12 Breakthrough Ways Brands and Retailers Can Partner More E�ectively Online
PROFITERO | BETTER PARTNER WHITEPAPER
INSIDE YOU’LL LEARN» What retailers can now o�er brands in abundance, leading to smarter collaboration
» Why the connection between online brand media and e-retail sales is so powerful
» When to know to give Big Data a rest
» What experts such as Tim Dorgan and Chris Drumey say about their experiences leading eCommerce operations for Peapod and United Biscuits respectively
A Quick Guide to Transforming the Way You Work with Your E-Commerce Partners
BY KEITH ANDERSON
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 2
Quite simply, the traditional working relationship
between buyers and sellers in the brick-and-mortar
world is being transformed by the explosive growth of
online retail.
It’s the forward-looking CPG and retailer that is “out
in front” of these changes, while the late adapters are
already falling behind and squandering the advantages
they enjoyed in a physical store environment.
What are the nature of these changes—for both brands
and retailers? More importantly, whether you’re on the
buyer or seller side, what can your organization do to
keep pace with or outdistance your competitors—and
continue to grow your eCommerce channel?
For answers, we spoke to two industry experts, Tim
Dorgan, SVP of Marketing Services at CROSSMARK
(and formerly of Peapod Interactive), and Chris Drumey,
Head of eCommerce at United Biscuits (and formerly of
Coca-Cola).
Both Tim and Chris are seasoned veterans of the
e-grocery space—and it’s the space we focus on
in this whitepaper, although each of the featured
guidelines is intended to apply to the full spectrum
of the e-retail categories.
Brands and retailers need to collaborate better.THIS GUIDE PROVIDES YOU WITH A DOZEN ESSENTIAL POINTERS ON HOW TO DO IT.
In the age of eCommerce, the pace of change continues to accelerate, and nowhere is that change as apparent as in the evolving relationship between the two bulwarks of the retail industry—the CPG companies who create the brands (also referred to as manufacturers, sellers, suppliers and vendors), and the retailers themselves (the buyers).
FOR BRANDS
1. Prepare to think creatively about your e-retail
channel, since it offers more flexibility than
brick-and-mortar.
2. Assign dedicated digital teams to work
with e-retailers—it’s a top priority, not an
afterthought to brick-and-mortar.
3. Beware of one size fits all—recognize each
retailer model is different.
4. Be sure you’re supplying retailers with
accurate, current product data and visuals.
5. Participate actively in the retailer’s
trial programs.
6. Capitalize on the one-click connection
between your online media and the retailer’s
online sales function.
FOR E-TAILERS
7. Treat CPG companies as partners,
not vendors.
8. Share your data freely with your
brand partners.
9. Be on the lookout for qualitative insights
amidst the vast quantity of data.
10. If you’re working with a new CPG partner,
help them experience that ‘Aha’ moment of
realizing they’re already all-in.
11. Commit to testing and learning with your
eCommerce partners over the long term.
12. Looking to the future, expect to see
deployment become the order of the day.
The 12 guidelines
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 3
CHRIS DRUMEYON HOW THE RAPID EVOLUTION OF ECOMMERCEIS CHANGING BRAND/RETAILER RELATIONSHIPS
Both sides realize there has to be a different approach, where suppliers and
retailers work more closely together.
We’re seeing much greater collaboration online than we do in traditional
brick-and-mortar relationships. One reason is that online has far fewer
restrictions than we see in-store—for example, there are no physical barriers
to putting different products together that might normally be on opposite
sides of the store.
That makes for more innovative thinking and partnering. And suppliers and
retailers have so much more data on shopper behavior. It all comes down to
trying to understand the shopper and being able to figure out what you need
to be doing differently to sell more online.
TIM DORGANON THE IMPORTANCE OF ONLINEBRAND/RETAILER COLLABORATION
Suppliers and retailers each bring a unique set of assets to the table, all of
which are focused on the same group of people—the shoppers.
Many successful partnerships that I saw between CPG manufacturers and
Peapod really followed the same dynamic: the manufacturers provide
expertise in their category, along with some understanding of their shoppers.
And they bring the power of their brand and money, which appeal to the
retailer.
For their part, retailers bring access to some very lucrative shoppers. It’s
been proven that online grocery shoppers are best in terms of big baskets,
shopping frequency, loyalty, and preference for big brands. Together, with the
suppliers’ and retailers’ attention to the same audience, it’s a case of one plus
one equals three.
