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ECOMMERCE

MARKETING IN A DIGITAL WORLD

BY COLLIN DOUMA, GLOBAL DIGITAL PLANNING LEAD & STEVE WHITE, ECOMM PLANNER OF THE– GILLETTE Proprietary BAL and Confidential


ECOMMERCE

MARKETING IN A DIGITAL WORLD

WHEN YOU LOOK AT THE PREDICTIONS MADE DURING THE PEAK OF THE (INTERNET) BOOM IN THE 1990S, ABOUT ECOMMERCE, OR INTERNET TRAFFIC, OR BROADBAND ADOPTION, OR INTERNET ADVERTISING, THEY WERE ALL RIGHT - THEY WERE JUST WRONG IN TIME. CHRIS ANDERSON EDITOR AND CHIEF WIRED MAGAZINE

BY COLLIN DOUMA, GLOBAL DIGITAL PLANNING LEAD & STEVE WHITE, ECOMM PLANNER OF THE GILLETTE BAL

There’s no doubt the task of hitting a 500+ index on eNOS in less than 3 years is a daunting one for the BAL. It seems outright impossible in the terms of fiscal 11’12. But if P&G is willing to mix a radically different approach to eCommerce, with a healthy dose of entrepreneurism and a dash of reasonable investment, there’s no better place to nail a direct ROI than in digital retail. The difference in approach will become clear in the following pages. You will be asked to think differently about your category, how guys shop, what guys want. You will be challenged to change Gillette ‘s behavior for them, instead of asking them to change their

behavior for you. This will be the determining factor in success or failure of this ask. Currently, guys simply don’t need Gillette selling them stuff online. We need guys buying our stuff online. With this basic truth, we will first need to consider if we manufacture demand or answer a hidden consumer behavior to drive real business results. With these goals, we’re sure there’s very little room for the luxury of choice. We instinctively believe it is both. eCommerce is as much a marketing initiative as it is a core retail channel. In effect, we are building a direct to consumer eretail system. Let’s not underestimate what that actually

means. This is not an advertising play. This is a core business offering that, if done correctly will directly impact your bottom line and will require marketing thinking and advertising to promote it. This document should be evaluated as thought starters to a business proposal rather than a marketing plan. If that is granted, all else will follow.

ECOMMERCE IS NOT AN ADVERTISING PLAY. IT’S A CORE BUSINESS OFFERING THAT, IF DONE CORRECTLY WILL DIRECTLY IMPACT THE BOTTOM LINE. – Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

ECOMMERCE EVERYWHERE. THE MAGNIFICENCE OF UBIQUITOUS AVAILABILITY. Is Gillette the largest male brand in the world because of advertising? Obviously not, the history, the innovation and the sheer quality of the product has earned Gillette its high ranking as one of Interbrand’s top global brands. But these measurements alone wouldn’t qualify Gillette if not for distribution. Gillette products can be found on store shelves from Pond Inlet Canada to Punta Arenas Chile, from John o’ Groats Scotland to Cape Town South Africa, from Porto Portugal to Naukan Russia. A distribution network that is rivaled by the likes of Coca Cola, (the only FMCG ranked above Gillette on Interbrand’s list.) It is the distribution of it that makes Gillette so big today. King once quipped “There is no other article for individual use so universally known or widely distributed. In my travels, i have found it in the most northern town in Norway and in the heart of the Sahara Desert”. It is the same thinking that will get Gillette it’s right sized position online. And it will be an easier task to realize than the one that Gillette himself was facing all those years ago. Our success will be limited only by any limitations on our drive to achieve it. And therein lies the core of our strategy. The magnificence of ubiquitous availability.

eCommerce everywhere. Let’s think less about social media, above the line advertising, football and brand assets, bricks and mortar and online stores and let’s think about the entire world as a store. In this store, we can buy anywhere at any

THERE IS NO OTHER ARTICLE FOR INDIVIDUAL USE SO UNIVERSALLY KNOWN OR WIDELY DISTRIBUTED. IN MY TRAVELS, I HAVE FOUND IT IN THE MOST NORTHERN TOWN IN NORWAY AND IN THE HEART OF THE SAHARA DESERT. -KING GILLETTE time. Our guys will not seek us, but they will find us nestled in the corner of their daily digital ritual. They will find us on the subway, on the highways, in the streets, in their homes, on the backs of chairs, on their phones. Indeed, the store is everywhere we choose to place it. Our guys will see us when they need us and we’ll be barely visible when they don’t. They will connect with us as frequently as they determine, and we will be waiting for them. And we will share with them our common goals, so that we might achieve them together. This truly is the difference between then and now.

OUR SUCCESS WILL BE LIMITED ONLY BY LIMITATIONS ON OUR DRIVE TO ACHIEVE IT.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

THE THREE FRONTS. WHERE GILLETTE WILL MEET HIM. When looking at eCommerce, we ought to apply the “Catch Connect Close Continue” model against it. Let there be no doubt that Close is the priority, but simply closing the deal is not enough to bring in “More Men, More Often, More Completely”, those steps need to happen before. “Closing” alone also fails to consider a strategic approach to consumers who are current, willing but don’t know how, or are unaware that there is even this option available. Three fronts to tackle emerge and if executed with brilliance and precision,will lead us confidently to our goals.

APPEALING TO HIM IN DIGITAL FMOT

THE CUSTOMERS

P&G OWNED BASKETS

GILLETTE INNOVATION

STRATEGY: CLOSE/CONTINUE TARGET: CURRENT BUYERS

STRATEGY: CATCH/CLOSE/CONTINUE TARGET: POTENTIAL BUYERS

STRATEGY: CONNECT/CLOSE TARGET: POTENTIAL BUYERS

Get current online shoppers to close more often by optimizing digital FMOT experience and incentivizing repeat purchase on existing customer sites. Current eRetail partners include giants like Amazon, eBay, Walmart, Target, Costco, Drugstore.com, and thousands of smaller pharma, grocery and deli delivery services around the world. A continued focused effort around the optimization of the Digital shelf and eCRM program will serve to frame up the need.

