • Encourage dialogue and conversation at your social sites to invite questions from fans and followers.
  • As the situation changes, keep your stakeholders informed.
  • Be generous of spirit and look for “surprise and delight” opportunities and stories for users and channel customers. Celebrate helpfulness, acts of kindness, and ‘we’re all in this together’ kinds of inspirational unity.

Navigation leads to reputation

Your efforts to be accessible, approachable and honest here will lead to respect and confidence among the stakeholders that matter to the future of your business. Both internal and external audiences will benefit greatly from your efforts to keep them apprised of what’s going on.

As always should you need help navigating these uncharted waters, we’re here to support you with guidance, messaging, copy, media and anything else you might need.

Looking for more food for thought? Subscribe to the Emerging Trends Report.

Bob Wheatley is the CEO of Chicago-based Emergent, The Healthy Living Agency. Traditional brand marketing often sidesteps more human qualities that can help consumers form an emotional bond. Yet brands yearn for authentic engagement, trust and a lasting relationship with their customers. Emergent helps brands erase ineffective self-promotion and replace it with clarity, honesty and deeper meaning in their customer relationships and communication. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

Friends of the Future Delivers On Its Premise

September 23rd, 2019 Posted by Agency Services, CMO, Digital marketing, digital tools, e-commerce, food retail strategy, grocery e-commerce, Supermarket strategy 0 comments on “Friends of the Future Delivers On Its Premise”

The hot ticket networking experience at Groceryshop

In a food industry now preoccupied with algorithms and digital platforms, it’s remarkable when reminded that personal, human connections still inform the beginning of most successful business relationships.

Nowhere was that shown in greater relief than on Monday night at the recent Groceryshop convention. An “A” list of food retail executives gathered at the sold-out Friends of the Future reception to network with key industry players – many of whom are working feverishly to help solve the transformational changes now unfolding in the food and beverage world.

  • Groceryshop has firmly established itself as the leading food industry conference centered on the digital race to answer upheaval in how families select and shop for food. No surprise much of the conference agenda in 2019 showcased emerging technologies in e-commerce, food delivery, digital marketing, supply chain management and robotics.

Yet the Friends event served as a potent reminder that business, whether between advisers and suppliers in the food business, or with consumers themselves, is driven by the high-touch resonance of conversations between people.

“Friends is exactly that, an opportunity to truly connect on a personal level and get better acquainted. It’s in the moment when we talk and look each other in the eye that we find common ground, mutual interest, and most of all trust,” said Bill Kies, President of Kies Consulting and executive producer of the Friends of the Future event.

In its second season, Friends of the Future promised an informal atmosphere of exceptional food and beverage as grist to facilitate relationship building between food retail business leaders and decision makers. No other agenda except sharing experiences and ideas.

The event’s top sponsors including Accenture, Nielsen, Inmar and Shipt, helped press the call to action, with 250 executives gathering at The Venetian’s Yardbird restaurant, closed down to accommodate the crowd. Nearly 40 food retail companies were represented, evidence of an industry in transition while facing the rise of e-commerce challenges and new competition from the ascending restaurant food delivery business. Other event sponsors included Planalytics, ShopperKit, Label Insight, FlyBuy and the Food Marketing Institute.

“It was an amazing evening,” Kies reported, “friendships were initiated, and solutions explored among retailers looking to navigate an increasingly complex business environment.” Kies promised a return for Goceryshop in 2020 with an added dimension: the event will expand to include CPG food executives alongside the legacy list of food retail leaders.

For more information contact Bill Kies – bill@kiesconsulting.com

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies. Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

You are now selling sand in the desert…

February 22nd, 2019 Posted by brand marketing, Brand preference, brand strategy, consumer behavior, Consumer insight, e-commerce, Healthy lifestyle, Higher Purpose, shopper behavior, storytelling 0 comments on “You are now selling sand in the desert…”

Navigating the Impact of Infinite Choice

If ever there were a time when sound, informed strategy mattered to the success and outcomes of food, beverage and lifestyle marketing this would be it. Like it or not we’ve entered the era of nearly infinite consumer choices in a media environment of almost countless channels. This requires a new marketing formula.

