The brick & mortar retail market places served consumers for over 5 millennia and thrived through a multitude of pandemics far more deadly than COVID-19. It is a perceived convenience and reach of online shopping that makes people question the survival of this traditional method of CPG delivery, particularly at times when fear defines consumer experience marketing.
While overall convenience of the online shopping experience is indisputable, there are many consumer products/categories that do not easily fit into this model. They need a personal, face-to face, high touch approach of consumer experience marketing and in store sampling and tasting. Here are just a few examples:
Many new grocery brands and specialty food sales nearly collapsed because they depended on consumers “discovering” them. A discovery is not a result of a search, consumers come upon new products to them and recognize their value to them after trying or tasting them
To paraphrase Mark Twain - the news about the death of brick and mortar retail are greatly exaggerated. Innovations of e-commerce used to improve CPG experience marketing and overall customer experience are greatly appreciated by all, but humans are social animals. After vaccinations and immunity take the edge from necessity of social distancing, consumers will return in droves to the stores to taste new products, to squeeze their tomatoes and to enjoy human interactions again.
At CES 2020, H.S. Kim, President and CEO of the Consumer Electronics Division at Samsung Electronics, announced the “Age of Experience” during his opening keynote:
“The Age of Experience will be defined by personalized technology that meets your needs… [it] will help you make a tangible connection with technology in a personal way that was not possible in the past. Instead of changing your routine to incorporate more devices, your devices will work seamlessly for you.”
To put it in simply, the Age of Experience is using technology to create personalized experiences that make life more convenient, more enjoyable, and more meaningful.
The New Retail
In the world of marketing and brand building, especially in the digital space, the concept of creating a deeply integrated experience is likely familiar to you. With ever-growing competition, brands are more eager than ever to build lasting relationships with consumers. In parallel, consumers expect a more meaningful experience.
As with these growing demands, brands have felt the pressure to create a more personal and consistent shopping experience, which has been generally referred to as “omni-channel.”
What is Omni-Channel Marketing?
Omnichannel involves integrating each touchpoint to offer the customer exactly what they need, when they need it, anywhere they are and on any device. So, in theory, a customer can be shopping online from a desktop or mobile device, via phone, or in a brick-and-mortar store, and the experience of your brand will be seamless.
It’s a pretty simple concept, however, executing it is where it becomes tricky.
Take booking a trip to Disney, for example. Starting with your first experience on their website - whether you’re on a desktop or a mobile device, the experience is seamless. Once you book a trip, you can use the My Disney Experience tool to plan everything, from where you'll dine to securing your Fast Pass.
While In the park, you can use your mobile app to locate the attractions you want to see, as well as view the estimated wait time for each of them.
Furthermore, the release of its Magic Band program allows a consumer to use a wristband as an all-in-one park admission ticket, hotel room key, photo storage device, fast pass, and food ordering tool.
They are a tried and true example of how to blur the lines between online and the physical world to compete in the new Age of Experience.
CPG Brands in The New Age of Experience - The Problem
Unfortunately for many CPG brands, their ability to improve the experience of their customers is very often limited by their distribution partners.
In fact, there is a sensitive area of overlap where a retailer (e-commerce or brick-and-mortar) is more concerned about the value of their brand than the value of yours. If you don’t have a well-established brand, the retailer would have to decide whether granting you shelf space will hurt or increase their own value.
Most CPG brands often have very limited access to the consumers of their products in mass, because retailers consider the consumers of your products to be their customers. This greatly restricts the ability of a CPG brand to understand the experiences that customers have with their products, and to collect data. This can ultimately negatively impact their ability to drive a true omni-channel strategy.
To thrive in the Age of Experience, CPG brands have to find direct connection with the consumers of their products.
CPG Brands in The Age of Experience - The Solution
Similar to Disney, few understand the concept of omni-channel retail better than Jeff Besos. Amazon is still a poster child of a company designed around customer experience and that is the key to success of the Amazon brand. In fact, Amazon’s stated mission is to be “Earth’s most customer-centric company.”
While Amazon has vastly more resources than most brands today do, there are still lessons to be learned from their success - and it focuses on leveraging consumer data to improve experience.
So how do CPG brands accomplish this when retailers impede on your ability to connect with your consumers and gather important data?
The answer: tactile experience.
There is an old saying: “one picture is worth a thousand of words.” One of our customers, an experiential marketing firm called Flavor Fanatics, modified the saying to “one taste is worth a thousand pictures” (i.e. advertising images). This is a great testament to a power of tactile experience.
Take Le Tote, for example. They are an online fashion rental store who, in November of 2019 purchased the 194-year-old department store chain Lord & Taylor for $100 million. While it raised a lot of questions, founders Rakesh Tondon and Brett Northart defended their decision, stating:
“A lot of these digitally native brands are realizing there is a ceiling to how much you can scale, and how much you can really connect with a consumer online… There are real limitations, there is no tactile experience, there is a lot of lag and latency in the shipping experience.”
