Mondelez International wants to occupy the leading edge of all aspects of its business, from consumer trends in emerging nations to go-to-market technologies. So the recent Kraft global-snacks spinoff – home to powerhouse brands including Oreo, Trident, Chips Ahoy! and Sour Patch Kids – is trying to leapfrog the rest of the CPG industry with a huge new mobile marketing and retailing initiative. The goal: establish leadership in an area that is becoming more important to food and beverage brands every day.
In launching Mobile Futures, a program of intense cooperation between mobile-technology startups and specific Mondelez brands, the company is looking for ideas and answers about how to harness smartphones more effectively than most of the industry has, both to encourage and facilitate in-store marketing and impulse purchases as well as out-of-store applications. Mondelez also is devoting 10% of its marketing spending this year to ways to exploit mobile technology.
“What we’ve found with the exploration we’ve already done over the last four years is that mobile is one of the most incredibly interactive and engaging ways to touch the consumer closest to the point of purchase,” Ed Kaczmarek, director of innovation and emerging technology for Mondelez International, told CPGmatters.
“It’s so important for marketers not just to push a message to consumers on mobile, and make it feel like a TV ad, but to really engage the consumer with something that’s relevant and may actually help them or bring value to their life.”
One example of how Mobile Futures might help Mondelez brands at retail is unfolding over the first quarter of this year. It is a partnership between its Stride gum brand and one of the startups, Waze, a community-based traffic and navigation app, based in Palo Alto, Calif.. There are “a variety of ways [Waze’s] technology can drive impulse purchases with Stride and keep the brand top of mind with consumers,” said Betty Su, director of marketing for young adult gum for Mondelez. One possibility: a Stride icon would appear on a smartphone when a driver passes a store where the gum is sold.
Mondelez also hopes to advance frequent-shopper initiatives through Mobile Futures. “Loyalty is the big nut that we want to crack,” Kaczmarek said. “There’s huge value to us in that. We always want to reward our customers and we want those rewards to lead to deeper consumer engagement and relationships and being loyal to our brands.”
Kaczmarek pointed to Mondelez’s partnership with ShopKick, a shopping app that rewards consumers with loyalty points and gift cards for their purchases at a variety of retailers, ranging from American Eagle and Macy’s to Target and Toys R Us. “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 said.
In general, Mondelez’s predecessor company, Kraft, and other CPG marketers were relatively slow to harness digital technologies about a decade ago. That was largely because marketers in his industry “tend to go with what they can measure and what is proven,” Kaczmarek said. “Now, mobile is fairly new. There’s a lot going on with it that is nascent – that hasn’t necessarily been proven with hard return on investment.”
But instead of hanging back until ROI on mobile investments are proven, Mondelez is pressing to become part of the proof, through Mobile Futures. In doing so, the company is joining other major brands in a variety of industries – including PepsiCo, Nike and Lexus – in financing marketing-technology companies in their infancy, through funding contests, direct investments or other means.
In Mobile Futures, Mondelez hosted two days of pitch sessions by would-be partners and then selected nine mobile-technology startups to 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 the important areas of 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 for creating new mobile ventures that address broader business challenges.
Despite the rapidly rising attachment by consumers to their smartphones as shopping aides, 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 fine-tune how to engage consumers on mobile devices,” he said. “We must evolve more because what you still see with mobile marketing is mainly just banner ads. We really need to leverage what technology enables us to do to more relevantly reach each consumer.”
Mondelez has been consulting with retailers lately about how best to harness smartphones in the store and also has entertained retailers’ own pilots and proposals. Under Mobile Futures, Mondelez also hooked up with two convenience-store chains, Quick Check and Kum & Go, to help the CPG company choose the nine startups. “We’re hoping that they can get involved with some of [the resulting] pilots,” Kaczmarek said.
Mondelez is open to involvement by other retailers as well, he added. “One of the most important things we’re trying to do with a nascent technology is to scale it to reach more consumers, and working with our brands and with retailers is a great way to do that,” Kaczmarek said.
With the potential to revolutionize in-store marketing, mobile technologies will have a huge effect on traditional instruments such as point-of-purchase marketing, merchandising and other in-store promotional techniques.
“I think [mobile] will complement some of these methods, but I do think as mobile evolves it will replace some of them,” Kaczmarek said. “Working with mobile and creating everything digitally, you can do it very quickly. And when you learn something, you can basically turn it around in a few days and have something new. You can’t do that with standard things that you have to print and mount and then get them into the store.
“Retailers are very excited, but we all have to figure out what that most optimal mix is.”
At the same time, Kaczmarek acknowledged that not all retailers are enthused about the possibilities and the likely disruption to their marketing that the spread of mobile technologies no doubt will entail.
“Some [retailers] are willing to experiment ahead of the curve,” he said. “Others may want to wait it out a bit. But in the last six months, we’ve seen more retailers open to experimentation because I think everyone has awakened and sees the opportunity with mobile.”