Unilever buys Dollar Shave Club - Is this the emerging era of direct mass marketing?

Last week, Unilever announced it had acquired Dollar Shave Club.  Tech Crunch carried an interesting article on the $1 billion acquisition and the challenges reputed & established FMCG brands face with the onslaught of innovative and emerging brands. 

FMCG companies have been living in an era of mass marketing for over 100 years now. They have working on the premise that if they  create a great brand and have an efficient supply chain, then the sale is done. Hence, over the last few decades, they have been working on building an efficient supply chain and ensuring the stocks are placed ahead of competition and replenished efficiently. As far as the customers were concerned, if they had a top-of-mind recall about the brands and if there was availability when they landed in a retailer's store, the sale was completed. However, digital disruption and democratization of technology is transforming the  FMCG industry. Leaders like Unilever, P&G, Nestle, L'Oreal and the like have been reeling under this disruption.

The thinking of FMCG companies has to move from managing the supply chain to building a robust demand chain. The FMCG companies' supply chain approach  is about 3P strategy- " Place, Push & Purchase". However, the demand chain approach requires a drastically different mindset which is a 3F strategy " Find, Fill & Fullfill". The customer behavior here is about "Discover & Buy" rather than "Reach & Buy". Also, it is no more about replenishing retailers'' stock but it is about replenishing customers' stock. This for FMCG companies turns their marketing thinking on its head. However, the customers are lapping it up, as they are able to get value & convenience like never before. This also throws-up new big data opportunities about customer purchase behaviour for FMCG companies as new direct-to-customer digital channels are emerging to engage with customers and they now need to understand the insights that arise out of these huge data sources.

The era of direct mass marketing is around the corner for FMCG companies and they need to serve these customers in new ways in the future.



Marketing is getting rewired- How do marketing specialists rewire themselves?

I was reading Bill Lee's  HBR blog article on Marketing is dead. Quite an evocative headline, I must say. We have either heard or seen such headlines for example - CRM is dead, Long live CRM!

So, I wanted to get away from the hyperbole to the real message or take-out there from his article. There is nothing extraordinary in the article that one has not read or seen in the blogs, conferences or discussion forums over the last couple of years. The key questions to me is how is it being practiced on the ground?

I agree with Bill Lee that there is a tectonic shift in how traditional marketing will be done in the future but the chasm within the marketing specialists still remain which is the biggest challenge and pain for marketers. 

Lee talks about about four key points that is needed to rewire marketing as against the traditional marketing model that is broken:

  1. Restore Community Marketing
  2. Find your customer influencers
  3. Help customer influencers with social capital
  4. Get your customer influencers involved in the solution you provide

The interesting aspect of making this change happen is how will marketing specialists - advertising, public relations, digital marketing, CRM & analytics have to adapt themselves to these new rules. What I observe today is that the advertising folks have a poor understanding of community marketing or content marketing or database marketing while digital marketers have a relatively poor understanding of brand keys and architecture and public relations folks talk only about online reputation management(ORM). This is where marketers get frustrated with their marketing partners. 

Here's what I believe can make it happen on the ground:

  1. Hire outside their disciplines- Many of these specialists need a higher appreciation & respect of the techniques of the other and a seamless fusion of each of the strategies into their marketing plans is increasingly important if this model has to be fixed. 
  2. Identify leaders as orchestrators - There is a need for what I call as orchestrators in each of the specialist disciplines who have the ability, skills and competency to tie-up the loose threads that emerge of out their team's plans into the other discpline or play a seeding role of embedding an idea of the other discipline within their marketing plans. Therefore, they lead the customers across their decision journey for their client's brands. 
  3. Clients need to identify conductors within their teams - I believe time has come for CMOs to look for conductors within their teams who demand and define the "tight connections" between the outcomes of each of these specialist disciplines & orchestrators within these specialist teams to make this happen.


Is your business ready to pick-up intentcast from customers?

The word "intentcast" has been used by Doc Searls, one of the proponents of customera taking control of their own data vs companies take control of the data.  He has written a brilliant piece in Wall Street Journal - Customer as God basis his new book intent economy.

 He makes a very strong point by mentioning that businesses treat customers like a cattle herd and they have to get ready for personal empowerment.

I personally believe this is true and agree with Doc totally. Here's why there's a silent revolution that's happening in the customers' own world:

  1. Businesses are increasingly finding a large majority of their customers really don't want them to be reached out to. The digital mediums of mobile, web make this "shut-out" very easy. I have heard customers say that You Tube Ads are annoying - be it the banners or the ads before the videos. They just are blind spots. The best customers don't want to be bugged with messages and worst customers  businesses don't care any way!  They need to find a new model to appeal to both.
  2. It is sometimes extremely painful to provide information to businesses and many a times the same information is sought again and again across different parts of the same businesses  and across the internet. Information is not seamlessly transported across the pockets of businesses or across different sites they are present on the web.
  3. Customer's personal information is treated with very little respect as tracking by cookies, content is widespread. Search for information is treated as " intent to buy" which may not be the real case in the offline world.  Walking in the high street or mall does not mean we are opening the wallet to buy.
  4. Rather "intent to buy" must be treated as information and bussinesses must find flexible ways to build conversations with customers. Not all conversations are purchase conversations.
  5. If businesses  own the platform along with customers who intend to know, understand, compare, evaluate and purchase, then at least customers will give them a chance.
  6. In my opinion, Intentcast is the end of the sales funnel but bussinesses that lead  customers to the end of this funnel will be the ones that will gain trustshare and then marketshare.