How CPG Brands Can Create Tactile Experience
I get it, not every business is capable of making a $100 million dollar investment to expand their offline footprint, nor do I think it’s advisable in many cases.
The point is that you must meet consumers where they are in order to build relationships and create a deeply integrated experience. An extremely effective way for CPG brands to do this, is through in-store product demonstrations.
You can spend millions of dollars using beautiful copywriting and top-notch design to tell of the greatness of your product, without showing a cent of change in perception of your brand by actual customers.
Alternatively, you can invest $2-$4 per customer, allow them to touch, smell, and/or taste your product, and get direct on-the-spot feedback. This strategy not only benefits your brand’s ability to innovate, but also it benefits your relationship with your consumers. They feel like they’re being heard - not by a robo-chat, or a generic email survey, but by a real person, in real time. And not a "survey", but actual conversation.
Now, isn’t that the better customer experience?
It is notoriously difficult to measure the impact of a brand’s marketing efforts – particularly when it comes to offline advertising. Methods for assessing the ROI of packaging design, billboards, pamphlets, TV advertisements and other traditional offline marketing tactics extremely vague.
This can lend a hand in explaining why the pioneers of the online digital marketing industry, such as Google, Amazon, and Facebook, have seen such explosive growth. After all, the digital funnel analysis can easily provide you with important marketing metrics such as how much reach your advertising has, customer attribution, and cost of customer acquisition, while most brick and mortar marketing efforts cannot.
So the question is: how do you fight this seemingly uphill battle to measure the monetary value of building brand awareness?
In-Store Demo Campaigns
Most people undervalue a long-term impact of In store Demo Campaign, because they do not have a methodology to measure the holistic impact of their event. In other words, ROI is measured only by the amount of product sales during the demo instead of the “big-picture” impact.
While demo sales are certainly an important metric, and are fairly easy to acquire using demo reports and/or POS data in stores, it does not tell a complete story.
The reality is, with proper analytics in place, in-store demo campaigns can provide you with complete visibility into the ROI for every dollar that is invested.
Economic Valuation of Brand Building
When you ask CPG brand builders why they invest time and money into conducting demo campaigns, you will hear a combination of the following responses:
All of the above are very worthy goals, so how would you know if you achieved them or not without assigning economic valuations to them?
Economic valuation of the first two goals are reasonably well represented by sales receipts achieved during the demo event and additional sales uplift during 3-4 weeks immediately following the event. The only sources of such data can be the store POS or the distributor sales order records. But how does one measure the economic value of brand awareness?
A brand is the way a company, organization, or individual is perceived by those who experience it, and growing brand awareness means getting as many people to experience your product or service as possible.
The economic value of brand awareness can be calculated adopting the methods that are commonly used by digital marketers. One of the most effective promotional channels for building brand awareness is internet banner ads. Their effectiveness can be attributed to the powerful algorithms which serve ads using factors such as keywords, demographics, location, and remarketing in order to promote your brand and generate awareness in a very relevant way.
However, there are some big criticisms of online advertising especially around rising data privacy concerns. Ads can be “creepy” in the way they use demographic data and follow a person around the internet.
One may argue that an in-store demo is comparable to running “cold” online advertising (targeting an audience that has not interacted with your company). The goal of each is essentially the same: capture a moment of a potential customer’s attention in order to boost brand awareness.
On the other hand though, the value of tasting a product, interacting with a product, and having direct communication with a brand ambassador, or is a more authentic and valuable interaction than clicking on an advertisement would be. In addition, a consumer may feel more open connecting with a brand in an offline environment, where they are not concerned about their online privacy.
The point is not to argue whether in-store demos are better or worse than online advertising, as the success of different marketing channels can depend heavily on your specific product or service.
Rather, the point is that ROI of in-store demos are often substantially undervalued when, in fact, they should be seen as a valuable offline method of brand awareness building, comparable to online advertising. Therefore, similar methods should be used analyzing the holistic, “big-picture” ROI of an in-store demo, versus simply focusing on the low hanging fruit metrics, such as day sales.
If you’re curious to learn more about getting better analytics from your in-store demos, you can find a free copy of Demo ROI Calculator template by clicking on this link.
After acquiring the brick-and-mortar grocery chain, Amazon started to integrate Whole Foods into its delivery machine. Just look at some Whole Foods Market stores that started to look like a warehouse for delivery pick-ups with regular customers being pushed away.
