CPGmatters: Marketers Gain Efficiency with Online Sampling
By
Dan Alaimo
Through
a special arrangement, presented here for discussion is a summary of a current
article from the monthly e-zine, CPGmatters.
CPG
marketers want efficient promotions, while consumers welcome free stuff. The
two may have common ground in the relatively new world of online sampling.
With
this promotion, bargain-hunting consumers request samples from websites
that may be sponsored by manufacturers, retailers or companies providing
the online program and fulfillment. What is lost in immediacy is gained from
the efficiency of people getting the products they ask for, not what they
chance upon in the store.
Among
the major manufacturers that have dabbled in this promotion are: Johnson & Johnson,
Kimberly Clark, Con Agra, Hallmark and Nestle. Retailers include: Wal-Mart,
Kroger (all banners), Costco, Sam’s, Walgreens, CVS, Supervalu, Schnucks and
Pathmark.
Trading
partners and other experts agree that online sampling will never supplant its
in-store cousin. There are certain products – perishables, notably – that will
never lend themselves to ordering online on a broad scale.
On
the other hand, certain products – many in the health and beauty care categories
– work very well with online requests for samples. For example, Prilosec OTC
will go into the hands – and stomachs – of those who really need the product,
and the explanatory information will be delivered by links to comprehensive
data sources, rather than a flier handed out in-store.
Feminine
hygiene products are frequently among the online sample offers, as are incontinence
products. Baby formula, and other baby services, is another highly targeted
product area that can be delivered best to families with new babies either
online, and then direct to the home, or in a healthcare setting.
Meanwhile,
in the online world, sampling offers can be better tailored to the specific
needs of the vendors and their consumers. For example, the StartSampling.com
website offers a free subscription to Remedy Life Magazine, diabetic product
needs and offers, and a free back-to-school planning calendar with $20 of coupon
savings from Nestle.
Online
sampling is not quite a revolution, “but it is certainly another arrow in the
quiver for manufacturers," said James Tenser, principal, VSN Strategies, Tucson,
Ariz. “If it lets them start relationships with consumers, this is another
entry point for consumer marketing."
It’s
a trade-off of immediacy of product for immediacy of in-depth information,
according to Mr. Tenser. “Clearly it is not going to be a virtual equivalent
of the lady in the hairnet with the little microwave standing in the aisles
of the supermarket giving out samples. It’s not the stuff, but the information
about the stuff that matters the most," he said.
“I
see this as coexisting rather nicely with in-store sampling, but it is going
to serve a different function, and maybe for different products," he added.
Discussion
Questions: What do you think of the benefits as well as the limits of online
sampling? How does it compare to and complement in-store sampling?
Online sampling works extremely well if a brand marketer is looking to reach a large audience, hopefully targeted, in an efficient manner. By automating the process online, it allows the company to distribute numerous samples throughout the United States, without having to have hundreds of people manning sampling tables in-store.
The negative to online sampling is that you are providing samples in people’s homes, but the product that you want them to buy is back in the store. There is research that indicates uplift in sales caused by sampling a product, but that uplift occurs when consumers are able to taste a product in-store through sampling, and then purchase the product right there.
Bottom line is that in-store sampling will serve one purpose, and online sampling another, and both should be a part of a brand’s overall marketing strategy.
The idea of leveraging the web for sampling makes sense, especially for specific needs such as newborn care or personal care. The trick, of course, is how do we gain information from this sampling and convert the effort into not just a single transaction, but an ongoing relationship?
The moment of truth when opening the package has got to have impact. Is my product mixed in with a bunch of other non-related items? Or, does my product take center stage? Have I given the potential customer incentive to actually buy and can I track that order back to the original sample request?
The insight out of this system could be robust and powerful, if the strategy is well thought out and the execution is flawless.
Online sampling addresses a problem that continues to plague CPG marketers–and many retailers: customer anonymity. It’s one thing to give out free product to strangers, but when you know who they are, there are limitless opportunities…like asking them how they liked the sample. Offering them a chance to buy or try other things.