Get current online consumers who have never bought Gillette online to buy Gillette online P&G has an eStore that provides a basic shopping basket to close any deal. Facebook eCommerce and Gillette.com are white labeled eStore fronts and the Art of Shaving eStore is selling Gillette products every day. The question is, how do we develop a single, flexible eCommerce platform so we can innovate new and creative ways to bring the “low hanging fruit” into Gillette Direct eCommerce.

Get current online consumers who have never bought CPGs online to start and stay with Gillette. Once Gillette has an established shopping basket, we will be in a position to innovate. The effort to size of prize ratio is very favorable in this area promising a massive ROI. Consider the following eCommerce innovation models as a tip of the iceberg once our eCommerce platform is functioning.

Digital FMOT

Direct to consumer

...how does it work? Why? (7) ...what is Gillette doing now? (5)

Never stop improving

Subscriptions Subscription Gifting Affiliate Programs Virtual Bundles Decentralized Storefronts Mobile ...find out what is going on! (8)

KNOWLEDGE IS POWER In order for us to really prioritize and plan each of these columns, the BAL has a lot of questions we need answered that include, but are not limited to; What is the path to purchase? What are the purchase barriers? Where do they make the purchase decisions? What are the strongest influences of those decisions? What is the size of prize per channel currently? What is the profit margin per transaction? How can we identify and track past and future transactional details. How shall we track business data for optimization?

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

DIGITAL FMOT.

CONTINUED LEADERSHIP AT GLOBAL ERETAIL. THE DIGITAL SHELF Gillette continues to be a leader within CPG products in producing digital content, delivering against its business goals of closure, regimen, trading-up and increased trial.

GILLETTE DIGITAL SHOPPING CONTENT IS CONSIDERED “BEST-INCLASS” GLOBALLY, AS RECENTLY CALLED OUT BY P&G DIGITAL LEADERSHIP. This construction of an “always on” presence will ensure shoppers are delivered a consistent equity across the globe. These eRetail “shelves” show up at retail with a compliance percentage which outperforms traditional bricks-and-mortar stores while offering dynamic flexibility to promote regional programs and cultural specifics. For eRetail to deliver on the promise of More Men, More Often, More Completely, Gillette will need to focus on three areas this year and in years to come; continued “always on” content development and global distribution, attraction (awareness) among men shopping in eRetail via iMedia and merchandising, and channel product innovation. Robust plans and the full weight of the BAL partnership’s expertise are being deployed against these goals.

ECOMMERCE STOREFRONTS STOREFRONTS CONTINUE TO BE A USEFUL TOOL TO EDUCATE SHOPPERS ON THE ENTIRE SHAVE CARE

“Always On” Content and Global Distribution Gillette is currently delivering “always on” for eRetail in the form of Product Pages, Storefronts and robust Enhanced Educational Content. Each of these areas help with the top eCommerce shopper barriers of awareness and shipping. At the same time, they bolster our ability to improve search (SEO) and deliver peer-to-peer reviews, which shoppers count on when preparing for online and offline shopping trips. Gillette continues to globally distribute its BIC assets for eRetailers to deploy in local markets through Global eCommerce Toolkits. Increased regional training and understanding eRetailer needs at the local level will result Gillette’s ability to deploy more sophisticated, localized and customized shopper programs in the coming years. Layered with eRetail programs to overcome shipping, selection and price barriers, each of these partnerships is key to delivering on the promise of long-term eCommerce growth. Distribution and eRetailer site limitations will limit, and ultimately restrict the aggressive growth desired by Gillette in eCommerce, making eRetailers only one part of a larger solution.

ENHANCED CONTENT ENHANCED CONTENT IS GILLETTE’S EFMOT, HELPING TO CLOSE THE SALE AND PROMOTE PREMIUM SYSTEMS AS THE SHOPPER SOLUTION. GILLETTE’S BEST-IN-CLASS CONTENT IS EASILY PORTABLE TO ERETAILERS ACROSS THE GLOBE.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

AWARENESS

RESEARCH SHOWS US A NUMBER OF MEN ARE SHOPPING ERETAIL BUT SIMPLY LACK THE AWARENESS OF THEIR ABILITY TO BUY MEN’S GROOMING PRODUCTS. A LARGER STUDY ACROSS ALL P&G PRODUCTS SHOWED THE UPSIDE OF THIS AUDIENCE ALONE AT $5B (P&G CMK STUDY 2010). Gillette continues to deliver awareness drivers to eRetail in both online and offline via earned and paid media, delivering record indices in YOY eNOS growth. iMedia and eRetailer site merchandising continue to be a valuable strategy for delivering shoppers Delivery Innovation Delivery innovation at eRetail will continue to define profitability and deter counterfeit problems for Gillette. Already delivering in SIOC (ship-in-own-container) Gillette

is better able to control FMOT in the home and create efficiencies providing value for online shoppers. This type of continued innovation and “design for the channel” mentality will help eRetailers to play a significant part in Gillette’s overall global eCommerce sales globally. eRetailer Integration As Gillette strives to deliver more customized solutions for eRetailers, it will make sense to partner with them by participating in their proprietary programs. These partnerships are similar to those within bricks-and-mortar stores and can help Gillette get additional awareness and purchase intent from eRetail shoppers. Each one of these programs is deliberately modular for global deployment but they are strategically designed to work together, reinforcing Gillette’s goal of closing the sale and driving awareness for its Shave Care products.

