P2PIQ-May 2020

MAY 2020

Path Purchase

pathtopurchaseiq.com

TO

E N D - TO - E N D S T R AT E G I E S F O R D R I V I N G C O N S U M E R D E M A N D

INSIDE COVID-19 AT RETAIL:

ADDRESSING THE CHALLENGES

IMAGE GALLERY:

REACTIONS TO THE PANDEMIC

STANDOUT SMALL BRANDS:

20 UPSTARTS MAKING NOISE

STORE SPOTLIGHT: AMAZON GO GROCERY

Hall of Fame

Alex Gourlay

Helping Walgreens shape the future of drugstores

POWERED BY

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“The global economy is dynamic and tumultuous.

But, there is always an opportunity to innovate, collaborate, and delight today’s shoppers.”

— TANNER VAN DUSEN, CHIEF INNOVATION OFFICER, ENSEMBLEIQ

THE FUTURE TAKES FOCUS

NOW

Unexpected market forces rapidly change the way we build trust in our brands. It’s time to join the only community that connects thousands of professionals to insight and influence essential for solving business problems and driving growth into the future.

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PathtoPurchaseIQ.com FOR MORE INFORMATION, PLEASE CONTACT ARLENE SCHUSTEFF, ASSOCIATE BRAND DIRECTOR, AT ASCHUSTEFF@ENSEMBLEIQ.COM

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Contents E N D -TO - E N D ST R AT E G I E S F O R D R I V I N G C O NS U M E R D E M A N D

Back Cover COVID-19 at Retail

As societal restrictions escalate and retail challenges persist, brands are forced to determine a new course of action.

12

SPECIAL REPORTS

Hall of Fame Q&A

Walgreens Boots Alliance’s Alex Gourlay, who’s guided one of the nation’s largest drugstore retailers through a period of massive change, has earned induction into the Path to Purchase Institute Hall of Fame.

20

Standout Small Brands

We offer a pat on the back to 20 brands rising up the ranks as category challengers and shopper favorites.

May 2020

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May 2020 VO LU M E 33 | ISS U E 5

DEPARTMENTS 6

Hands Across the Industry

11

P2PI Member Spotlight:

KlassCo

NEWS

43

Editor’s Note:

28 32

P2P Toolkit Store Spotlight:

Amazon Go Grocery

36

Activation Gallery:

COVID-19 at Retail

10 Home Depot

8

8 Fighting Hunger,

Sparking Change

Walmart adjusted its promotional calendar due to the COVID-19 pandemic, working with Feeding America to move up the launch of its seventh annual campaign.

8 M&M’s Works

With Dollar General

Dollar General is exclusively stocking “orange vanilla creme”-flavored M&M’s candies from Mars Inc.

Supports Moen’s Launch

The retailer promoted the arrival of the Nebia by Moen water-saving spa shower with a variety of activity.

40

Solution Provider News

42

Personnel Appointments/ Editorial Index

32

10 Yeti Partners

With Lowe’s

Lowe’s is carrying dozens of SKUs from the outdoor brand in more than 500 of its 1,900-plus stores.

43 Retail Intel:

Training Pet Owners

PetSmart elevated its annual “puppy central” campaign this year with ramped up in-store, digital and print activity.

Path to Purchase IQ (USPS 4568, ISSN 2688-4984 ) is published 12 times a year, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Subscription rates: $125 for U.S. addresses; $190 for Canadian addresses; $275 for all other addresses. Single copies (pre- paid only): $20 in the U.S. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2020 by EnsembleIQ. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or information storage and retrieval system, without permission in writing from the publisher. Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295.

POSTMASTER: send address changes to Path to Purchase IQ, PO Box 3200, Northbrook IL 60065-3200.

May 2020

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FULL SCHEDULE O F R E TA I L E R S

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Editor’s Note

Editor-in-Chief Peter Breen, pbreen@ensembleiq.com

Hands Across the Industry

Executive Editor Tim Binder, tbinder@ensembleiq.com Managing Editor Charlie Menchaca, cmenchaca@ensembleiq.com Associate Director/Content Patrycja Malinowska, pmalinowska@ensembleiq.com

PETER BREEN, EDITOR-IN-CHIEF

I unconsciously extended my arm to shake hands as soon as Morry Smulevitz introduced himself. In my defense, it’s hard to unlearn 50 years of social norms overnight.

The vice president of corporate communications for Walgreens Boots Alliance, Morry had sent us instructions the night before. Alex Gourlay had very graciously agreed to keep the appointment for his Hall of Fame interview on March 12, as long as we simply agreed to follow the new social guidelines the world’s largest drugstore retailer had just implemented for employees at HQ in Deerfield, Illinois: maintain three feet of distance, and no handshakes. I was able to get control of myself after the initial goof; Bill Schober, Tim Binder and I later exchanged what probably were the first-ever elbow bumps with an Institute Hall of Fame inductee in the program’s history.

The potential impact of the COVID-19 virus was rapidly taking shape that week, so we had half-expected for the interview to be canceled. We were delighted, then, to be meeting with Gourlay. At the time, however, we had no idea how fortunate we really were: Our own company closed its offices and banned travel that very afternoon as the entire country began preparing in earnest for the pandemic that was about to engulf us.

Had it been canceled, the interview likely would not have been rescheduled – could not have been rescheduled, since Gourlay and Walgreens have had far more pressing concerns since then as the company joined other key retailers in taking a lead role helping consumers (not to mention the nation) deal with the escalating crisis.

Gourlay seems well-suited to that kind of role. While his overall intelligence and industry experience were obvious during our conversation, the compassion he has

Associate Editor/Content Cyndi Loza, cloza@ensembleiq.com

for consumers and the pride he derives from helping them lead healthier lives are what really stood out during the interview, as you’ll learn while reading our profile on page 12.

Walgreens has done an exemplary job responding to the crisis (as we noted in the April issue), overhauling its typical store policies to meet shopper needs, adding additional services to give customers more options, providing a wealth of relevant information to help them cope – and yes, also maintaining a business-as-usual approach when that was still possible. (After all, the magical Easter Bunny didn’t have the luxury of sheltering in place along with the rest of us.) I can’t factually verify that Walgreens has been “Trusted Since 1901,” but I can confidently assert that it’s been trusted by a lot of shoppers since mid-March.

To be sure, we’ve witnessed a lot of compassion across the entire industry since March 12: the many retailers implementing policies to ensure shopper safety and product availability (even if it meant eliminating profit); the many brands donating inventory or money (or both) to support relief efforts; the brands and solution providers putting aside their regular production schedules to make much-needed items for first responders and healthcare personnel, or to help with shortages of key consumer product categories. (We examine some of these initiatives in our flip-cover story on the COVID-19 crisis.)

It’s been a source of pride for us here at the Institute to see how compassionately our industry has responded to the crisis over the last two months (which, frankly, have seemed like two years). There are a lot of hands out there that I’d like to shake in gratitude.

Hopefully, I’ll be allowed to do that again sometime very soon.

May 2020

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Associate Editor/Content Jacqueline Barba, jbarba@ensembleiq.com Editor Emeritus Bill Schober, bschober@ensembleiq.com Director – Production Ed Ward, eward@ensembleiq.com Creative Director Colette Magliaro, cmagliaro@ensembleiq.com Art Director Michael Escobedo, mescobedo@ensembleiq.com CONTRIBUTING WRITERS Erika Flynn, Ed Finkel, Michael Applebaum, Chris Gelbach, Dawn Klingensmith, Neal Lorenzi, April Miller, Samantha Nelson

SALES & P2PI MEMBER DEVELOPMENT Managing Director Tanner Van Dusen, 312.518.5000, tvandusen@ensembleiq.com SVP, Content/Brand Director Joe Territo, 973.727.7338, jterrito@ensembleiq.com Associate Brand Director Arlene Schusteff, 773.992.4414, aschusteff@ensembleiq.com Senior Director/Member Development Patrick Hare, phare@ensembleiq.com Director/Member/New Business Development Todd Turner, tturner@ensembleiq.com Manager, New Member Development Katrina Lopez, klopez@ensembleiq.com

ENSEMBLEIQ LEADERSHIP TEAM

Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several Senior Vice President, Content Joe Territo

EDITORIAL AND EXECUTIVE OFFICES 8550 W. Bryn Mawr Ave., Suite 200 Chicago, IL 60631-3731 Phone: 773.992.4450 | Fax: 773.992.4455

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Cause Marketing

Walmart Fast Tracks ‘Fight Hunger’

BY PAT RYC J A M A L I N O W S K A

Walmart adjusted its promotional calendar as the COVID-19 pandemic took precedence as the most urgent and universal social cause facing society today.

The retailer worked with Feeding America to move up the launch of its seventh annual “Fight Hunger. Spark Change” (FHSC) campaign and begin collecting online donations earlier than originally planned, giving consumers a way to help each other by supporting their local food banks.

Walmart kicked off the effort with a $3 million donation, and participating manufacturers Campbell Soup Co., Conagra Brands, General Mills, Kellogg

Co., Kraft-Heinz, J.M. Smucker Co., PepsiCo, Clorox Co. and Unilever committed nearly $30 million in cash and in-kind donations to organizations helping to meet the intensifying need for food assistance.

A larger group of partner brands is also supporting the typical purchase-triggered donations from April 13 to May 10.

“The FHSC campaign has been a way for Walmart and Sam’s Club to partner with our suppliers and customers to help bring food to the people who need it most. … It’s been an important effort every year, but this one is especially critical,” Walmart wrote in a media release.

On March 27, the mass merchant deployed a mobile push notification inviting consumers to help and linking to a mobile

p u r e h t o e s e h t s s i m t Don’ u P o t h t a P n only i

Exclusive Products

Dollar General Promotes Exclusive M&M’s SKU

BY C Y N D I L O Z A

Dollar General is exclusively stocking “orange vanilla creme”-flavored M&M’s candies from Mars Inc. The retailer describes the limited-time confectionery as white chocolate candies with “flavor hints of orange and vanilla wrapped in the brand’s signature colorful shell.”

Loosely inspired by Unilever’s “creamsicle” orange- and vanilla-flavored ice cream, the SKU is priced at $3.25 per 9-ounce pack (or two packs for $6).

Dollar General is drumming up additional support for the candy by dangling a digital coupon for $2 off the purchase of $10 worth of any M&M’s items. In stores,

custom floorstands tout the product’s exclusivity and the digital offer, which expires Jan. 21, 2021.

Orange vanilla cream M&M’s first hit shelves at Dollar General for a limited time in April 2018. At the time, the brand donated $1 (up to $20,000) for every bag sold to the Dollar General Literacy Foundation.

The dollar store chain regularly teams with manufacturers on exclusive products or bulkpurchase incentives. Among other recent account-specific activity: • Kellogg Co.’s Pringles promised Dollar

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landing page detailing the effort. From there, visitors can reach a Feeding America donation page. That day, the retailer also shared a promotional video in a Facebook update, noting that “These days, food banks are experiencing more demand than ever.” In previous years, Walmart had made additional donations triggered by social media shares via consumers, but that was not part of this flight.

The retailer had departed from its regularly scheduled promotional programming on social media midway through March, for the next two weeks instead focusing exclusively on delivering vital store policy updates as well as thanking and celebrating employees. The latest videos uploaded to YouTube explain how “easy” it is to get grocery delivery and pickup as more consumers turn to these options.

The Walmart Foundation also has pledged $10 million to food banks, and school and senior meal programs via nonprofits as part of a separate $25 million commitment to supporting organizations on the coronavirus frontlines. IQ

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General shoppers who purchased any two cans of Pringles a free can of wavy Pringles via digital coupon.

Account-specific floorstands touted the offer as valid from March 16 through April 19 (though the details for the digital offer on DollarGeneral. com communicated it as valid through April 26).