Most grocery stores are originally designed for shoppers, not delivery pickers. This means small inventory storage areas. That also means employees who pick products for online orders would need to grab most items from the same shelves as shoppers. They would roam aisles with scanners in their hand, asking their colleagues on the floor when they can’t find something. All this time could be better spent elsewhere, namely helping other shoppers.
The same scene would happen at the customer service counter, or even in the parking lot. Within the limited space for both regular and online shoppers, order pickers and delivery personnel will start driving your foot traffic away. These are the customers who come to buy one thing and end up buying a few more.
Amazon has something else on its agenda. Not only do they offer free delivery for online order fulfilled in Whole Foods, they recently announced free delivery for Prime members shopping on Amazon Fresh too.
So what are the other big grocery retailers doing about this?
While Walmart, Kroger and other chains offer home delivery for a fee, they have been promoting ways for customers to order online and pick up groceries in their stores (perhaps as an attempt to recoup some store traffic). Customers have responded well to this partly because it is free.
But, as the New York Times put it: “With its new announcement, Amazon is showing it is willing to spend heavily on delivery where its competitors have not, and make up the costs through other purchases made by Prime members, to undercut the value traditional grocers have been offering.”
Kroger is fighting to stay relevant, despite the increased investment behind online and other initiatives pressuring the bottom line. “It said it has expanded grocery pick-up to 1,780 locations and delivery to 2,225 to cover about 95% of its target households. It’s also working with European online grocery retailer Ocado to build automated warehouses to fulfill e-commerce orders.”
That is a lot of investment to be on par with Amazon’s “get-in-and-out-quick” scheme. Before anyone forgets, the tech giant has been trying to “Amazonify” everything with its Prime membership program. Fast delivery, convenience, limited human interaction represent the long-term bet in changing consumer behavior - not only in the grocery space. Once that loyalty is built for Prime customers, they will buy more, and more frequently.
Meanwhile, brick-and-mortar stores’ sale per customer transaction starts to come down. New food products will not sell because online shoppers mostly replenish the supplies they usually put on their virtual shopping lists. As they can’t discover and taste a new flavor online, there are no impulse purchases, only chores that need to be ticked off.
Next thing you know, who needs a supermarket, when you can have a pick-up center? The same narrative is happening to the restaurant industry, where “ghost kitchens” are rising. Who needs to go to restaurants to eat, when you can order online? Who needs to open a restaurant and weather high operating costs, when you can rent space in these delivery-only kitchens?
There are no brick-and-mortar stores without customer traffic.
Traditional supermarkets are a dying breed, at least the statistics and predictions say so. But is there a way to turn it around? The answer might be hidden in plain sight, something that is already in physical stores’ DNA.
For large players, the much-larger brick-and-mortar store fleets are proving to be key weapons against Amazon. They are playing to their strengths:
“Target has been remodeling stores and is doubling down on its own line of stores brands to differentiate its merchandise and lure customer traffic.”
“Kroger has engaged with DDB creative ad agency to come up with a “refreshed, stronger brand” to drive visits.”
What about smaller supermarkets? Have they got a chance of survival?
Yes if they don’t fall prey to inertia. Yes if they don’t jump on the home delivery bandwagon without proper consideration. Yes if they find a way to bring people together over the mouth-watering appeal of prize ingredients, exotic treats and thirst quenchers.
It’s a very basic human need. Shoppers appreciate the chance to indulge their taste buds through free samples, elevated by an energetic brand ambassador in-store. And supermarkets have every right to make it about the food, connecting people and delighting senses through food.
It’s the combination of behavioral psychology and spatial design to make people care about supermarkets again. It means making grocery shopping more like going to the movies, or a theme park. You are not going to sell convenience or efficiency, but “experience.”
One of the most effective ways to generate customer buzz is offering product sampling.
When shoppers “experiment” and derive pleasure from the process of sampling, engaging, interacting, and evaluating various options, they tend to take more time shopping. And you know how the story goes if you increase the all-important “dwell time” metric in this industry.
The bottom line
Instead of helping delivery companies destroy your business, partner with new product vendors to create continuous experience of new flavors discovery. So your customers feel welcomed at your stores rather than being obstacles to the rushing product pickers.
While Amazon and others are betting on the future of grocery shopping as “getting in and out quickly without interacting with another human being”, focus on creating customer experience that makes shoppers come to your store not because they have to, but because they want to.
Want to see how smart demo scheduling technology can help you create better in-store experience? Get in touch here.
Some brands will only pay for demos (in store sampling) because the retailers require them to support the "exposure" of their products. Yet many of today’s well recognized brands achieved spectacular results in a very short time by using the leverage of field marketing. Their example shows that investment into smart field marketing/experiential marketing strategy can produce return by far higher than other forms of advertising.