IMEDIA BOTH ONSITE AND OFFSITE IMEDIA HELP GILLETTE TO ADDRESS THE AWARENESS SHOPPING BARRIER AND REINFORCE BRAND EQUITIES AND MESSAGING.

PACKAGE & DELIVERY INNOVATION IN MANY INSTANCES GILLETTE AND OTHER BRANDS ARE NOT DESIGNING PRODUCTS SPECIFICALLY FOR THE ECOMMERCE CHANNEL, WHICH LEVERAGE ITS UNIQUE CAPABILITIES

CUSTOMER CUSTOMIZATION AFFILIATING GILLETTE WITH ERETAIL PROGRAMS THAT APPEAL TO ITS SEGMENTS, ESPECIALLY POME, CAN HELP CAPTURE THOSE ALREADY SHOPPING THE ECOMMERCE CHANNEL AND ENTICE THEM TO BUY.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

DIRECT-TO-CONSUMER ECOMMERCE. CONTROL PROVIDES SHOPPERS THE ULTIMATE UTILITY. Having successfully leveraged (and sometimes created) a global distribution network for retail, Gillette sits at the precipice of the next great frontier: The Front Door Direct-to-Consumer eCommerce at its essence is a continuation of the very thing which started this story, distribution. Now, instead of being steps away from every household in the world we can actually be inside each of our consumer’s homes, providing the products, advice and leadership they have come to expect from Gillette. While computers and (more important globally) the mobile device have allowed shopping Gillette products from the home for some time, it has always taken place via an eRetailer. The struggles with this model are twofold; provide value while making a profit and eRetailer priorities. Gillette has to keep eRetailers stocked with products, manage inventory and work with a sales force, all costly endeavors. This makes delivering shopper value (which they demand of online shopping) difficult.

REMOVING THE ERETAILER AND, INSTEAD, SHIPPING FROM “PRODUCTION LINE TO BATHROOM” GIVES CONTROL BACK TO GILLETTE AND UTILITY TO SHOPPERS. In the eRetailer model, their priorities often outweigh those of Gillette. Their promotional framework, navigation, search and recommendation engines are all for their benefit not the

PRODUCT SEARCH AND SHOPPER-BASED DESIGN IN MANY INSTANCES ERETAIL SITES ARE NOT OPTIMIZED FOR GILLETTE OR THE GREATER SHAVE CARE CATEGORY. THESE TYPES OF BASIC SHOPPER-BASED DESIGN ISSUES CAN BE CONTROLLED THROUGH A DIRECT-TO-CONSUMER MODEL AND PROVIDE UTILITY TO SHOPPERS.

individual brand. Some of the fundamental issues with awareness, product access and display could be solved with navigation and search changes to eRetail sites. However, while these changes may help Gillette or the shave care category they are not overall beneficial to the retailer or their prime shopper in many cases.

customization at a local and personal level to increase closure, build basket and promote regimen for Gillette men.

While Gillette will continue to respect, support and rely on global eRetailers as part of its success, DTC eCommerce is the only way to deliver the utility, flexibility and value key to achieving Gillette’s long-term Owning the basket and creation of a eCommerce goals. It can serve as the direct-to-consumer site will allow main hub of a global eCRM program, Gillette to control these shopper-based launching pad for new products, design principles and design search, home for auto-replenishment and product display and recommendation loyalty programs - all free from engines specifically for shave care competitive products. and Gillette. Further utility will be realized through the creation of

DIRECT-TO-CONSUMER SUCCESS NO CATEGORY HAS BENEFITTED MORE FROM THE DIRECT-TOCONSUMER MODEL MORE THAN THE CLOTHING INDUSTRY. STILL THE #2 CATEGORY ON ERETAILERS LIKE AMAZON.COM, THEIR OWN SITES PRESENT THE OPTIONS THEIR SPECIFIC CUSTOMERS WANT AND CREATE NAVIGATION, SEARCH AND PRODUCT DISPLAY SPECIFICALLY FOR THEM. FINALLY, CUSTOMIZATION WITHIN THESE SITES CREATES REAL UTILITY FOR USERS AS THE SITES ADAPT WITH EACH SUCCESSIVE USE.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

GILLETTE INNOVATION. NEVER STOP IMPROVING.

Innovation has been the lifeblood of Gillette from the very beginning, and leveraging innovation against a direct-to-consumer eCommerce site will help realize the goal of personalized relationships with men. An ongoing theme across shopping, web and mobile continues to be customization as utility. Partner eRetail sites are working hard to create customization based upon shopping preferences, lifestyle and demographic information. Because Gillette does not own this information, or the basket, it will always be limited without a direct-to-consumer option. With business challenges highlighted by compliance, consumption and compounded by competition and

IN 1895 THE VISION SPLENDID CAME AS GILLETTE STOOD BEFORE A MIRROR HONING HIS CUT-THROAT RAZOR. THE ONLY PART OF IT WHICH DID ANY WORK, AND NOT MUCH AT THAT, WAS THE EDGE. WHY FORGE AND TEMPER A HUNK OF STEEL JUST AS A BACKING TO AN EDGE? “I STOOD BEFORE THAT MIRROR IN A TRANCE OF JOY,” HE WROTE TO HIS WIFE. “I HAVE GOT IT. OUR FUTURE IS MADE.” - KING GILLETTE

trade-out, personal relationships and advocacy are more important than ever before. The following pages illustrate a vast number and range of thinking in the area of innovation within the digital landscape.

SUBSCRIPTIONS.

