12 breakthrough ways brands and retailers can partner more...

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


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


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


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.


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.


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.


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.


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.


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.


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.


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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12 breakthrough ways brands and retailers can partner more...

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