• PepsiCo dangled a “buy 4, get 1 free” digital offer on 32-ounce beverages from Gatorade via endcaps that were outfitted with account-specific headers and signage encouraging shoppers to text “Gatorade” to a promotional number to obtain the offer. The digital offer expired April 30.

• Coca-Cola Co. deployed two accountspecific floorstands to plug the beverage giant’s new Coke Energy drinks and cherryvanilla flavored beverages, respectively. The retailer drummed up additional support for Coca-Cola “Cherry Vanilla” beverages with a carousel ad plugging a digital offer for $1 off the purchase of three single-serve products from the manufacturer. IQ

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Stand out from the crowd.

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THE JUNE 2020 ISSUE CLOSES ON MAY 1 s e i Agenc g n i t e k r a M opper h S s l o r 2020 To e t b n e m e m t e p g e a S g n Consumer E June 2020 An official publication of

p2pi.org

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Product Launch

Nebia by Moen Spa Shower Hits Home Depot

BY C Y N D I L O Z A

The Home Depot may have canceled its spring promotions due to COVID-19, but it’s still supporting the arrival of Moen’s new Nebia by Moen water-saving spa shower with promotional activity.

The Nebia by Moen showerhead and wand boasts a patented spray technology that breaks water up into tiny droplets to create a sensation of more water, while actually using 45% less water than the 2.5 gallons of water per minute used by typical showerheads.

The product was first available for pre-order via crowdfunding platform Kickstarter in January, rolled out to Moen retail channels such as wholesale

plumbing showrooms and HomeDepot. com in March, and hit Home Depot stores in April. It is available in four colors/ finishes and ranges from $258 to $358 on HomeDepot.com.

Sponsored Google ads, TV spots and a video on Moen’s YouTube channel tout the

Retailer Collaboration

Yeti Stomps into Lowe’s

BY C H A R L I E M E N C H AC A

Lowe’s is leaning into its new wholesale partnership with Cortec Group Management Services’ Yeti.

The home improvement retailer is carrying dozens of SKUs from the outdoor brand in more than 500 of its 1,900-plus stores, with expansion planned for this fall, according to a Lowe’s spokesperson.

The assortment includes mugs, water bottles and the signature, high-end coolers that built Yeti’s credibility among fishermen and hunters. Now the brand hopes to expand its target consumer to include DIY-ers and the Pro shopper.

The rollout began in January when digital ads on Lowes.com and e-blasts directed consumers to a dedicated Yeti

brand page within the retailer’s website. One ad stated Yeti products were “available online now and in select stores mid-February.”

Stores with the Yeti goods are merchandising them on two dedicated endcaps outfitted with headers and bilingual messaging. The larger endcap is located in the seasonal department and is accompanied by a custom sidekick; the smaller endcap facilitates impulse purchases at checkout.

The Path to Purchase Institute has also spotted Yeti merchandised in-line in the seasonal department of one Arizona store

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SKU’s availability at Home Depot. The retailer also positions the product as new on HomeDepot.com and gives it an enhanced e-commerce page containing multiple videos about the product, various images of the spa shower system with captions highlighting specific features, and detailed instructions for a 15-minute, DIY installation.

San Francisco startup Nebia launched its first spa shower iteration in 2015 via Kickstarter. In 2019, the company launched its next-generation Nebia 2.0 spa shower and teamed with Moen.

“At Moen, we’re constantly leveraging the best science and technology to transform the way consumers interact with water in the home,” Laurie Birko, director of marketing for showering at Moen, said in a media release. “In 2019, we announced our partnership with Nebia and over the past year have worked together to scale their technology, creating an innovative product that revolutionizes the shower experience for consumers and is better for the planet.” IQ

with accompanying shelf strips and on an additional display rack with header near the ProServices desk and tool department of several locations.

Additional support included a Jan. 21 update on the Lowe’s Twitter account and a front-page feature in the retailer’s March 26 circular (with “Availability varies by store” messaging).

Although Yeti products are not available at channel rival The Home Depot, Ace Hardware carries and promotes the brand with in-store displays as well as within e-blasts, radio spots and display ads on sites such as Yahoo.com. Yeti’s other retail partners include Bass Pro Shops, Dick’s Sporting Goods, Williams-Sonoma and Total Wine & More. IQ

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NOT A PATH TO PURCHASE INSTITUTE MEMBER?

Member Spotlight

Join the 400+ companies who rely on the Path to Purchase Institute every day for strategies and best practices on succeeding in today’s chaotic omnicommerce environment. For more information, contact Katrina Lopez at klopez@ensembleiq.com.

KlassCo

KlassCo is the Mexican packaged goods company behind the Aguas Frescas drink mix brand, which boasts authentic flavors and natural ingredients. It is headquartered in Mexico City and has a branch office in Houston with operations throughout Mexico and the U.S. Overall, KlassCo develops, manufactures, markets and distributes foods, drinks and candies throughout the two countries, with a focus on building leading brands. KlassCo also has capabilities to manufacture private-label products with facilities focusing on powders and granulates; liquids and semi-liquids; and confectionery. The company has a comprehensive portfolio of natural ingredients and has providers for several clean label ingredients for each category it produces.

Path to Purchase IQ managing editor Charlie Menchaca recently asked Alan

Hernandez, KlassCo’s shopper marketing coordinator, a few questions.

Tell us about a campaign for one of your products.

Our company will continue to invest in understanding how to reach the evolving Hispanic landscape and reach new Hispanic generations.

— ALAN HERNANDEZ, KLASSCO SHOPPER MARKETING COORDINATOR

May 2020

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HERNANDEZ: During summer 2019, we partnered with Fandango Loyalty Solutions. We rewarded our most loyal shoppers purchasing three Aguas Frescas products with a $5 movie coupon from Fandango. The offer was promoted via social media posts and in-store displays.

How does your company use its P2PI membership resources?

HERNANDEZ: We use our membership to get inspiration from other manufacturers, as well as find new vendor contacts and learn about our retailers.

What are your predictions for the future of marketing, and how will your company navigate that future?

HERNANDEZ: Marketing will continue to evolve in order to speak to newer generations. Our company will continue to invest in understanding how to reach the evolving Hispanic landscape and reach new Hispanic generations. IQ

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HALL OF FAME Q&A

Alex Gourlay Co-Chief Operating Officer, Walgreens Boots Alliance

In recognition of his efforts in helping Walgreens respond to industry disruption and become a customer-centric, omnichannel retailer that is ready and able to address the ever-evolving healthcare needs of consumers, Alex Gourlay has been selected as a 2020 inductee into the Path to Purchase Institute’s Hall of Fame.

Walgreens Boots Alliance’s co-chief operating officer since 2016, Gourlay is responsible for the execution and transformation of both the Walgreens and Boots businesses, as well as for overseeing global operations. From 2014 until February 2020, he also served as president of the Walgreens chain, guiding one of the nation’s largest drugstore retailers through a period of massive

Judging by your accent, you didn’t grow up in Deerfield. Could you tell us about your background?

Gourlay: I grew up on the north side of Glasgow, Scotland, which is really similar to Chicago because it is a very workingclass city. My mum was a housewife, and I had a pretty ordinary, working-class background, going to comprehensive schools and learning how to work hard to make a living. My father was a coal miner, originally, but then he got into further education – which in the UK was around community centers – so he progressed through life and did very well for himself. I learned the value of hard work and always having another ambition from him.

Did you have any jobs as a kid?

Gourlay: My first job was collecting divots from a local golf course after school, and putting the sand and the seed back. But I joined Boots as a 16-year-old on the “chemist counter,” serving people with

over-the-counter medicines. I also helped in the warehouse, doing what’s called “porter work,” which is basically cleaning up when people spill things or someone is not so well – I’d be called to go clean it up.

Was there something special about Boots for you?

Gourlay: Boots was always a place I remember going to with my mum and, in particular, whenever there was someone ill in the family. I can recall on these visits how intense the conversation was, and occasionally it was about me: I’d be feeling off color or something. We’d always get solutions, so I had a positive, warm feeling about being in that local Boots store.

You went to University of Strathclyde for a pharmacy degree and qualified in 1981. Was it Boots that made you want to be a pharmacist?

Gourlay: I think so. It was more intuitive than thought through. I also quite enjoyed the thought of a career in retail, and Boots was and is very well-respected as an employer in

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change. Before joining Walgreens in October 2013, Gourlay was chief executive for the health & beauty division of Alliance Boots, the UK-based pharmacy with which U.S.-based Walgreens began merging one year earlier.

The Institute was first introduced to Gourlay in March 2014 when, as the retailer’s president of customer experience and daily living, he participated in a keynote “fireside chat” at the Shopper Marketing Summit in Chicago.

In March, Bill Schober, Peter Breen and Tim Binder interviewed Gourlay at Walgreens Boots Alliance’s headquarters in Deerfield, Illinois.

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the UK. For me, it was an obvious choice.

It was never really in doubt, to be honest.

Did Boots have any kind of scholarship for you?

Gourlay: Yes. I worked throughout school part time, Saturdays, every holiday – whenever I could. Then, in the summer months, there was placement where pharmacy students could come in for their 8-10 weeks of vacation and learn over-the-counter medicine, which is a big deal in the UK. You begin to understand the practicalities of working in a community pharmacy as a pharmacist.

We’ve learned over the years that, in Walgreens’ culture, the pharmacist runs the entire store, which is different from mainstream retail.

Was it the same way in the UK? Gourlay: If you go back to the 1980s, almost every senior role in Boots would have been a pharmacist, all the way up to my generation. All models evolve, but you are right when you say that Boots and

Photos by Brian Morrison pathtopurchaseiq.com

4/20/20 2:46 PM

HALL OF FAME Q&A Alex Gourlay, Walgreens Walgreens have the mindset of a pharmacy company: Pharmacists build trust and relationships, and at the end of the day, we’re always on the patient’s side. The mindset is: Is it right? Is it safe? Is it quality? Can we help the patient understand what they’re taking and feel better about it?

I’ve signed many, many letters for people who have worked even longer [for Boots/ Walgreens] than I have. People stay because they like the culture, they like what the company stands for and, most importantly, how it puts the patient before profit.

Alex Gourlay Title: Co-Chief Operating Officer Company: Walgreens Boots Alliance Education: Pharmacy degree from University of Strathclyde Career path: • Pharmacy student, part-time store associate, Boots the Chemists: 1976-1981 • Pharmacist / Regional Store Manager, Boots the Chemists: 1981-2000 • Head of Stores Human Resources, Boots the Chemists: January 2000-2003 • Healthcare and Property Director, Boots the Chemists: 2003-2006 • Managing Director, Boots UK Ltd / Alliance Group Operating Committee: 2006-2009 • Chief Executive, Health & Beauty division, Alliance Boots, January 2009-October 2013 • President, Customer Experience / Executive VP, Walgreen Co.: October 2013-September 2014 • President-Elect Walgreen Co.: September 2014-December 2014 • President Walgreen Co.: December 2014-February 2020 • Co-Chief Operating Officer Walgreens Boots Alliance Inc.: June 2016-present Industry Activities: • Fellow, Royal Pharmaceutical Society of Great Britain • Past Chairman, National Association of Chain Drug Stores • Director, Retail Industry Leaders Association • Director, World Business Chicago

After college, you joined Boots full time in 1976. How would you describe your climb through the company?

Gourlay: Random. Never deliberate, to be honest – I just enjoyed what I did. I loved running shops, and we moved probably a dozen times. I am grateful to my wife Margaret and our children Nicola and Natalie, who are all fantastic and were so supportive in pulling up stakes and moving homes with me, from Scotland to the North of England, to the Midlands.

