Marcela Sapone: Smart brands like Aesop have figured out that clever distribution builds brands.
Aesop and others realize that modern brand building lies in meeting today’s new consumer in the places they are: the hotel, the restaurant, the boutique. Now the onus is on CPGs to unlock new channels to break out of stalled growth.
NEW YORK — Recently, Racked reporter Cheryl Wischhover published a terrific piece mapping out Aesop’s methodical strategy for robust brand building. Putting aside the brand’s iconic packaging and the thoughtfulness of their products for a moment, it’s important to point out an overlooked fact: Much of Aesop’s success has come from the physical places where they are found.
And no, it’s not just their architecturally significant storefronts, as great as they tend to be. It’s the thoughtful collaborations and adjacencies the brand has established in the physical world. Be they hotels, restaurants, and boutiques Aesop appears in places that just match its aesthetic and mission-driven profile and purpose.
Make no mistake — it sends a loud, reassuring signal to a potential new customer when that person opens the bathroom door and is greeted with an assortment of Aesop soaps, shampoos, and lotions. If the old brand adage that “everything communicates,” holds true, this is something that has been working in their favor in a big way.
Aesop’s smart collaborations first began with the Park Hyatt Tokyo, which was integral to the early days of the brand. Since then, it’s continued that strategy by aligning with hip boutiques like the Longman and Eagle in Chicago. Of course, not just anyone can have their products. Aesop carefully screens every hotel and restaurant they work with, turning some places down.
The big takeaway here is that brands need to find clever new ways to distribute their goods and services. There is no substitute for the actual experience, something beyond what you can see on a shop shelf or quickly click to buy online.
To get specific, this is the idea of distribution as brand building.
And look for it to get more powerful and more valuable as more spaces for this become available.
There’s a big reason for this: Today’s digital spend has failed to produce increased growth for the brand marketers trying to sell products around the world. This means that big CPG players must try new pathways for products to reach consumers where they live.
Speaking last month at the Dmexco marketing conference in Cologne, Germany, P&G Chief Brand Officer Marc Pritchard voiced a familiar industry lament about the failure of current ad spending to boost stagnating growth.
“Despite spending an astounding $600 billion a year in marketing,” Pritchard said, “our collective industries still aren’t growing enough, holding stubbornly onto low, same-digit growth — you might say never has so many done so much for so little.”
Declaring 2017 as the year “the bloom came off the rose for digital media,” he criticized the inefficiency, lack of transparency, and fraudulence of the digital ad ecosystem, where only 20% of P&G’s 30-second spots were viewed for at least two seconds (the Media Rating Council’s minimum standard for viewability).
P&G isn’t the only CPG conglomerate struggling to reach consumers through both traditional and digital advertising — particularly younger shoppers, who are blocking, scrolling past, or simply blind to the digital ads cluttering their screens.
To be sure, marketers and social platforms have been innovating to improve the digital ad experience and to make ads more harmonious with the content in our feeds. But at a time when smaller DTC competitors like Dollar Shave Club, Honest Company, and Birchbox are making their way into homes — and hearts — without big-budget ad spends, incumbent CPGs need to find new methods of getting their products through consumers’ doors and building brand loyalty.
What new distribution models might look like.
These pathways — finding new and fruitful distribution channels for people to experience the brand — are not dissimilar to what Aesop has been executing beautifully. People will always need soap, razors, and other items that make up recurring household spend. The good news is more pathways are beginning to reveal themselves.
These new distribution models will incorporate personalized concierge services, voice, sensors, and artificial intelligence that alert us to items we need and want. Most significantly, platforms trusted to curate experiences and coordinate in-home delivery will change how brands fulfill and expand customer desires past the front door.
The home is the new channel.
Not for ads, but something more powerful: organic fulfillment. This has been a long time in the making. Going as far back as the days of the Avon Lady, consumers have invited brands to promote, sell, and distribute products directly into their homes thanks to a network of trust and word of mouth.
Similarly, thoughtful product placement and brand alignments awaited consumers in new locations and contexts, enabling travelers to discover the aforementioned Aesop products in the Park Hyatt Tokyo, Equinox members to sample Kiehl’s moisturizer, or Entourage fans to watch Vince sipping Avión tequila.
The next evolution of this in-context advertising will bring personalized, intuitively placed products into the home through seamless coordination by trusted services. This represents a multi-billion-dollar realignment in retail marketing. In this coming phase, the fundamental dynamic that has ruled commerce for centuries, “market to me”, will cede ground to a new system in which commerce is organically integrated into what we do and how we live.
We’re seeing some experimentation with multinationals who are already experimenting with this “no click” approach. In one case, consumers received sample products, delivered directly into their refrigerators, to preview and then opt-in to receive them continuously, restocked in their fridge. A pilot of 500 homes had a conversion to a weekly delivery subscription of 17 percent. Imagine the brand building and sales implications if those figures were extrapolated across the country, for more categories.
There are lots of reasons to be excited about organic fulfillment. Previously disconnected parts of the marketing funnel — brand building, consideration, and purchase — come together in hyper-targeted, in-home placement. And results are immediate as distribution in the home offers the most complete ROI and feedback loop available.
Marketers now have the opportunity to serve up one-to-one marketing experiences in person and will need to embrace next-level fulfillment if they want to break out of their stalled growth, create deep consumer relationships, and fend off direct-to-consumer upstarts with cool names, minimal logos, and VC cash.
Lean Luxe subscriber Marcela Sapone is the co-founder and CEO of Hello Alfred, a NYC-based on-demand hospitality and services company. The views reflected here are those of the author and do not necessarily reflect the views of Lean Luxe