We will be attending this year’s Virtual National Hardware Show, happening October 12th through 15th. Virtual meetings can be arranged with us, so please reach out if you’re attending.
Amazon Advertising’s big conference, AdCon 2020, is being held virtually this year on September 30th and October 1st. The event will bring together thousands of advertisers to hear inspiring keynotes, attend educational breakout sessions, and engage with experts. Ideoclick is proud to be a sponsor of this informative Amazon Advertising event. More information can be found on this AdCon 2020 event page.
Adapting Product Innovation Strategies to Pandemic and Post-Pandemic Realities
Retail has always needed to adapt to shifting trends in the marketplace. With the onslaught of the COVID-19 pandemic, companies of all types have been forced to reassess marketing programs, product offerings, and supply chain strategies in warp-speed. Many companies have learned that product innovation can create wins in connecting with consumers during the new commerce landscape.
At the forefront has been a notion of “essentials versus non-essentials” and how manufacturers and suppliers approach the pandemic-induced transformation of shopping behaviors, manufacturing capabilities, and supply chain disruption.
“Innovation is going to be critically important across the board, as it relates to the essential category. I think there will actually be a push by a lot of retailers to expand offerings in those areas and then make room for that expansion in some of those higher-demand categories.”
Urea also noted that companies will have to “sharpen their pencils” as it relates to non-essential categories. Companies will have to account for progress in areas like differentiation and incremental category growth, as a part of what they are bringing to the table from a product innovation standpoint.
Refocused Product Development, Based on Consumer Needs
In terms of new product development, some companies have refocused their efforts. Sean Riley of Dude Products shared with the panel the example of his company’s Dude Bomb product, which was deemed non-essential throughout the depths of the pandemic. As a pivot, Dude Products launched an at-home bidet attachment to supplement the demands of the toilet paper supply craze that occurred at the beginning of the pandemic.
“It was important to step back and ask, ‘What is something core that the consumer needs, and how can we do that better?’ It’s almost going back to your roots, simplifying and then innovating your way back. [The bidet] was a way for us to double-down on innovating. We may have to pull back [certain] innovation dollars and redeploy them into what we do best.”
How Product Innovation Helps Connect to Your Consumer Base
One key point, specifically among retail brands, is being conscious of the messaging and content being promoted during the pandemic universe. Ideoclick’s Andrea Leigh referenced the dichotomy between Banana Republic, who was still deploying “work wear” digital advertisements and Anthropolgie, who immediately recognized the risk of appearing tone-deaf and created an entirely new lifestyle section on its website that covered things like working from home, sprucing up your home office, and creating WFH playlists.
“Where the innovation has to come from now is around messaging and content; being more timely and relevant. And, figuring out different ways to engage with customers, even though [companies] may not be in what’s considered an essential category. It’s not necessarily about products, but rather how you’re thinking about the customer and really understanding where they are at.”
Jessica Hauff of L’Oreal echoed Leigh’s sentiments about keeping the customer as the focus—and even redeploying internal resources in order to meet consumers’ needs.
“Hair color was becoming the new toilet paper. So many women were buying at-home hair color for the first time in their lives. But, it can be a very intimidating process. It’s messy, it smells, there’s a four-page pamphlet of instructions and warnings. We really ramped up content—especially digital content—around helping people pick the right shade, helping with their first-time application, how to follow it up.”
L’Oreal also utilized its tech center participants as company ambassadors, since those individuals were no longer able to go into a physical office. “They started creating content, doing live chats, webinars, etceterra with consumers. We just really tried to think about creative ways to connect with consumers and make sure they know we’re still here,” added Hauff.
SKU Rationalization: Keep the Discussion Going
With many retailers (supermarkets, drug stores, some “bigger box” retail players) grappling with the essential versus non-essential argument, session mediator Kevin Coupe of Morning News Beat raised the very pertinent and prudent question about reducing SKU count. All panel members agreed this approach is not simply black-and-white.