It wasn’t like Walgreens where most stores are the same size. Boots had all types of sizes, and generally speaking, you’d get more and more responsibility with each bigger shop: small pharmacies, then middle-sized pharmacies and, eventually, large drugstores or health & beauty stores. In my mid-30s, I ended up running one of the biggest shops in Leeds.

I enjoyed solving problems with other people and never worried much about who got the credit. Eventually you start to get noticed and people want to have you on their teams. That’s how careers happen inside a company.

Were there any mentors along the way?

Gourlay: For sure, my current boss Stefano Pessina has been the most important. I was always very curious about what I didn’t know, so I could name another five or six people who were fundamental in my development.

I’d argue with them for months and then finally realize: they were right. For me, it was all about the dialogue and so they would challenge me, push me, debate with me – and then I’d see the light.

When did you become part of Boots corporate?

Why were you picked to come to the U.S. and work with Walgreens?

Gourlay: I’d been an area manager for two years when the company restructured.

Grocery was becoming very big in the UK, Tesco in particular, and the business was under a bit of pressure. Because I was the youngest area manager and thought to have strong people skills, in 2000 they asked me to become part of Human Resources. I led

Gourlay: Walgreens was looking to develop its model. Their CEO, Greg Wasson, who is a great guy, had seen an opportunity to understand the retail and wholesale sides of Alliance Boots and also generally realize synergy in costs and buying. After the first stage was complete, the Walgreens board bought

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stores’ HR and personnel, and it was an incredibly important couple of years for my personal development, because that’s where I learned how the business model worked and built stronger people skills.

In HR, I got a chance to understand how the organization came together.

Since I knew a lot about store operations and the customer-facing side as well, I was given a lot of big problems to solve.

I wasn’t trained in formal HR policies and procedures, so I think I was a little bit freer to become a problem-solver and a change guy. It was a very important couple of years for me.

I also did property, health, and commercial pharmacy because I was good at transforming costs. Then, in 2007, the business was taken private by [investment firm] KKR and [Alliance Boots executive deputy chairman] Stefano Pessina. Stefano asked me to first take on the role of head of Boots’ operations. Then, about a year and a half later, he asked me to become the CEO of the health and beauty division, which was Boots and all the brands and some other operations.

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HALL OF FAME Q&A Alex Gourlay, Walgreens part of Alliance Boots and they were looking to start the integration. It was also very clear that the second stage was going to happen. They had a vacancy here for the front-end merchandiser after Joe Magnacca took on another role. I was not a perfect fit – my experience in the front end was primarily as president of Boots in the UK. But Greg and Stefano agreed that it would be a good idea to bring me across.

I agreed to come initially for just a couple years to help with the integration.

[Current Walgreens President] Richard Ashworth went the other way [over to the UK] and became the head of healthcare at Boots. Richard and I were very lucky because we were both like foreignexchange students, except that he came back [to the U.S.] and I’ve stayed.

Soon after you came to Walgreens, you spoke at our Summit and discussed Walgreens wanting to “go big” in beauty. Looking back now, six years later, has Walgreens succeeded there?

Gourlay: I would say we’ve gone big in skincare. Walgreens was already pretty strong in cosmetics because that’s such an obvious item that customers pick up in a drugstore. But skincare was one of the bridge categories between pharmacy and health & beauty because in skincare, you often start off with a skin condition, and then can end up with a low-cost or a high-cost beauty product.

Many shoppers can move through that whole spectrum as a solution very quickly. So I would say that we’ve done our job well in skincare. We introduced the No7 brand, which really is a skincare brand based on strong technologies – for example, the serums. We’re now at “Beauty Differentiation Three,” which is the third phase of developing all of the beauty strategy.

We’ve had to figure out, which is more difficult, exactly how to make an efficient model in America. Because Boots was definitely positioned in the UK with a very big share in beauty, and most of

the manufacturers, including the premium manufacturers, went to Boots for almost everything. So we had to evolve the image, the customer proposition and the service standards at Walgreens over a much longer period of time. I would say we’re probably about one-third of the way through changing the overall image to becoming what I call “health, wellness and beauty specialists.”

How would you rate your progress thus far?

Gourlay: Walgreens is 117 years old. If you think back to [the history display in Walgreens’ HQ lobby], you saw the selfservice drugstore of the late 1980s. That model is gone now. CVS is changing; others are selling out, to be honest; we are changing. Our aim is to become a much more personal, community-based, pharmacy-centric, health, wellness and beauty specialist.

But we don’t always have to do things by ourselves. To be really specialized in a modern world, you’ve got to go deep and invite partners into your brand and your supply chain to build a different type of model. That’s what we are trying to do.

So it hasn’t been a straight road – I won’t deny that. And if you speak to the shortterm analysts in the street, some haven’t recognized the progress. But I think inside the business, people would say that with 4,000 beauty consultants, with No7 in well over 6,500 drugstores, and with profitability of our front-end model being substantially,

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remarkably stronger than it was five years ago, I’d say, “Yeah. We’ve done OK.”

When did you become president of Walgreens?

Gourlay: I’d spent about a year running the front end when Greg appointed me to be president in January 2015. I passed that baton on to Richard [Ashworth] in February, so I did five years as president and three years also in a joint role of co-COO.

How did your job change when you added the larger, global role to your duties as president of Walgreens?

Gourlay: The first three years working at Walgreens was really all about kicking off the transformation. We started to build on three massive investments: a new pharmacy system and a frontend system, and then on top of that, digital technology. The focus to become a modern digital- and data-driven Walgreens really started back then.

There was also a ton of work to grow the market share in prescription volume.

If you recall, we’d lost a lot of volume in a fallout with Express Scripts. We did a number of different things to recover our pharmacy volume with other partners in the marketplace.

So we recovered our pharmacy volume, and then we started to work on two other areas. One I would call the overall brand of Walgreens, becoming much more of a healthcare-centric brand. It’s early work on

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HALL OF FAME Q&A Alex Gourlay, Walgreens that piece as well, but we’ve tried to really position Walgreens as “Trusted Since 1901.”

People ask me, “Why did you move away from ‘Happy & Healthy’?” Well, it was an interesting sign-off, but if you look at what we’re doing and where we’re headed, it was almost ahead of its time, to some extent.

Let’s remind people that, fundamentally, we’re a healthcare company.

It also became clear that we had to have more value, so we started investing in our pharmacy business in terms of pricing. And that’s been very successful in generating volume. We just kicked off a very strong program to change how our people feel about being in charge of the stores. We call this program “Frontier,” and it’s all about problemsolving in front of the customer without having to wait for direction from the operational head office. That was a big program of change. We tried to free people up to spend more time with customers, such as the beauty advisors, and in many other things we do.

Then we looked at the assortment.

People said, “Your stores are confusing, and overloaded with products; curate your products better.” So we did a lot of work in beauty and healthcare, developing much more information on the shelves by working with many of our suppliers.

We also converted all our photographic labs and really kicked on that business.

We started looking at seasonal to become much more of a gifting destination.

That was the first three years of the effort, but then we stood back and said, “It’s not enough.” This marketplace is rapidly changing and we can accelerate our work, so we kicked off “Project Greens” about two years ago. We asked Kroger to help us with food because, while food is important to us, we just didn’t have the brand nor the depth of experience ourselves to do this quickly enough. Project Greens was also about us getting into the “last mile,” and we did that in particular with our FedEx partnership.

We also worked on many healthcare partnerships which are all in the early stages of development, such as primary care, optical and labs.

We’re very good at pharmacy, OTC and healthcare, and getting better at skincare, wellness and beauty.

Kroger is very good at food. So when you put a Kroger and a Walgreens together, digitally and physically, you start to create maybe a third marketplace.

Sounds like there was a lot to consider.

Gourlay: The last two years, after I took on the co-COO role, I really stepped back a bit from Walgreens to look after Project Greens and the development of digital and supporting the new hires in marketing, IT, innovation and communications. We’ve really focused on going for that customer view and giving better curation, product assortments and experience.

I’ve worked with Richard really closely for four years, and in the last year, Richard has more and more been running the day-to-day and I’ve been trying to develop the new model. It’s a big job when you’re transforming a business that’s already as successful as Walgreens is and so important to the American community.

It’s amazing how people come to Walgreens right now, in this COVID-19 situation, because they trust us. Walgreens is the pharmacy America trusts – above any other name, in my view. We see that all the time and we are determined to modernize Walgreens and make a great customer/ patient experience. We are very confident and have a ton of work ahead of us, but the investments pay off in the moments like these, serving people who are really worried.

One member of the team said to me yesterday, “Customers are very concerned about COVID-19.” Our teams are keeping them calm, advising them on what to do and explaining how they should take care of their families. It’s great to see, and it’s why Walgreens, as a pharmacy-led healthcare

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company, is so vital to the communities we serve, and the reason why Walgreens will never disappear from the American landscape. Never.

How is the partnership with Kroger progressing?

Gourlay: We both saw the same problem at the same time. We speak to everyone – “Alliance” is our last name, our middle name and our first name – so we really believe in partnerships. Our strategies aligned because Kroger is also trying to create a digital environment and become “the grocer America trusts.” So we worked on what we could do together.

We’ve done two market tests in northern Kentucky over the past 12 months, and they continue to do well; now we’re in Knoxville [Tennessee]; and we are also starting up a joint buying group.

Designing something for the future of your company takes a while. We’re making good progress, and we’re very comfortable with each other. If it works for the customer, the shareholders and for both sides, then we will continue to do it.

With your Microsoft partnership, the phrase that jumps out is “transforming the future of healthcare.” What does that mean and where does it take you?

Gourlay: We bring the frontline of healthcare to American communities with pharmacists working with primary

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HALL OF FAME Q&A Alex Gourlay, Walgreens care physicians, healthcare providers, professionals of all types. We also have an app that’s been downloaded almost 60 million times and a loyalty program that’s used by 100 million Americans. But while we’re deep into communities and we’ve got deep human expertise, we don’t have the modern technical expertise that you need to bring all that alive as a digital company.

The phrase that I really like is: “Walgreens and partners: human kindness, with digital magic.” That’s what we are trying to do. It’s a massive task to drive consumer accessibility and value in the healthcare marketplace. A lot of Americans have no idea how much it is going to cost when they get ill.

Lots of people right now are walking into Walgreens, CVS and other pharmacies and asking the pharmacist, “How do I protect myself and my family

from this virus? What is it that I need to do to take control of my health?”

Also, everyone recognizes that, with 20% of American [gross domestic product] being spent on healthcare, which is double what’s spent in many other countries, and a healthcare system that’s not any more successful than other systems, there’s a massive opportunity for consumers, patients and caregivers to have a transformed healthcare marketplace.

That’s the job we are on. We believe we’ve got the right partners, and that we’re able to provide the right support, but we have a long way to go to make it happen. We accept that. The good news is that many of our key competitors – Walmart and CVS in particular – are on the same journey, for the same reasons. And we wish them luck because if they are successful, we all – Walgreens, consumers, patients – will be successful as well. American consumers should have much

better options five years from now in how they choose to use healthcare. That’s what we are trying to do.

The drone delivery test is not widespread, but everyone wants to know about it. What are you learning?

Gourlay: It’s going well. It’s a longterm play. It’s with Wing, an Alphabet company, and they are flying commercial drones today in Christiansburg, Virginia, where the delivery area covers thousands of homes. They are delivering more than one hundred SKUs. They are the only company that I’m aware of that is actually flying drones today on a commercial basis. We’re very keen to expand that service to other regions, slowly, under their guidance, and to expand into other healthcare products and prescriptions.