SVP of Marketing Services, CROSSMARKPrevious: IBM, Peapod Interactive, TAP.tv,
Various advertising agencies
Head of eCommerce, United BiscuitsPrevious: The Coca-Cola Company, Procter & Gamble
Brands and e-retailers featured in this whitepaper
AMAZON.COM | COCA-COLA | OCADO
PEAPOD | PHILADELPHIA CREAM CHEESE | UNITED BISCUITS
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 4
But online selling gives you much more flexibility. In
e-grocery, one obvious advantage is the adjacencies of
different-temperature products.
When I was at Coca-Cola, there was always a major
objective to get product sited in-store against chilled or
frozen pizzas. But there wasn’t always the space in store
to do that, so it was very difficult to make it happen.
Online you can combine the two with just a simple
combined banner.
Another example: Think of a shopper walking into a brick-
and-mortar store with a recipe for a pasta dish. They have
to go to the ambient (room temperature) food shelves to
get the pasta. Then it’s off to the fresh area to get some
tomatoes and vegetables, then to the meat counter or the
chilled aisle to get some meat.
But online, you can offer all of that in one bundle. You can
provide shoppers with a recipe as a bit of inspiration, and
they can add all of those items into their basket with one
click, instead of walking to the four corners of the store to
find everything.
When the brand team generates these types of ideas,
and partners with e-retailers to make them happen, it can
make for some very effective selling.
Chris Drumey: In e-retail, manufacturers have more of an opportunity to think creatively about product placement and work with the retailers on it. In brick-and-mortar, you see more rules and restrictions, such as clear aisle policies or retailer templates for point of sale materials.
Prepare to think creatively about your e-retail channel, since it offers more flexibility than brick-and-mortar.
1.
Chris Drumey: To truly serve your brand—and at the same time benefit the e-retailers you’re working with—you need to commit dedicated resources and investments to your eCommerce operation. There’s no other way to be a reliable partner.
Assign dedicated digital teams to work with e-retailers—it’s a top priority, not an afterthought to brick-and-mortar.
2.
So many big brands are still trying to manage the
e-channel as part of their existing business, but as a bit of
a bolt-on. They’re not really sure how to manage it, so they
often give responsibility to a younger person, a recent
college graduate perhaps, who’s from the digital age and
supposedly understands online.
Partnership guidelines for brands
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 5
But brands really need to do much more. They need to
recognize the incremental advantages and opportunities
that online can offer and treat them appropriately.
The brands that will win are the ones who think of online
first in their planning. The companies that will lose are
still developing their brand plans and promotional plans
around brick-and-mortar—and then copying and pasting
them to their online operation, almost as an afterthought.
For example, if a CPG company is shooting a new piece
of TV copy, you’ve got all the talent, the production crew,
etc. in one place to ensure you can create footage for
all channels and formats. Why not just take a few extra
minutes of footage that you can use as exclusive online
content with an e-retailer, or in social media?
It would tie into the TV commercial, but maybe have a
different angle, or be more tailored to the retailer. Retailers
really like it, because it generates interest. The problem is,
so many businesses are thinking about this convergence
at the end of the planning process, when it’s too late—you
don’t have all those parties together shooting the TV
commercial anymore.
It’s Shopper Marketing 101 when I say that CPG companies
need to understand their retailers and their business
models. But I’ve found that many suppliers make a
fundamental mistake by assuming many retailer models
are similar or the same.
When I was at Peapod, a major CPG company came
in and told us about a national study they had on
e-groceries. They claimed it generated valuable learning—
which was that our e-grocery target was supposedly
55 and older, maybe a bit downscale—and they tried to
convince us to act on it.
However, on closer examination, we discovered their
premise was flawed because they were thinking our retail
model was the same as Amazon’s, which was one of our
competitors.
Whereas Amazon.com was national, Peapod was in select
geographies only. And with Amazon, you could only order
selected dry grocery items like Tide or cat food, while
Peapod was basically a full grocery store where you could
order fresh, frozen or dry groceries delivered right to
your door.
So in the study, when the manufacturer surveyed people
from Phoenix, for example, about their perceptions of
online grocery shopping, their responses were skewed by
the fact that Peapod wasn’t available in their area.
Their background and experience would not let them
provide information that was as relevant to Peapod as if
the person was in a Peapod market. They were asked,
for instance, “Can you imagine doing all your grocery
shopping this way?” They’d be answering, “How could I?
I can’t buy produce, I can’t buy ice cream, I can’t buy so
many of the items I want.”
In fact, only 5% of the possible respondents for that survey
had access to the model that we were in fact executing.
This type of mistake happens all too frequently today, and
it can often send a CPG company down the wrong path,
and in turn, send their retail partners there as well.
Tim Dorgan: It’s Shopper Marketing 101 when I say that CPG companies need to understand their retailers and their business models. But I’ve found that many suppliers make a fundamental mistake by assuming many retailer models are similar or the same.