MOVE VALUE, MORE OFTEN, MORE COMPLETELY. A model wherein consumers subscribe to CPG items has already proven successful in the diaper category. Mom’s are purchasing what they need, at price parity, with the convenience of home delivery, “never running out.” Replicating this model for men requires insights into their purchase behavior, buying triggers and interactions with retail. (see Knowledge is Power) Since a purchase trigger for men is often “running out,” this model is attractive for the same reasons as diapers are to women. Diapers have been able to succeed in increasing

consumption, driving brand scale and improving customer loyalty. All areas where Gillette can win. Current eRetailers provide subscription options, but they are cumbersome, separate for each item and include a discount. Following the eCommerce insight that Apple’s iTunes have taught us Sometimes $1 is cheaper than free the convenience of finding the song and the reliability of its quality is worth 99 cents compared to seeking it out with questionable quality from other sources. Gillette could learn from this value reframing model and build a much more appropriate

subscription model based off the convenience of never having to think of it again without discounts, providing utility and encouraging participation. Gillette can innovate within this space under a direct-to-consumer model by providing subscription packages unique to each of its men while promoting trade-up and all of its shave care products. Guys can subscribe for their whole face. Within this model, discounts are traded for real utility creating loyalty and increasing consumption for Gillette.

SUBSCRIBE & SAVE CURRENTLY AMAZON IS THE ONLY RETAIL PARTNER TO PROVIDE A ROBUST SUBSCRIPTION OPTION FOR GILLETTE. HOWEVER, THEIR DEEP DISCOUNTING MODEL AND CUMBERSOME INTERFACE DOESN’T PROVIDE REAL UTILITY FOR SHOPPERS OR CROSS AND UPSELL FOR GILLETTE

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

TROY.

REFRAMING VALUE WHILE INCREASING NOS. SIZE OF PRIZE? ~$10 MILLION. Troy shaves twice a week with ProGlide and Fusion Gel. He changes his ProGlide cart once a month, getting between 8 and 9 shaves per cart. He reluctantly spends about $32.97 on 8 pack of carts on Walmart.com. He usually clicks in a 7 oz gel can of shave prep at the same time. This means, about twice a year he gets dinged for $36.53 for his basic supplies. 

The following father's day, Troy gets an email that suggests that a shaving subscription would make a great Gift for his Dad. He estimates the frequency of his father’s shaves, and pays $75 one time to give his Dad a years worth of "top of the line" shaves with a free personalized DOP kit bag.

He grumbles.

Before subscriptions, Troy was worth about $54.79 a year to Gillette. In subscription year 1, Troy became a $68.04 consumer. A 24.1% increase.

Soon, Troy will see a communication claiming he will only have to buy shaving products once more in his life by visiting Gillette.com There, he can "subscribe" and be done with it.

In subscription year 2, Troy became a $70.68 … A healthy 3.8% increase, But now he annually renews his Dad's Subscription making him worth $145.68 a year. 

He clicks straight away where he is greeted with Of course Troy sees this as $5.90 a month, with a shaving profiler. He is asked what system and an annual fee of $75 for his dad. prep he uses. He is offered an upgrade to pro series prep yet decides to decline. Troy is worth 165% more to Gillette than he was before subscriptions and he barely notices. He is then asked for the frequency he shaves and he answers dutifully. The system recommends changing the cart 2 times a month. Troy declines and enters 1 time a month.  The system then calculates out his actual annual shave cost at $54.97 (full retail) and displays the amortized payments over 12 months. Troy learns he's shaving with ProGlide for only $4.56/month this actually seems pretty cheap to Troy… so he clicks the link prompting him to add the Thermal Scrub and Cooling lotion for the slight monthly increase of $1.11. Troy now shaves top of the line for $5.67 a month. He enters his credit card number. And moves on with life. Once every few months, his supplies simply show up.

I’M NOT ENTIRELY INTERESTED IN TALKING ABOUT SHAVING CREAM - TROY

One day Troy got a free upgraded razor (400) with his regular order with all carts upgraded. He can keep the new system and carts if he likes it or not. There is a call to action in the box that tells him to go online and adjust to this new system for an extra $0.22 a month.  No brainer. When there, he adds an extra cart a year, as he always seems to be running that last one a long time before new ones arrive. 

TROY IS WORTH 165% MORE TO GILLETTE THAT HE WAS BEFORE SUBSCRIPTIONS AND HE BARELY NOTICES.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

SOCIAL-CONTROLLED PRICES UNIQLO

CAMPAIGNS WHICH INCENTIVIZE VIA SOCIAL MEDIA SOUND LIKE THE PERFECT SOLUTION TO MONETIZING A PRESENCE ON TWITTER/ FACEBOOK ETC. HOWEVER, THERE IS ALSO AN ARGUMENT WHICH STATES THAT A 'TWEET FOR DISCOUNTS' MODEL DOESN'T CONSTITUTE GENUINE ENGAGEMENT - I.E. THE USER IS ONLY TALKING ABOUT THE BRAND BECAUSE THEY HAVE A MONETARY CARROT WAVED IN FRONT OF THEM, NOT AS A RESULT OF ANY REAL ADVOCACY.

Running from the 3rd - 8th September, 2010, UNIQLO Counter is filling the dead digital air time before a brandspanking new online store launches on Sep 9th. Designed to drive users to the revamped website, this campaign is promising discounts which will be made available on a selection of the most popular items. The pleasing twist, however, is that customers can control exactly how low these prices go by posting about each product on Twitter! By visiting uniqlo.com/uk/ luckycounter, users can choose from a selection of twelve items from the brand's most popular lines - including super soft merino cashmere, Japanese denim, ultra light premium down and HeatTech. The site will then connect them directly to Twitter and then (providing they are logged in) automatically Tweet the following message: 'Tweet and discount UNIQLO's [PREMIUM DOWN ULTRA LIGHT PARKA]! [£56.53]'. The important thing in this Tweet is the price, which reduces with every new message posted. The more Tweets that are made about an individual item, the more its price will drop. Users can return to the UNIQLO Counter site to see these updating in real-time; the final discounts achieved by September 8th will be those available when the new online store launches.

