CPG brands can face significant challenges in launching new products, as these traditional products require decidedly non-traditional retail digital marketing plans to ensure success.
Brands which used to rely on things like word of mouth, in-store advertising, and discounts must compete in an ever-growing market. These traditional advertising methods may not be enough anymore. However, there is a way to use technology to make old advertising methods new again.
New product launches are particularly hard for CPG brands as about 30,000 new products hit the shelves every single year. The vast majority, 95%, will not be successful. Brands are trying to convince a finite number of consumers to purchase a seemingly infinite number of new products. Brands must gain the trust of consumers, incentivize purchases and finally, direct them to new products while they’re in the store.
Expanding Word of Mouth With Social Media
Word of mouth is a traditional component of advertising. However, technology has made this go much further. Social media capabilities today allow brands to significantly expand on the power of personal recommendations.
| Traditional | Contemporary |
| Spokespeople: In the past, this was typically well-known actors, sports figures, or mascots. These individuals usually enter contracts to represent products. Often, these contracts were exclusive in that the spokesperson could not be seen using a competitor’s brand. | Mega-Influencers: Mega-influencers on social media generally have more than 500,000 followers—indicating online celebrity status. These individuals may often be actors, sports figures, or other famous individuals—but not always. |
| Brand ambassadors: Brand ambassadors were not typically famous but held much clout within their communities. These individuals would be loyal users of a brand and would recommend that brand to friends and family. | Macro-influencers: Macro-influencers usually have between 100,000 and 500,000 followers. While they may not be celebrities, they have extensive online followings of individuals who trust their opinions. |
| Brand-aware consumers: Consumers that are aware of a brand are more likely to purchase that brand, though there are varying levels of brand awareness, from simple knowledge of a brand all the way up to brand ambassadorship. | Micro-influencers: Micro influencers have under 100,000 followers and mainly influence family and friends, as opposed to the general public. Despite that, their trust level is high with consumers, and their reach can go quite far. |
When leveraging word-of-mouth through social media, most brands concentrate on macro-influencers as these individuals offer lower cost advertising options—even creating content in exchange for free products or exposure. Incentives are great not just for gaining recommendations, but also for improving sales and increasing market share.
Replacing Discounts With Rewards
Discounts, coupons, and other price-based incentives are all widespread practices for CPG brands attempting to gain the attention of consumers, but they come with some obvious downsides. First, these discounts may create an immediate loss for CPG brands, as the brand must reduce the price of the product to sell it. Second, they draw in consumers who are heavily focused on cost, meaning that they may not continue to purchase the product when it returns to its regular price.
Another option for gaining sales during a new product launch can be to offer rewards points for purchases. Shopkick uses this strategy in encouraging consumer purchases. As the rewards are earned, there’s an emotional connection that the brand makes with the consumers which improves future sales.
Enhancing Retail Digital Marketing With Apps
In the past, in-store marketing was focused on in-store displays and obtaining prime shelf real estate. However, there’s only so much shelf space to go around, and limited room for displays, meaning that enhancing the in-store experience for customers could be very costly. With many marketers competing for the same spots and incentives, retailers could essentially name their price for in-store advertising.
Mobile apps offer an alternative that can improve both the in-store advertising experience and even eliminate the issue of having poor shelf real estate. Shopkick works by offering users kicks (aka rewards points) for scanning items in the store. This interaction directs consumers to select CPG products while also incentivizing purchases. Apps can be used as a way to reach consumers in the shopping aisle with information about new products, ensuring brands are able to connect with consumers at the right time.
Apps can enhance traditional in-store advertising, allowing CPG brands to stand out with new products.
Apps can enhance traditional in-store advertising, allowing CPG brands to stand out with new products. By using technology to update conventional advertising options like word of mouth, discounts, and shelf placement, brands can expand their reach and potentially their market share. Retail digital marketing strategies offer a new way to reach consumers without having to rely on discounts or high-expense advertising campaigns.
Shopkick works with our partners to boost attention for new product releases by offering an innovative app that provides incentives for interacting with products. For more information about becoming a partner, contact us.
Image courtesy of sylv1rob1
