Using Consumer Insights/Data to Create A New Consumer Category through D2C
Theresa Farrell and Rebecca Dilnik,
- proactive is a direct to consumer billion dollar brand via television
- hard to innovate in the consumer packaged goods area, traditional method has a lot of issues
- complex – marketing, media, distribution and more
- expensive – buying media, planning distribution, stocking, inventory, training
- risky – CPG innovation failure rate is between 50% and 90%
- inflexible – once machine is moving, media is bought, customers are ready, you can’t just stop it
- success won’t be known for six months
- test markets are complex, expensive, time consumer, and maybe not even predictive if you don’t match them well, garbage in garbage out
- in direct to consumer space, you can sell a little bit and learn a lot
- lower investment than with a national launch, don’t have to build up large inventory, you can measure instantly what was bought and by whom, you can modify your plan more quickly
- Case study #1: Neat Sheet
- Little Swimmers are diapers so toddlers can swim)
- the outer cover prevented sand from sticking to it so why not transfer that into a little ground cover – the NEAT SHEET
- projected market results were not met, tests said it would work but couldn’t get it in the stores and consumers couldn’t find it, people loved the product and they needed to raise awareness of it
- works at the beach, working on your car, at sports events, at concerts and 100 other uses
- how could they get stores interested in the product? QVC would be a great opportunity
- good sales in 2002 and 2003, but by 2007 they took it off the market, but lots of great learnings about how to prepare to use QVC
- Case Study #2: Kleenex hand towels
- discovered via diary data, tested really well, packaging is designed to fit any bathroom on a towel bar or on the counter. but kleenex is a big brand and habits are hard to break. people are used to using a regular towel. consumers need demos.
- tested in january 2010. in 8 minute slot they had several demos. first slot had 2700 purchases. $7500 per minute. QVC says if you get $5000 per minute they will keep you on air longer. They were able to figure out where within the 8 minutes they got the most interest. ended up selling more than $9000 a minute which was the best of the day.
- a fresh clean towel every time you dry your hands eliminates the “yuck” factor and is a good health benefit [but boy is that wasteful!]
- learned a little more, sold a little more.
- retailers were sold on the DTC results and were able to get store distribution a lot easier, continue to see adoption to today
- Case Study #3: Truist moisturizing socks and gloves
- designed for women over 50, positioning is not maintaining youth, it is honest aging and taking care of yourself and the changes that come with it [deemed a risky position. sigh. okay, be happy with who you are. right now.]
- we are taught about the aging process way too early, we are expected to look impossibly perfect [hell yeah! yes, I took a less than flattering selfie of myself today🙂 ]
- how do we support a great product and minimize the risk? start with DRTC. Made a 30 minute infomercial with real women. Great viewership but low sales.
- switched to a 5 minute version to the target audience, modified the video to show real women using the product. this worked but adding free shipping helped more.
- fortunately experiments are quick and cheap – media format, optimal line up, price experimentation, free products or free shipping, find the right TV channel to put your infomercial on
- Key takeaways for DTC for innovation
- you can get in the market a lot faster, lower investment of media and product, real time research of changing price product format [honestly never thought that major brand names did infomercials]