THE MOST PRACTICAL APPLICATION FOR THIS AND GILLETTE MIGHT BE IN APPLICATION OF A “SAMPLING” PROGRAM WHERE AWARENESS TO A NEW PRODUCT COULD BE OPTIMIZED ALONGSIDE A PRICE REDUCTION TO DRIVE TRIAL WITHOUT THE BRAND ASSUMING THE TOTAL COST OF THE

Amy Howarth, head of marketing for UNIQLO UK explains why the brand chose to capitalize on the growing trend for adding incentives via social media: 'The decision to hand over control of the prices of the launch day products to the customer, whilst the site was down during the e-commerce migration period, was a way to maintain contact/relationship with the customer and offer them something a little more unique whilst the website was temporarily closed. We chose Twitter because the real-time aspect makes the promotion that bit more

GROUP BUYING EVERYONE LOVES DEALS With recent studies reporting average online shopping basket abandonment rates to be at least 70%, limited time promotions such as those offered by Groupon and LivingSocial incentivize online shoppers, making the experience more exciting and spontaneous. GILLETTE OUGHT TO CONSIDER GROUP BUYING WITH SIGNIFICANT PURCHASES. CONSIDER SUBSCRIPTIONS, PREMIUM TAOS KITS AND BUNDLES.

The fact that huge retail players such as Amazon and Tesco are getting involved suggests that the huge ‘daily deal’ trend is here to stay.

dynamic and engaging. It's also totally transparent and visible - meaning the customers really are in control!' The launch of UNIQLO Counter coincides with that of the brand's new global Facebook page, from which it will communicate breaking news of upcoming collections, trends and events. A new YouTube channel has also been created and will host videos of UNIQLO in-house stylists dressing fans in the latest seasonal trends.

AmazonLocal’s page for businesses interested in using the site to promote their deals states that Amazon customers spend 70% more money online than the average internet user. It is this 137 million-strong internetsavvy user base that gives them a leg up on their competitors as all their customers are already registered. However, it is worth noting that Amazon Local isn’t sourcing the deals; using other providers allows them a piece of the action in this fastgrowing space without going all-in.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

CONTEXTUAL COMMERCE. ON-TIME, ON-TARGET MARKETING. Reaching the customer with a perfectly-timed, individuallytargeted message is the efficient, relevant ad model which marketers have chased since the first time a media commentator penned the words ' [insert date] is the year of mobile.' Now mobile operators and the likes of GPS-based apps such as Foursquare are offering brands the chance to reach the service's database with communications designed to drive footfall to stores, impulse buys and point-of-sale purchases. Brands have the opportunity of purchasing geo-fenced locations (specific physical spots in which to broadcast digital communications such as MMS and SMS)  in which to broadcast their message, for example part of the high street. Other location-based schemes see shoppers check-in to locations to receive deals. L'OREAL / O2: In a six-month long UK trial, beauty brand L'Oreal has bought geo-fenced space from mobile network O2. Messages, both SMS and MMS, will appear on the phones of passers-by who have opted into the O2 More marketing scheme, which boasts 1m users. Shoppers will receive alerts offering buy-one-get-one-free on Elvive hair shampoo at the Superdrug store. Starbucks, Marks & Spencer and House of Fraser are also taking part in the trial. VONS / FOURSQUARE: Safeway-owned supermarket Vons partnered with PepsiCo and location-based app Foursquare on a cleverly contextual trial of a mobile rewards scheme. People checking in to the 300-store Californian chain received coupons for PepsiCo products such as Quaker Oats. Where the app innovated was in how it used the personal data from Foursquare users. If they had displayed preferences through their check-ins, they would received tailored offers. For example - a gym bunny who had earned a badge for attending regular workouts may receive a special discount on Gatorade energy drinks. Smart.

DR WHO EXPERIENCE: Visitors to the BBC's sci-fi themed conference at London exhibition centre Olympia will step into an arena with a closed wi-fi loop, meaning they will only be able to access Dr Who content within the venue. The connection means visitors can access exhibition info, Dr Who content and discounts off merchandise, as well as avoiding the slow 3G wireless connections which can hinder the mobile web experience. We can easily see this scheme rolling out to the high street - shoppers at Nike Town, for example, locking into a closed network to unlock deals and exclusive branded content.

Once merely a breakthrough in person-to-person contact, the mobile phone now represents all media to all men. As the world's cities become ever-more populated the streets are a center for both business and pleasure, with a handset key to a busy lifestyle. IF GILLETTE IS ABLE TO MARRY OUR OFFER TO THE MOBILE SHOPPER IT WILL BE WELL PLACED TO BENEFIT. THIS IS KEY TO MOBILE MARKETING, WHERE THE CUSTOMER'S ATTENTION MAY BE ELSEWHERE. By piggybacking data sets of popular apps and providers brands can locate a crowd who is willing to receive deals, and in the right place to take advantage. Contextual elements further refine the definition of marketing relevance -sweaty guys straight out of the gym looking for a shower and a shave before they start their day, shoppers able to lock into closed wi-fi networks to browse stock levels and buy at discount.