It’s the start of a long journey. Like

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HALL OF FAME Q&A Alex Gourlay, Walgreens everything else in innovation, what will be normal in 10 years seems crazy sitting here today. But I can assure you that the statistics are good, people are receiving wellness products such as OTC medicines, tissues, toothpaste and even their [potato] chips by drone today, and it’s all working well and safely. I can’t say much more on this phase. There won’t be a scale service for a while, but it’s a stepby-step process.

Will it wind up being mostly chips or mostly prescriptions that get delivered?

Gourlay: I don’t know. It’s clearly going to be young people using it at first because it’s great fun and more convenient, as they are so used to everything being at their fingertips today. The behavior will catch on very quickly, I think. And when you have conditions like the coronavirus situation, if we had a full-line drone service right now, I’m sure people would be using it.

In terms of innovation, are you testing a lot of things that might never scale?

Gourlay: Ideas are free. But if you are not careful, they can complicate the operator’s life – and if you put yourself in the place of our operators, they might not always be happy about that. But I’m more of a problem solver, so I like ideas, and we encourage them from anywhere. You have to have a very clear process before you can say, “Ok, this is the one we are going to pilot.”

The great news for Walgreens is that we can scale quickly because we are already on 9,000-plus corners and have 100 million people using our loyalty card and 60 million people using our app. We are one of a half-dozen platforms that can scale quickly. Over the next five to 10 years, you are going to see a ton of stuff at Walgreens.

You won’t see all of the gnashing of teeth and scratching of heads [behind the scenes], but you will see a ton of innovation because we have to

innovate. The customer demands it, and the Walgreens brand deserves it.

out of a physical manifestation, so there’s more work to do there.

Can we look at a few other partnerships? First off: Cooler Screens, which recently expanded.

Jenny Craig?

Gourlay: Cooler Screens started off as an interesting idea, and I have to say the world of digitalization and data and mass personalization is a really powerful concept.

We had some local innovators who were willing to test it with us. I think this kind of technology could also scale quite quickly across grocers. Customer adoption has been pretty good, and we are working our way through important matters of compliance to ensure a positive experience for consumers.

FedEx? Gourlay: FedEx has been successful. Being able to drop off or pick up products in your local Walgreens has gone really well.

We ramped up just beyond the rate we expected.

I see some of the competitors marketing directly to pick up in their car park. We think that’s ideal for us: car park pickup, drivethru 2.0 and internal pickup – fantastic. The last mile is a big part of the strategy that’s working really well, but we’ve got more work to join up the partnerships and the data and make it even more convenient and an overall better experience for customers.

Birchbox?

Gourlay: Birchbox was really about two things: Could we sell subscription models in a pharmacy and would people pay to have beauty products regularly delivered? And secondly, how could we improve our digital, physical experience for beauty customers so they get access to more brands and independent brands, in particular, because Birchbox had tons of hot, new brands that can sometimes come and go very quickly.

Can Walgreens become more famous for beauty innovation?

So that’s still in test and trial. Customers love the idea of it, but it is not a particularly efficient model in our drugstores, so we’ve got more work to do to create it on the digital side, I think. Birchbox was really born

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Gourlay: Jenny Craig just started, and it seems to be going well. It’s an obvious linking of fitness and health – as is Kroger.

Jenny Craig is all about the experience again, being able to speak to a human being about prepared meals and how to take care of your health in a very different way. They are a great company and they are very appealing to our customer base.

It only started in January, but we are very excited to see the positive reaction from our customers.

Does the future of the modern drugstore still leave room for more physical stores?

Gourlay: We are developing a format that we call “small drugstores,” similar to what you see in Europe: a pharmacy, OTC medicines, drive-through and pickup.

We’ve got about 50 of them in the market and we’re really pleased with how they are progressing. It gives us the ability to get to new locations with a more organic model.

The marketplace is quite distressed at the moment with the reimbursement pressure. You saw this week that CVS bought [supermarket retailer] Schnucks’ pharmacy business, taking advantage of grocery chains wanting to change their model. So I think you’ll see the drugstore format changing. We see three models: • The traditional convenience model, which you may call the health-andbeauty-specialist convenience model, which is pharmacy-centric.

• The small pharmacy with pickup and drive-thru, OTC and pharmacy, but at much lower costs so you can get to tighter spaces and provide good service – including digital services.

• And last but not least, a healthcare model with a primary care base pharmacy alongside doctors, physically and digitally. We’ve got three different tests in three different markets: with Humana’s Partners in Primary Care, with

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HALL OF FAME Q&A Alex Gourlay, Walgreens Southwest Medical Healthcare in Las Vegas, and with VillageMD in Houston.

Many of our readers are nationalbrand marketing people. What is your take on the power of national brands going forward?

Gourlay: Huge. From what I’ve seen over the last four to five years, the world has changed. The [big CPG] companies have been really smart to focus on their big brands and the things that really matter to consumers. They are hugely important to the marketplace. Hugely important.

In the U.S., I think, there are three platforms. There’s a Walmart platform; that’s 35% of the market. If you are a brand owner, you can’t afford not to be in Walmart, can you? And Walmart knows that. A second platform or marketplace is Amazon, and if you are a big brand who’s thinking of not being on Amazon, that’s a KinterCSN_PrintAdFINAL.pdf

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strange decision to make as well.

The third marketplace, I believe, is one I would call the “mass specialists.” These are people who are really good at what they do. We’re very good at pharmacy, OTC and healthcare, and getting better at skincare, wellness and beauty. Kroger is very good at food. So when you put a Kroger and a Walgreens together, digitally and physically, you start to create maybe a third marketplace.

Most uninformed CPGs would say, [such an alliance] means you want better cost of goods. And they are right; of course you want better cost of goods. But we also want to make sure that we offer access to more customers for the brands that we work with to ensure that we are creating a win-win.

So if I believe the drugstore channel is a thing of the past, then what’s the thing of the future? Well, it’s a mass specialist platform where the CPGs can work together with

different models on a platform and reach more customers that don’t always want to go to an Amazon or a Walmart, but who do want to have the comfort of great value from a mass specialist.

Of course, I’m a bit biased when I say that. And maybe a bit hopeful. But I honestly believe it is an opportunity for both CPG companies and people who are truly good at what they do in their space.

You can be good at many things, but you can’t be good at everything. People like specialists, they like to know they’re getting the best value, and they want to know in their most difficult moments that they are getting the best for themselves and their families.

So, to all of the manufacturers and CPG companies out there: All we desire are the very best products, the best innovation and the best marketing. We are always available to give you more customers. IQ

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INDUSTRY TRENDS

STANDOUT SMALL BRANDS A look at 20 brands rising up the ranks as category challengers and shopper favorites

BY PAT H T O P U R C H A S E I Q S TA F F

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N

ot all challenger brands are digital natives – although it sure seems that way lately.

To be perfectly honest, being a digital native is only logical these days. Any entrepreneur still seeking to build a brand the old-fashioned way – via brick-and-mortar distribution, gained one chain or even one store at a time – might be considered crazy given the comparative ease involved with launching a self-operated website and simultaneously gauging consumer interest while generating sales at a more manageable level (despite the occasional backorder-inducing overnight success, as you’ll soon see).

Then again, the term carries with it the implication that digitally “native” brands aren’t necessarily going to remain digitally exclusive. And that certainly has been the case for most of the 20 Standout Small Brands we profile over the next few pages. Unless their business models prohibit doing so (value propositions based on customized products can be tough to transition, for instance), nearly every brand on the list is already enjoying distribution through at least a few top national retailers.

That trend has been driven largely by the fact that most top retailers now view alliances with digitally native brands as a competitive advantage in attracting younger shoppers who are already buying them online – and, in many cases, can be called “digital natives” themselves.

Besides their online origins, what else do our Standout Small Brands have in common? It won’t be a surprise to learn that most of them offer healthier, more natural products (not to mention packaging).

It also won’t be shocking to hear that many are the brainchild of someone who was looking to solve a personal need, and then determined that the need was far more common.

Another commonality among these standouts is their appeal to traditional brands, who lately have been borrowing liberally from the challenger playbooks when it comes to product development, marketing and sales – when they aren’t buying those playbooks outright through acquisition, as Colgate-Palmolive, Coca-Cola and Diageo have done.

Who knows? Maybe one of these digital natives is in your company’s future, too. Read on.

Brand/Company Name: Ballsy Year Launched: 2017 Website: ballwash.com A more family-friendly publication might hesitate to even mention this brand (or maybe even its category), especially since much of Ballsy’s messaging is based on double entendre or even bawdy puns. Of course, that should be expected for a brand that makes “Men’s Products for Men’s Parts.” The line of belowthe-belt body washes and other grooming products are made in the U.S. using all-natural ingredients. Selling mostly DTC at the moment, the company is actively soliciting retail partners through its website. Consumers can earn “ballcoins” rewards (what else) for liking and sharing on social media, as well as for purchases.

Brand/Company Name: Blueland Year Launched: 2019 Website: blueland.com Guided by its mission to eliminate the need for single-use plastic packaging, direct-to-consumer company Blueland offers three “safe yet effective” cleaning solutions – for multi-surfaces, bathrooms, and glass and mirrors – that are distributed in dry tablet forms with reusable glass bottles and hand soap.

Blueland products are available in starter kits (ranging from $12 to $39) or sold separately on the brand’s website. The eco-friendly company made a splash last fall after landing a deal on the season premiere of ABC-TV’s “Shark Tank.” Products are also available in Bed Bath & Beyond, Walmart, Target and The Home Depot.

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STANDOUT SMALL BRANDS Brand/Company Name: Bombas Year Launched: 2013 Website: bombas.com Knowing that socks are the most requested clothing item in homeless shelters, Bombas launched with a pledge to donate a pair for every one purchased. The direct-to-consumer company received backing on “Shark Tank” in 2014, and has since surpassed $100 million in annual sales and added T-shirts to the offerings in April 2019. Also last year, Bombas added the Afterpay checkout option to its website to allow for free financing and paying over time. As of March, it had donated more than 33 million items to more than 3,000 giving partners.

Brand/Company Name: CleanCult Year Launched: 2016 Website: cleancult.com The zero-waste, cruelty-free subscription company makes eco-friendly cleaning and laundry products using ingredients like coconut and essential oils. First orders of CleanCult ship in glass containers, and refills are sent in recyclable cardboard cartons.

After first exploring the business idea as part of Babson College’s Summer Venture Program, founders Ryan Lupberger and Zachary Bedrosian launched the company via crowdsourcing platform Kickstarter by promising non-toxic detergent tablets that would be as effective as conventional products for the brand’s first offering. Beyond selling a variety of memberships through its own e-commerce channel, the company also enables one-time purchases via Amazon and The Container Store.

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Brand/Company Name: Cece’s Veggies Year Launched: 2015 Website: cecesveggieco.com It started as a ploy to get founder Mason Arnold’s glutenallergic daughter Cece to enjoy vegetables. Now, Cece’s Veggies is a brand specializing in diet-friendly and veggie-based noodles and other alternatives for dishes such as rice and mac & cheese. The Austin, Texas-based company uses 100% real and certified organic vegetables and a patented technology to create a longer shelf life, while operating a zero-food-waste facility. Ranked No. 3 on Inc.’s 2019 list of the fastest-growing privately held U.S. companies in the U.S., Cece’s Veggies is available in the produce section at many retailers, including Whole Foods, Kroger, Target, H-E-B and Costco.

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Brand/Company Name: Dropps Year Launched: 2005 Website: dropps.com Dropps is a direct-to-consumer provider of eco-friendly laundry products. The company claims to have invented the original detergent pod four years before any of the established brands began adopting the innovation. Because DTC better fits its mission, Dropps pulled its products from retail shelves in 2017 and shifted to online sales only by offering cost-saving subscription plans shipped via sustainable packaging. In February, the company received a $16 million investment from The Craftory, a London-based global investment fund. It will use the money to broaden its product offering, expand market reach and bolster its infrastructure with a goal of capturing a sizable share of the household cleaning category.

