Sales & Marketing Report 2019: Consumer Engagement

The consumer goods industry, as a whole, is not known for early adoption. Consumers, on the other hand, use technology like a magic wand to get what they want – some of that appearing almost instantly (driving directions, price comparisons) or within minutes (pizza delivery), and others expected as constants in the “Now Economy.”

Consumer goods manufacturers that aren’t heavily investing in technology to engage consumers are likely being left behind. Tim Warner, who leads PepsiCo’s consumer and market research in Europe and parts of Africa, told The Financial Times that a “burning platform feeling” has prodded established brands to action, as tech-savvy new competitors snatch up market share. At an investment conference last year, Jorge Paulo Lemann of 3G Capital, which owns Kraft Heinz, likened himself to a “terrified dinosaur.”

But here’s something even a Tyrannosaurus Rex can grasp: Competition has increased meteorically, and adopting new technology to better engage consumers is a critical adaptation for survival.

Let’s Get Digital

Consumer goods brands historically have been hesitant to invest heavily in emerging, untested technologies. But nowadays, investments in consumer engagement tools don’t inexorably lead to unknown territory. High returns can be gained leveraging tried-and-true technologies in new and innovative ways to connect with consumers.

And consumers are readily available for deeper engagement because they’re everywhere. Think of all the digital on-ramps to the path to purchase at which brands can meet and make meaningful connections with consumers: mobile devices, social networks, voice assistants, wearables. The digital space offers no shortage of ways to reach consumers with personalized communications, offers and even products.

Shoppers are there already, initiating the relationships. In a 2018 study from Salesforce and Publicis.Sapient, 87% of shoppers said they begin product searches on digital channels, up from 71% in 2017.

Whether or not brands are capitalizing, there’s a lot of dance cards out there with room for them.

Online consumers also are social, Snapchatting pics for input on which lipstick shade looks best or group-texting party buddies for a beer brand consensus. Here again, there’s room on consumer dance cards, and some brands are already out there, engaged in a pas de deux with target consumers. Brown-Forman Corp., for instance, launched a chatbot to help consumers discover which whiskey brand in the company’s portfolio they might prefer; the average length of engagement with the tool was nearly 13 minutes – an eternity in the digital realm.

Click, Scan, Swipe

As surely as shoppers are starting journeys online, they’re equipped at every stage with their smartphones. With the U.S. penetration rate projected to reach 98% this year, according to research database Statista, phones are now accompanying literally all shoppers to the store. And with concerns over the potential downsides of that fact (remember the largely unfounded fears about showrooming?), brands now see it as a golden ticket to reach consumers at the most opportune time for conversion.

One of the most effective ways to engage consumers through their smartphones is to further enable their use of the devices. By scanning codes on product packaging or displays, shoppers can get branded information such as recommended uses, recipes, safety and sustainability data, complementary products to buy, and other relevant information.

Procter & Gamble’s Pampers Easy Ups training underwear now come in licensed superhero designs, and in-store displays for a time featured a downloadable potty training chart as well as a quiz parents took at-shelf to identify which superhero was most like their child. With one click, parents shared the results via Facebook or Twitter, and of course were then prompted to “complete the transformation” by buying the corresponding Easy Ups.

Mobile technology also has simplified and streamlined market research. Inspired by the dating app Tinder, Unilever’s Idea Swipe tool puts a new product idea in front of consumers (ice cream with cereal bits, anyone?) on their smartphones and prompts them to swipe right if they like it or left if they don’t.

Shared Experiences

A more immersive engagement technology that’s increasingly deployed due to declining development costs is augmented reality. 7-Eleven, for one, has been partnering with brands to launch a variety of AR experiences through its mobile app.

With Keurig Dr Pepper, for example, the convenience store staged an AR experience enabling football fans to use their phone cameras to place goal posts within their environment and try their hand at field goals. With PepsiCo’s Cheetos, 7-Eleven gave users the opportunity to “take a selfie with Chester,” the brand’s cheetah mascot; Chester’s glasses, ears and mouth were superimposed onto a real-time image of a user’s face.

Young consumers are constantly Instagramming and Snapchatting photos, and brands that manage to get in the picture – be it a Chester selfie or a branded filter – become part of that person’s story.

While AR has become fairly common, true virtual reality experiences are fewer and farther between. Walmart, however, in collaboration with DreamWorks Animation, designed an immersive VR environment tied to the release of “How to Train Your Dragon: The Hidden World.” The experiential event was staged last winter in Walmart parking lots, which were stocked with all the necessary components. 

