PepsiCo Gathers Shopper Insights
Along the Path to Purchase
By Dan Alaimo
The path to purchase is not a straight line, and neither is it a circle as some have described it. It is more like a pool or a “puddle,” says Sonja Mathews, director of strategy and consumer insights, PepsiCo, Purchase, N.Y. “We’ve seen a lot of models that are circular in nature. It almost infers a linear relationship to the path to purchase, but I don’t think it is linear. I think a shopper is really a time traveler.”
For instance, she added, when shoppers are in a traditional path-to-purchase venue, which is usually a store, they are referring back to home-based occasions for which they are going through that shopping experience. When they see a particular brand on the shelf, they are thinking back to the time that they tried that brand. When they see something that don’t recognize, they are thinking about future uses for that brand.”
As a result, Mathews said, the path-to-purchase is complete. At any stage in the consumers’ purchase consideration cycle, “the stakes are very high for us – as retailers, as brands, or as agencies – to make or break that tenuous connection. So I really think that the path to purchase is more of a puddle.”
Mathews spoke in Chicago as part of a panel at the annual conference hosted by the Association for Integrated Marketing (formerly the Promotion Marketing Association), New York.
The path to purchase involves the shopper, but also anyone interested in, affected by, or even observing the brand purchase. “This would be not only people who are pushing the big cart, but also the people who are whispering in the ear of the person pushing the big cart. These are influencers, who might not even be in the store. Then there are those who see somebody else trying something, and think, ‘I wonder if that’s for me.’ That is a magical moment when the path to purchase in the store begins,” Mathews said.
This complicates simpler concepts of path to purchase. “That neat little circle talking about pre-shop, shop and post-shop is maybe not quite so applicable.” Referring to an earlier presentation at the conference by a Target Corp. executive, she pointed out that the retailer practices “three-dimensional selling. They are looking for a problem to solve rather than a brand to sell, and that means they are actually doing something very right.”
Research comparing shopper behavior in 2007 and 2009 gave PepsiCo insight into how the path to purchase changed when the economy went from good to bad, she explained. “What we saw were huge shifts in attitudes, behaviors and trust. Also, we saw a real need for shoppers to build deeper relationships and connections with the retailers, with the brands, and to find sources of information that they could trust,” Mathews said.
Among other findings, PepsiCo saw a “step-change, an increase in pre-shop activity, as well as a huge percentage increase in people that were more aggressively shopping up and down the aisles in the store. We also saw a dramatic and sustained increase in quick trips, and these quick trips are really a result of people eating out less, and doing a little bit of cherry picking,” she noted.
Another reason for the increase in quick trips was people trying to conserve by buying for the week instead of the month. “Then they were augmenting their purchases more throughout the week because they are cooking more,” she said.
At 7-Eleven, based in Dallas, quick trips are a challenge and a fact of life, according to Rita Bargerhuff, chief marketing officer, who was also on the PMA panel. “Our customers are so mission-oriented, they spend about two-and-a-half to three minutes in our store.” She sees technology and solution selling as a way to increase purchases. “If we can create convenient solutions and put those products in the best proximity, in addition to using digital and mobile (technology), I think we will be very successful.”
If shoppers see a multi-product solution, “they would think it was a great connection, but wouldn’t have physically walked to the store to put that together,” Bargerhuff noted.
“I absolutely agree (path to purchase) is a puddle. The real challenge – and I think it has always been a challenge – is that as marketers, we are never really certain when that starts,” she added.
The path to purchase is not a straight line like the Fidelity television commercial portrays, but the puddle Mathews and Bargerhuff spoke of, according to Al Witteman, managing director, retail strategist at marketing agency Tracy Locke, Dallas, who moderated the panel.
“If you can capture that emotional tension with consumers that happens during occasional usage, and you can understand how to bring that through the retail path to purchase, and make that emotional connection come alive at retail, and you are giving the retailer shopper insights and showing them how to do that within their brand and category growth objectives, they will listen to you. In the final analysis, even though most of our work is done on the rationale side, when you really understand shoppers when they are ready to buy, it is about how that offer in combination with the brand and the retail experience makes them feel about themselves,” he said, concluding the session.
