How FMCG brands are using digital transformation to accelerate their business
3 February 2017
Digital transformation is not only leveraging new technological opportunities to accelerate the business. It is a cultural change and a shift towards making digital the heart of the business. It is a journey that many traditional FMCG brands, are undertaking to compete in a market that is now seeing more agile direct-to-consumer start-ups.
In Good Rebels, we looked at who was using digital technology across our four areas of digital transformation successfully;
- Customer intelligence
- Customer experience
- New business models
- Organisational efficiency
These days, to have a competitive edge is to be customer centric. To have a deep understanding of our customers’ needs and fulfil them better than anyone else. Not only do we need customer data (and plenty of it), but a means to gather and interpret the data for valuable insights and consumer trends.
Unilever are one such brand that puts great emphasis and resources into consumer insight, with their global marketing-information system. Anyone within Unilever can access over 70,000 research documents for insight on consumer behaviour and patterns in local and global markets.
Their brand Knorr recently launched its “Love at First Taste” campaign, inspired by research showing that most people are attracted to others who like the same flavours they do. So Knorr found singles with shared tastes, set them up on food-based blind dates, and filmed the results. The video was released on social media and sent out to people who’d been identified as “food influencers.” In the first three weeks, the video received 100 million views.
This contemporary approach for the Knorr brand, helped to reach a new generation of millennial foodies and generate new interest and awareness for the brand.
Recent trends in FMCG have been the increase in demand for healthy and convenient products; organic, home-grown, sugar-free, free-range, chemical free, natural… as consumers ourselves, we all want to know that what we consume is not harming us, or the producers. We worry about urban life, pollution, stress and a lack of time, so products that claim to help balance our lifestyle are often favoured over those that don’t. Products such as Huel are taking off, “nutritionally complete” foods that claim to offer everything you need.
We’re also seeing established brands such as Campbell Soups using digital transformation to secure a place in the lives of new generations of consumers. The Campbell’s Real Food Index has been developed as a scorecard for customers to track progress against its ingredient commitments, such as plans to remove artificial colours and flavours from its North American products by the end of 2018 and What’s in my food, where you can find out the ingredients in any of their products.
In November 2016, Campbell Soups invested over $32 million into Habit, a San Francisco-based startup that provides personalised diet recommendations and food delivery services, making it the sole investor in this insight-rich digital platform. Campbell may now use their partnership with Habit to gain granular detail on the biology, health goals and habits of their consumers.
Brands continue to strive towards delivering unique experiences to an increasingly connected customer. Customers want a personal experience and to connect with brands on a human level. Digital automation is helping to move some way towards reaching customers at scale, with not only emails and personalised content, but geolocation targeting as well as increased use of personal AI assistants or chatbots.
Blackmores, an Australian vitamins and supplements brand, have just launched their Well-Bot, an AI assistant on Facebook Messenger that is helping customers to achieve their New Year’s Resolution; to be healthier. Well-Bot is a bit of fun, but it also helps to drive sales by pointing customers in the right direction of vitamins and supplements for purchase to help them achieve their goals. Well-Bot offers personalised fitness, nutrition, beauty and mindfulness action plans. At the same time, we expect that Blackmores are gathering valuable insight on their customers around their health and habits, as well as driving new interest.
Research shows that customers are willing to pay more for personalised products too. Up to 20% over the premium in the UK for example in this YouGov report published by Deloitte. Nutella, Coke and Marmite are just a few of the FMCG brands that still offer personalised packaging for example.
New business models
Amazon are uniquely positioned, with one of the world’s leading e-commerce platforms and logistics systems set-up to deliver goods the same day as they are ordered in some locations. Amazon Pantry offers popular grocery brands, whilst their new Wickedly Prime is the brands latest range of Amazon branded snacks and beverages.
Using their existing e-commerce infrastructure, Amazon layered on a level of subscription. It’s personal, convenient and in the case of Wickedly, exclusive to members, adding value to the Prime membership. Amazon can take advantage of their existing Prime community and reviews built on brand trust. The subscriptions Amazon offer, incentivised with long term savings for members, ensure a retained turnover. With years of access to customers’ shopping data, they also have the insight for further product development.
Innocent Drinks is a company founded with sustainability and good ethics in mind. Innocent have retained their seemingly independent and grassroots image with their digital presence, despite the fact they are 90% owned by Coca Cola. One of the keys to Innocent’s success is their strong commitment to their customers, suppliers and their social and environmental impact.10% of their profits are used “to do good things” and their marketing focus has always been on emotional messaging and charity work rather than its individual products, with great success.
Not long ago, the business saw a decline in sales with new and cheaper smoothie drink competitors in the market and also suffered the ‘sugar’ debate on the natural sugars found in their smoothies. So they went back to the drawing board and the heart of their business values and out of that ‘The Chain of Good’ campaign was born through video and social media. This was followed by other charitable efforts that have helped to spur on brand awareness such as The Big Knit in the UK, which resonates with those consumers who want to do good in their community and “make a difference”.
Their Innocent Foundation supports farming NGOs in developing countries. Their ethical stance has always been transparent in everything that they do, right down to their Innocent (and very witty) tone of voice on social media which sees up to 35% engagement.
Point of sale is no longer always in-store, especially for younger generations where it is increasingly mobile; ordering from Uber Eats, Amazon, or smaller boutique or artisan brands directly for things like coffee beans, food and recipe kits, pressed juice, olives and more…
Graze, a UK healthy snack-box brand is run on data, software and code. Graze operate a very agile and streamlined business that has a loyal community. Their site fuels data, based on customers’ “try”, “like”, “love”, “bin” or “send soon” reactions, for feedback on product development. Each box is packed and dispatched following the automation of 300 million customer ratings through their accounts. Graze has been incredibly successful and is now partnering with major supermarkets in the UK who are stocking their popular snack-box combinations.
With minimal human resource and super efficient automation, from working in the cloud, down to the way in which each box is packed and shipped with personalised ingredients, the efficient set-up continues to help set Graze apart from the competition.
It is clear from these examples there is value in embracing digital technology for business transformation. It is a cultural change for some more traditional FMCG brands and a large undertaking, but it is the difference between staying competitive in an ever evolving landscape and not.
Harvard Business Review on Unilever’s ‘Insights Engine’