P&G Tries Retail with Olay Store
Procter & Gamble wants a first-hand look at what and why women buy and that’s why the manufacturer is opening a 130-square-foot Olay Store in a Cincinnati-area mall.
The temporary store, which will be open for business between Aug. 15 and Oct. 15, is not the first of its kind for the brand. P&G has opened similar Olay stores in Poland, Spain, Russia and Mexico, according to the Cincinnati Business Courier.
The first stand-alone Olay store was opened for business in Poland at Warsaw’s Galeria Mokotaw.
Lia Braaten Hager, global manager/global identity director for Olay, told VisualStore, “The store became the first iteration of our new identity, bringing more warmth, light and femininity to our overall consumer experience.
The store in Warsaw was unusual, said Beth Harlor, vp/creative director for Benchmark, the design and brand consultancy that worked with P&G to develop the Olay Store, because ” Poland is a market where Olay hadn’t existed. P&G wanted to launch with scale, starting with the freestanding store and then working toward opening counters in various department stores.”
John Brownlee, brand manager of Olay North America, said the company is looking to its kiosk experiment to give it the insights it needs to promote the sale of its products in stores here.
“The key task of this site is not to sell the product,” said Maria Deacon, senior environmental designer at Benchmark. “This is acting as a teaching tool.”
P&G expects to learn quite a lot about what motivates consumers to buy Olay products in the two months the kiosk is in operation at the Kenwood Towne Centre mall.
P&G will have 80 of its best and brightest in areas such as package and market research observing shoppers and their interactions with the kiosk’s beauty consultants.
Discussion Questions: How will P&G’s Olay Store kiosk help its retailer partners? Do you see companies such as P&G opening their own stores if
sales performance turns out to be strong in kiosk laboratories?
While this makes perfect sense as a research tool, the products of which can and should be passed on to retailers for the mutual benefit of P&G and those selling its products, I cannot see manufacturers expanding into their own little world of retailing. Particularly a company like P&G with such a wide range of products. Selling those products in stores that attract customers making purchases in other departments gets them incremental sales. If they open their own store, all they will get is people who care enough about their products to make a special trip to buy them. I cannot see a long term sales success in this idea although I agree with most everyone else that it might well help sales in stores where P&G are one of many suppliers.
An interesting approach particularly on the heels of Revlon’s $40 million loss from its Vital Radiance line. Retailers scaled way back, arguing that the line should have taken after a few months. Revlon counters that the line was not given enough time to take root. Would a Revlon laboratory store have worked out the kinks and made for a more successful launch?
Just one suggestion to P&G: If you haven’t already done so, get your ad agency involved. Have their account managers, creative gurus, research personnel, and media buyers work in the kiosks.
It seems likely that in the next 10-20 years there will be cataclysmic changes in the relationship of manufacturers to retailers. Manufacturers will never really understand retailers until they walk in their shoes, and vice versa. OK, so that is already happening. Certainly retailers are already up to their eyeballs in brand competition with the manufacturers – private label.
I know that this is being cast as a “shopper” study laboratory, but why not a “retailing” study laboratory? For that matter, Nike and others have no problem running their own stores while selling their brands through the wider retail channel. Why not a “P&G” store? A beauty kiosk makes a great beginning, but I think that failure for a great manufacturer like P&G to push in this direction would be a failure of leadership. (Hallmark is another great company doing well with a dual retailer/manufacturer strategy.)
This gives P&G managers the ability to test their brand vision unencumbered by the varying constraints of their retail partners. As they test ideas and analyze results, they will be able to refine their message and merchandising. Then they can make a stronger case, supported by data, to implement their programs in different venues in a way that is closer to their definition of brand-consistent, and presumably, with a greater chance of success.
My guess would be that if P&G obtains useful insights about their “traditional” customers in the Cincinnati market, similar stores may open up for short periods in other markets across the US so they can better understand other groups of customers. I’m sure it is an experiment and what they do next depends upon the results of this one. However, I agree with the previous comment — Kudos! for attempting a new way to learn about your customers.
It’s a great idea for P&G. I agree with the previous comments that a kiosk will provide the company with insights into how their customers buy. There are, of course, benefits to retailers that can be used to help them sell more Olay merchandise and better serve their customers…so long as the folks at P&G don’t decide they know more about retailing than their retailers and open several hundred of the kiosks in malls around the country.
Kudos to P&G for their approach to learning more about how to get customers engaged in the Olay brand. This is what customer-centric marketing is all about. I think Mark Lilien’s comment that the kiosk is basically an extended focus group is a good way to look at it. It provides the kind of qualitative feedback that focus groups are designed to reveal, yet avoids the group-think that hampers so many focus groups.
As far as the benefit to retailers…if P&G can do a better job of engaging customers with their Olay brand, it can mean increased sales for retailers. At the high ring that Olay generates, that’s a good thing.
These temporary stores are fantastic laboratories for the brand to interact directly with its consumers. New benefits can be demonstrated and immediate feedback obtained. By being in a retail environment instead of traditional market research settings, these stores become a better indicator of actual shopping behavior.
However, and I am sure P&G is aware of this, they are still laboratory environments. The consumer behavior changes once they are in the actual shopping channel where the actual purchase will take place. Other factors will be in play, clutter will have occurred, and the shopping mentality will differ dramatically from the one generated in the lab store.
The greatest caveat is that the amount of time, energy, attention and commitment will vary wildly between the lab environment and the actual shopping channel. By definition, the customer who has the time and interest to stop at the Olay store is not in the center of the Olay bell curve for, say Kroger.
Using retail locations as both brand reinforcement and marketing test environments can work. Just look to Nike to understand how.
Anything P&G learns about Olay customers might help HBA retailers. This Cincinnati store is like an extended focus group. The only problem P&G might encounter: since their headquarters is local, some of the shoppers might be part of the P&G extended family.
Having done work with P&G in the past, this endeavor does not surprise me. P&G is a great marketing company that happens to manufacture some decent products. Think about it; do you REALLY know why you buy Tide or any of the other P&G brands? This is why I do not think this will start a trend. This is purely a test, and in 6-12 months, P&G will develop another test with an equal “WOW” factor.
Kudos P&G, this is brilliant! Not only is the Oil of Olay brand getting in front of their audience while she’s out shopping, they are opening the door to REAL CONVERSATIONS with her!
We are all talking about how important it is to communicate with the consumer and understand her needs, desires and motivators. Here they have created a method in-environment to talk to her and get it straight from the front lines. Via exercises like these, they will be able to generate insight-driven, creative business solutions for the brand and share those insights to help spur sales with their retail partners. The beauty is that this is the goal — not stand alone stores.
Finally, a group that’s not only talking about realigning for customer-centricity but doing it. I hope we see more follow in their footsteps!
P&G is not the first to use the retail laboratory approach for a manufacturer, and hopefully the trend will pick up a bit. While the time period is a bit short for the test and the location isn’t the best, the general idea has great merit.
Manufacturers need to become better at understanding the retail experience and integrating that knowledge into their businesses. Much like Toyota works closely with its suppliers, retailers and manufacturers need to get closer. Manufacturers should explore other laboratory experiences, such as supporting store within store environments with key retailers in several locations to get a better dataset. The labs also should help with supply chain issues and help both the retailer and manufacturer tweak the product and the store presentation to find the tipping point for sales.