H&M / MY TOWN: Swedish clothes retailer H&M delivered more than 10m media impressions to iPhones through a 2010 partnership with location-based app My Town. Anyone who used the app to check in to an American outlet received points in the My Town game system, plus discounts on apparel. The brand became the most popular of the app's retail partners, with 700,000 checkins. A subsequent promotion for the H&M Denim Day line led to 350,000 check-ins. – Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

CONTENT COMMERCE. AN EMERGING ETAIL TREND. Content commerce (cCommerce) covers the many ways brands are deploying all types of content in their efforts to keep potential customers engaged with their brands for longer in the hope that this will encourage them to make a purchase. While this can take the form of magazine-style editorial, cCommerce can include anything from integrating a social function into an e-commerce site, investing in video to help demonstrate products, or simply investing in fun features to keep people on your site. Content covers a broad church of creation and includes some rich media as well as email marketing and user-generated content. What turns content into c-commerce is a direct link to checkout. MARKS & SPENCER Marks & Spencer's range of highquality video clips on www.marksandspencer.tv is directly credited with boosting sales at the main retail site. When, for example, UK model Myleene Klass talks about a particular garment and there's a clickto-buy button next to the video, there's an average increase of 23% in sales compared to the results on static pages on the website. Video can also make complex subjects easier to understand. For the brand's wine subscription service, text-filled pages were swapped for a two minute video showing the Head of Wine explaining the service: clearly the right man for the job, his personable demeanor helped increase subscriptions by 90%. FIRST DIRECT At a time when most banks are hugely unpopular, First Direct turned positive sentiment into a live, dynamic reflection of its customer support. The HSBC-owned UK online bank mined forums, blogs, comment threads and social networks for real-time data on what customers were actually saying about the brand. The graphic

representations of consumer feedback were turned into portable widgets that could be shared across social networking sites and also ran as live digital advertising on the London Underground. The content, created byMindshare, MadeByPi, JWT and Millward Brown Precis, helped drive responses up 240% for current accounts as well as boosting core brand KPIs such as brand differentiation and increase in current account consideration.

content, Net-a-Porter has become especially adept at providing magazine-standard layouts with beautifully shot fashion 'stories', but also sends regular email newsletters with style tips and hot-off-the-catwalk trends, and editor’s picks. Net-A-Porter content is also available via iPad and iPhone apps, offering ‘luxury fashion on the go’.

NET-A-PORTER.COM This web property, which describes itself as ‘the world’s premier online luxury fashion destination’, was launched in 2000 by entrepreneur and former fashion journalist Natalie Massenet. The company has developed a strategy - since adopted by other fashion sites such as asos.com and ralphlauren.com - of investing in quality editorial to make the act of visiting an eCommerce site less transactional and more social, more like flicking through Vogue. Constantly finessing and refreshing its

BRASS TACKS DON'T FORGET SEARCH VALUE: AS WELL AS ENCOURAGING ACTUAL TRANSACTIONS, QUALITY CONTENT IS ALSO A USEFUL WAY TO DRIVE TRAFFIC TO GILLETTE.COM AS IT CAN IMPROVE THE RANKINGS IN NATURAL SEARCH, REDUCING THE DEPENDENCE ON PAYING FOR SEARCH TERMS. MAKE YOUR CONTENT PORTABLE: TO BENEFIT FROM THE POTENTIAL OF SOCIAL MEDIA DISTRIBUTION, CONTENT NEEDS TO BE PORTABLE. CREATE UNITS THAT CAN SIT ON FACEBOOK PROFILES AND BE UPDATED DYNAMICALLY. MAKE THE JOURNEY SEAMLESS: CONSUMERS NEED TO BE ABLE TO GET FROM CONTENT TO COMMERCE SEAMLESSLY. THEY NEED TO FEEL THAT THE JOURNEY FROM ENGAGEMENT TO CREDIT CARD DETAILS IS NATURAL AND UNFORCED. INTEGRATE YOUR THINKING: GREAT C-COMMERCE REQUIRES INPUT FROM A VARIETY OF SPECIALIST AREAS: THE E-COMMERCE TEAM, THE MARKETING TEAM, THE DIGITAL AGENCY AND THE CONTENT PROVIDERS. MAKING THEM WORK TOGETHER IS ESSENTIAL IF THE JOURNEY IS NOT TO BECOME CLUNKY AND UNNATURAL, AND IT’S UP TO THE CLIENT MARKETING DEPARTMENT TO OVERSEE THIS PROCESS.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

GLOBAL SOCIAL COMMERCE.

LEVERAGING INFLUENCER NETWORKS TO BUILD EARNED MEDIA AND TRANSACTION. As brands like Gillette continue to utilize Facebook as a gathering place for its advocates and brand fans, it makes sense to provide opportunities to shop within the platform itself.

NA FACEBOOK SELLING SITE THIS STORE LEVERAGES THE ARMY OF GILLETTE FB FANS AND EMPOWERS THEM WITH THE ABILITY TO PURCHASE FROM THE GILLETTE PAGE WITHOUT LEAVING FACEBOOK

Currently the site exists and, with little outside support, has not become a juggernaut of sales for the brand. However, the reasoning is sound that with the proper level of support, Gillette can take its global base of fans and activate them to shop through this tool. By adding incentives and promotions through Facebook’s new app platform, Gillette can get access to their social-network’s network, shown to be, on average, 130 people for each fan. While these Facebook storefronts are in their fledgling stages they indicate a larger trend of removing “recall” from the traditional marketing model of; awareness, recall, and purchase. Bringing the store to the consumer at the point of awareness can help Gillette within social media, dynamic banners and via social affiliates. Fulfillment of orders via these various channels can also provide unique opportunities to provide value and utility to Gillette men across the globe.

INDIAN RETAILERS GO SOCIAL BUYING LOCAL SHOPS THROUGH FACEBOOK Indian online multi-vendor retail site AaramShop has launched a Facebook app that allows web shoppers to buy direct through the social network.

AARAMSHOP: EVERYTHING FROM HAIRCARE PRODUCTS TO SPICES

Launched on June 9 in beta, AaramShop works as a web portal and storefront for small businesses in India that cannot compete with larger stores for SEO, advertising or web presence. Local grocers sign up for free, and AaramShop lists all products from all participating stores online. The service is free to customers too, who can then browse and buy, with the nearest participating shop getting the business to then deliver the goods.

