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Jonathan OpdykeCEO and Co-FounderHookLogic
HookLogic, a performance marketing platform, works with retailers and online travel sites to help brands gain critical insights into which ads are driving sales and where to target those ads. CEO and co-founder Jonathan Opdyke spoke with eMarketer’s Patricia Orsini about CPG brands’ ecommerce challenges and what they are doing to increase sales.
eMarketer: What are some of the major challenges for consumer packaged goods (CPG) brands in ecommerce?
Jonathan Opdyke: The vast majority of the marketing opportunities for CPG brands are at the grocery retailers. Also, CPG products are bought in large baskets—we don’t buy butter alone, we don’t buy laundry detergent alone. And with an online store, you no longer have the automatic visibility on the shelf. Think about shopping on a mobile app: You might see four products on the screen. So it is fundamentally important to be listed high in those applications.
eMarketer: How does HookLogic work with brands to help them be seen by online shoppers?
Opdyke: The reality is that in an algorithmic approach, sometimes it can be very hard to jump into the queue. ... If you’re putting out a new model or selling things online for the first time, you may be deprioritized out of the gate because you’re competing with brands that are selling well.
Depending on how the algorithms work, there may not be a natural push to the top. And so buying your way to the top may be the way to get the [buyer] to recognize you, and create the beginnings of a profile; the algorithms start to take over, and you get listed higher.
What we’ve been able to validate in terms of paid search is that it helps you own more of the digital shelf and own better positions on the digital shelf. Then it’s more about optimizing and finding how much of the digital shelf you can build.
eMarketer: Once a product is doing well on the digital shelf, are there other challenges they must deal with in order to make the sale?
Opdyke: It comes down to four Ps: placement in the approach. The packaging has to be right. The price has to be right. The promotion has to be right in order to win out.
eMarketer: Would another challenge be convincing people to purchase online?
Opdyke: To some degree. That’s the job of the retailer, to get people to build carts, and create an online shopping experience that people want to use.
eMarketer: Can brands have any effect there?
Opdyke: There’s the element of inspiration. We allow advertisers to cross-sell categories. For example, a spice brand could target the meat category. A shopper might be filling their cart with a typical weekly order, not thinking, “I need to restock my spices.” But in an ad on the meat section, there’s an opportunity to be seen.
We may even be able to help stimulate the start of an online shopping cart by showing somebody a really interesting food item and saying, “We’re online now in Peapod” or some other online retailer. That gets them to go and start a Peapod cart, and then they might add a bunch of stuff in order to get free delivery.
eMarketer: How else can CPG brands stimulate sales?
Opdyke: With something like Peapod, a shopper might be starting their order on Monday but reserving a spot on Saturday for the delivery. Throughout the week as they run out of things, they continue to add to the cart.
There’s a huge opportunity in that gap period to inspire them to add, based on what’s in their cart already, what has been in their typical cart, using various predictive elements that you can start to home in on. It’s as if someone is walking around the store for six days straight, as opposed to what’s typically a 45-minute journey.
eMarketer: Online sales in the CPG sector are still quite small—most estimates say they are 1% of overall sales. How quickly do you see it growing?
Opdyke: There is a greater acceptance among people who have [shopped for groceries online]. Once people start doing it, they don’t go back. It’s growing in acceptance in much the same way that ride-sharing wasn’t a big deal years ago, but it’s now become massive.
We see every major grocery chain making online retail a major initiative. Some are further along than others, but it’s feeling much more inevitable vs. the spinning of the wheels that happened 10 to 15 years ago.
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