Goodbye for Now – and Hello
Jody Kalmbach was standing in a lunch line at Amazon 15 or so years ago when her boss, Jeff Bezos, challenged her with a question: “Are we a technology company or are we a retailer?”
“Technology,” she responded, which was (phew!) the right answer.
Ironically, on the very day that Ms. Kalmbach told me that story a few weeks ago, The Wall Street Journal had a shocking exclusive: Amazon now plans to open “dozens of grocery stores” – brick-and-mortar units reportedly with more mainstream appeal than its Whole Foods format – starting in Los Angeles later this year.
Ms. Kalmbach left Amazon several years ago and has been busy the past four helping to digitally revolutionize the shopping experience at brick-and-mortar behemoth Kroger. This effort has, thus far, so far surpassed expectations that it’s earned her a spot in the Path to Purchase Institute’s Hall of Fame class for 2019.
A case could be made that both Amazon and Kroger are, to some degree, reversing tactics. The longer, more strategic view of these enterprises, however, has them both pivoting toward the same goal: A better connection with shoppers.
Kroger has learned that shoppers, being human, are mercurial. Sometimes we plan properly, sometimes we’re impulsive, and sometimes we goof it all up. One week we feel we have to sniff every cantaloupe and the next we don’t seem to care about anything. Thus, we want a seamless array of merchandise ordering and receiving options that will match our whenever/wherever/what-ever! shopping modes and moods.
Amazon, meanwhile, seems to want to crack the code behind something Kroger already knows: Shoppers, being human, have an emotional relationship with food. It connects us with family and notions of nurturing, nutrition and self-expression. Food shopping is often enriched through personal interaction. Hence, Amazon’s deeper dive into brick-and-mortar venues.
These are profound shifts in how two of the world’s biggest players are thinking about consumers. If you’re a CPG marketer and you feel like the ground is shifting under you, you should. But you’re not alone, at least. In her Hall of Fame interview in the April issue of Shopper Marketing, April Carlisle, VP–Shopper Marketing at The Coca-Cola Co., notes that by next year 20% of stores will have click-and-collect. Those consumers are still going to stores but won’t see your brand walls and endcaps and instant consumption displays. Do you have any idea how you will tempt this growing cohort of consumers?
Change, as the cliche goes, is a constant, and that’s certainly been the case over my decades at this institution and in its various manifestations: P-O-P Times, the New York Show, the In-Store Marketing Expo, P.R.I.S.M., the Institute Advisory Council, P-O-P & Sign Design, TREX (the Total Retail Experience), Pathfinders, Women in P-O-P, the In-Store Metrics Consortium, the Senior Executive Congress, Design of the Times, Leadership University, Shopper Marketing Effies, the On-Demand and Digital Printing Pavilion, League of Leaders, the Retail Commission on Shopper Marketing, and of course, the Path to Purchase Institute, to name just a few.
But something even bigger and more fundamental is going down this time. My colleague, Peter Breen, often points out that the wisest consumer goods companies are already doing two big things: 1) Transitioning from a product-centric to a consumer-centric focus; and 2) Adopting enterprise-wide strategies in order to develop demand-responsive capabilities.
This is a game-changing shift that’s way, way more involved than just getting your CMO to play nice occasionally with the retail execution team. Coca-Cola, for example, seems to be rising to the challenge, creating a new digital integration office and a senior-level officer to implement best practices for advancing digital integration across its system.
The term “shopper marketing,” while still very much an element of the Institute’s community and its coverage mission, will be insufficient going forward to describe all of the product development, analytics, retailer collaboration and consumer engagement challenges that CPG companies need to align around.
What’s really going to be interesting is to see what rises in its place. Stay tuned.