Web shop browsers in New Delhi, Gurgaon and Noida can buy everything from haircare products to rice and spices. AaramShop then finds the closest shop to deliver the shopping to them, with the recipient only paying upon delivery.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

SOCIAL FMOT IN A VIRTUAL GUY AISLE RETHINKING AFFILIATES

As illustrated by the AaramShop and P&G initiatives already underway, the idea of selling ON Facebook is not difficult or out of place. In fact, we think we can take it a step further. What if we could enable users of Facebook to put a branded store front on their own profile? We believe the results would be very lucrative. This direct advocacy applied to the “social graph” makes a perfectly scaleable program of a 750 billion potential buyers and sellers. Why would a guy install a Gillette storefront? We believe we can motivate him into posting a store front with a profit sharing model, where a small percentage of the sale goes back to him. We also believe that if Gillette was serving the right content, they may place this functionality on their profile to access the content. BBDO in Israel is working on a project they have code named “Krypton”. This is a social eCommerce model to deliver this type of functionality. Krypton’s core idea is to create one central shop that controls all of the installs of stores across Facebook. This way the brand retains control of all content and pricing. When someone buys, a predetermined commission (say, 3%) is payed back to the host profile. Each action on thier store triggers a wall posting or similar viral traffic driver. A call to action to create their own store is clearly visible and would grow this program organically.

AMAZON.COM’S TWOMILLION AFFILIATE PARTNERS ACCOUNT FOR UP TO 40% IN SALES ANNUALLY. THEIR MONTHLY TRAFFIC OF UNIQUE SHOPPERS (53,000,000 IN JULY 2011) IS AIDED BY THOUSANDS OF AFFILIATE SITES ACROSS THE GLOBE. - AMAZON.COM / WIKIPEDIA

Each person who posts on Facebook becomes a true brand advocate, endorsing and selling. There is also a repeat purchase benefit to this type of program as the

The user gets immersed in a brand experience in a new way. He is allowed to profit from the brand and has an obvious incentive to drive sales.

Amazon Associates program have discovered, many associates themselves shop via their stores in order to get a slightly reduced price. Krypton is planning on starting with Facebook but expanding the capability to Twitter and the blogoshere once the core service is established. The brand benefits are many including a new viral model of eCommerce, deeper engagement with brand fan, thousands of newly discovered ambassadors, and a new form of marketing.

THE GUY AISLE Krypton is not expected to rest on one or two brands. It is their intention to grow into a multibrand retail hub where users decide what they want to stock the shelves with based on their own interests. We see this as a social commerce version of the “Guy Aisle”. As users install this software on their profile, they would then be presented with a list of brands that they have already “liked” and are part of the project. They may add additional brands, input their own information and launch the app. It’s that simple.

AFFILIATES PERMEATE THE DIGITAL LANDSCAPE THERE ARE OTHER AFFILIATE STRATEGIES AVAILABLE TO GILLETTE SPANNING ACROSS THE DIGITAL LANDSCAPE TO INCLUDE BLOGS, WEBSITES, AND MOBILE APPLICATIONS (APPS). SIMILAR TO SOCIAL STOREFRONTS, AN AFFILIATE PROGRAM IS A “WINDOW” TO PURCHASING GILLETTE PRODUCTS VIA LOCATIONS OUTSIDE OF RETAILERS, SOCIAL MEDIA OR GILLETTE.COM. AFFILIATE PROGRAMS CREATE MICRO-RETAILERS, AND DIVIDENDS ARE PAID BASED UPON TOTAL PURCHASE AT THE GILLETTE DTC SITE, RATHER THAN A TRADITIONAL PAY-PER-CLICK MODEL. MANY BUSINESS HAVE DEPLOYED AFFILIATE PROGRAMS TO GREAT SUCCESS AS OWNERS OF THEIR ECOMMERCE SITE. STRICT MANAGEMENT OF THESE PROGRAMS ALLOWS DYNAMIC UPDATES TO CONTENT AND WILL ENSURE A CONSISTENT GILLETTE PRESENCE WHILE GIVING THE ABILITY TO DELIVER LOCALIZED SOLUTIONS GLOBALLY. GILLETTE HAS ALREADY SHOWN AN ACUMEN FOR DELIVERING CUTTING-EDGE WEB CONTENT AND SOLUTIONS. THIS TYPE OF AFFILIATE MODEL WILL SERVE AS ITS NEWEST PLATFORM TO DELIVER EXPECTED LEADERSHIP. – Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

ALL ABOARD THE M-COMMERCE TRAIN. HOME PLUS, TESCO GO MOBILE IN KOREA. The Tesco-owned South Korean Home plus chain needed an overhaul for their E-Mart as the country's number one retailer, despite fewer physical stores and without adding more locations. Cheil Worldwide, Seoul, helped Home plus become a part of hardworking Koreans' daily consumer cycle by making it easier to shop. Home plus ignored its location issues by bringing virtual stores to commuters in the form of connected outdoor displays at a busy subway station. Digital billboards portrayed a shop shelf layout identical to Home plus stores. On screen QR codes could be used by commuters registered with a home delivery service to add items to their basket for delivery in time for dinner that evening. Results: 10,287 visited the Home plus virtual store, with the numbers of registered users boosted by 76% as a result. Online sales rose by 130%, with Home plus now established as Korea's number one online retailer, while closing the gap to E-Mart in offline market share. THE CAMPAIGN EARNED A MEDIA GRAND PRIX AT THE CANNES LIONS 2011 ADVERTISING FESTIVAL.

– Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

WE THINK THE CONSUMER INSIGHT OF KOREAN’S BUSY LIFE SCHEDULE IS AT THE HEART OF THE SUCCESS OF THE TESCO OOH ECOMMERCE PROGRAM. BESIDES THE OBVIOUS INTEGRATION OF GILLETTE PRODUCTS IN THE TESCO OFFERING, WE HAVE BEEN DOING A LOT OF THINKING ABOUT HOW THIS TYPE OF MOBILE COMMERCE CHANNEL COULD WORK FOR GILLETTE. BESIDES A FULFILLMENT ENGINE, THERE ARE THREE ADDITIONAL BARRIERS THAT GILLETTE WOULD FACE IN APPROACHING SOMETHING LIKE THIS. ONE IS THE BREADTH OF OFFERING AND TWO IS THE GLOBAL SCALE. OUR ANSWER TO OVERCOMING THESE BARRIERS ARE REALLY SIMPLE WE NEED TO SCALE DOWN THE OFFERING AS SEEN BY TESCO BUT PROVIDE VALUE IN A DIFFERENT WAY AND SCALE UP THE LOCATIONS THAT THESE ARE AVAILABLE.

VINYL VENDING MACHINES OOH, MOBILE, PACKAGING AND FMOT As much as we don’t want to admit it, many guys see purchasing our products as a chore. It sits among their todo lists, shopping lists and when I get around to it lists. What if we make it easier for them by increasing a purchase opportunity in more places and get their order to them quicker than they can imagine? This is no longer the limit to our current distribution system. We can get the product to the guy where he is, and when he wants it. Vinyl vending machines are full scale “stickers” of store shelves and vending machines we place in high receptive areas. Our guy simply scans the QR code with any capable mobile device and they are taken to our eCommerce store front. Here they can do any number of actions including placing their order and signing up for subscription. We know all too well that making the product available is not always going to close the sale. Where we place Vinyl Vending Machines and how quickly we can deliver would set us apart from other retailers and reframe value as convenience for our guys. AT THE GYM IN VANCOUVER. He’s still using the same pack of carts he had when he first joined. Not to mention he’s scraping plastic on his armpit his deo is so short. A vinyl shelf sticker is on the locker next to him. A quick scan and order and it will be delivered straight to the gym for his next workout. AT THE AIRPORT IN FRANKFURT. Security just tossed his 3rd can of shave prep because it was over 100 ml. and he didn’t want to check his bag for this quick overnight trip. He veers for a quick rest stop before hitting the gate when he sees our full scale Vinyl Vending Min the men’s washroom. He scans the executive traveler dop kit

and has it delivered to his hotel in Geneva the next morning. Now he won’t have to shave with hotel soap, and customs got his last can of goop and he won’t be slowed down by checking is bag. AT WORK IN MEXICO CITY. It’s mid day in the factory and it’s hotter than normal. The deodorant stick he bought at his local tuck shop isn’t going to get him through the day. The men’s locker room has a Vinyl Vending Machine, ready to go. He knows that he needs to apply twice a day, so he subscribes to 6 deodorants a year. Like clockwork, every couple of months, his package arrives. He has added razors now too. ON THE GO IN MOSCOW. He needs to get across town to visit his girlfriend and grabs a cab. He can tell by the smell that the taxi driver is near the end of his shift. As they race towards his rendezvous, he sees a Vinyl Vending Machine on the glass partition. He remembers he’s running short and saw a guy do the same thing the bus last week. He places the order. WHY STOP HERE? Once we have established this platform we can expand it. Barcodes that exist on our packs currently could also be triggers for the mobile storefront making every bathroom a place to reorder. THE LAST CART SLOT IN A SYSTEMS TRAY COULD CONTAIN A CODE AND CALL TO ACTION TO REORDER. THE POSSIBILITIES OF CONTACT WILL ONLY EXPAND AS WE INNOVATE NEW WAYS VIA NEW INSIGHTS TO CATCH AND CLOSE THE SALE WHERE EVER AND WHEN EVER HE NEEDS US. – Proprietary and Confidential


MARKETING IN A DIGITAL WORLD : ECOMMERCE

SO WHAT?

A CALL TO ACTION. The current goals in front of us are the impetus for this document's creation and are driving its timing. The solutions, however, should put in place a foundation for Gillette to both maintain and drive global success in the new, digital marketplace for many years to come. As we finalize this piece, the closing month of the second quarter is fast approaching us. The opportunity gap for meeting our goals is closing. Empowered with the proper resources and mandate, the preceding thoughts can be assembled into a place to help meet and perhaps beat these aggressive goals. As we authored this piece it came to our attention that there are several test and learns activated across the world for eCommerce. Some of these are on Gillette, some are on other P&G brands. We feel like we have only scratched the surface on the innovation potential of this explosive new retail model and we still lack a truly global scope of what is already active, potential to optimize and potential to innovate across the board.

The Great One - Wayne Gretzky once quipped, “You miss 100% of the shots you don’t take”. If we shoot for PAR we might actually get it. Today we shoot for birdie. We authored this piece in the hopes that we could assist Gillette in taking a more aggressive move to reach the goals outlined on your Global Digital OGSM. 1.9% total NOS from eCommerce in fiscal 11’12. No more test and learns. Do, and do more. That must be our motto. We propose an eCommerce task force be assembled immediately of both relevant Gillette and BAL members in collaboration on a business transparent effort. We shall deliver our plan within 6 weeks of the assignment and begin to implement to meet your goals We await your response.

~COLLIN, STEVE AND YOUR BAL AGENCY PARTNERS

YOU MISS 100% OF THE SHOTS YOU DON’T TAKE WAYNE GRETZKEY

– Proprietary and Confidential


BBDO | PROXIMITY | INTERGER | KETCHUM

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