Thinking at scale today takes on a completely different meaning when consumers are presented with so many options within a click to buy environment. Thus, how should you design for success when you’re ultimately selling sand in the desert? We will answer that question here.

Left to its natural course, food marketing tends to gravitate towards the vanilla middle – an effort to appeal to the broadest possible audience – and in working to address everyone, you end up mattering to no one. When the options are legion this can quickly turn marketing and communication investments into a moonshot without navigation – the hit (or more often miss) driven by luck more than intention.

At various times we’ve written about the importance of putting consumers at the center of strategic planning. Now, we further qualify that statement by saying – in order for a strategic marketing plan to be measurably effective, putting consumers at the center of planning is table stakes. And determining who that consumer is will require even tougher decisions to prune and refocus the definition of the cohort you wish to serve. Why? Because the 80/20 rule is in full force as the vast majority of volume and profit will come from a smaller segment of committed advocates – assuming you’ve planned for relevance to a community of potential believers.

This is the most compelling argument ever for – different

Let’s start with a foundational understanding that the brand must be perceived as special, unique, useful and valuable before there’s any shot at being memorable. No one has the time or mental bandwidth any longer to assess the vast array of options in any given product category. So how do you resolve the reality of inexhaustible choice?

You must start with the intended core user and work backwards. Seth Godin made a cogent observation in his recent book “This is Marketing” when he described the effort behind what may be the most powerful TV commercial ever made – Apple’s “1984” spot for the launch of the Macintosh. The spot aired during the most watched American sports program on earth, the Super Bowl. The majority of viewers would not have understood or probably cared about what Apple was trying to convey in its dark Orwellian mini-movie.

The lesson: it didn’t have to register with everyone to be successful. Godin observed the spot only needed to touch a million savvy creators and early adopters who picked up that Apple was up to something revolutionary. The rest of the viewers didn’t matter, and indeed the rest is history given Apple’s ascent to brand superstardom. Whatever the brand, the audience of committed advocates will always remain relatively small.

It is with the small and devoted cohort where effort and outreach needs to be directed. And those investments should come from a concerted endeavor to push hard at the edges of what’s unique and different in your brand proposition. Here’s the question we often evaluate with clients: how can positioning, audience, product formulation, and the character of the brand, be dialed sufficiently to the right or left so that we’re able to create a new category – one that our client can own?

Who is it for and why?

To dial in your position successfully you then have to know who it’s for and why. It follows if you want to have meaningful relationships with consumers, then imbue your brand with greater meaning. But for whom?

That’s a big question that requires some rigor to answer correctly. Who is going to quickly respond and be drawn like a magnet to your product proposition? Once defined, all eyes and energy must be directed to fully understanding their hopes, dreams, needs and aspirations. Your marketing strategy is then fine-tuned to align with that insight, opening the door for the brand to become an enabler of their wants and needs – in a voice that’s relevant to them – becoming a reflection of their wants and how they’d like the world to perceive their beliefs and priorities.

This is important because purchases now are largely symbolic representations of what people want others to know about what they believe in and think.

The hard truth about marketing

Of note, we’re doing business in an environment overflowing with self-assured claims, assertions and hype. Here’s the difficult pill to swallow: people don’t believe any of it. The counterintuitive basis of effective marketing today is to not look, talk and walk like marketing.

That said, there is a reflexive habit in strategic planning to navel gaze. To focus on the craft of what’s been created, formulated or built. Here at Emergent we totally understand that spirit and where it comes from, after all most brands are justifiably proud of the considerable effort they invest in technology, quality and improvement. But this also sets the table for potential marketing disconnect.

You are not selling a food or beverage

In the same vein as pet food is sold to humans and not to dogs or cats, it isn’t the product that people are buying. What you are actually marketing are feelings, connection, desire, happiness and status. Not stuff, not items, not things in boxes or bags. Not chips or salsa or soup. People are buying a feeling and expression of their status and belief system.

So then, what’s the path to creating a marketing plan with this insight embedded all the way through? It will require all of the hands on the marketing tiller to be empathetic anthropologists of what the biggest brand fans are about.