Brand/Company Name: Clio Snacks Year Launched: 2015 Website: cliosnacks.com Clio Snacks was born from founder Sergey Konchakovskiy’s desire to figure out fun ways to get his kids to eat nourishing foods. The company offers on-the-go Greek yogurt bars in a variety of sweet and tart flavors made with whole-milk Greek yogurt and wrapped in dark chocolate.

Despite declining yogurt sales in recent years, Clio grew 275% from 2017 to 2018 and has quickly gained distribution at retailers including Walmart, according to Forbes. Last year, the company expanded its assortment to include packs of “mini” Clio bars.

Brand/Company Name: Health-Ade Year Launched: 2012 Website: health-ade.com Health-Ade Kombucha is a sparkling, probiotic tea made with high-quality, organic ingredients and brewed in small-batch glass jars the old-fashioned way: using living cultures.

The company’s three co-founders got their start selling homespun bottles at Los Angeles farmers markets. Today, Health-Ade is one of the more ubiquitous kombucha brands on store shelves, targeting mainstream soda drinkers with distribution across roughly 26,000 retail locations nationwide including Walmart, Target and Walgreens stores. The brand also operates its own DTC website and is available via Amazon.

Coca-Cola became an equity investor last year.

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STANDOUT SMALL BRANDS Brand/Company Name: Magic Spoon Year Launched: 2019 Website: magicspoon.com Magic Spoon offers a premium, direct-to-consumer line of low-carb, high-protein cereals that aim to resemble the taste – and even the fun, loud packaging – of classic, less-nutritious cereals such as General Mills’ Cocoa Puffs and Kellogg Co.’s Frosted Flakes and Fruit Loops. The blatant upstart has been gaining momentum since its launch, when it sold more than two months of inventory within the first week, cofounder Gabi Lewis told Fast Company. Magic Spoon raised $5.5 million in a seed round last fall to help propel growth. The better-for-you cereals are sold in $39 four-packs via MagicSpoon.com.

Brand/Company Name: Kindred Bravely Year Launched: 2015 Website: kindredbravely.com

Brand/Company Name: Hello Products Year Launched: 2009 Website: hello-products.com

CEO Deeanne Akerson co-founded Kindred Bravely because she couldn’t find a cute yet comfortable pair of pajamas to wear while nursing her then 1-year-old child. The company’s assortment now covers all stages of pregnancy and maternity with products designed “by moms, for moms.”

Simultaneous efforts to build a supportive community of moms include an educational blog and ongoing charitable activity. A fit quiz on the brand’s DTC site lets women design ideally comfortable, supportive bras for pregnancy, nursing and pumping. Products are now being sold by various resellers on most online marketplaces.

At a conference last fall, founder Craig Dubitsky called the oral care market he’d been disrupting “a $40 billion category that is basically owned by three companies.” The challenger makes “naturally friendly” (a phrase it trademarked) toothpaste, mouthwash, floss and brushes that have appealed to younger consumers because of their healthier ingredients (like charcoal) and sustainable packaging (like plastic-free tubes). Alas, Hello joined the biggest of those three in January, when it was acquired

by Colgate-Palmolive. The brand was widely available in the U.S. through Kroger, Walmart, Target, ShopRite and others before the deal. Soon after the announcement, it unveiled a new line of CBD-infused SKUs.

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Brand/Company Name: NomNomNow Year Launched: 2015 Website: nomnomnow.com

Brand/Company Name: Ooze Wholesale Year Launched: 2015 Website: oozelife.com

San Francisco-based NomNomNow is a subscriptionbased service that delivers fresh, portion-controlled dog and cat food developed by board-certified veterinarians and personalized to fit each pet’s unique health needs using a proprietary, data-driven technology platform.

The company was started in a small kitchen by young entrepreneurs eyeing enormous opportunity in the category. Internet Retailer estimated that NomNomNow generated $47.5 million in sales in 2018, and late last year named it the fastest-growing online pet retailer. The company leans heavily on insights to continue improving the customer experience and innovate in new areas such as pet supplements and personalized research.

Ooze Wholesale is unapologetic about its vaping and cannabis focus, and is holding its own in a fast-growing industry. As the exclusive distributor of more than 1,000 brands of smoking products and accessories (such as King Palm and Loud Lock compliant packaging), Ooze sells through dispensaries, smoke shops and convenience stores. In a fouryear span, the company grew from a 10,000-square-foot warehouse to a 44,000-square-foot space while tripling its staff. Other partner brands include Truweigh scales and Green Monkey Grinders. Ooze landed at No. 58 on the Inc. 5000 list of fastest-growing companies in 2019 with $25.9 million in revenue.

Brand/Company Name: Recess Year Launched: 2018 Website: takearecess.com Recess is sparkling water infused with hemp extract and “adaptogens” purported to reduce stress and improve both balance and mental clarity. “We canned a feeling,” cofounder Ben Witte told Business Insider. He also told Yahoo Finance that he believes CBD to be “the caffeine of the 21st century.” The brand’s successful launch in October 2018 resulted in 4,000 backorders. Recess offers free shipping on all DTC orders (an eight-pack of pomegranate hibiscus costs $39.99) and 18% discounts to subscribers. The brand has 55,000 followers on Instagram, where its messaging can get a little, well, trippy.

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STANDOUT SMALL BRANDS Brand/Company Name: Seedlip Year Launched: 2015 Website: seedlipdrinks.com Offering three blends of “the world’s first distilled non-alcoholic spirit,” UK-based Seedlip boasts a premium brand positioning and a price to match. It is intended to be mixed to create sophisticated non-alcoholic cocktails. After debuting in UK department store Selfridges in late 2015, the product is now sold in bars and retailers across some 25 countries. A non-drinker, founder Ben Branson took his inspiration from John French’s 1651 book “The Art of Distillation,” creating the sugar-free, zero-calorie beverage by mixing distilled botanical ingredients on his family farm. Diageo’s Distill Ventures investment arm purchased a minority stake in Seedlip in 2016 and acquired the company in 2019.

Brand/Company Name: Skinny Dipped Year Launched: 2013 Website: skinnydipped.com Skinny Dipped was founded by a family who resolved to spend more time together after a friend’s death. Breezy Griffith and her mom, Val, took two years to perfect the chocolate-covered almond snack, which is made with real ingredients, plant protein and no sugar alternatives. The company ranked No. 32 on the Inc. 5000 last year with $10.2 million in 2018 revenue. Along with its DTC site, Skinny Dipped is now available across several retail channels, including mass (Target, Meijer), grocery (Kroger, Albertsons) and drugstore (CVS).

Brand/Company Name: Soylent Year Launched: 2014 Website: soylent.com Although its name might be a tad distasteful for Charlton Heston (Google it), 6-year-old Soylent is serving up meal replacement shakes, powders and food squares that are “affordable, sustainable, and satisfying” for “a world with a rapidly growing population and rapidly diminishing resources.” The brand’s Reddit community has 37,500 members sharing recipes. Available DTC in single orders or “subscribe and save,” the products also have distribution through 7-Eleven, Walmart, Target, Kroger and CVS; a recent deal with Cargo will have it available in Uber rides as well. Socially conscious from launch, the company had donated two million meals as of last fall.

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Brand/Company Name: Uncle Dougie’s Year Launched: 1989 Website: getdougies.com Doug Tomek “started making 100% natural, gluten-free, chemical-free, nothing artificial, good-and-good-for-you stuff before it was cool,” according to the Uncle Dougie’s website. Thirty years later, in 2019, the maker of natural and organic sauces, marinades and rubs dramatically reduced its carbon footprint by shifting to a flexible pouch for the newest line of barbeque sauces – the first condiment company to do so.

And the company says it’s in a unique position to immediately adopt recyclable, flexible food-grade plastic once it becomes available. The product has distribution at multiple Albertsons-owned banners, Meijer and Whole Foods, among other retailers.

Brand/Company Name: Wandrd Year Launched: 2015 Website: wandrd.com Wandrd is the brainchild of brothers Ryan, Spencer and Austin Cope who decided to come up with a stylish and functional camera bag after determining that the product was missing from the market. The brothers profess to be running more than a product company; their brand mission is to encourage people to see the world and live passionately. With a staff of roughly 12, Wandrd is now selling its travel bags and accessories via its DTC site and retail camera stores to consumers in more than 100 countries. It ranked 80th on Inc.’s 2019 list.

Brand/Company Name: Sweet Loren’s Year Launched: 2010 Website: sweetlorens.com CEO and founder Loren Brill created her all-natural cookie dough as she eliminated processed foods from her diet after beating cancer. Sweet Loren’s is now the topselling natural cookie dough in the U.S. (and third-largest cookie dough seller overall). It ranked 114th on the 2019 Inc. 500 list of fastest-growing private companies in the U.S. The product is carried in more than 10,000 stores, including Kroger, Albertsons and Publix locations, and is also sold online at SweetLorens. com. In February, the brand declared its raw dough as edible, while also debuting an updated logo and premium matte packaging.

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Technology Innovation

P2P Toolkit

A roundup of technology-driven tools that drive consumer understanding, engagement and conversion on every step of the path to purchase.

BY B I L L S C H O B E R

The Chinese proverb “Better to Light a Candle than Curse the Darkness” has been digitally updated for COVID-19. The designers at Air, a workplace collaboration tool, created an interactive map of the many direct-to-consumer brands based in New York City where “their employees are currently working remote, but we wanted to illustrate ... the way it was before coronavirus and the way it will return soon. ... If you’ve got a soft spot for any of these companies, now’s the time to show your support.”

Meanwhile, the developer of a Washington, D.C.-area app, “OurStreets,” which focused on dangerous driving behavior, relaunched the app as “OurStreets Supplies,” a tool for the crowdsource reporting of retail shortages or surpluses of in-demand items like canned goods, toilet paper, hand sanitizer and fruits and vegetables. The user snaps a photo of what’s on shelves; reports whether the item appears to be fully stocked, sold out or somewhere in-between; and comments on whether safe social distancing was being practiced while shopping. The information is aggregated and then reported in a real-time map.

Men’s fashion brand Perry Ellis International certainly sets its sights high. It dubbed its interactive sales tool the “Life Ready Application,” boasting that it helps “the unengaged male shopper” put together complete looks, using a lifestyle strategy that presents outfits by occasion. “Unengaged” seems to be code for “digital native” shoppers who need extra assistance outfitting themselves for life events such as job interviews or weddings. The Life Ready application steers the interaction, and offers guidance based on expectations for a given event.

Perry Ellis executives say that during a test at three Dillard’s locations, the brand saw a 10%-12% lift in sales and transaction value. The application also uses Google Analytics to monitor traffic flow and correlate which outfits customers most commonly view and purchase by geography. Creative Realities developed the UX, using Elo touchscreens and BrightSign’s mobile app software.

Bill Schober is Editor Emeritus of Path to Purchase IQ. He’s been associated with the Institute since 1994, covering all aspects of consumer marketing with a special emphasis on the shopping experience. He welcomes any questions, comments, requests or pitches about P2P Toolkit, and can be reached at bschober@ensembleiq.com.

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P2P Toolkit

SPOTLIGHT: Data Collection Publix is putting its cookies, web beacons, Google analytics and “FOMO” (fear of missing out) to work with the introduction of Club Publix. This freeto-join membership program is being built around certain shoppers’ desires for “first-to-know” information. Personalized communications (email, direct mail and app notifications) will be based on an individual member’s purchasing data, enabling Publix to push some real hot buttons: • be “the first notified” about BOGOs and other sales; • learn about product launches “before anyone else;” • access exclusive “perks” and coupons based on purchase patterns; and • get a “sneak peek” at the weekly ad.

