Winning Omnichannel in the Next Normal

Winning Omnichannel in the Next Normal

Does your organization have a strategy to gain share in an omnichannel environment turned upside-down by COVID-19?

A significant shift occurred in the consumer packaged goods industry over the past few years as leading organizations adopted an omnichannel approach to consumer demand generation and selling. These companies moved away from a siloed, ‘push’ approach to mass marketing and acknowledged the realities of a complex consumer / shopper journey along with the need to make brand connections in a more relevant, meaningful way. Those that made the shift realized significant growth as the majority of industry growth shifted to sources outside the traditional brick and mortar world.

COVID-19 heightened the importance of taking an omnichannel view as consumer points of influence and purchase rapidly shift. It also revealed the need to re-visit what we mean by the term omnichannel, given three new realities:

1. Omnichannel is bigger than we thought
2. Consumer / shopper journeys are dynamic and rapidly changing
3. Last year’s playbook no longer applies

Omnichannel is bigger than we thought

Do you know where your core consumer personas are making brand decisions and shopping? That question is increasingly difficult to answer, as the majority of CPG spending now falls outside of ‘traditional’ sources tracked by syndicated data.

Both brands and retailers now compete against a broader set of options that threaten to supplant their offerings with more compelling value propositions. A broader framing also makes it increasingly difficult to influence consumers as they move along the purchase journey.

Example: Functional Water

Brands and retailers must recognize that consumers do not think in terms of ‘channels.’ The imperative is to conduct regular, far-reaching assessments of where and how consumer personas are fulfilling their needs—or risk losing market share to unseen or untracked competitors.

Consumer/shopper journeys are dynamic and rapidly changing

Consumers are changing more quickly than ever. Gone are the days when brand owners and retailers could comfortably develop annual plans followed by a period focused on execution. The disruption and changes ushered in by COVID provide an important lesson on the need to adapt quickly.

While COVID is clearly disruptive, brands and retailers need to be vigilant and agile at all times. For example, the Pet category experienced tremendous change when Chewy.com and Amazon provided a much more compelling total value equation for pet parents that caught many brands and retailers flat-footed.

Brand owners and retailers need to efficiently focus resources on consumers that represent a disproportionate share of business. But rapidly changing consumer behaviors reinforce the need to also deploy forward-looking insights to identify future sources of growth or disruption, and proactively nurture these spaces before competition arises. This requires brands to develop rapid “test and learn” capabilities to create conviction and action new learning. Otherwise, business owners find themselves chasing new sources of demand and struggling to close a widening gap.

Last year’s playbook no longer applies

In this fluid landscape, it is increasingly challenging for brands and retailers to stay visible and trigger connections at the right time. In the Next Normal, brands can no longer be passive influencers of the experience at the shelf or rely on basic ecommerce search.

Example: Impulse triggers have shifted

The need to connect with consumers at the right time, in the right way, with the right message is even more important given that only 8% of today’s consumers consider themselves brand loyalists, and are highly willing to switch brands or retailers when they see a better offer.

It is critical to understand the relationship between your brand offer and your consumer’s lifestyle. Leading brand owners and retailers are using forward-looking journey insights to map where and how to best sway consumers through brand messages and value added experiences.

How to drive change

Brand owners and retailers need to take action now to ensure they are equipped to win in the Next Normal and beyond. As we’ve seen, the only constant is change: the CPG industry has changed as much over the past three months as in the prior ten years. Four key steps are recommended to configure for an omnichannel Next Normal. Each step is illustrated based on a case example from a leading personal care company that successfully unlocked new pathways to omnichannel growth.

Seurat Group is an insights-driven consumer packaged goods consulting and private equity firm whose mission is to delight consumers. We create for our clients the clarity to act & invest in a better future.

Reach out at info@seuratgroup.com for additional thoughts on building a consumer/shopper insight foundation and omnichannel growth strategy for the Next Normal and beyond.

Webinar: Igniting Sales Strategy That Fuels Brand Passion and Accelerates Growth

Webinar: Igniting Sales Strategy That Fuels Brand Passion and Accelerates Growth

Building strong, sustainable brands today is inextricably linked with choices about where and how to sell. Getting discovered inside a traditional retail outlet is almost impossible as brands compete with 40,000 SKUs. This challenge in discovery combined with the reality that since 2016 more food and beverage transactions take place outside of traditional retail presents a quickly shifting market for challenger brands.