A New Direction

Deeper digital relationships with consumers are enabling brands to brave a frontier that once may have seemed fruitless or off-limits. While it might originally have seemed that a company peddling T-shirts was a better fit for direct-to-consumer commerce than a company selling tea, brands of all types are moving into the space.

Courting consumers directly with the promise of convenience, lower prices or personalized products, brands create opportunities to build stronger relationships and deeper brand loyalty.

DTC models are a hit with younger generations in particular. The majority (58%) of Millennials and Gen Z-ers are already buying at least one product directly from a brand on a regular basis, compared to 49% of Gen Xers and 34% of Baby Boomers, according research from Salesforce. Collectively, 47% of consumers across those three demographics say they identify more with brands than the retailers where they shop, and 44% expect to buy more products straight from brands in the future.

Now grasping the proven potential of DTC, brands have responded either by acquiring “digital native” startups or launching their own businesses. Enough examples are available in the men’s grooming category alone: Unilever’s 2016 purchase of Dollar Shave Club, P&G’s 2018 rollout of a subscription service for Gillette, Edgewell’s acquisition of Harry’s Inc. last February.

On top of greater margins, direct access to consumers gives brands the opportunity – and the power – to collect consumer data and not rely entirely on third parties or retailer partners. Along with information from social media interactions and digital touchpoints, this data can be analyzed to glean insights, identify needs and behavior, and anticipate trends.

On the Horizon

Consumer engagement is no longer restricted to stores or screens, either, thanks to the Internet of Things, which embeds connectivity into everyday objects so they can send and receive data. The oft-cited example relevant to brands is the refrigerator that tells consumers when they’re almost out of milk. In the near future, the “IoP” – Internet of packaging – will facilitate product reorders, among other brand-consumer communication.

Blockchain is another emerging technology. Already being used for ingredient sourcing, product tracking and other supply chain issues, applications for consumer engagement are starting to surface. When Miller Lite launched a digital trivia game promoted to geo-targeted users, it used blockchain technology to authenticate entrants and immediately reward winners with $5 via PayPal. 

Set to deliver a true omnichannel experience, application programming interfaces (APIs) allow for the seamless sharing of data so a shopper can buy a product online, consult customer service about it via social media, and then return or exchange the purchase in-store – a hassle-free experience thanks to the exchange of information across channels.

The Human Touch

While technology is now an imperative when connecting with consumers, the “touchy feely” elements of engagement remain important, too. Experiential events are one to combine technology and the human touch.

Huggies staged a traveling portrait studio, for example, and offered free professional family photography. High-resolution photo files were sent to participants via email, enabling Huggies to capture that data and gain another touchpoint for the future. On site, participants who shared their photos on social media earned free diapers. (Also on site were the necessary tools for a task that technology has yet to take over: a diaper changing area was supplied with Huggies baby wipes and sample packs of diapers.)

To be successful, consumer engagement must be interpersonal even when driven by technology. And from the Stone Age to the Information Age, the one timeless way to connect has been through storytelling.

Coca-Cola recently built a story around an archival photo of an airman holding up a bottle of Coke, trophy-style, after becoming the first black pilot to shoot down an enemy plane. The brand and frequent collaborator Mondelez International used that hook to create a Black History Month program in the military retail channel called “Tell Us Your Service Story.” By explaining the pilot’s story to a receptive audience, “We were going to inspire others to tell us their stories,” Mike Pelletier, Coca-Cola senior manager of shopper marketing, noted at the Path to Purchase Summit last May.

Kraft Heinz’s lemonade brand, Country Time, launched a social campaign called “Legal-Ade” that paid fines for kids whose lemonade stands were shut down by local law enforcement agencies for lack of a permit. Parents qualified for the reward by uploading images of the citations along with a story explaining what motivated their kids to set up a stand in the first place.

Considering that 54% of respondents in the aforementioned Salesforce study think companies need to fundamentally transform how they engage consumers, all brands should be prepared to start a new chapter. Technology will help them turn the page and connect with consumers in new and better ways.

To read the rest of the 2019 Sales & Marketing Report, click on the links below:

Sales & Marketing Report: Tools of Engagement

Data & Analytics: Everyone’s an Analyst

Retail Execution: In Search of the Perfect Store

To download a PDF of the full report, click on the attachment below.