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CPGmatters: Kraft Spinoff Looks to Big Mobile Future

By Dale Buss

February 12, 2013

Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.

In launching Mobile Futures, a program of intense cooperation between mobile technology startups and its specific brands, Mondelez International is looking for ideas and answers about how to harness smartphones more effectively than most of the industry has. The manufacturer's goals are to encourage and facilitate in-store marketing and impulse purchases as well as out-of-store applications.

In Mobile Futures, the recent Kraft spinoff and parent of Oreo, Trident, Chips Ahoy! and other snack brands hosted two days of pitch sessions. They then selected nine mobile technology startups that would partner with the company's brand teams for the entire first quarter to create and launch new mobile pilots. Their focus is on driving impulse purchases and mobile-at-retail consumer experiences, with additional pilots in social TV and social-location-mobile apps. The partnerships are intended to yield usable innovations at the end of the quarter and set the stage to address broader business challenges.

Ten percent of Mondelez's marketing spending this year is going toward ways to exploit mobile technology.

One example of how Mobile Futures might pay off is a partnership between its Stride gum brand and Waze, a community-based traffic and navigation app. One possibility: a Stride icon would appear on a smartphone when a driver passes a store where the gum is sold.

Ed Kaczmarek, director of innovation and emerging technology for Mondelez, believes mobile technologies will complement some existing in-store marketing methods and replace others. He said, "Working with mobile and creating everything digitally, you can do it very quickly."

Mondelez also hopes to advance frequent shopper initiatives through Mobile Futures. Mr. Kaczmarek pointed to the company's partnership with ShopKick, an app that rewards consumers with loyalty points and gift cards for their purchases at a variety of retailers. "That's an interesting approach because it rewards consumers across their entire lifestyle, versus being siloed with just groceries or just mass merchandise or just technology," he told CPGmatters.

Despite the rapidly rising attachment by consumers to their smartphones as shopping aides, Mr. Kaczmarek said CPG brands and retailers have been slow to take advantage so far. Both groups have focused on helping consumers create shopping lists at home that they can carry on their smartphones into stores and with making digital coupons available to shoppers once they're on location.

"We must evolve more because what you still see with mobile marketing is mainly just banner ads," he said. "We really need to leverage what technology enables us to do to more relevantly reach each consumer."

FINANCIALS: [NASDAQ:MDLZ]

Discussion Questions:

What do you think of Mondelez's investment in mobile startups? Is now the time for CPG brands and retailers to be aggressively investing in mobile marketing?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much of a competitive advantage will Mondelez likely gain from its aggressive investments and partnerships with mobile startups?

Comments:

Visionary.

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Liz Crawford, VP, Strategy & Insights, Match Drive

Learning how to better use mobile technologies makes sense, but having a brand logo appear each time a Waze user passes a store that carries the product would seem to annoy consumers more than bolster the brand.

Mobile, like social media, needs to engage the consumer, not just push messages at her.

While I'm glad that companies like Mondelez are sponsoring forums to look for mobile solutions, I'm surprised at how little knowledge they have to date.

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Max Goldberg, Founding Partner, The Radical Clarity Group

Mondelez's investment in mobile development is clearly a good direction, but it seems from the description here, that they are far from anything innovative. The Stride gum/Waze example is laughable. That idea is so many years old that it would imply they need some serious guidance in the tech/mobile world. Aside from being an obvious concept, who in the world is going to choose to navigate to a retailer of their gum?

Regarding other CPG brands aggressively investing in mobile: they are late to the game. Have a look at my article: "Can Mobile Break Retail's Grip On CPG Sales?"

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Two things are clear about the future of mobile marketing. 1) This canvas has very little paint on it. 2) No one has a clue as to what the eventual picture will be.

Smart companies are certainly taking some risk by investing at the early stages of this movement. But only those who step up to the canvas with brush in hand can influence the result.

Just as certainly there are many companies watching this so they can make their own copies, once the picture is finished and valuable.

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Dan Raftery, President, Raftery Resource Network Inc.

"Fully activated mobile assisted shopping" in my mind implies having clear celluar or WiFi access in-store that facilities targeted messaging that acknowledges WHO you are, and WHERE in the store you are. Further, having the option to bypass the "traditional" checkout process and pay via mobile completes the trifecta. Retailers are all over the board on investing in mobile-ready stores.

Brands are smart to lead the way, but until there is a cogent business model that produces real provocation for the retailer to ready their stores for a robust mobile experience, we are going to see the going relatively slow on the way to a fully activated mobile shopping experience.

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Mark Heckman, Principal, Mark Heckman Consulting

New approaches to using mobile technology effectively are needed. This kind of partnership sounds promising because the people from the mobile companies will look at the challenge with one perspective and the people from Kraft should be able to bring the knowledge of their customers. Sounds like a good approach to spur innovation.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

I heard Bonin Bough announce this at the Mobile Marketing Association conference last fall. He is committed to getting ahead of the technology that will dominate culture. Consider that none of the funded initiatives in this generation will bear fruit, but the commitment is the important thing, as the home run might come in the next generation.

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Joel Rubinson, President, Rubinson Partners, Inc.

Terrific idea. Smartphones will be a primary communications vehicle going forward. The challenge for food retailers and CPG companies going forward is to better understand the technology and its optimum usage as an efficient and effective marketing tool.

The Mondelez commitment to pioneer this technology in a systematic manner is unique and noteworthy. I will be interested in seeing the results and applications going forward.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

Marketing works when it taps into the "Why do I care?" for consumers. If I get a push notification where gum is sold, I'm more likely to delete the app than to stop and pick up gum. While the opportunities in mobile marketing are vast, retailers need to spend more time developing the connection between brands, the consumer, and why they should care.

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Zel Bianco, President, founder and CEO, Interactive Edge

Mondelez's investment in mobile is well-timed. Young consumers and their parents—let's call them 18-44, are the sweet spot for both the Mondelez brands, as well as those enthusiastic adopters of mobile devices and technology.

Like the Great Gretzky, who scored so well in hockey by anticipating where the puck was going to be next, Mondelez is positioning themselves to be where the consumer is heading.

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Roger Saunders, Managing Director, PROSPER BUSINESS DEVELOPMENT / BIGinsight

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