Members are advised to enter their phone numbers at the register or pay with the Publix app when shopping to make future communications more personalized.

The fine print notes that members consent to Publix’s use of technologies to receive and store data when they interact with these services, including, but not limited to, the devices and software being used, the content viewed, and whether ads places on Club Publix and other websites and apps are effective. The same fine print notes that Publix currently does not respond to web browser “do not track” signals or other mechanisms for opting out of data collection across its sites and online services.

Nielsen Global Connect has announced that Sylo, a thirdparty verification and measurement platform for influencer marketing, has joined its Connect Partner Network. Under this partnership, Sylo will have access to Nielsen’s proprietary retail sales and shopper marketing data in order to determine, in real time, which influencers are actually influencing sales. According to the companies, until this alliance there had been no efficient, effective measurement service that was fast enough to optimize, in real time, the retail sales impact of influencer marketing campaigns.

During a recent test of a national campaign by a global CPG brand, Sylo and Nielsen say they were able to identify individual influencers that had concentrated regional audiences, and attribute to them sales in the region that outperformed the national trend. Sylo emphasizes that it is “unbiased” because it is completely removed from promoting influencers, since its analytics are based on data directly from the social platform APIs.

Danone is launching a digitally enabled data-collection service called “Track & Connect.” Using a combination of blockchain, serialization and aggregation technology alongside a packing innovation, Track & Connect is intended to give consumers and retailers comprehensive traceability on the movement of Danone’s baby formulas as they make their way from ingredient suppliers to store shelves.

Danone is managing a “global code repository” that generates billions of QR codes and places two on each product package. The first code is laser printed on the outer pack, while a second code is placed inside a tamper-resistant seal so it can only be scanned by consumers, using their smartphones, after purchase.

The outer code accesses a web page with the location, date and time the product was produced in Danone’s factories as well as information on its journey through the supply chain. When the inner code is read by a shopper, it registers the package “as purchased” on the global code repository and then enables Danone to offer that shopper customized after-sale support such as access to mobile apps, parenting videos, customer helplines or online e-commerce services.

Track & Connect data will also help retailers to forecast shoppers’ buying habits and personalize offers under their loyalty programs. Danone is initially launching the service in China as well as France, Germany, Australia and New Zealand.

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P2P Toolkit

SPOTLIGHT: Data Collection

Label Insight has been granted patents on its methods for automatically deconstructing, analyzing and confirming data on product packaging and labels. CPG packaging typically includes data points on ingredient amounts, nutrition labels, marketing claims and certifications. Sometimes, however, this information gets tailored to the needs of specific grocery retail channel partners, which increases the risk of data inconsistency. To address potential inconsistencies, Label Insight developed an automated data solution which can also identify conflicts between package claims and regulatory guidelines.

Label Insight, which partners with more than 300 retail banners and 5,500 CPG brands, says its goal is to remove “risk and complexity” for its clients as consumers continue to demand greater product transparency. Its database boasts more than 170,000 product nutrients, 397,000 product ingredients and 5 million product claims.

Everyone was all too familiar with toilet paper shortages, bans on reusable shopping bags, checkout aisle sneeze guards and other supply chain distortions (to say nothing of the countless personal tragedies) brought on by COVID-19. Throughout March, Catalina Marketing mined its Buyer Intelligence Database to track sales in all categories to identify which ones were being reshaped (spikes or declines) by the pandemic. Some key observations: • Store trips began growing around March 1, and peaked on March 13, with total dollar sales per store up 60%.

• Categories in long-term decline experienced upswings in sales in March, including bleach (up 340%), deodorant soap bars (up 218%), aluminum foil (up 86%); and yes, toilet paper (p almost 400%).

• Quarantining at home spiked sales for books (up 42%), smoking accessories (up 29%), and yes, condoms (up 25%).

• Working from home, on the other hand, led to 25% declines in personal grooming products such as cosmetics, trimming devices and perfume.

How much of this pandemic-induced behavior will endure is anyone’s guess, but the mobile data analytics service Apptopia tracked a sharp divergence in the daily download patterns of delivery apps. The packaged-goods delivery apps (Walmart, Instacart and Shipt) showed significant upticks in March, while the prepared-meal delivery apps (DoorDash, Uber Eats, Grubhub, and Postmates) crashed.

Short analysis: It’s long been theorized that the trick is to get a person to develop their first online shopping list of repeatable purchases, and after that, they’ll be inclined to stick with it. Life post-COVID-19 will test that theory.

i u G n o i t u l o S g n i m o c p u r e h t o e e n s i z e a h t g a s s i m Q I e s a Don’t m h c r u P o t h t a P n i only Keeping an eye on venture capital funding to spot potential game-changers over the horizon … Fast, a startup that’s trying to build a universal, platformagnostic log-in and check-out service for online stores, just raised $20 million. When shoppers visit pretty much any e-commerce site apart from Amazon and their go-to grocer, they usually have to re-log-in, which gets to be a pain. Fast’s proposition is to become everyone’s central log-in by requesting just five pieces of information: name, email, phone number, address and credit card number(s).

Its goal is to become the universal profile for all shopper interactions online by offering shoppers one-click login (which is in market now), one-click payment and one-click data (still being developed).

A second company worth noting is Yaguara, a 4-yearold Denver-based startup that recently got a cash infusion from a venture group that includes the founders of Warby Parker, Harry’s, and Allbirds. Yaguara aggregates and unifies e-commerce data across departments, aligns the insights and metrics and then offers predictive recommendations that are powered by network data. The company already has 250 e-commerce customers using the platform.

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ies c n e g A g n i t rke Shopper Ma 2020 r e b m e t p e S An official publication of

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StoreSpotlight

Amazon Go Grocery

BY PAT RYC J A M A L I N O W S K A

Once viewed simply as a wild experiment, Amazon’s “just walk out” shopping technology is now powering a full grocery store that the company opened in February at 610 E. Pike Street in its hometown of Seattle.

As the name suggests, Amazon Go Grocery shares many characteristics with the Amazon Go convenience stores that first brought the company’s frictionless payment platform to U.S. shoppers, including mobile code entry, thousands of overhead cameras and, of course, cashierless checkout itself. The main difference is that the much larger, 10,700-square-foot Go Grocery store adds a produce department as well as expanded frozen, meat and dairy departments, giving urban grocery shoppers a one-stop, contact-less payment destination for their grocery trips.

Shoppers log in to their Amazon account via the Amazon Go mobile application and request entry by scanning the code displayed on their smartphone. Immediately beyond the entry gates, small upright carts designed for the L-shaped store’s relatively narrow aisles are corralled alongside reusable shopping bags labeled as “free.”

Printed and digital signs invite shoppers to “Grab a cart” and “Bag as you shop.”

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Throughout the store, additional digital signs communicate messages such as the price of avocados. During the COVID-19 pandemic, some have been repurposed to request shoppers practice social distancing by staying six feet apart. Other types of promotional signage are virtually nonexistent. Similarly, the store eschews any temporary merchandising units.

The store sources a number of its items, including entire gondolas of organic produce (priced individually as there is no weighing of merchandise) as well as meat, artisanal cheese and other fresh food, from Whole Foods suppliers. However, rather than competing with Amazon’s Whole Foods chain, the company hopes Amazon Go Grocery will add value and further expand its brick-and-mortar footprint with its mix of products, price and convenience.

With cart in hand, shoppers face a bakery wall topped by a directional mural that sends them to the left (for snacks; meals made easy; sushi, pasta, pizza, salad, sides) or right (for dairy, meat & seafood, deli), depending on their shopping intent. There is also a separate area for wine, beer and spirits that requires shoppers to show their ID to gain entry.

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StoreSpotlight

The breadth of categories within the store is comparable to a typical suburban supermarket, but the highly curated assortment favors smaller pack sizes. There are even shelves dedicated to single-pack free samples with instructions to “grab one of each” – although they sat empty during our visit. Local companies are a big part of the mix, as are both private label 365 Whole Foods Market products and those from major brands such as the flagships of Kellogg Co. and Coca-Cola Co.

On their way out, shoppers pass by a self-serve Starbucks coffee station – temporarily closed due to COVID-19 – and a selection of impulse items that includes a co-branded chocolate bar with local high-end chocolatier Theo. Both are part of a staging area that includes counter space for shoppers who need to organize their groceries as well as a parking validation machine for the store’s spaces, which are free for one hour. Amazon has not said if, where or when it might open more Amazon Go Grocery locations.

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More Online

Path to Purchase Institute members can see more Amazon Go Grocery photos in the image vault at P2PI.org.

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ActivationGallery

COVID-19 at Retail When the coronavirus pandemic took hold in March, brands and retailers had to react, first to keep people safe, and then also to determine a way of still doing business. On the following pages, we present a sampling of the activity the editors of the Path to Purchase Institute observed. Institute members can see much more COVID-19-related activity in the image vault at P2PI.org.

Ahold Delhaize’s The Giant Company launched a COVID-19-inspired #MoreForAll call to action in a move to combat stockpiling by encouraging shoppers to purchase “only what they need.”

While many programs were scrapped or put on hold in response to the pandemic, Best Buy quickly rolled out its own COVID-19-inspired promotional efforts capitalizing on the increased demand for home technology as much of the country prepared to stay home indefinitely. The consumer electronics retailer launched a dedicated “be-at-home essentials” e-commerce shop corralling “the tech you want for a cleaner, more productive home” in categories including home office, home cleaning, health monitoring, fitness, kitchen and entertainment.

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Target adjusted its circular activity during the pandemic, stopping print ads on March 29. It communicated that the change was temporary in an April 5 email blast and on the covers of its March 29, April 5 and April 12 digital circulars.

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A CVS video ad ran on Weather.com, auto-playing at the top of an article landing page. The audio message started with “To help you through the current health crisis ...,” and the ad went on to plug free delivery service.

The home page of Procter & Gamble’s Tide promoted a free laundry service for “the family of frontline responders” in select cities.

Petco moved quickly to adjust its social media messaging and connect with consumers as COVID-19 took hold while others in the channel went temporarily silent or did nothing to acknowledge the pandemic. Among the pet retailer’s first related posts was one that empathized with consumers who are stuck at home while promoting the chain’s PupBox subscriptions and one that shared a video of “must-haves” to include in emergency preparedness kits while linking to a pet essentials e-commerce shop.

Petco even leveraged Instagram stories to stream a live Q&A with its head of veterinary medicine.

Spring arrived with most of the country under stay-at-home orders ... a perfect time for The Scotts Co. to promote its subscription lawn program, which delivers fertilizers to consumer homes throughout the year.

In an April email with the subject line “Right now, home maintenance is even more important,” Lowe’s showcased product images of Samsung water filters, 3M’s Filtrete and a Duracell battery.

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ActivationGallery

Lowe’s employed standees, floor clings and unframed printed signs to enforce social distancing at its stores. Plexiglass also was installed at the customer service desks and at checkout.

Albertsons’ Jewel-Osco was one of the many retailers to install plexiglass partitions at checkout to protect cashiers and shoppers.

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THE ART OF MERCHANDISING

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Signs affixed to shelves at a ShopRite store in College Point, New York, asked shoppers to stand six feet away from employees as they restock and work, while directing them to union United Food and Commercial Workers Local 342’s Facebook page to learn more.

Elsewhere in the same store, ShopRite signs within the aisles communicated purchase limits on items such as eggs, aloe gel, baby wipes, bleach, disinfectant sprays and bottled water.

Aldi-owned Trader Joe’s was quick to have its safety measures and store operations in place, including limiting the number of shoppers inside the store and keeping shelves fully stocked. A chalkboard sign outside a store in Chicago communicated: “Given the current environment we will be bagging all of your groceries in our paper bags free of charge.”