Beware of one size fits all—recognize each retailer model is different. 3.
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 6
When someone goes online to research or buy a
product, you want to know it’s shown with data that’s
current, accurate and complete. If you’re selling salad
dressing, for example, is the product shown with a
listing of the right ingredients, the right nutritional
labeling, and so on?
Suppose your ingredients change. Let’s say you’ve
got an old listing somewhere on the web that doesn’t
reflect you’ve added a peanut extract as one of your
ingredients. Think of the liability issue if someone
has a peanut allergy, but didn’t see it listed in the
product data.
Or let’s say the product packaging changes, but the
UPC Code doesn’t. That’s going to be a hard change
for anyone to pick up and make sure it’s reflected on
the site.
Tim Dorgan: It may not sound all that exciting, but one of the first things you need to do when you’re getting involved in eCommerce is make sure of the integrity of your images and your product data.
Be sure you’re supplying retailers with accurate, current product data and visuals.4.
Offer yourselves up as trial partners—be part of the pilot
in order to get your brands more deeply embedded in
what the retailer is doing.
Our agencies come up with some great ideas and it’s
important to keep bringing innovation to the trade. But
we’ve found we often get more traction with something
that is already on the retailer’s agenda, and naturally
they are going to support it!
Chris Drumey: Keep abreast of what the retailer is considering in terms of trials. Chances are, they’ll always be trying out new initiatives and functionalities, and are often looking for brands to include within these.
Participate actively in the retailer’s trial programs.5.
When CPGs supply retailers with outdated
or incorrect product data and photos,
this is a huge source of frustration for the
retailer. It makes for lots of extra work, and
fixing the problem is very important.
I can’t tell you how many times that we met with a CPG
that did a search on their brand and found a photo of
their product that might have been 10 years old. Some of
it is just embarrassing. But if you really want to engage
in e-commerce., you have to master this task before you
branch out and start doing the marketing and promotion
and so forth.
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 7
Fifteen or 20 years ago, these teams would be spending
most of their media budget on TV, outdoor or press.
Consumers might not be going into a store for another
few days, though, so there was a disconnect between
seeing the media and going into the store.. It’s still a
factor today.
The beauty of online is the two can be that much closer.
Consumers are consuming media and shopping online,
often in the same session.
Or they want to read an online article about specific
products, or see recommendations from friends on
Facebook. And they’re doing all of this in the same online
session as their actual shopping with the retailer. So you’re
always one click away from a sale.
Now the brand teams are thinking, “If we’re doing digital
media and digital advertising, how can we point towards
online sales by driving traffic to retailers or adding Buy
Now functionality?”
But I don’t think there are enough people in our profession
who fully realize the opportunity of linking online media to
online sales. There doesn’t seem to be anyone who’s really
cracked the code yet on how to do this best.
The Buy Now buttons are just one example. Certainly,
in grocery, these buttons are almost too advanced for
shoppers. There’s a learning curve in play. Still, I expect
we’ll continue to see innovation and collaboration on the
part of brand and retail teams in this area.
Capitalize on the one-click connection between your online media and the retailer’s online sales function.
6.
Chris Drumey: The brand team is now closer to the actual sale of a product than it has ever been.
Partnership guidelines for e-tailers
As such, we worked with the CPG community as clients,
not as vendors. That’s an important distinction, because
most retailers work with brands as vendors/suppliers.
The goal at Peapod—and what I believe the goal should be
for all e-retailers—is to encourage investment on the part
of the brands and be their venue of choice for selling their
products in an eCommerce environment.
Treat CPG companies as partners, not vendors.7.
Tim Dorgan: From personal experience, I can say that at the inception of Peapod Interactive in 1994, our focus was on working with CPG’s to enable them to market better in the retail environment.
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 8
To do that, you need to be forthcoming on all matters
related to the partnership, and take what is best described
as a client-agency approach.
You also have to flexible. One thing we did not want
do with CPG companies is tell them, “You’re required
to spend a certain amount with us, and to spend it on
specific initiatives, and all we need to offer you in return
are pre-set, templated programs into which you can inject
your brand.”
We took quite the opposite approach. We made the
relationship much more customized on a company-by-
company, brand-by-brand basis, so the brands would
not only be featured distinctively, they would also benefit
from learning things they felt were applicable specifically
to them.
More often than not, the results of fostering this type of
relationship will be positive. I can’t speak for all of the CPG
partners I’ve worked with, but my observation is that they
really enjoy working under these types of parameters.