One of our managing partners, Jill Brant, was invited to lead a discussion with industry experts on how leading edge brands build insight on their consumer journey and then position their products for sale with customers that create the opportunity to generate brand passion. These brands understand that where you sell can become a source of advantage and a marketing strategy to drive outsized growth across the entire demand landscape.

View a recording of her presentation below.

Moving from Respond to Reimagine: Leading Customer Engagement in the Next Normal

Moving from Respond to Reimagine: Leading Customer Engagement in the Next Normal

Radical Change in Retail

 

 

The pace of change among incumbent retailers in the consumer goods industry has historically been painfully slow. Despite many aisle reinvention projects, ‘stores of the future,’ in-store theatre, and shopper marketing programs, executional change has been measured in small increments: one additional facing, one incremental display, one shelf added to a category, or one more household adopting click and collect.

COVID-19 has clearly changed this dynamic. Retailers had to quickly respond to shopper behavior disruption and manufacturer supply realities with significant changes in-store, online and in fulfillment. Whole departments, such as Deli, were upended to address health and safety concerns with prepared foods, while store layouts were shifted to manage shopper flow and distancing requirements. Space and inventory holding power were quickly re-wired to meet radical shifts in demand overall and for specific products (e.g., paper and cleaning products), as well as ramp up for different fulfilment models such as click and collect.

Many manufacturers and retailers benefitted from these rapid changes, particularly shifts in consumption back to the home, consolidation of shopping trips, and re-prioritization of consumer needs that spiked demand for safe, convenient, and high-value brands and products.

We are quickly moving past the respond phase and do not believe the recent past provides a complete picture of the future.

The COVID-19 accelerant is now ushering in an unprecedented reimagine phase across the retail landscape, bringing changes within the next six to twelve months that historically would take five to ten years to develop. This presents both massive opportunity and risk for manufacturers. Shifts in consumption and shopping behaviors will drive continued change at retail and elevate the importance of influencing shopping behavior across an evolving, complex purchase journey.

More than ever, manufacturers need to be proactive to create customer planning engagement or risk having outcomes determined for them. Winners will influence customer planning conversations by using new insights to reimagine the category vision, growth drivers and brand roles. Our ongoing dialogue with consumers, shoppers, and retailers reveals four key areas of focus to reimagine the growth vision for each category:

 

Implication: In the face of renewed foodservice consumption, trading partners must identify ways to bolster the retail/at-home offer. Each category and brand must continually evolve their offer and value equation to maintain share-of-stomach gains from the respond stage.

For example, Deli is critical to meet demand for fresh, convenient, and great-tasting foods, but must shift from open, self-serve bars to a safer packaged assortment to compete with away-from-home options.

 

Implication: Re-orient category growth drivers and brand roles to address evolving consumer and shopper needs. Manufacturers need deep insight into why consumers are changing behaviors to identify what will ‘stick’ during the reimagine phase and how to deliver value to different tiers within a category.

Brands that played premium roles will need to demonstrate how they address a broader demand landscape and meet the needs of consumers making changes due to financial impacts of COVID shutdowns.

 

Implication: As shoppers make more planned trips, brands must be top-of-mind, prioritizing physical availability and visibility both in-store and online. Manufacturers need to build omni-channel shelving guidelines and partner with retailers to influence category strategy at shelf (share of space, brand blocks, shelf position) and online to both influence and deliver on demand. This requires factoring in holding power and optimal mix to meet the needs of a range of fulfillment options and incorporating strategies to influence shoppers at the point of purchase.

For example, as online sales in the Vitamins, Minerals, and Supplements category grew 15% vs. last year, manufacturers like Olly are helping retailers like Target use their .com business to compete for sales against a proliferation of direct-to-consumer players. In parallel, manufacturers are leveraging their growth online to ensure right availability, holding power, and brand blocks in-store to support other fulfillment models.