APRIL 2010
Sampling Gives Vita Coco Vital Competitive Edge
By Dale Buss
Michael Kirban runs one of the highest-cost product-sampling operations in beverage retailing. But the CEO and founder of Vita Coco isn’t about to apologize for it. His Cadillac-level sampling strategy has helped build a dominant share of the fast-growing U.S. market for coconut water.
Now – relying on a blend of in-store and event sampling by trained and avid personnel – the New York-based entrepreneur is optimistic about cementing Vita Coco’s position in the fast-growing new segment even though it’s an independently owned player competing with affiliates of Coca-Cola Co. and PepsiCo.
“As this becomes the next big category, we want to be the next big player in it,” Kirban told CPGmatters.com. “There is no reason we can’t be the next Tropicana.”
While it’s too early to tell how soon growth in the hot segment will level off, there’s no doubt that coconut water – not coconut milk that is obtained from mature coconuts, but the watery juice from young coconuts – is on a torrid spurt right now. Vita Coco has about a 60% share of the U.S market while PepsiCo affiliate ONE World Enterprises and Coca-Cola partner Zico split the remainder.
The giants’ interest in the category clearly will help it grow over the long term, but for now Vita Coco, the scrappy startup, remains the most dynamic player. And Kirban believes that diligence and vigilance will be enough to keep Vita Coco solidly and indefinitely in the lead of this high-profile better-for-you beverage phenomenon.
“We have a little bit of time to retain our category leadership [in North America] as the category continues to grow, similar to what Red Bull did and what Vitaminwater did, and so did other brands that got big and were independent at the time,” he said.
Vita Coco is made at a factory in Brazil. The six flavors of Vita Coco each come in three sizes whose suggested retail prices range from $1.79 to $4.99. Retail outlets in the U.S. include mainstream supermarkets, a variety of natural-foods outlets such as Whole Foods, and ethnic food stores.
Vita Coco distributes to this array of outlets because it tries to cover two major consumer bases: early adopters interested in the Next Big Thing in healthy beverages, and the millions of immigrant Americans who grew up drinking coconut water in their home countries in South America, the Caribbean and Asia.
“We have two consumer bases that no other beverage has” in combination, Kirban said. “We’re right in between and getting people from each group.”
Vita Coco also concentrates its marketing efforts in huge and ethnically diverse ethnic markets including Boston, New York and Los Angeles. In part because he has picked his spots, Kirban has been successful in positioning Vita Coco as the healthy drink of the stars. He has managed to garner celebrities such as Teri Hatcher among his customer base and a few, including Madonna and Demi Moore, as minority investors.
The brand conducts mainly high-energy guerrilla marketing including dispatching a number of Vita Coco vans carrying crews of energetic “brand educators” who blitz supermarkets with intense sampling and dispense samples of the drinks at races, festivals and other events. And its approach to sampling is a point of great pride for Vita Coco. The company employs about 200 health-club trainers, out-of-work actors, college students and others part-time to hand out samples throughout the metro markets the company has targeted, paying them from $15 to $30 an hour. These twenty-somethings are a far cry from the low-key older women who staff most grocery-store demos – and they get far better results.
“The national average is that 20 to 30% of those sampled in a store actually buy a product during the sampling period, but ours is closer to 60%,” said Jeff Rubenstein, Vita Coco’s vice president of consumer marketing.
Vita Coco’s sampling strategy starts with recruiting and “auditioning” would-be “brand educators” at extravagant Brazilian-themed barbecues held in yoga studios, sorority houses and other locations where the company is likely to find people who have what Rubenstein calls a “life-loving attitude” and who would enthusiastically “serve as the literal and figurative face of the brand.”
This is a “super-expensive way of recruiting,” he said. “What we’re doing costs us more than $1,000 per [recruiting session], but it’s worth it to find the right people. We build this immersive environment and hope the right people will come.”