Here are some areas to focus on strategically:

  • What your audience wants, not what you want to tell them
  • What they believe
  • What they need
  • What they aspire to
  • What story would emotionally resonate with them

The more you invest in seeking to understand, the more likely you are to land on the big idea (one that immediately influences the behavior of the business) and create a voice for the brand that is engaging and is shared. When you seek to improve the lives of your best customers, you earn permission for a relationship with them and the marketing you create comes across less like a transactional maneuver.

If you think this way, it will flow downstream to impact how the business operates. We already know that what the brand does is more powerful than what it says, so there’s an opportunity built into the recipe for authenticity.

Brand trust continues to decline, so the game plan must be to build it, earn it, cultivate it. The reason transparency has ascended to ever higher importance is precisely because people don’t accept anything on face value. Claims and assertions are exactly that. When you verify, validate and reveal the product creation story by letting consumers all the way in, it fosters belief and trust.

10 components of successful marketing  –

  1. You must push for positioning that’s truly unique, different and helps create a new category
  2. Refocus and narrow your audience definition to the smaller community of ardent fans
  3. Devote your insight research to this audience and discover how the brand sits in service of their lifestyle needs
  4. Become an enabler of their wants and desires
  5. Recognize you’re not selling a product but an emotional connection
  6. Activate brand experiences because behaviors speak louder than words
  7. Know that being relevant is more important than being superior
  8. Authentic storytelling to this audience is the path to engagement
  9. Trust is everything…you must earn it
  10. Transparency is the precursor to creating trust

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies. Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

WILL SOCIAL CHANNEL SHIFTS DRIVE BRANDS TO GO DIRECT?

February 23rd, 2018 Posted by Agency Services, brand marketing, CMO, Content Marketing, Digital marketing, digital tools, food retail strategy, Food service, Social community, Social media, social media marketing 0 comments on “WILL SOCIAL CHANNEL SHIFTS DRIVE BRANDS TO GO DIRECT?”

Brands look to better manage their own destiny

As we’ve stated many times here at Emergent, the brand that gets closest to the customer wins. Yet a form of strategic separation now descending on the food marketing universe has made it more challenging for brands to manage how that consumer closeness is achieved. These same conditions help contribute to the collapse of traditional media marketing models (about scale and control) often deployed by legacy brands to build and maintain consumer relationships.

As a result, we believe what’s ahead for CPG food may well include a large helping of direct-to-consumer outreach efforts. E-commerce growth has already redefined the business landscape, giving consumers a comfort level with buying products from home.

Retail isn’t going away, online or off, but we think a measurable percentage of the business overall may indeed move to direct-to-consumer platforms.

Meantime escalating brand participation in the “walled garden” of rented audiences in major social channels, such as Facebook, YouTube, Instagram and Twitter, has also conveyed relationship control to these platform intermediaries. On any given day, the decisions made by these social media giants can be a good thing or bad as their policy changes impact what brands can and cannot do on their platforms.

  • Brands, now forced to reckon with the shift of business to e-commerce, are finding the complexity of cross channel marketing and online engagement has already worked to snuff out the last embers of mass media’s flame. Disappearing with mass media’s grip is the brand’s ability to efficiently leapfrog various forms of retail or other digital gatekeepers to capture consumer brand equity and preference.

Algorithm alarm bell – now what?

Food and beverage companies working to implement their brand-building strategies in social channels find themselves challenged once again, as the behemoth community aggregators like Facebook, Instagram and YouTube adjust algorithms and feed policies making it harder to organically scale audience attention and reach.

In January, the tide turned (the second time since 2016) as Facebook announced yet another round of changes that favor posts from friends and family while diminishing organic post distribution from brands and publishers. Larger, mega-influencers – who must use Pages rather than personal Facebook accounts – will face a similar audience squeeze.

More regulated content policies put greater pressure on brands in social channels to up their shareable post quality game. We believe though, these restrictive conditions will add more value to building direct consumer relationships. This means, thoughtfully reconsidering how best to connect with consumers and deploy tools that sit outside the control of social channel policy moves, through owned channels like Blogs and email (e-newsletter).