 

Implication: Provide a seamless omnichannel shopping experience for those who are interacting with retailers and brands across more touchpoints. Retailers need to provide operating models that delight and deliver on shopper demands before expanding service offerings. Manufacturers need to apply new insight through the various paths to purchase and identify implications for driving demand at the point of purchase to plan with retailers.

Follow the lead of manufacturers who are already providing visibility to total omni behavior to develop optimal online programs and physical retail recommendations that reflect online needs and in-store fulfillment.

Reimagining the Next Normal of Customer Planning

Winning manufacturers have a vision for creating category value grounded in a new insight foundation, using a forward-looking lens to understand where shopper behavior and decision criteria are headed.

Value comes from translating this insight into a category vision program that reimagines solutions for the four aspects outlined above and is communicated through a persuasive selling narrative that can be adapted to key customers and channels.

Seurat recommends the framework below to create the vision, narrative, and program to increase customer engagement during this pivotal window of shopper and retailer change.

 

 

 

Reach out to the Seurat Group at info@seuratgroup.com for additional thoughts on building an insight foundation and category vision to capture long-term growth through the reimagine phase and beyond.

Anticipating the Next Normal: Connect with your Consumer

Anticipating the Next Normal: Connect with your Consumer

Overview

Consumer Packaged Goods play a vital societal role in fulfilling both basic physical needs and more discretionary human ‘wants.’ During these times of change, we believe deep consumer understanding is necessary for the CPG industry to more effectively provide for needs during the COVID-19 crisis and pivot to address an emerging ‘Next Normal.’

Many are following changes in consumer spending and sentiment, which provides a lagging view of events as consumers deal with the global pandemic. We believe it is equally important to understand why consumers are making choices in the near term and identify how brands and retailers can better meet rapidly changing needs moving forward. The Seurat Group is fielding ongoing ethnographic discussions with consumers across the country to develop a real time understanding of the drivers of choice and how those will change based on disruptions brought on by the COVID-19 pandemic.

Changing Consumer Needs

More consumers are necessarily spending more time, energy and resources meeting foundational physical needs. At the same time, more unstructured hours spent at home affords some consumers a unique window to seek purpose and fulfillment. Both impact purchase decision-making and it is critically important for brands and retailers to understand how the needs of consumers are changing at a granular level, since the impact of COVID has been very uneven.

Disruption of Decision-Making

Over the past two months the consumer decision process has been completely disrupted. Prior to COVID-19, many consumer decisions were based on a habitual, subconscious process used to simplify a sea of options. Now, decisions are more deliberate as consumers match new priorities to a rapidly shifting consideration set.

While the negative human impact of the crisis cannot be overlooked, the current situation provides a unique lens into human decision-making, revealing how brands and retailers can better provide consumers with what the need and want, now and in the future.

Anticipating the Next Normal

Every brand in the world is emailing me some story. It won’t convince me to buy something. But I won’t forget the companies that are actually making things better for me.

While there is no crystal ball view to the future, we used our consumer ethnographies to develop a model of behavior to better understand, and predict, how choices made in the consumer goods space will continue to evolve. Applying the model at the category level reveals opportunities for brands and retailers to better meet consumer and shopper needs. It measures the change in consumer need prioritization, pain points, and desired benefits sought from goods and services. It is a forward-looking perspective that is crucial to prepare for the ‘Next Normal’ and reveals some of the changes we observe now are temporary while others will be far more enduring.

Example of the Consumer Model in Action: Baking at Home

Consumer Behavioral Change ‘Stickiness’

Understanding changes to consumer need priorities and pain points, along with the ability of manufacturers and retailers to consistently deliver against these changes during COVID, is key to mapping the near-term impact. Identifying the level of long-term change to consumer needs and assessing how well brands and retailers performed during the crisis shows us the ‘Next Normal’.

Growth Scenario: Delivering on changing needs, addressing pain points and building trust

I started shopping at Aldi to save money. Their organic produce surprised the hell out of me. I’m sold and don’t feel the need to go back to Whole Foods anymore.

Decline Scenario: Underdelivering on changing needs, not addressing pain points and eroding trust

I tried to order click-and-collect for groceries but things were out-of-stock, I couldn’t figure out how to use it efficiently and there were no delivery windows for 2 weeks. Not going to be trying that again.