Introduction of In Store Sampling
Brands are always looking for ways to get closer to consumers, especially in this digital era. With the fragmented media landscape, many are turning to “shopper marketing” - delivering messages to consumers when they are in shopping mode and receptive to such content. In-store sampling is among the most effective vehicles to drive consumers towards trial and purchase.
Whilst the path of purchase can vary for different products, consumer packaged goods generally enjoy a shorter conversion path (unlike buying big ticket or discretionary items where the buyer journey may take multiple turns). That means there is a greater chance for field marketing tactics such as product sampling to influence consumer behaviour.
Product sampling effectiveness
When the sampling marketing strategy is considered as part of an overarching marketing strategy, it can deliver great results both directly and indirectly.
Many studies have proven that in-store sampling produces both an immediate and long-term lift in product sales. There is even a snowball effect in sales if repeated sampling events are organized for a single product. In addition, in-store sampling drives trial of the new product, with a well-established track record of boosting sales of new product launches.
Why is it so effective? As rational as humans think they are, we are still driven by our senses. Hence, one of the key purchase decision factors is the ability to sample the product or see a demonstration, with 83% of respondents agreeing.
Sampling also taps into the impulsivity of shoppers, with nearly 74% of respondents observed to make impulse purchases of the product being sampled. The physical proximity can make forgotten cravings more salient.
Another psychological factor is “reciprocity.” When you are given something, you are more likely to reciprocate. Especially in a high-traffic store, shoppers with a “heightened awareness of the presence of others at the sampling station may feel a level of social pressure to make a post-sample purchase.”
If brand awareness is your goal, product sampling can also be a great vehicle to assist your other marketing channels. Executed well, the in-store sampling experience can generate positive word of mouth - the most persuasive source of information for consumers.
Another indirect benefit is that running in-store demos can increase total category sales, not just sales for the sampled product.
Devising an effective sampling marketing strategy
As with any business operation, you need a clear strategy for the use of in-store sampling for brand/product activation. An important but often overlooked fact is you need to firstly know what success looks like. By having the right measurements and goals in place, you can work backwards to lay out a plan of attack.
So what are those metrics?
1. Traffic engagement - what percent of passing shoppers stop to taste the product
2. Product engagement - how much time a shopper spend by the demo station
3. T2P Conversion Rate© - what percent of shoppers who taste the product end up purchasing
If your sampling marketing strategy is focused on market test of a new product, review and analysis of captured shoppers comments, may prove the most valuable part of the exercise as they allow to tune your new product characteristics and messaging in sync with expected customer experience.
Considering the cost-benefit equation, a research paper in the Journal of Retailing advises: “If the incremental cost of a sampling event exceeds 15 times the unit price of the product, the event ceases to be profitable.”
The next step is to then work out a detailed plan by considering the following factors: place, people and process.
As the usual adage goes “location location location”, we can’t emphasize the importance of choosing the right store and right area within the store to run product sampling enough.
Essentially there are two factors: Store traffic and shopper demographics, plus other practical considerations.
And a number of questions for brands to consider:
To avoid the trap of “old school demos”, hire brand ambassadors (BA) that are knowledgeable and enthusiastic about the product. Obviously, skimping on this by using minimum-wage BA would yield minimal return.
On the other hand, properly trained BA can effectively convey the product and brand image. This helps in influencing shoppers’ perception of the promoted brands positively.
Running smooth in-store demo campaigns requires coordinating several factors: product inventory, store’s timetable and BA’s availability. The conventional way which involves multiple rounds of calls to different people generates inefficiency and dramatically lowers the ROI of in-store sampling.
Thankfully, there is a better way through using software. The simplicity of demo scheduling software implementation and ease of adoption makes the tool an attractive option. Smart technology enables a smart coordination, which combines lower management overhead with market intelligence and empowers quality BA to do their job.
Like other marketing strategies, in-store sampling is not a set-and-forget thing. Continuously refining the plan based on analytics and data will help brands get the most out of it.
Q: How do I keep quality Brand Ambassadors?
A: Reduce their friction and frustration by giving them the ability to self-register availability and certainty of scheduled slots, as well as on-time payments.
Q: Do I need to hire a dedicated demo coordinator?
A: No. You can reduce overhead by deploying smart tools that allow brands to schedule and manage up to 400-500 demos/month
Q: Why aren’t a lot of brands deploying the sampling marketing strategy?
A: Many still think in-store demos are expensive and a waste of time. However, with proper planning and enabling tools, it can help brands build better relationships with stores, BA and ultimately, shoppers.
Q: Can I organize effective demos without hiring in-store sampling companies?
A: Yes. If you’re confident in recruiting BA or already have a database/relationship with promotional staffing agencies, the rest can be effectively handled by using technology to minimize cost.
Want to see what smart demo scheduling technology can do for your CPG brand? Request a free demo here.