Consequently, we believe the model for food and beverage brand building may change in the next three to five years. Pepsico currently projects their annual e-commerce sales to be north of a $1 billion across direct, retailer-owned and pure play (Amazon) e-commerce channels.

Of note, many of the new and emerging brands now grabbing the marketing spotlight in food, got their start in the direct-to-consumer space, where they built a loyal fan following before venturing into retail channel distribution.

  • A classic example: in the personal care category, online brand Harry’s disrupted the legacy razor blade industry by answering consumer frustration over runaway price increases. They successfully constructed a direct-to-consumer subscription model that helped Harry’s deliver a more affordable, high-quality alternative. The new Harry’s brand story, alongside rival Dollar Shave Club, helped end Gillette’s dominance.

As consumer contentment with buying online continues to expand in adjacent businesses, Harry’s recently secured added equity investment to fund another bellwether expansion. This time into other personal care, household and baby products categories that may naturally fit into a subscription model.

Bottom line: selling directly allows the brand unfiltered and unfettered access to consumers. As such it enables a direct flow of conversation without the unexpected shifts that are occurring in third party social channels due to conflicting business interests and priorities.

Behavior changes occurring behind the curtain

We see the shift to e-commerce as an outcome of evolutionary progress – meaning anything that adds measurably to consumer convenience and satisfaction is going to get its day in the sun.

During the last decade consumers spent 12 percent less time shopping, according to Jared Koerten, senior food analyst with Euromonitor International. “Consumers are spending less time shopping (while) looking for efficiencies and ways to save time,” he said. The result is fewer conventional shopping trips while online ordering continues to accelerate.

E-commerce and the digital communications environment will continue to be a major focus of brand marketing strategies. Consumers see the value in reallocating their spare time from shopping trip to other passions and pursuits. Be that as it may, other changes are occurring in the digital universe that impact how closer consumer relationships are incubated.

Emergent’s guidance on optimizing social channel strategy:

  1. Social algorithm changes enhance the valuable role of smaller (nano) influencers and the content they create, while amplifying the need to ensure that influencer relationships are truly founded on aligned interests and subject matter relevance.
  2. Social channel policy changes that depress organic distribution and engagement will necessitate yet again, more pay-to-play activity to boost posts.
  3. There will be diversification of outreach strategies to include more investment in direct paths of communication through Blogs and email.
  4. Rise of User Generated Content as a key component of social media marketing strategy. This tactic helps sidestep the policy changes and hits the right notes on authenticity and value to brand community participants.
  5. In case you’re wondering what form of content ranks highest in shares on social channels: Infographics.

Social channel policy changes and the dynamics of e-commerce may favor a new look for brand marketing that leans in on going direct. With it comes great responsibility in how these interactions are managed – so it doesn’t appear to be just a transactional proposition.

Help over hype – always.

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

 

 

 

food spells out food

The Future of Food and Food Retail Now Shifts Course

July 18th, 2017 Posted by Food Trend, Retail brand building, retail brand relevance, shopper behavior, shopper experience, Supermarket strategy 0 comments on “The Future of Food and Food Retail Now Shifts Course”

Emergent’s guidance on what comes next

The recent Amazon/Whole Foods acquisition has ignited a firestorm of analysis and assessment concerning the impacts and implications. Some of the conversation has reached far and wide – from the future of supermarkets to outcomes for large CPG food brands and foodservice businesses.

Here we help summarize how the food industry changes could manifest, as well as guidance on what comes next.

Implications of the Amazon/Whole Foods acquisition

Grocery leadership is rapidly becoming a two horse race between Walmart and Amazon, creating a new class of retail that blends online and physical store strategies. The ‘new last mile’ competition now moves to address the single biggest barrier to grocery e-commerce growth: fresh/perishable sales. Many consumers lack trust in online platforms to select and safely transport produce and proteins to their standards and freshness expectations.