1 in 2 online delivery grocery shoppers reported wait times of 2+ days

How should CPG Manufacturers and Retailers Respond?

During these unprecedented times it is critical for brands and retailers to stay connected with consumers and shoppers in real time to identify the impact of COVID on consumer needs and pain points and continually assess how they can adjust their offer to better deliver in the near term. At the same time, there is a need to use forward-looking insight to determine what the ‘Next Normal’ will be and develop strategies to deliver on this future state at a matrixed consumer, brand, occasion and local level.

Key steps for brands and retailers as they work to provide for consumers now and build enduring relationships:
 

1. Build deep empathy and understanding across consumer cohorts in real time
  • Build a view of consumer needs, pain points and the brand value equation
  • Re-construct the consumer / shopper journey
  • Focus on speed of perspective and depth over precision
  • Decisions will be made on incomplete data—declare a belief in what will happen, and don’t waver
2. Develop a clear, consumer-based vision for the future. Everyone is inundated with what’s happening day by day.
3. Implement a blueprint for the ‘Next Normal’ now, using a task force structure grounded in the consumer.
  • Track, learn and adjust based on the gapping between initial thinking on what will happen vs what does happen.

Reach out to the Seurat Group team for additional information on ways to build the insight foundation needed to prepare for the next normal and develop a blueprint to delight consumers and shoppers through this time of change.

Top 10 Female-Founded Challenger Brands

Top 10 Female-Founded Challenger Brands

In Celebration of International Women’s Day 2020

Introduction

In 2011, Jessica Alba founded the Honest Company with the aim of disrupting categories where modern-minded women haven’t been able to find clean, safe and trusted solutions for their families. Alba created the brand with the following belief: “You shouldn’t have to choose between what works and what’s good for you,” which empowered women to expect better products for themselves, without compromise. Today, the Honest Company is on a path to becoming a Billion-dollar global brand. Alba is still Chairwoman of the Board and reflects what the brand stands for in her personal lifestyle and values.

At the Seurat Group, we admire the founder’s journey and strive to support female founders, like Alba, who are challenging conventional consumer categories and leading a business revolution. For this International Women’s Day 2020, we are celebrating 10 female-founded brands delighting consumers with not just their products, but with what these brands ultimately stand for: female empowerment. Alongside the Honest Company, we would like to highlight 9 other female-founded brands showcasing disruptive mentalities, and inspirational success!

Purely Elizabeth

Elizabeth Stein was a nutritionist who wanted to recommend anti-inflammatory, gluten-free diets to her clients, yet felt hampered because she couldn’t point to any products she could endorse. From there, Stein turned to her kitchen, and Purely Elizabeth was born. Business boomed dramatically; she hoped for merely 20 orders upon launching the company. She got 10,000 in the first 3 hours! Today, Purely Elizabeth remains a healthier alternative to traditional granolas and bars. But, Stein says, “I’ve always envisioned Purely Elizabeth as a bigger lifestyle brand.” She has released a cookbook, expanded into categories from oatmeal to body scrubs, and continues to be an innovator in the healthy products community.

Beautycounter

When Gregg Renfrew launched Beautycounter in 2013, her single focus was to create transparency and safety in the personal care industry: “I wanted to create a safer and healthier place for my children, family, and ultimately everyone in the world.” The US remains dramatically behind the EU in banning harmful substances from the skincare industry (having only banned ~30 ingredients to date, compared to nearly 1,800 in the EU). Beautycounter has barred over 1,500 ingredients and educates consumers on the reasons for this standard. Beautycounter has also galvanized the safe product movement through community selling, uniquely connecting the brand story with Consultants selling on its behalf.

Talea Beer Co.

Talea Beer Company is named after its co-founders Tara Hankinson and LeAnn Darland, and their company’s target is someone who does not like beer. How do they do that? They don’t mimic the time-honored traditional brewers that dominate the mainstream landscape. Talea’s ‘flavored’ offers don’t feature a hint of (artificial) lime or berry; rather, they’ve reengineered the craft process to create delicious, boundary pushing offers with milk and fruit sugar. Their approach is grounded in meeting a need – over 70% of female craft-beer drinkers feel frustrated that brands view them as an afterthought, and Talea is reaching these women with their innovative approach.