There may be some additional costs but the efficiency, measurability and ultimately, predictability, will deliver an ROI.
The online sampling promotion can be a useful one. It is, however, probably limited to the “Beauty Care,” “Food/Grocery,” and “Medicines/Vitamines” categories–hence the firms named in the article. Product samples in-store and delivered to the home still are likely to trump items ordered online.
Consumer response from a question in the June, 2009, Simultaneous Media Usage Survey (SIMM) from BIGresearch, delivered this data point:
With 1 meaning “No Influence” and 5 meaning “Greatly Influenced,” please tell us how each of the following promotions influence you to buy certain Brands or Products.
Product Sample – In-Store rated 3.5, with 53% of those Adults rating the promotion 4 or 5
Product Sample – Delivered to Home rated 3.2, with 48% of those Adults rating the promotion 4 or 5
Product Sample – Ordered Online rated 2.6, with 31% of those Adults rating the promotion 4 or 5
Chances are that consumers want/need to touch, feel, sense, taste the products that they are sampling. That builds trust and confidence. Likely, once a consumer has had satisfactory sampling success with a retailer in the past via a purchase, the online order in the future will have greater credibility and action that moves toward a sale.
When the same adult sample with the June SIMM (22,000 Adults) were asked:
“Over the last 90 days, which type of products did you research online before buying them?” of people who said they research online “Regularly” or “Occasionally,” the response was:
Beauty Care/Cosmetics, 19%
Food/Grocery, 25%
Medicines/Vitamins, 20%
Fish where the fish are, and you can take something home for dinner.
Online sampling makes sense, but more should be offered “where people play” in the virtual worlds of Facebook or MySpace. Until Internet coupons become safe, it might make sense to offer “snail mail” coupons that not only offer consumers free or discounted products but also allow them to pick them up at their local retailer.
Online sampling should be a highly effective way to reach younger consumers who are forming their purchasing habits. Kashi has been offering sample boxes of cereal and the results have been very strong for them. I wouldn’t underestimate the potential for increased sales, but perhaps more importantly, longtime brand loyalty.
There are some good points raised here, however, I am a big fan of including samples packed with the shipping box for other products ordered online. This way, the customer is not anonymous and the hit rate for followup purchases of free sampled items is very high.
Other panelists have pointed to a number of very real benefits to online sampling, such as measurability (Phil), reach and targeting (Joel), and the potential to build lasting loyalty (Cathy). However, there is a big downside to “online” sampling–only half the process is online; there is still an expensive direct-mail fulfillment process to go through once the online request has been made.
Instead, why not do targeted sampling using free trial coupons? Recipients could be selected based on their previous shopping history, and delivery of the actual coupons can be through any channel (email, register tape printing, cell phone, kiosk, direct mail, etc.). In addition to eliminating the cost of fulfillment for the physical samples, you get the shopper to actually find the product in the store, put it in her cart, and bring it home, so the shopper begins to form the habits and associations that can lead to subsequent purchases. And by actively choosing recipients (instead of allowing deal-chasers to self-select), you can ensure that a much more valuable shopper ultimately benefits from the free product.
Online sampling is a great example of brands adapting to how consumers’ shopping behaviors and lifestyles have changed. With more consumers shopping online and increasing brand competition, smart brands have learned that they can offer a sample online to a consumer who has specifically indicated they want that product. That’s a big difference from the consumer who just happens upon a sampling kiosk on the store floor.
While in-store sampling remains a very good way to incite the purchase, one of the key changes in shopping behaviors is that more consumers report making purchasing decisions before arriving at the store. Online sampling may be one way to ensure more consumers put the product on their shopping lists before they leave home and in their cart when in-store.
And sampling needn’t be just online or in-store. Creative brands get disruptive, according to a Promo magazine article (“Sampling By Surprise,” 3/1/09). That article highlighted brands that put samples in consumers’ hands by going to where customers gather, like handing out Crest Whitestrips at movie theaters, staging house parties by Sargento for its Salad Finishers and Potato Finishers products, and handing out the vitamin drink Emergen-C on the ski slope.