While we can tell our clients how effective rewards programs are, the best way to demonstrate this is through a rewards program case study. As the leading consumer rewards app, the Shopkick team knows that CPG brands are particularly challenged by the need to stand out, as many consumers are switching from traditional grocery shopping to e-commerce options. These CPG brands are challenged with finding ways to gain attention both on the store shelves and in the digital space. This was the case with a well-known coffee brand that we had the opportunity to work with. Validated by a third-party Nielsen Catalina Solutions study, we were able to prove the effectiveness of rewards programs for CPG brands.
In this case, the client had a few different goals they hoped to reach with a mobile app-based campaign. The brand’s main goal was to increase awareness of its seasonal flavors while also increasing sales for its packaged coffee products. They wanted to be able to incentivize their customers without becoming reliant on product discounts. Through tailoring a program based on their very specific challenges and opportunities, Shopkick was able to help them reach their goals for both increasing brand awareness and improving sales.
The Challenges of Marketing CPG Coffee Brands
The coffee category is a crowded one. A quick visit to the coffee aisle in any grocery store will show how filled the market is with famous brands and niche options. Marketing coffee to consumers is a challenge for many reasons, including:
- Convenience: Only about 8% of Americans buy whole bean coffee: The majority prefer convenience and value, which has given Keurig Green Mountain, a pod-based brand, control over an incredible 20% of the market in recent years.
- Taste: While price was long considered the deciding factor for consumers seeking out coffee brands, it has been shown that almost 60% of consumers choose their coffee based on flavor. Marketers then must find ways to convert consumers to a brand or product, or encourage them to try it.
- Consumer Loyalty: Consumers may not be terribly loyal in general when it comes to CPG brands, but coffee is the exception: About one-third of consumers report always purchasing the same kind of CPG coffee brand.
Keeping these challenges in mind, Shopkick needed to create a strategy that would help our client stand out in the coffee market. The client’s brand wasn’t the lowest cost, and they were trying to gain attention for a seasonal item, so we needed to create a strategy that would pull CPG market share from other lower cost or similar brands.
Creating a Strategy for In-Store Sales
To drive sales for the coffee brand, we focused on two key decision-making moments for the consumer: the planning phase, as the consumer was preparing for their trip to the store; and while that consumer was in the seemingly endless shopping aisle. We capitalized on these moments using several different methods:
- Timely video advertising: Video is a proven converter, with one study indicating that video viewers were up to 85% more likely to purchase a product than those who did not view video. In this case, we added both video and editorial content to the pre-shop process, to familiarize consumers with the client’s new products before they left home.
- Incentivized in-store sales: For this, we offered “kicks,” which are Shopkick rewards, to customers who found the products in the store. These kicks can be traded in for mobile gift cards, which is a good way to incentivize customers in the store without offering a discount.
- Measured data on the purchase journey: One additional benefit of the mobile campaign was that we were able to provide purchase journey data to the coffee brand, so they could see where and when consumers were motivated to buy. This information could then be leveraged within future campaigns.
This three-prong strategy allowed us to provide insight into customer behavior for the brand while also improving brand awareness and in-store sales. By using timely messages, combined with in-store incentives, we were able to help this coffee brand reach and exceed their goals.
The Results of the Campaign
Through our mobile app strategy, we were able to see significant improvement for both product awareness and sales for this coffee brand. Specifically, we saw:
- 66 million campaign impressions overall, increasing brand awareness
- An 8% increase in total incremental sales lift, with 42% of those incremental sales coming from new buyers
- A $1.36 return on ad spend across the entire brand portfolio
- A 1.07% total share shift
Of course, these are just the immediate and direct results of the campaign. Consumers who took a chance on the brand for the first time may have shifted their loyalty to that brand in the future, meaning that this is a strategy that pays off long-term as well.
A strong performing rewards program can be a major boost to both established and new CPG brands. Through our campaign, a mature coffee brand was able to gain greater recognition for seasonal and new products while also improving sales. By incentivizing buyers and leveraging video, this CPG brand saw great results in an incredibly competitive category.
Image courtesy dolgachov