DISCUSSION
Should CPG brands cast their DTC businesses in a supporting role to stores?
Written by Melissa Minkow
Photo: Getty Images/PeopleImages
It appears there’s been a significant tide turn for consumer packaged goods (CPG) brands in the direct to consumer (DTC) selling versus retailer distribution debate as marked by a consensus among presenters this week at Groceryshop in Las Vegas.
A year ago, the repeated objective mentioned among CPG executives focused on shifting consumers towards buying from their DTC sites in order to capture the most first-party data possible. This year, regardless of the session, the universal takeaway from the CPG success stories was to instead leverage DTC sites in a way that complements their presence on grocery store shelves and websites.
Charisse Hughes, chief brand and advanced analytics officer of The Kellogg Company, said on day one of the conference that DTC is useful for unearthing consumer insights and for experimenting.
Ms. Hughes said, however, that while DTC is where Kellogg’s innovates and tests, it does present challenges with respect to the last mile. Kellogg’s has determined that DTC sites are best for “swag and new products” so that there’s a differentiated value to the owned channel.
A similar strategy was echoed on day two by Francesca Hahn, VP of digital commerce at Mondelēz, who highlighted the engaging ways shoppers can interact with the Oreo and Sour Patch Kids sites.
“Everyday products are [sold] in-store only,” said Ms.Hahn, emphasizing that the sites are designed for discovery moments and for brand loyalists seeking elevated consumption experiences. Once again raising the issue of the last mile, she acknowledged that Mondelēz is working diligently to ensure delivery timeliness for optimal freshness and so that gift-based purchases arrive on schedule.
Day three’s keynote panel with Bubble Skincare founder and CEO Shai Eisenman and Olipop cofounder, CEO and formulator, Ben Goodwin, shed even more light on the balance CPG brands are now excited about striking between DTC and retail.
Ms. Eisenman described her brand’s retail presence as pivotal given consumers’ preferences for shopping for skincare products in person, especially when buying an item in that category for the first time.
Mr. Goodwin noted the value Olipop’s site brings in its ability to “complete the loop” for in-store grocery shoppers. In conversation after his session, Goodwin reiterated how crucial offering a range of flavors and consistently available inventory has been, saying “If shoppers get frustrated by out of stock issues in stores, they can find the product on our website or sign up for subscriptions online.”