COCA-COLA
Coca-Cola leverages e-retailer data to improve online search—and sales:
”Coca-Cola offers a great example of a brand
utilizing e-retailer data to improve sales,”
according to Chris Drumey (see guideline #8).
”As you know, Coca-Cola goes under the name
of Coke, but has multiple products and brand
names. Lots of shoppers were going onto the
retailer site and just typing ‘Coke’ into the search
bar. When they did that, they’d often get Diet
Coke or Coke Zero, when all they were really
looking for was Classic Coca-Cola.
“With that knowledge, Coca-Cola and its
e-retail partners were able to adjust some of
the descriptions in the tags so that if shoppers
were typing in ‘Coke,’ they’d also see the
Classic Coke keys.”
One of the key ways to do this is with sharing data. After
all, one of the biggest advantages of online selling is that
it offers us a lot more insight on how shoppers are using
the site, so we can jointly address their needs better.
Retailers are able to see so much more than they
would in store, because they’re able to track where
people are clicking, what pages they’re visiting on the
sites, what sort of items they’re adding to their baskets,
and what sort of terms they’re using to search for
different products.
That’s really rich data. I can say that some of the biggest
wins we’ve had is being able to access this type of
data that’d been supplied by our retail partners. But
it’s absolutely up to the retailers to give it to the brand
team—there’s no other way for us to get it.
Historically, some retailers have been quite guarded in
this area. The progressive retailers, those who I think are
really advancing, are the ones that are prepared to share
the data.
That helps suppliers ensure their offerings are optimized,
that they’ve got the right keywords and product
descriptions to help with search, that impact shots are
displayed in the best way, and that their media selection
has put them in the right place. That idea of sharing
and learning together is definitely what helps generate
success (see Coca-Cola sidebar).
Share your data freely with your brand partners.8.
Chris Drumey: It’s vital for retailers to take an approach with brand teams that features transparency, openness and collaboration. They’ve got to show a willingness to genuinely work together and move away from that traditional supplier/buyer relationship.
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 9
PHILADELPHIA CREAM CHEESE
Philadelphia Cream Cheese finds a qualitative “nugget” to gain the edge:
“When I was helping Philadelphia Cream Cheese with
their marketing,” Tim Dorgan recalls, “the product was
perceived as a very indulgent purchase. Sales were not
where we wanted them to be, and there was plenty of
information and research that explored why that was the
case.
“It took a copywriter working on the business to look at
the data and say, ‘Do you know that on a serving basis,
cream cheese is half the calories or butter or margarine?’
(see guideline #9)
“That’s not to say cream cheese was necessarily better
for you, but by conveying that it had half the calories of
butter or margarine, we were providing consumers with
permission to indulge. That was a very insightful moment
that was apart from all the research and all the data,
and it produced the kind of nugget that can often prove
decisive.
“My point is that you can be data rich and insight poor.
You can have all the data in the world, but unless you
have an analytical and insightful member of your team
looking at it, it’s basically worthless.”
Yes, the data is there to certainly read things on the back
end, and to do the targeting on the front end based on
previous purchase behavior or online behavior or other
variables. But you can look at all the data in the world and
still not have an insight that provides you with that nugget,
that angle that makes the difference and motivates
someone to buy.
For that, you have to realize that insights are qualitative as
well as quantitative. A good example of this was in my ad
agency days when we were working on the Philadelphia
brand cream cheese account (see sidebar).
It was a case of pure human insight coming to the fore.
And that’s why I urge CPG companies to not be too
enamored of all the technology that’s available. They
shouldn’t leave their qualitative hats at the door.
Rather, when they look at data, they both need to
be willing to think out of the box, to be creative, to
experiment and take chances.
Be on the lookout for qualitative insights amidst the vast quantity of data.9.
Tim Dorgan: Make no mistake, it’s wonderful to have all that data. But I’d also advise retailers to add a caveat when they’re sharing data—namely, that neither they nor the brand should get too hung up on Big Data.
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 10
There were always those “Aha’s,” when new CPG partners
would be surprised at how much of their product we were
already selling. Most likely, unless they had an extremely
long sales cycle, they were already doing eCommerce to a
broader degree than they even knew.
Why does this matter? Why is it a pivotal moment for the
e-retailer? Because it’s at this point that the manufacturer
needs to decide what potentially that channel can mean
for them how and when they want to interact with their
e-retailer partners.
If the goal is just more sales—that’s great. But maybe
there is a deeper objective they can identify and use as
a framework for their conversation with the individual
e-retailers.
For example, suppose you want to get an early read
on the effect new products or competitors will have on
your best shoppers. You may think these customers are
vulnerable, but now you can find out for sure.