Simple Mills

Kaitlin Smith of Simple Mills lives the tale of “you are what you eat.” Due to chronic joint pain, she turned to more natural foods and saw a gap in the market for natural and organic baked goods. The brand started from humble beginnings in 2013 when Smith was baking the product’s muffin mixes and taking samples to each Whole Foods store in Atlanta. Today, Simple Mills has an extensive product portfolio, and Smith has been named a Forbes 30 under 30. She attributes her success to disrupting a category in decline – the baking aisle. “If it’s easier and tastier, people will eat differently, and as a result will be able to do more with their lives.”

Fur

Laura Schubert and Lillian Tung are the co-founders of fur, the first for-women brand focused on body, hair and skin. Both have one goal in common: “We are on a mission to remaster how people feel about body hair and to remove the shame many people have around their bodies.” Their hero product “Fur Oil” is meant to clear pores and soften and reduce ingrown hair, resulting in healthier skin. Fur products have premium distribution in upscale boutiques like Free People and Kith, as well as spas and salons. The brand receives incredible love online due to celebrity endorsements from the likes of Emma Watson, as well as influencers and general beauty care users, who appreciate the overall feminist message and confident tone discussing a traditionally taboo topic.

Miyokos

Miyoko Schinner is the CEO and founder of Miyoko’s Kitchen. She is a chef, an author, and perhaps most importantly, a perspective changer – she is shifting how people think about vegan food and lifestyles. Miyoko has dedicated her life to convincing others there’s a different way to eat. Miyokos launched online in 2014 and has taken off, offering vegan dairy products (cheeses and butters), with the goal of “help(ing) people see the power of their plate in creating a more peaceful, compassionate planet.” Crafted in California wine country, the products aren’t just humane, they’re delicious. Award winning products are helping Miyoko take on the $120 B cheese industry one dairy product at a time.

Health-Ade Kombucha

Daina Trout and Vanessa Dew started selling Trout’s first batches of kombucha at Brentwood Farmers Market in 2012. The kombucha sold out. In 2013, when kombucha was still a nascent category, they got distribution in 8 Gelson’s stores as a trial. This unlocked partnerships with distributors like Nature’s Best, propelling Health-Ade to West Coast and eventual nationwide distribution. Health-Ade’s built its brand as the “champion of the happiest and healthiest you.” From humble beginnings at a farmer’s market, Health-Ade is now found in more than 26,000 stores around the nation.

Coolhaus

Natasha Case and Freya Estrella started baking cookies, making ice cream, and combining them into ‘cool houses’ in Los Angeles in 2008. They shared their products with the people of Los Angeles by buying a postal van, and making the trek to debut these ice cream sandwiches at Coachella Music Festival. Coolhaus touts its certified women-owned status, citing that it’s “such an important cause and a challenge our World faces. To change you have to lead by example.” And lead they have. Coolhaus has achieved incredible success in over 7,500 grocery stores across the US, with over 30 offers. Yet, the brand has remained true to its roots: Coolhaus continues its founding tradition with 10 mobile ice cream trucks and carts in LA, NYC, and Dallas.

LOLI Beauty

Tina Hedges of LOLI Beauty is a veteran in building startups. She launched a celebrity haircare brand and a hangover prevention beverage before LOLI. In 2017, Hedges created the idea of “Living Organic Loving Ingredients,” the inspiration behind LOLI. LOLI Beauty is the world’s first zero-waste, organic, and customizable beauty brand. All products are waterless, food-grade, and made with up-cycled, sustainably grown, superfood ingredients. Designed with the sustainability-conscious consumer in mind, even the packaging is compostable. Recently, the Global Cosmetic Industry featured LOLI Beauty as one of the top 30 disruptive beauty brands to watch for in 2020.

Conclusion

We hope you enjoyed learning about these 10 female-founded brands. Please look forward to Part II of this series, where we will highlight the journey of being a female founder in CPG and lessons to be learned. As always, we want to hear from you! If you’d like more information on any of our challenger brand studies, or want to share a brand of your own, please reach out at info@seuratgroup.com. Happy International Women’s Day!