The new Nielsen Consumer Packaged Goods (CPG) Retail forecast for 2015 predicts the largest dollar share gains in mass supercenters and ecommerce, growing by a combined 5 share points between 2009 and 2015. They suggest that this gain will be fueled by the rise in mobile Internet use, with smartphones becoming the primary engagement channel for shoppers (http://tiny.cc/dps0g).

The accelerated rate of growth for ecommerce seems especially challenging, considering it would need to double the rate of growth from the last 10 years in the next 5 to achieve the 10% share prediction. In order to achieve this kind of growth, I think two things need to happen: one, the idea of ecommerce needs to change, from online purchase only, to partial attribution for online-influenced purchase; and two, a shift in the way that brands connect their efforts across online and offline channels, to integrate Internet capability into their business and marketing frameworks.

Fig. 1.1: MakeBuzz Dual Customer Journey

For companies to leverage the Internet as a sales and marketing channel, as well as for geo-targeting, they must have a framework in place that can facilitate this shift in buying behavior. The current user experience for most websites on smartphones is still lacking, and most brands still need to install other basic efforts to close the gaps in the dual online-offline customer journey. As the smartphone device will continues to evolve, CPG brands need to have this framework in place to support and respond to external innovation, while fostering their own internal innovation.

Neilson is predicting big numbers ahead for ecommerce but in order for this to happen, brands will need to update their business frameworks to be as agile as the consumers they propose to reach, and as innovative as the devices they plan to use.

I recently saw a video of Jeff Jarvis, author of What Would Google Do? and the popular blog BuzzMachine. He was talking about the idea of the Internet as “connection machine” that “cuts out the middle man” and allows for a direct relationship between the consumer and the brand. He goes on to say that this relationship is far more valuable than the one gleaned through stores and advertising.

What he neglects to mention, however, is that in the real world, a brand cannot be sustained through this connection alone.
Ideally, the Internet is additive to other efforts. Stores can be a vital customer touch point, giving consumers an array of options and a visceral experience that cannot be matched online. Companies that try to subsist off of a direct relationship usually only do so for a short time, before their value eventually weakens. These companies are able to stay afloat through residual brand value created by their marketing and stores, but ultimately, their brand (and sales) decline.

In fact, the only company I can think of that needs very little advertising and no storefront is Amazon, but they rely on the brand value of their products— not their own brand per se. Think of Apple without the advertising or the stores and what do you have?

And what about those start-up brands? How do we propose they build a customer base without marketing and advertising? How do we introduce people to these new products if not through display and touch? I’d like to suggest that Twitter is not the answer and would be hard-pressed to name a brand that was built online alone.

The truth is still that ecommerce makes only a small percentage of the retail economy and the Internet can help drive offline sales, but it is not the primary outlet. As appealing as it may be to remove the “middle man”, or the advertiser, the Internet has not made this happen. What it has done is given the consumer a voice, and provides a channel for dialog between the consumer and the brand, to which marketing can respond.

I came across an interesting article in the New York Times entitled “A Quest to Learn What Drives Consumer Decisions,” http://www.nytimes.com/2010/06/30/business/media/30adco.html saying that Draftfcb, owned by the Interpublic Group of Companies, is opening what it is calling the “Institute of Decision Making, devoted to finding out more about the instinctual ways that consumers behave along with the rational and emotional ones.”

Consumer thought and motivation are great subjects, filled with plenty of opportunity for academic theory, with profound output. Ask yourself: In 2009, were you really looking for an iPad-like device? Many of the most-desired products are very difficult to predict in the absence of prior experience and data streams. In my own line of work, I often consider the fundamental needs driving consumer behavior, to determine how brands can best meet those needs.

But after researching this Institute a bit more, I found myself wondering whether an entity that owns ad agencies could really pursue this question, considering the potential conflict of interest that might arise from their findings. I’m most concerned that whatever good does come out of this intellectual pursuit doesn’t get twisted to fit a tired business model. I feel like every few years, I hear about Madison Avenue’s “new solutions” that merely seek to sell traditional media in service of big agencies.

I think the true means of discovering consumer motivation and thought processes is through independent analysis that focuses on the big picture, and not discrete channels of data. The more time spent on discerning the neuroscience behind deciding which brand of beer to buy, can mean less time spent on the common sense and macroeconomic analysis that can inform a truly effective marketing and business strategy.

If the goal is to connect with consumers, there are much more practical ways to proceed, and I would proffer that the very least of the requirements in an independent, media-neutral ‘research’ institute.