Eighty percent of the brand’s eventual recruits are bilingual, speaking Spanish or maybe Portuguese as well as English, he said, and they’re supposed to have a pre-existing Vita Coco consumption habit of “three to five” of the drinks per week, Rubenstein said. They’re trained in the classroom, then in the field, then in role-playing exercises where they deal with simulated consumers.
“They learn how we chop the coconut, how we extract the liquid, how we pasteurized and package it and how it’s differentiated from the competition,” he said.
Sampling personnel practice demonstrations. They are also subjected to pop quizzes “to make sure they’re totally versed on everything related to the category, to the [coconut-water] culture, and to who we are as a competitor,” Rubenstein said.
Once on the scene at special events or in the aisles of a Whole Foods Market, a mainstream supermarket or an ethnic grocery, these representatives press hard to amp up actual sales where and when they’re deployed and to secure new long-term accounts from the retailers. They’re supposed to focus on “spending a lot more time with a lot fewer people” at sampling locations, he said.
Another key to Vita Coco’s success is that it tries to enlist the enthusiasm and support of supporting retailers. For that reason, for example, at Whole Foods, exuberant Vita Coco samplers wear gloves and hats per chain and store regulations; and women pull back their hair.
“What is fundamental to our program is the manner and their style and our personalities,” Rubenstein said. “That’s the proprietary part – how to build an authentic relationship with someone and educate them” on Vita Coco.
“Sure, there are only so many ways you can skin a cat – it’s still sampling,” he said. “But it’s about giving someone a true, authentic brand experience.”
Market Watch
PromoWorks, House Party Partner
To Link Marketing Programs
By Rose Anthony
PromoWorks, provider of direct-to-consumer product sampling and shopper engagement events, and House Party, provider of in-home-and-digital marketing programs, are partnering to provide offerings for brand marketers that link in-store sampling and in-home marketing via completely new customized programs.
“The real power of this partnership is that marketers can for the first time link these two critical moments of increasingly rare consumer receptivity – when consumers are trying products in the homes of their families and friends, and when they’re sampling and making purchase decisions in-store,” said Kitty Kolding, CEO of House Party. “This link is revolutionary, and will dramatically improve marketers’ cost-effectiveness and results.”
She said marketers can now close the home - store loop: they can engage hundreds of thousands of highly targeted, opted-in, influential consumers with product samples and compelling offers in their homes through a national House Party event; and they can drive purchase at retail via the in-store shopper engagement and sampling events of PromoWorks. Combining these two potent marketing approaches is designed to deliver the proven results that each already achieves. Every step in the loop will be thoroughly measured and reported.
“Activating targeted consumers through the in-home party experience, and then converting those leads to an in-store purchase, while monitoring performance all along the way, will give marketers a highly targeted direct connection to their consumers and a better program ROI than ever before,” said John Stermer, EVP Sales and Marketing for PromoWorks.
This partnership offers marketers many ways to combine in-home and in-store marketing.
For example: Through the new In-Box Sampling program, PromoWorks’ clients can now sample their products into the Party Packs, the center of the House Party events – boxes of branded materials and samples that arrive at the host households just before the National Party day.
Together, PromoWorks and House Party aim to build fully customized, completely integrated programs from the ground up, programs that artfully combine the immersive brand experiences of House Party events with the in-store activation, purchase and conversion of PromoWorks programs.
Flickinger to Keynote at NARMS
Burt Flickinger III, a widely known and leading expert on all aspects of the wholesaling and retailing industry, will be the keynote speaker at the 15th Annual NARMS Spring Conference in Wesley Chapel, Fla. on April 18.
Flickinger is the Managing Director of Strategic Resource Group of New York and will address “The Future of Marketing, Retailing and Communicating with the Consumer” at the NARMS event which launches three days of interactive meetings among retail service providers, manufacturers, retailers and associated industry suppliers.
New Pix Kiosks in Walmart
A change of photo kiosks in Walmart is developing. HP terminals will replace Kodak photo kiosks soon, according to publishing reports.
Walmart will install “Prints in Minutes” terminals by HP. The roll-out is scheduled to be completed by summer.