Change in strategy for supermarket companies

The future of supermarket companies shifts more towards ‘specialty retailer’ strategies focused on improved, curated grocery and perimeter businesses. Higher quality, unique products, local sourcing, improved Deli menus, Grocerant businesses, and heavier investment to in-store experience become the retail differentiator. The goal here is to leverage a physical advantage of tactile, higher quality food and culinary experience. E-commerce will be mission critical – that said, not likely anyone will catch up now to Walmart and Amazon. Costco maybe.

Hard discount takes price leadership, elevates private brand strategy

Entry of Lidl, and Aldi growth investment will put pressure on pricing at all levels. Large cap CPG may take the brunt of this as their core categories continue to see challenges in the face of cultural shifts to preference for new, innovative and higher quality, artisanal brands and fresh versions of packaged items. This could force more M&A activity to satisfy Wall Street and engage balance sheet efforts to reduce operating costs.

Emergence of super-premium private brand investments

Retailers, increasingly on the hunt for innovation and better margin businesses, will up their game by putting more investment in their private brand programs – potentially surpassing legacy CPG brands on quality and uniqueness. Amazon will bring 365 to their Fresh platform. This, in turn, puts more pricing pressure on large CPG.

Implications to casual restaurant chain business

Roughly half of casual dining restaurant chain sales are sourced from family occasions – and families have hastened the declining use of casual dining outlets, moving instead toward at-home meals. Primary reasons for the move back home are health (e.g., quality ingredients), preparation control and cost. The Amazon-Whole Foods combination could make at home/healthy meals easier and less expensive in ways that compete with supermarkets and restaurants. It’s possible that Amazon could become a top-10 restaurant chain (near the $5 billion in system sales of Panera Bread). By creating faster market share gains in perimeter categories, Amazon and Whole Foods will quicken the ongoing center-store rationalization.

Battle is on for hearts and minds of Millennials

Sixty percent of Millennials are Amazon buyers (source: NPD Group). Twenty percent of American consumers bought at least one item from Whole Foods last year, however among Millennials, the number is substantially higher: 24 percent. This is extraordinary penetration for a supermarket chain with just 431 stores. The proposed deal gives Amazon control of those stores – nearly all of them are in neighborhoods that are more affluent and younger than America as a whole.

Emergent’s guidance on what’s next:

1. Unique and differentiated brands are now more vital than ever as competitive leverage for supermarkets. Brands that play to consumer sensibilities around higher quality ingredients, craftsmanship and visibility to creation stories, and mission (Higher Purpose) will be key to retail channel.

2. Deli marketing and merchandising programs become more critical to supermarket growth as center store rationalization picks up pace; a conundrum for food retail as this is traditionally where the profit often sits. Pricing pressures on large cap CPG will likely come from several fronts. More legacy brand declines could be on the way, amping the need for faster innovation.

3. A newly charged renaissance in home cooking will create more opportunities for brand growth as consumers look for ideas and inspiration to fuel their eat-at-home aspirations. Creative programming to leverage this condition is key. Emergent has developed a variety of content creation strategies to leverage this opportunity, which can be repurposed for retailer use on their own social channels.

4. Further erosion of the casual dining segment is likely to continue due to competition from supermarkets and Amazon/Walmart for prepared foods, kits and fresh food solutions for at-home meals. For multi-channel companies this condition might recommend greater investment now in retail channel development and brand marketing investments.

5. The emergence of new brands in center store and perimeter categories will create challenges for retailers. This is due to absence of scaled promotion budgets and higher product input costs contributing to higher prices on lower overall volume businesses. Retailers will need more sophisticated marketing and merchandising solutions to help nurture and grow these higher quality, boutique brands. The same holds true for CPG companies that invest and acquire these new, emerging brands that require a different formula to build scale. Emergent has designed a new Emerging Brand Marketers’ Playbook for this purpose.

6. Consumers are omni-channel shoppers. The move online will accelerate and reach a tipping point in the next two years. Fresh is the battleground. Brands need to be collaborative partners with food retail as e-commerce strategies gain traction and the need to address trust issues with fresh/perishable item shopping is key to growth. Emergent can help optimize omni-channel strategies.

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

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