Riley proposed that certain suppliers can actually benefit from a bit of diversity, instead of “betting the farm” on two or three big brands—citing the shortage of toilet paper and related items. “I agree about making the selection simpler. But, suppliers that don’t have a lot of diversity in one category—[leads to] why they ran out of toilet paper and flushable wipes. Suppliers that carry more brands were actually able to serve the customer better.”
For retailers that are still very focused on a brick-and-mortar presence, Leigh cautioned they are going to need a reason to draw people back into the stores. “If they really shrunk their assortment, I think they run a risk. You have to do what you have to do, but you also have to be careful about what you’re cutting and why.”
Hauff reinforced this necessary balance, based on customer-centricity and the costs involved with supply chain issues and in-store stocking. “Each [retailer] is going to find this a bit differently. Take Target, which people think of as a place to go and discover new brands; new products. For them, not to offer that breadth of assortment wouldn’t be in line with their positioning in the marketplace. Other retailers that are more of a replenishment mindset, they probably have an opportunity to scale back.”
Message of the Day: Be Quick on Your Feet
As all panel members look to the future, they are cautiously optimistic about pandemic recovery—but are also cognizant a post-pandemic recessionary period is likely inevitable. Ultimately, a company’s ability to nimbly adapt and implement change will determine its continued success in the months, and years, to come.
To learn more about how Ideoclick helps brands build velocity on Amazon, connect with us here.
7.15.20 – Hello from Ideoclick,
We have multiple Amazon updates for sellers (both Seller Central and Vendor Central) we wanted to make sure you’re aware of this week.
Although an official date for Amazon Prime Day has not yet been announced, communication from Amazon Vendor Central explains that POs for approved Prime Day deals will begin in August. Our estimation is that Prime Day will be held during the first or second week of October.
For Seller Central clients, plan to start increasing your inventory position on FBA four to six weeks prior to October 1st.
For Vendor Central clients, Amazon stated that you should expect to receive POs for approved deals in two phases starting at the beginning of August.
FFP/SIOC Chargeback Grace Period Extension
Amazon has announced that it will extend its grace period on the SIOC minimum dimensions chargeback. The SIOC exemption rule will now be effective 1/1/2021. For visibility to which ASINs are likely to be eventually affected, you will notice them under “waived” status in Vendor Central chargeback notices. The main point is that the baseline SIOC requirements have not changed, meaning that an ASIN with packaging larger than 18″ x 14″ x 8″ or greater than 20 lbs will require SIOC FFP certification.
This is a highly detailed and confusing subject, and we are here to help you navigate it. If you need assistance, please reach out to your client success manager or contact us if you’re not already a client.
Upcoming Warehouse Limits
Please be aware that in preparation for holiday and due to the COVID pandemic, Amazon intends to apply storage limits to sellers using FBA . The limits are expected to extend to all product categories. Starting today, Amazon is removing its inventory removal fee to accommodate the new standards. This is expected to alleviate some supply chain constraints, but we don’t have information on how long the new inventory regulations will apply.
Seller Central Visibility
Along with other Amazon updates for sellers, the company has announced that U.S. based 3P sellers must now disclose contact information publicly. The decision should help brand manufacturers identify and shut down the sale of counterfeit or unregulated goods as well as identify unauthorized sellers.
Your Ideoclick Team
Get on Board or Get Left Behind
With an unprecedented event like the COVID-19 pandemic, no universal playbook exists to guide companies on how to resume, reinvent, or reinvigorate operations. Everyone is maneuvering as best they can, but it’s now time for companies to take a hard look at their go-to-market innovation strategies.
At the heart of that is innovation. In this installment of our “Deinvest to Reinvest” Virtual Leadership Summit blog series, we return to moderator Thom Blischok of The Dialogic Group and panel members Anne Zybowski of Clorox, Jim Norred of Microsoft for Walmart, Patrick Spear of GMDC, and Bill Campbell of Premium Retail Services.
Old-School vs. New-School Approach
COVID has changed everything. It is critical that companies leverage current and emerging technologies to rise to customer expectations, as well as shift processes relating to the supply chain.