At Peapod, for example, we could see customer
vulnerability whenever a competitor launched. How
quickly did the people I consider my best customers turn
around and defect? And if that were the case, what about
the rest of my customers? It became an early warning
system for me, something that went beyond simply the
sales numbers. It was a way of extracting the next order of
benefits from my eCommerce operation.
If you’re working with a new CPG partner, help them experience that ‘Aha’ moment of realizing they’re already all-in.
10.
Tim Dorgan: I’ve had a lot of experience with new CPG partners who came into the arena thinking of eCommerce as a new channel. The first thing they needed to understand was how much business they were already doing in that channel.
Tim Dorgan: I think continuity of involvement is what it takes for a CPG-retailer partnership to succeed. Don’t view it as a test here and a test there, but look at the partnership on more of a longitudinal basis.
What’s the cumulative impact of what I do, as opposed to
just what’s the incident-by-incident impact of what I do? I
think those organizations that commit to an effort over the
long haul are perhaps the best.
You have to look at every initiative as learning. If I do
something that succeeds, that’s learning. If I do something
that fails, that’s learning, too.
We’re at a stage in the eCommerce curve where
everything ought to be about learning and shaping your
best market strategy. But there are those who come in
with the sentiment, “I’ll commit to this testing, but it’s got
to pay out within this purchase cycle, or within one or two
purchase cycles.”
I understand where they’re coming from, but because the
medium is so new, it would be unfortunate if they were
swayed by one bad experience and then went on their
merry way.
Commit to testing and learning with your eCommerce partners over the long term.11.
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 11
It’s very possible that the CPG team is seeing only a short
distance ahead. In which case, the e-retailer can choose
to impart a longer view.
They can say, “Sure, it’s tough not to think in the short
term when you’re testing on a quarterly basis and
your goals are quarterly. But you’ve got to get back to
establishing what your goals are. If your goals are to
sell more stuff, then the quarterly view will eventually
be on strategy. But if you have a secondary goal or an
additional goal of finding better, more intrusive ways to
interact with your end users, that promotes more of a
longitudinal look at your tactics.”
Bottom line: Having a longer vision is really what, in many cases, differentiates the evolved players from the less evolved ones.”
UNITED BISCUITS / OCADO
United Biscuits and Ocado:An example of a brand/e-retailer partnership at work.
As Chris Drumey describes, United Biscuits, the largest
cookie/biscuit manufacturer in the U.K., has formed a
mutually-beneficial partnership with Ocado, the giant
grocery chain and e-grocer.
One example how we’ve partnered is by offering a gift
with a purchase online. It’s easy because we just send the
gifts to Ocado and they simply list them online with the
products being sold.
It’s set up as a multi-buy mechanism, so when shoppers
buy the required number of products, they get to add a
free gift to their basket, which completes the deal. It’s all
delivered as part of one order.
Contrast that to if we were running that promotion
in-store. We’d have to get the gift out to hundreds of
different stores, so logistically it would be much harder.
Then we’d have to ask, where would the gifts sit on the
shelf? Does each store have a place where they naturally
go? If they sit out in the warehouse, you might miss them.
As you can see, online is a very cool way to do it and
it and offers huge advantages over the brick-and-
mortar model.
For instance, instead of doing all programs in a customized way with a manufacturer, a retailer might offer more
traditional media availability sold in the most efficient way possible. I think there will always be room for customized
‘test and learn,’ but at a certain point people will think they have tested and learned enough and they will just want
to deploy.
12.
Tim Dorgan: Down the road, testing won’t end, but we’ll reach a point where a different and perhaps lesser emphasis is placed on it. There will be less ‘test and learn’ and more broad-scale execution.
Looking to the future, expect to see deployment become the order of the day.
PROFITERO | HOW TO BE A BETTER BRAND/RETAIL PARTNER PAGE 12
Conclusion
In the new world of online retail, the traditional brand-retailer partnership is undergoing dramatic change. To
succeed, brands and e-retailers alike need to think in creative new ways as they share data, conduct trials, place
product on the (digital) shelf, assign job responsibilities, and undertake the challenges of maximizing their sales…
and their learnings. These 12 guidelines serve as a handy starting point or helpful reminder that helps steer brands
and retailers in the right direction.
Profitero is the leading global provider of eCommerce Intelligence
for retailers and brands, offering the largest reach and scale of
online data collection in the industry. We deliver your competitor’s
prices, promotions and full product assortments to you every day,
enabling you to make faster and smarter pricing decisions. We also
deliver timely data on in-stock availability, product content, ratings
and reviews, and search and category rankings—all designed to
help you measure and improve your eCommerce performance.
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