How much is too much of a Good Thing?

Not long ago email was the focal point for many promotional campaigns for both online selling & offline selling. Now that so many more people are online and spending up to 20 hours each week online, email campaigns have become less of a focal point as a silver bullet for reaching consumers online.

So why are we inundated with so many emails from merchants every day? Email is still a great way to touch huge numbers of people in one motion. But we consumers will opt out of getting emails if we receive too many (some department stores) or there are too many that are not relevant deals (travel deal sites).

The emergence of time sensitive Social Commerce daily deal offerings has lead millions of us ( 70 million by Groupon’s subscriber count and 26 million by LivingSocial’s ) to be totally accepting of multiple daily emails from deal sites. Even though, often the deal is not relevant. The reason for their success is obvious to this consumer.

First, they offer a deep discount and that is very appealing and time sensitive. Also, consumers never have a clue as to what the deals of that day are going to be, so not only are they willing to be bombarded with emails daily, but they are anxious to see what the deal will be each day. The group nature and time sensitivity of Social Commerce offerings is also a key to consumers’ interest and willingness to have their inboxes fill up daily.

The key here is that deal being offered in the email is communicated in the title of the email. This allows one to easily determine if the deal email is of enough interest to even open the email offer. Or delete.

And as long as there are frequently relevant, hot deals in our emails from Social Commerce sites, we will welcome them.

Walmart Gets Social

Walmart announced the purchased yesterday of Mountain View, CA based Kosmix, a social media search engine which will operate as part of a newly formed group dubbed @WalmartLabs. Walmart expects them to create technologies and businesses around social and mobile commerce that will support its multi-channel strategy. Walmart's new venture into social media is sure to blur the line between offline and online shopping.

As marketers look for ways to differential themselves & their offerings, we are seeing more Social Benefit connections to promotions. In a promotion plus Social Benefit connection, not only are consumers offered savings, but their purchase will benefit charities.

We are familiar with calls to action that offer to contribute a portion of proceeds to a charity, but this offers both a savings and a charitable contribution, if volume thresholds are reached in a specified time period. This is a powerful way to drive a “unique” connection with consumers and offer a compelling call to action.

In fact the example here does not offer a deep discount savings but when combined with the charitable connection, may be more powerful that a straight discount that offered a deeper discount.

Consumers want to feel connected to good deeds and this provides a savings and meets that need.

Race to top 30 NFL Markets?

At home Grocery delivery is heating up among retailers with the goal line being market dominance in the top 30 NFL Markets. Among recent developments:

• AmazonFresh is testing home delivery in Seattle and has Q2 expansion plans
• Walmart plans to test in the San Francisco
• Peapod is expanding its footprint (New York, Baltimore, Chicago, New England)
• With Peapod’s entry into New York, FreshDirect has recently expanded its acquisition efforts including promotions on Groupon.com
• Regional “Clicks and Bricks” are featuring trial discounts for the service, testing in limited store tests
o Harris Teeter (Charlotte)
o King Soopers (Denver)
o Schnucks (St Louis)
o Meijer (Detroit)
o A&P (New York)
• Safeway continues to grow its service with Vons (San Diego, San Francisco) and Genuardi’s (Philadelphia)

While its uncertain which services will get sacked and which ultimately will prevail, it is clear that a new footprint is developing that will impact how manufacturers and retailers compete to drive penetration, incremental volume and loyalty. A footprint that removes the showcase of physical store locations from the shopping behavior.

We will post an update on the rapidly changing home delivery market on Opening Day of the NFL Season. How much will it have changed over the next six months?

Moms and Families Stocking Up on-line

While books still leads the pack for incidence (52%) of "categories purchased online in past 6 months," Baby supplies is not far behind at 50%. Our latest Quant. shopper study shows strong incidence ratings for an array of CPG categories.

This is a strong indicator of a new generation of new Moms migrating online, driven by convenience. We are seeing the tipping point for Petcare, Personal Care, food and other HH items as well. Much of this is being driven by Amazon, but will only continue to grow as multi-channel retailers increase their focus on online CPG sales.

Now is the time to drive brand visibility, availability and loyalty as penetration and habitation grows.

Pricing Online - Is transparency good for all ?

There is folklore galore of companies that had become dependant on having a significant portion of their business with Walmart and what happened. Over time that business grew and grew, until they did most of their business with Walmart. As is often the case, they were under severe pressure to deliver better and better pricing. Then the retailer found a lower price ( and probably lower quality ) oversees source and our local CPG company that became too reliant on one retailer went out of business.

When shopping for goods online, consumers have an incredible ability to look at and compare price with just a few clicks. This price transparency is good for consumers in the same way that having Walmart always drive for lower cost and passing it on to consumers is good.

It is however challenging for manufacturers to maintain margin and make a profit when the online marketplace is increasingly dominated across categories by Amazon.com. The Amazon marketplace contains components that exist in no other retail environment. This marketplace allows third party sellers to use Amazon as a storefront to sell products ( any & all products ). The only stipulation is that if there are any problems with consumer complaints about this 3^rd Party, that they are resolved quickly and quietly.

A third party seller ( 3P ) pays a percentage to Amazon and must be reliable, suppliying quality products in a timey manner.

Manufacturers find that frequently 3P sellers are selling their products on Amazon at prices far below normal retails and even below cost. We can only assume that there is breakage in manufacturers’ supply chain that allows these goods to appear at prices that are disruptive to the market place at large. When vender managers at Amazon are asked to hell address this disruptive pricing, they invariable turn the question back to the manufacturer, asking “ Where is the gap in your supply chain that is allowing this ? “.

So while pricing transparency is good for consumers, has the online open market place has created a new set of challenges for manufacturers ?