Frito-Lay Leverages eCommerce to Meet Consumer Needs
By Dale Buss
Among the biggest challenges that Frito-Lay faces is making it as easy as possible for shoppers to buy its wares. And that calls for tapping into e-commerce more effectively to ensure that the PepsiCo-owned snacks giant makes a successful transition to an era in which American consumers finally are embracing digital purchase even of routine CPG goods just as they earlier decided to buy books, music, computers, sneakers and nearly everything else online.
The company used to rely only on traditional TV, print and radio marketing and a robust in-store merchandising machine to make sure consumers and shoppers saw and paid attention to Frito-Lay products such as Tostitos and Fritos chips and were presented with various ways to work them into snacking occasions and meal menus. But these days the marketer is focused on reaching consumers and finding ways to get Frito-Lay products to shoppers how and when they want them, and at the prices they want, in the most convenient ways.
“As an innovator in the CPG industry, Frito-Lay maintains its position and competitiveness by continuing to evolve to meet consumer demand,” Mike Del Pozzo of Frito-Lay North America told CPGmatters in an interview following his presentation at the GroceryShop trade show in Las Vegas. “We are unique as we are involved in every piece of operations from seed to shelf, and we have teams dedicated to tracking trends and best practices across every aspect of the business. Our goal is to be accessible and relevant to the consumer regardless of how they shop,” said the senior vice president of sales and chief customer officer.
The company best known for snack chips such as Fritos and Tostitos actually has a growing portfolio of more than 1,200 products and more than 30 brands, offering snacks for every type of consumer, for every type of occasion, and even for every dietary regimen including organic, gluten, dairy-free, Kosher and Non-GMO Project Verified. Even in an era of popularity of Atkins, keto and other low-carb diets, Frito-Lay has relevant offerings including nuts, seeds and beef jerky.
Frito-Lay defines access and relevance broadly and focuses on four areas to achieve more of it, Del Pozzo explained. They are snacking frequency and packaging, loyalty, impulse shopping – and e-commerce. To encourage more frequency of purchase of its products, for example, Frito-Lay has been introducing new flavor options in its multipacks, which are on-the-go size. And, in general, the company is exploring how its favorite products can show up in different ways in various new sizes and types of packaging on store shelves.
“You’d say, ‘Well, that’s great for a company like Frito-Lay,” Del Pozzo said during a recent presentation. “But it also puts a lot of pressure on us to make sure we have the right relevant offerings.”
The other three venues for boosting sales and relevance are more closely tied together, Del Pozzo explained. For instance, to build loyalty, Frito-Lay has “a constant two-way dialogue with consumers,” which in part depends on communicating online and via social media in various ways. A key example for connecting with consumers is the Tasty Rewards program, which offers exclusive deals, sweepstakes, coupons and other sweeteners. The company also recently launched PepCoin, which encourages consumers to buy specially marked, single-serve PepsiCo beverages and Frito-Lay snacks together – for cash rewards via refunds of up to 10 percent when people use PayPal or Venmo digital accounts.
“That’s really helped us think more about the macro,” Del Pozzo told Business Insider. “Think about what we can do together now – the ability to leverage digital to drive that snack and beverage occasion as one company has really been a huge benefit.”
Similarly, Frito-Lay has been mixing its physical-world assets with its increasing online presence to encourage even more impulse shopping, which of course long has been a key reason for purchase of its products.
“Sometimes that’s creating snack and beverage bundles for specific occasions that are easy to find at the grocery store or online,” Del Pozzo said. “Or offering the ability to have snacks automatically delivered at home every two or four weeks, or at the frequency needed.”
The company’s growing e-commerce focus requires constant and continuing pressure and innovation. In one recent initiative, for instance, Frito-Lay saw that buying gift packages for students, military members or even road trips was a big phenomenon. So, the company created customized, thoughtful packages with a curated assortment of Frito-Lay salty snacks, crackers, nuts and seeds, Del Pozzo said – and the packs are among its best sellers.
“We believe e-commerce can continue to fuel our business outside of traditional growth spaces, and we utilize this channel to customize the way we meet consumer needs,” Del Pozzo said.