Ronald deVlam, brand leader, sgsco Design, urges brands to take notice of a changing world.
The popularity of digital shopping is growing exponentially. At the same time, the rising consumer, the Millennial, is choosing non-traditional, experiential, and ultra-personalised modes of shopping. Together, these trends are profoundly and irreversibly changing the way brands build meaningful connections with people. They are also giving marketers a major headache.
How do they succeed in this brave, new world where the criteria of closing the deal with consumers has changed from shouting big, bold and loud to managing micro-moments and making meaning? Traditional monolithic, iconic brands are finding it hard to be relevant. Many brands simply haven’t yet woken up to the new reality yet.
That said, most global players now know that ignoring it, and hoping that all the old certainties will return is a vain hope. To survive and thrive in this new world brands need to understand the shifts that are taking place, get to grips with how these are changing the key moments of sale, and figure out how to adapt.
The moments of sale
In the traditional world of bricks and mortar, there have long been three key moments of truth. The first moment is where a brand catches the consumer’s attention, the consumer stops at that shelf, considers and then makes the selection and purchase. Own this moment and you will make sales as consumers trial your product.
The second moment occurs after purchase. It is the experience of use – whether it delivers on the brand promise, whether it is a source of pride and joy or of frustration and disappointment. The third moment is concerned with the disposal. Is it recycled, re-used, or does it decompose in landfill? Own these moments and you will make resales, as consumers become loyalists and advocates.
In the past, brand marketers were guilty of focusing too heavily on the first moment and insufficiently on the second two. In many cases this has resulted in brands needing to spend ever greater sums to attract customers who are then disappointed by the product experience or the environmental credentials and so never purchase again.
The cycle has continued for many decades, with some brands understanding and optimizing for all three traditional moments and reaping the benefits, while others continued to ignore them altogether and so disappeared from our shelves. However, now it has all changed. The rules of the game have been rewritten.
A new world
In the world of e-commerce brands still need to be noticed, to deliver on their promise, and to be recommended, but how they do this has changed almost beyond recognition. For Google, with its 2011 description of what it calls the zero moment of truth (ZMOT), this is about understanding what consumers are looking for, being present there, and then being both relevant and interesting to those brands. Further evolution of consumer shopping habits and the prevalence of smart phones (a shopping cart in your hand) has brought the realization that there is no one single moment, but rather an infinite array of opportunities to convert a consumer’s interest to a brand sale that can happen at any point and at any time.
For Jeff Bezos of Amazon this is a flywheel. Its model deploys growth and massive scale to improve the customer experience and so be selected again, using those returns to offer ever greater choice and ever lower costs. It is a model that has been demonstrated to work, and it is one that FMCG brands need to start understanding.
After all, Amazon currently has 22% of the online grocery shopping market, and is expected to reach 50% by 2020. By 2025, online grocery sales are projected to be worth the sales of 3,900 stores, and Amazon could have as much as 60-75% of that market. Already, Amazon accounts for 55% of product searches on the internet, surpassing Google in terms of product research.
Put simply Amazon matters now and will matter even more in the future, and this is true of the broader e-commerce environment beyond Amazon. Brands need to develop a new understanding of how to get noticed, to deliver on their promise, and to be recommended in this new world.
This is not a problem for tomorrow; it is affecting major brands today. Look at the story of the Dollar Shave Club. Dollar Shave built a brand on the combination of price, differentiation and convenience. The messaging is hip, the product and shave is good enough and the overall experience created a high degree of loyalty.
The loyalty and social media likeability created a flywheel momentum of growth and scale that resulted in Dollar Shave Club selling to Unilever for over $1B and its traditional large scale corporate competitors having to trade on price and margin just to stay in the game. The market share of one plummeted from 70 percent in 2010 to 54 percent in 2016.
It is not alone. In March 2018 two former Unilever marketers launched Smol, a new detergent brand that will sell direct to consumers through letterbox delivery. It promises to halve a household’s laundry detergent spend without any effectiveness compromise, and the founders have plans to tackle the dominance by Unilever, Procter & Gamble and RB of the UK’s £1bn laundry market.
It is happening in shaving. It is happening in laundry. And the world’s big brands are for the most part not ready for this revolution. Their people, their processes, and their profit models, are all set up to tackle an entirely different challenge. They are not working out how to connect using a simple but strong story visualised very succinctly. They have yet to come to terms with the fact that their brand experience now hinges on the interaction with a box delivered to doorsteps. The idea that repurchase mechanisms now need to be built into the unboxing and actual brand experience is alien to them – as is the concept of pack shareability.
Rethinking the digital Moments of Sale
These are all concepts that brands need to get to grips with, and fast.
It is vital they do so. As Aidan Tracey, CEO of SGSCO proclaimed in his session, Winning at the Moment of Sale: Why the Rise of the Digital Shelf Changes the Consumer Path to Purchase: “There is no question. This is not business as usual. We are in a rapidly changing landscape. If you think we are living in an evolutionary time, you are kidding yourself. We are living in a revolutionary time.”