Thursday, March 6, 2014

Kraft Foods Touts ‘Power of Personalization’ to Remain Relevant

Consumers engage with brands when, where and how they want to nowadays. To reach them with the right messages, more brands and retailers are cultivating shopping experiences that are personalized. 

Kraft Foods, for example, is doing so as part of its evolving strategy that leverages data and consumers’ access to digital technology to create relevance and growth in the food business.

“In-store activation is all about personalization. It’s going to be interesting to see how this will manifest itself and how we deal with it to drive brand equity, drive traffic to the stores, and build baskets,” said Tom Corley, Executive Vice President and President, U.S. Sales, Kraft Foods Group.
He spoke about the “Power of Personalization” recently at the Food Marketing Institute Mid-Winter Conference in Scottsdale, Ariz. Joining him in the presentation was Jamie Egasti, CEO, Catalina Marketing. 

Egasti set the tone of the talk by saying the combination of technology and data is fundamentally changing the grocery business for manufacturers and retailers. That’s because the fragmentation of media gives consumers so many choices

Corley said one of the most powerful data points for him in the last 10 years has been the growth of frequent shopper card programs driving IT. “For 30 years, we didn’t have that personal relationship,” he said. “We didn’t have that one-to-one personalized ability to know who that shopper was. Today, with the advent of technology, retailers know who those consumers are. It’s going to continue and expectations will continue to rise from shoppers.”  

He asked the audience to consider the amount of data available today – syndicated, direct, market research, and trend-driven – and then “overlay” all of that information.

“There is a new reality,” he said. “We have a lot of data that is accessible to analyze and make decisions. We are able to overlay this one-to-one relationship data on consumers – whether you are a retailer or a manufacturer.” 

Corley went on to explain that the ability to connect with less than prosperous households, democratize pricing, and provide them with options has become accessible to manufacturers and service providers because of the one-to-one relationships with those households. 

“That has never happened in the history of consumer products,” he said. “We have never been able to democratize pricing from manufacturers to households in such an accessible manner. That will change the pricing paradigm.” 

Egasti said as consumers elevate their expectations for service, choice and personalization, trading partners will sharpen their ability to create more relevant experiences. But the executives listed several challenges for manufacturers and retailers:
  • How do you personalize and customize one-to-one relationships? 
  • How many can you have?
  • How will shoppers respond to your brand and your service?
  • How do you keep them over time? 

Eating occasions are changing, Corley said, but they still exist. It’s a matter of finding where they are and how that consumption is taking place. 

“That’s what you have to use the data for,” he said. “You have to use the data so that you stay connected with consumers as they change their behaviors and patterns. We have to maintain relevant connectivity with them so that we can build our brands with them. Also, we must be able to listen and learn. That’s where this one-on-one connectivity and the learning with our retailers are going to be a powerful advantage for us going forward. There’s a lot of power here if we can respond.” 

Corley said he recently met with a major grocery executive who said half of his core shoppers skip half of the center store aisles on every shopping trip. 

“We have an interest at Kraft because we are a center store company,” he explained. “But the solution is not spending more money on infrastructure. It’s not changing the aisles from vertical to horizontal. Those days are over.” 

He said capital expenditures are now generally reserved for new stores and for digital solutions that can be instantaneous, that consumers can understand, and that they are incented to engage in. 

Still, the speakers agreed that many retailers are finding it difficult to move away from traditional promotional tools like weekly circulars toward new digital-based platforms. Even Corley acknowledged that Kraft still spends most of its marketing dollars on print, coupons and related national ad buys – but that will be changing. 

“Coupons will be one of the first major transfers that we do as a company,” he said. “Electronic adoption is very quick and very efficient.” 

In response to a question by CPGmatters, Corley said a third of grocery shoppers use smartphones in stores for some sort of reward.

In the course of a year’s visits to the grocery store, most shoppers buy less than 1% of the items on the shelves, according to a new study by Catalina. The study, “Engaging the Selective Shopper,” involved examining the purchases of more than 32 million American shoppers at nearly 10,000 grocery stores. The study urged manufacturers and retailers to tailor their approaches to individual consumers as much as possible. If a message is not properly tailored, it doesn’t matter if the medium is print or   digital.  


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