Anne Zybowski of Clorox illustrated this shift in terms of moving from old-school economics to new-school economics, and why it’s important to “lean in harder” to e-Commerce as part of a deinvest-to-reinvest strategy to address go-to-market innovation.
“We have to think hard about where some of our traditional monies and efforts at the intersection of retailers and CPGs have gone, as well as how we communicate and engage with the customer. The old economics forced us to think that we could move consumers into channels, but now people are going to whatever channels they can,” she noted. “We fundamentally need to revisit the old [economics] and look at how we can reinvest more into digital, because that’s the way we’ve connected.”
Patrick Spear of GMDC discussed how many manufacturers are considering a streamlining of product lines. As an association that serves both retailers and suppliers, GMDC witnesses shifts from a retailer’s perspective, predicated on consumer demand—but also from the suppliers’ perspective in terms of demand shock and the supply chain.
“There’s the necessity right now to think differently about product assortment and where [companies] are putting the focus, just to meet near-term consumer needs. I think this is going to be a lasting trend,” shared Spear.
Technology in Action
Bill Campbell of Premium Retail Services provided three examples of technology in action. “We are overhauling our digital and commerce strategy with a heavy focus on virtual reps, which I think are going to get big in the future, online brand champions, and then trying to position ourselves to help with online order/pickup at store initiatives. Second, we have to hyper-focus on reducing costs so we’re ready for the future. And lastly, trying to ready ourselves for retailer shifts—including [retailers] outsourcing more operational responsibilities so that we’re ready when they’re ready.”
Bringing the Store to the Customer
Looking at the progress of technology integration into the shopper’s experience, Jim Norred of Microsoft for Walmart, stated that the COVID-19 crisis has drastically changed shopper expectations. This evolution requires re-imagination from the inside-out, as it relates to considerations like digital storefronts, order fulfillment, auto-replenishment, dark stores, micro-fulfillment, and home delivery.
“If [customers] can’t come to the store, you have to start thinking about ‘How do I bring the store to the customer through digital experiences?’ There’s been this topic around contactless shopping, but that’s really now frictionless shopping. Shoppers will be loyal to the brands that can deliver on these new experiences the way they want,” advised Norred.
Addressing Health & Hygiene
Also factoring in to the shopping experience—and shoppers’ expectations—is the component of health and hygiene. Spear spoke about this in terms of micro-fulfillment centers (MFCs), which he says “are coming.”
“How we think about front-end contact-less, frictionless, in the future—but also what role innovation and technology plays around health and hygiene. Not just for the store associates, but also the customers.”
Part of this involves the exploration into “COVID certification” to ensure hygiene and sanitation—and where that might be implemented as companies move forward. “If you have lead certification for a building, why couldn’t you have COVID certification for a restaurant, or a bar, or a distribution center? If there are policies and protocols you could follow to ensure [safety], from a standpoint of being a great place to be an employee, or a great place to shop, COVID certification would be relevant,” added Spear.
Why Working from Home Is Much More than “Convenience”
Norred expanded upon the technology aspect from a slightly different operational perspective: working from home (WFH). After 25 years working with retailers and CPGs that haven’t supported WFH, he avers the mentality that “work from work” as a superior way to conduct business is waning.
“That’s simply not the case today. I think technologies like Teams and Zoom or other collaboration tools are enabling [WFH], and I think you’ll see it more and more from traditional companies. It’s one of those things that can help drive costs down, because you don’t need the real estate anymore.”
Norred also noted that many companies are realizing how employees are proving to be more productive in a WFH environment.
Disrupt, Disrupt, Disrupt
All panelists were staunch that the approach of “wait and see” is not an option.
“Companies will have to begin creating and dedicating efforts to disrupting their own business models. Creating truly differentiated consumer experiences and operating models that let them compete versus waiting on [the pandemic] to be a forcing function,” stated Norred.
Without a concerted effort into innovative solutions across the board, businesses will unfortunately be left behind. “We think about innovation three ways: products, service, technology. You can’t have one without the other,” advised Spear.