Among the measures Walmart is adopting against COVID-19 is limiting the number of people allowed inside its stores at any time by admitting shoppers one-by-one at a single entrance. Those waiting outside to get in are asked to stand in makeshift queues at a distance of six feet apart. Inside stores, the retailer is placing floor markers at six-feet intervals in checkout lines to help people maintain the recommended distance.

HOOKS | SHELF MERCHANDISING | LABELING WWW.TRIONONLINE.COM/ART | 800-444-4665 ©2015 Trion Industries, Inc.

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Solution Provider News

Retail Revenue Down Across All Verticals After March Surge Consumer spending was down across all categories as of mid-April, with overall retail demand down 73%, according to data from Amperity.

This aggregate figure conceals the fact that specific verticals have seen spikes in revenue as consumers adjusted to the new reality of quarantines and social distancing.

Three categories that saw surges through the month of March have since subsided – food and beverage, health and beauty, and footwear and accessories.

Food and beverage peaked on March 23 and was up more than 100% as consumers stocked their pantries in a sprint of panic-buying.

HBA peaked on March 27 and was up more than 50% as consumers stocked up on essential health goods. Footwear and accessories peaked on April 2 and revenue was up more than 60%. As consumers adjusted to the new pace of daily life, they caught up on errands.

Survey: E-Commerce Sees Rough Road but Long-Term Benefits Although many online sellers face severe challenges in the pandemic, they are optimistic that e-commerce will emerge from the crisis as a winner.

The current climate has encouraged consumers not shopping online to switch to online stores while also causing significant shifts in demand for certain products. Sellics, a provider of software aiding e-commerce growth, conducted a survey earlier this spring revealing the challenges, chances and expectations of businesses on Amazon.

Survey respondents included brands selling on Amazon focusing mostly on the U.K., the U.S. and Germany. A vast majority of survey participants expect the crisis to last 3 to 6 months or longer and fear a long-lasting recession as an aftereffect.

Nonetheless, a majority of brands also predict e-commerce will leave the crisis stronger as more people start to order products online. This could lead to a change in behavior that intensifies an already existing trend and catapults e-commerce growth years into the future.

Catalina Maps Shopper Decisions

by State During Crisis To demonstrate the profound impact the COVID-19 pandemic has on shopping decisions and buyer behavior across the U.S., Catalina Marketing launched an interactive map on its website.

The map reports sales data across 78 major grocery and drug categories from states across the U.S., plus the District of Columbia, going back to the week ending Feb. 15 when novel coronavirus awareness and concerns really started to gain traction.

Total sales dollars per store were up an average of 13% versus the same period a year ago. Meanwhile, the number of shopping trips declined by 13% compared

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to the same period in 2019, even as the amount spent per visit increased by 31% over the prior year.

Inmar Partners with Ibotta Inmar Intelligence is teaming up with mobile rewards and payments platform Ibotta in the hopes of accelerating growth for cash-back offers across retailers nationwide.

The agreement combines Inmar Intelligence’s digital promotion platform with Ibotta’s performance-based promotional content. Ibotta extends cash-back offers capabilities to Inmar Intelligence’s retailer network and platform. In turn, Inmar Intelligence becomes the exclusive provider for social influence services in Ibotta campaigns, tapping into an established portfolio of influencer products and a vetted community of influencers.

Inmar Intelligence continues to directly manage cash-back content for regulated products, including those in the adult beverage category. The companies will keep investing in new technology to alleviate offers running concurrently, a recurring pain point for CPG partners and retailers.

News Corp Sells News America Marketing News Corp has agreed to sell its News America Marketing (NAM) business to

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Charlesbank Capital Partners, a private equity firm with offices in Boston and New York.

The deal is expected to close in the fourth quarter of fiscal 2020, subject to regulatory approval. The agreement follows a strategic review of NAM as part of News Corp’s ongoing efforts to optimize its portfolio and simplify its company structure.

Once the deal closes, Charlesbank plans to name Bill Redmond as NAM’s CEO. NAM’s in-store marketing media network operates in more than 60,000 stores in the U.S. and Canada while its SmartSource free-standing insert program reaches more than 60 million households. Its digital media network offers programmatic display, email, social and video opportunities.

COVID-19: What Grocers Can Do E-commerce solutions provider Mercatus offered three tips for retailers looking to ensure future resilience and success for their e-commerce program: 1. Invest in a click-and-collect (or curbside pickup) service you own and control.

In doing so, grocers are empowered to provide a better shopper experience, increase margins (compared to delivery or a fully outsourced experience), and train their employees to manage this service line, ensuring it stays open in times of crisis.

2. Invest in proper management and control of your delivery service. With shoppers actively avoiding leaving their homes, grocery retailers’ delivery services have been severely tested.

Events like the pandemic really bring to light the need to properly manage each

component so that the delivery program runs smoothly.

3. Own shopper data. While many retail banners have seen a massive increase in loyalty account registrations and app downloads, grocers using deliveryprovider marketplaces have been directing shoppers to sign up with them instead.

This is a major lost opportunity, as those new shoppers are unlikely to be loyal to the retailers who directed them to the marketplace.

Edge by Ascential Adds Yimian Data Yimian Data was acquired by Edge by Ascential to deliver integrated offerings and services. Yimian is an AI-powered commercial data analytics solutions provider established in China in 2014. It is devoted to unleashing the value of data and enabling smarter decisions for customers through advanced big data technology.

Edge by Ascential recognized the synergy of Yimian with its existing business across the U.S., Europe and Asia-Pacific (APAC) region, plus its expertise in China’s complex digital commerce market. Alongside the existing Edge by Ascential APAC business, this acquisition combines two strong industry players to bring holistic solutions to the world’s leading brands.

Leveraging the depth of Yimian’s technology innovation, Edge By Ascential now claims to deliver superior data analytics to help customers achieve their goals in digital commerce through consumer, shopper and retailer insights across multiple channels. That empowers companies to better optimize their e-commerce sales, identify key drivers of business growth, challenges and risks, and expand the

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boundaries of what is possible in digital commerce.

Innomark Expands East Coast Presence Visual marketing company Innomark Communications is introducing Innomark East. This latest venture, located in Secaucus, New Jersey, will leverage the company’s prepacked display capabilities to serve the CPG market. This new office will provide a convenient location to the many CPG customers that reside in the New York, New Jersey and Connecticut tri-state area.

The Secaucus office also will serve as a hub for Innomark East’s leadership, existing sales representatives, display design, project management and other support staff. The office will complement Innomark’s existing design, engineering and model shop resources in New York.

Any work generated through Innomark East will be produced and shipped through Innomark’s existing manufacturing facilities in Ohio. Innomark has manufacturing facilities in Southwest Ohio and Indiana, as well as customer engagement centers in Los Angeles, New York and Pittsburgh. IQ

Send your solution provider news – new products, projects, programs and technologies – to Charlie Menchaca at cmenchaca@ensembleiq.com.

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Personnel Appointments BRAND MARKETERS Del Monte Foods, Walnut Creek, California Former Dean Foods vice president of sales David Stis was named Del Monte Foods senior vice president and chief customer officer. He is responsible for company sales in all channels, including retail grocery and foodservice. Ashish Mallick, former Pinnacle Foods vice president, supply chain strategies and manufacturing transformation, was named Del Monte SVP and chief supply chain officer.

Georgia-Pacific, Atlanta Ryan Elwart, former SVP for global sales, was promoted to chief customer officer for the consumer products group. In this newly created position, Elwart leads a combined sales organization for the company’s retail and commercial businesses.

RETAILERS BJ’s Wholesale Club, Westborough, Massachusetts Former Bain & Company partner Paul Cichocki was named BJ’s executive vice president, membership, analytics and business transformation. Cichocki is responsible for the company’s membership, marketing and analytics

PAUL CICHOCKI

RYAN ELWART

organizations. He will report directly to BJ’s president and CEO Lee Delaney.

Wakefern Food Corp., Keasbey, New Jersey Steve Henig, former VP of digital commerce and analytics, was named chief customer officer. Henig oversees the branding, e-commerce, marketing and advertising departments. He will work with the Wakefern co-operative’s members, leadership and associates to develop a single brand voice for customers. Bryant Harris, former Save A Lot EVP and chief commercial officer, was named Wakefern chief merchandising officer. Harris is responsible for product procurement strategy, in-store merchandising, pricing and promotion.

SOLUTION PROVIDERS Acosta, Jacksonville, Florida Sharon Hart, former Stein Mart CIO and SVP, information systems, was named Acosta CIO. With more than 20 years of experience as an established leader in both the CPG and retail

SHARON HART

KAREN SALES

industries, Hart is focused on delivering omnichannel technology and digital solutions to drive sales growth.

Great Northern Corp., Oshkosh, Wisconsin Bruce Kehler, former senior director of sales, global key accounts, at Amcor Flexibles North America, was named Great Northern VP, sales development. In the role, Kehler provides sales leadership, strategic account development and key account relationship management.

SKUxchange, St. Petersburg, Florida Karen Sales, former Albertsons Cos. VP of national and shopper marketing, was named SVP of digital strategy and channel partnerships. She is a 2018 inductee into the Path to Purchase Institute Hall of Fame. SKUx is a global fintech company utilizing smart, secure, one-time-use digital incentives to drive incremental and directed spend for retailers. IQ

Editorial Index Ace Hardware...................................10 Ahold Delhaize ................................36 Air .........................................................28 Albertsons Cos.................................38 Allbirds ...............................................30 Amazon.com ....................................32 American Nutrition ........................43 Anheuser-Busch ..............................C4 Apptopia............................................30 Ballsy ...................................................21 Best Buy .............................................36 Birchbox .............................................18 Bissell ..................................................43 Blue Buffalo ......................................43 Blueland .............................................21 Bombas ..............................................22 BrightSign .........................................28 Campbell Soup Co. ................... 8, C3 Catalina Marketing..................30, 40 Cece’s Veggies ..................................22 Ceva Sante Animale.......................43 Chewy.com .......................................43 Church & Dwight ............................43

CleanCult ...........................................22 Clio Snacks ........................................23 Clorox Co., The ................................... 8 Coca-Cola Co., The.............. 8, 34, C4 Colgate-Palmolive ..........................40 Conagra Brands ................................. 8 Creative Realities ............................28 CVS Pharmacy..................................37 Danone...............................................29 Discovery ...........................................43 Dollar General .................................... 8 DoorDash ..........................................30 Dropps ................................................23 Edge by Ascential ...........................41 Elo ........................................................28 Fandango Loyalty Solutions ............................................11 Fast.......................................................30 FCB/RED .............................................C3 FedEx...................................................18 Feeding America............................... 8 General Mills....................................... 8 Grubhub ............................................30

Harry’s .................................................30 Health-Ade ........................................23 Hello Products .................................24 Home Depot, The ....................10, 43 Ibotta ..................................................40 Inmar Intelligence ..........................40 Innomark ...........................................41 Instacart .............................................30 Jenny Craig .......................................18 J.M Smucker Co. ................................ 8 Kellogg Co. ................................... 8, 34 Kimberly-Clark .................................C4 Kindred Bravely ...............................24 KlassCo ...............................................11 Kong Co..............................................43 Kraft-Heinz Co. ................................... 8 Label Insight .....................................30 Lowe’s ...................................10, 37, 38 Magic Spoon ....................................24 Mars Agency, The ...........................C3 Mars Inc. ........................................ 8, 43 Mercatus ............................................41 Microsoft............................................16

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Moen ...................................................10 Mondelez International................C4 Natural Pet ........................................43 News America Marketing ............40 Nielsen Global Connect ...............29 NomNomNow .................................25 Omnicommerce Vanguard..............C3 Ooze Wholesale...............................25 OurStreets .........................................28 Path to Purchase Institute ...........10 PepsiCo................................................. 8 Perry Ellis International ................28 Petco ...................................................37 PetSmart ............................................43 Postmates..........................................30 Procter & Gamble ...........................37 Publix ..................................................29 Quotient.............................................C3 Recess .................................................25 Scotts Co., The..................................37 Seedlip................................................26 Sellics ..................................................40 Shipt ....................................................30

ShopRite ............................................39 Skinny Dipped .................................26 Spectrum Brands ............................43 Soylent ...............................................26 Starbucks ...........................................34 Sweet Loren’s ...................................27 Sylo ......................................................29 Target ..................................................36 Theo ....................................................34 Trader Joe’s .......................................39 Uber Eats ...........................................30 Uncle Dougie’s .................................27 Unilever ................................................ 8 Virbac ..................................................43 Walgreens..................................... 6, 13 Walmart ................................ 8, 30, 39 Wandrd...............................................27 Warby Parker ....................................30 World Health Organization .........40 Yaguara ..............................................30 Yeti .......................................................10 Yimian Data ......................................41

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Retail Intel

PetSmart Trains New Pet Owners

BY PAT RYC J A M A L I N O W S K A

PetSmart elevated its annual “puppy central” campaign this year with ramped up in-store, digital and print activity.

Using the phrase “the new pet place,” PetSmart positioned itself as a one-stop shop for consumers who just got a new puppy – or another type of pet.

In stores, relevant products including toys, attire, treats, potty pads and dog beds were stocked on rolling racks and dump bins positioned in the main shopping aisle, directly in front of the entry door. The racks and surrounding endcaps were outfitted with coordinated header cards, creating a can’tbe-missed, dedicated merchandising area.

Kong Co. stood out by commanding one entire side of a rack, creating a visual brand block with its durable rubber treat dispensers and various options for fillers. PetSmart also plugged its grooming services with a side panel inviting salon walk-ins.

Some of the header cards promoted a “puppy guide” booklet that was merchandised alongside various stuffed toys on one of the racks. Priced at $19.99, the booklet’s cover promised more than $300 in savings on food, treats, toys, services and more while also delivering various puppy parenting tips, tricks and checklists for essential supplies, puppy proofing, socializing, training, grooming

and vaccinations.

Several pages were dedicated to PetSmart’s in-store services, providing coupons for such offerings as consultations and microchipping at Banfield, doggie day camp and overnight stays at PetSmart PetsHotel, and baths. One page also plugged PetSmart Charities and encouraged shoppers to make donations via the PIN pad at checkout.

While many of the product coupons contained in the booklet were generic, there was also noteworthy brand activity in the form of coupons ranging in value from $1 to $5 for Virbac, Spectrum Brands’ Dentley’s and Nature’s Miracle, Ceva Sante Animale’s Adaptil and private label Top Paw, among others. Natural Pet, American Nutrition’s Simply Nourish and private label Authority also were elevated on a

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nutrition tips page as “brands you & your puppy will love.”

The booklet was exclusively for dog parents, but this year’s in-store activity also included one rack dedicated to kitten products including toys, scratching posts and slow feeders.

Additional support for the new pet place campaign included circular features and home page banner ads. The latter

linked to a dedicated e-commerce shop offering shopping checklists, educational resources and recommended products for dogs and cats as well as fish, birds, reptiles and small critters.

Outside of the official campaign but still noteworthy, separate circular features dangled $5 or $15 in digital rewards with purchases of $25 or $50 worth of Blue Buffalo products under a relevant “Feed well in 2020 message.”

In other related moves, PetSmart’s Chewy.com is on the roster of official sponsors of the annual Puppy Bowl broadcast and TV adoption event aired by Discovery’s Animal Planet on Super Bowl Sunday. The e-commerce subsidiary took the spot from former sponsor and channel rival Petco in 2018, putting its own name on the Chewy “Lombarky” trophy as well as the end zone pylons mounted with cameras that provide a front-row-seat view. Home improvement retailer The Home Depot and brands including Church & Dwight’s Arm & Hammer Clump & Seal, Bissell, and Mars Inc.’s Pedigree and Temptation were also among this year’s sponsors. IQ

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MAY 2020

Path Purchase

pathtopurchaseiq.com

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E N D - TO - E N D S T R AT E G I E S F O R D R I V I N G C O N S U M E R D E M A N D

COVID-19 AT RETAIL Brands continue to shift strategies as marketplace conditions remain chaotic

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MEETING the MOMENT

The intensifying COVID-19 crisis has brands plotting a new course of action

BY S A M A N T H A N E L S O N

In a normal year, May would be the start of the summer marketing season. Store aisles would be filled with displays encouraging shoppers to pick up essentials for grilling and Memorial Day gatherings. Gift cards and cakes would be positioned as graduation gifts. Major League Baseball sponsors would

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connect with shoppers through promotions involving their local teams, while Olympic sponsors would be leveraging buzz for the Summer Games with impressive spectaculars.

Of course, this year is far from normal. March Madness was cancelled, the Tokyo Olympic Games were pushed to 2021, and MLB is looking at playing its entire season in Florida and Arizona.

Schools are closed and large parties are currently illegal.

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“Anybody who had an Olympic program – all that merchandise is sitting in a warehouse,” says FCB/RED senior vice presidentgroup management director Howard Klein. “And look at big brands like Coke Zero Sugar. March Madness was a big pillar for them. I think brands are [instead] trying to create whatever they can that’s more relevant for the times.”

Sponsoring brands can spend 40% to 50% of their annual marketing budget on the Olympics, estimates Quotient chief executive officer Steven Boal. Now they’re scrambling to move those marketing dollars, which is proving particularly difficult in a presidential election year when TV advertising prices were expected to be higher than usual. “We’re seeing a ton of social marketing,” Boal says. “We’re seeing influencer marketing. People are cooking more, so there’s more engagement with recipes.

Influencers with cooking followings are very busy right now.”

Meanwhile, many in-store promotions that weren’t based on cancelled seasonal events have also been scrapped because of how retailer operations have changed. “You can’t go into stores and build your displays,” Klein says. “Some stores say, ‘Drop off your stuff at the back door because that’s one less person in the store.’ If the store is actually letting the merchandiser come in, they want you in and out as soon as humanly possible. That’s really affected a lot of things.”

Shoppers also want to spend less time in stores, which have

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become increasingly stressful environments. “Anybody who had an in-store experience planned like sampling, all those things were cut,” says Heidi Froseth, founder and CEO of Omnicommerce Vanguard. “Not all of those budgets have been reinvested into other experiences. I’m a little concerned about that conservative approach.”

CHANGING TACTICS Froseth says that brands should try to meet the moment by pivoting to more relevant content. As an example, she praises General Mills, which has been offering solutions for parents who now have to plan three meals a day. The manufacturer has particularly been promoting its Betty Crocker brand to tap into the increased popularity of baking during the crisis. “CPGs have an opportunity to really ride this wave of in-home consumption, which could mean a banner year,” Froseth says.

Rob Rivenburgh, chief executive, North America, The Mars Agency, says that while programs focused on the Olympics or professional sports had to be scrapped, brands and retailers are pivoting toward cause campaigns and messaging based on togetherness. Campbell Soup Co. began investing in e-sports last November with a spot starring a professional “Super Smash Bros.

Melee” videogame player, but Rivenburgh says the manufacturer now is doubling down on the tactic, positioning the act of

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MEETING THE MOMENT

While it normally would have focused heavily on the NCAA Men’s College Basketball Tournament in March, Coca-Cola had greater issues to discuss this year, as the Times Square billboard attests.

watching competitive video games together as a way for dads to connect with kids when all traditional sporting events have been cancelled.

Rivenburgh expects this shift to continue at least until the fall.

“It’s going to be slow to see the sports leagues come back, or come back with a crowd,” he says.

Anheuser-Busch has redirected the money it would normally spend on sports and entertainment events to COVID-19 responses. The manufacturer has made a $5 million donation to the American Red Cross, is producing hand sanitizer at some of its manufacturing facilities, and is coordinating with stadiums and arenas to host blood drives. The company laid out its plan in a #OneTeam TV spot that has garnered nearly one million

“I think that any brands taking social responsibility seriously are being well received.”

— Steven Boal, CEO, Quotient

THE NEW NORMAL? Many CPGs were already planning for 2021 when COVID-19 reached the U.S., and now all of their future efforts are being

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views on YouTube. A-B’s Budweiser has also been using simple displays, digital marketing and social media activity to encourage consumers to share a beer during virtual happy hours.

A-B is a client of FCB/RED, so while Klein admits he’s biased, he says the manufacturer is doing a great job meeting the moment.

“You can’t go to a bar and drink, so you’re going to drink at home,” he says. “The approach that they’ve taken has been one of compassion and understanding. We’re all going through the exact same thing together.”

Kimberly-Clark’s Cottonelle addressed the significant product shortages caused by a mix of panic buying and consumers spending all of their bathroom time at home through a “#ShareASquare” campaign. The brand pledged to donate $1 (up to $100,000) to The United Way for every social post made through June 1 using the hashtag that describes how the consumer shared toilet paper with someone in need.

Cottonelle also pledged a base $1 million donation to United Way Worldwide’s COVID-19 Community Response and Recovery Fund and will contribute 1 million rolls of toilet paper to the cause this spring. Despite the crisis, “there is no shortage of kindness,” concludes the campaign’s spots. (See page C2.)

“I think that any brands taking social responsibility seriously are being well received,” Boal says.

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MEETING THE MOMENT

“The tried-and-true tactics that we’re used to are going to be shaken up. We’re looking at different contingency plans from a timing and marketing mix perspective. We’re planning for various scenarios.”

— Rob Rivenburgh, chief executive, North America, The Mars Agency

called into question. No one knows when social distancing guidelines will ease or what shopping behaviors will look like after an event like this.

“The prevailing view now is that there won’t be a return to full normal,” Boal says. “E-commerce grocery, which was growing, has a new baseline. This is the black swan event e-commerce grocery needed.”

Shoppers concerned about their safety have turned to e-commerce in record numbers, and now that the barriers to entry have been broken down, industry consensus is that at least some of those gains will last beyond the pandemic. Boal says that retailers who were already invested in e-commerce such as Walmart, Ahold Delhaize and Albertsons Cos. are well positioned to take advantage of the trend. He expects click-and-collect services to be even more popular than direct delivery following the crisis, predicting that Dollar General will be a winner in that area because of its high volume of stores (16,368 and counting).

Klein predicts that people will be able to get out again at

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Anheuser-Busch has redirected the money it would normally spend on sports and entertainment events to COVID-19 responses. The company laid out its plan in a #OneTeam spot aired on TV and YouTube. Budweiser has also encouraged consumers to share a beer during virtual happy hours. At left: Campbell Soup Co., which invests in e-sports, is now doubling down on the tactic since sporting events have been cancelled.

some point this summer, but that it won’t be until fourth quarter before things really go back to normal. He says brands are starting to discuss how to mark those moments with “welcome back” campaigns. “What has been taken away from you is the opportunity to be in person with people,” he says. “It’s the bonding with people, it’s contact. Once that’s come back, how do brands celebrate that?”

Rivenburgh hopes brands will be back setting up in-store displays by fall, but that new hygiene standards created by the crisis might transform retail. In-store sampling and salad bars may become taboo, and more shoppers might want to use their phones to pay rather than touching shared keypads or screens.

“I think things will be different no matter where we are in the fall,” he says. “The tried-and-true tactics that we’re used to are going to be shaken up. We’re looking at different contingency plans from a timing and marketing mix perspective. We’re planning for various scenarios.”

Which scenario ultimately plays out is still anybody’s guess. IQ

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