Much of the merchandising content on these shelves is the brand telling the consumer why it’s the best. If every brand is “the best,” how can we choose? As consumers ourselves, we know the answer: we listen to what our peers, friends, and fellow shoppers say about the products to make our decisions.

Brands have a number of in-store merchandising tools in their arsenal: endcaps and signage to draw attention to products, sales staff to answer customer questions and guide purchases, etc. So how can manufacturers leverage consumer-to-consumer conversations (that we know are happening) at the point of purchase? By supplying online shoppers with their fellow consumers’ opinions and timely answers to product questions. Now we’re “Social Merchandising”, a strategy that directly impacts sales and returns.

Endcaps and signage

Say I’m looking for a scanner. Like most consumers (66% of consumers research products online before they buy online or in-store), I head to my favorite consumer electronics retail website to research choices. The scanner category page – the online equivalent of a shelf – displays several scanners with similar types of product information: features, pricing, and in this case, customer reviews. And just like in a brick-and-mortar store, I’m faced with choice overload.

Ratings and reviews act as endcaps and signage, differentiating like products.

As I compare one scanner to another, my eyes are naturally drawn to a key difference. Scanner A has 183 reviews, while Scanner B has only five. Based on the 4.5 star average rating, , most of the 183 reviewers were more than satisfied with Scanner A. Which scanner gets more of my attention? That’s really a rhetorical question; you know the answer. A survey of 26,000+ found that consumer recommendations are the most credible form of advertising.

Much like endcaps and special signage in a retail store, customer reviews and ratings differentiate similar products at the point of purchase. Manufacturers can capitalize on this fact by collecting reviews from end customers and syndicating these authentic opinions to retailer sites. More reviews equals more visibility equals more clicks… you get the idea. And it works – three manufacturers saw a 26% increase in sales after syndicating reviews to a retailer site. That’s just online sales – eMarketer found that the internet influences $3.45 of in-store sales for every dollar spent online.

Your best sales team

Say I click Scanner A (the one with more reviews)to learn more. Once on the product page, I have related questions and I can’t find answers. For example, “Can this scan, resize, and print without being connected to a PC?”

Who better to answer my question than the manufacturing brand? Traditionally, brands haven’t had access to customers at this point in the purchase funnel. I could ask my question in-store, where brands spend significant resources continuously training retailer reps and updating product information – an expensive and resource-intensive endeavor. Or, my hunt for information could take me elsewhere – another retailer, or even another brand.

But what if brands could answer customer questions while they shop – making merchandising social, and directly engaging consumers to affect purchases? We already know customer Q&A boosts sales and reduces returns. User-generated answers reduced returns 23% for one client, and doubled online sales for PETCO. But what if manufacturing brands got involved? It’d be like having your brand’s best sales team on every sale. In our example, I'd ask my question directly on the product page. Scanner A's manufacturer, "ManufacturerSite," could then provided a timely, branded answer that lives on the product page, for every customer to see.

Manufacturers provide branded answers on retail sites. Click to enlarge.

These branded answers give manufacturers a strengthened presence on retailer sites, and let brands give shoppers all of the information they need to buy confidently. Samsung began answering questions on retailer sites under the persona “Mr. Samsung”, and found that for the questions they received, 91% were not already covered by the product information. Additionally, answers from Mr. Samsung were voted the most helpful on the retailer site.

As commerce becomes increasingly social, so must manufacturer’s merchandising efforts. Syndicated consumer reviews are the endcaps and signage that make your products stand out online. Branded answers at the point-of-purchase are your in-store sales team ready to answer any customer questions. This concept is a paradigm shift in how merchandising and distribution networks fit together. With planning season just around the corner, how will you make your merchandising social?

Manufacturers, connect with consumers at the point of purchase.

Reviews are your online endcaps. Branded answers are your online sales staff. See how Social Merchandising tools can boost your sales and reduce your returns.

The article highlighted a couple of examples in which a few consumers’ perceptions of the ads led to word of mouth that outweighed the intended ad message.

1. An ad for Motrin showing potential back pain for moms wearing baby slings came under fire when several “attachment parenting” enthusiasts posted complaints online. The complaints were picked up by two bloggers and tweeted within hours. A week later, as many as 300 tweets per hour about the ad were hitting the social web. Johnson & Johnson nixed the ad shortly after.
2. Method’s viral video parody ad about the chemicals in other cleaning solutions received praise at the National Advertisers Conference and on several environmental blogs. But after two blogs representing a large part of Method’s customer base took offense, complaining that the ads made light of sexual harassment, many customer complaint emails eventually led Method to pull the ad.

ABC News recently discussed how misuses of products can spread via social networks. For example, the tweet, “Finally over my cold. Summer colds suck. Thank you Z-Pack antibiotics,” reached 850,000 people. The information is wrong; antibiotics are not intended to treat colds.

How much time and money would these brands have to spend to generate the same reach and impact that a handful of consumers accomplished in an afternoon on Twitter? “The average consumer mentions specific brands over 90 times per week in conversations with friends, family, and co-workers,” says John Moore of WOMMA. Think about that for a second – one consumer generates more impressions than your media buyer could ever hope to afford.

Now think about the reach and power of that consumer online, with their social networks and consumer content mechanisms like reviews and Q&A. With the social web, this conversation overshadows your brand marketing in both volume and impact. As Scott Cook, founder of Intuit and member of the P&G Board of Directors puts it, “A brand is no longer what we tell the consumer it is – it is what the consumers tell each other it is.”

As a brand marketer or advertiser, how do you reconcile your brand marketing initiatives with the voice of the consumer? How do you hit the market with a message that reinforces your brand? Through the lens of traditional marketing and advertising, this is a really tough nut to crack. But adopt the “social is the new advertising” paradigm for a minute, and the answer to these questions becomes simple. Give consumers a channel to speak to each other via your brand properties, and tie it directly to the natural purchase process.

Don’t be afraid to let consumers be the voice of your brand. Yes, there are negative opinions about your brand online, but there are thousands to millions of consumers who like your brand enough to buy from you. What if the brands in the examples above had sought authentic consumer proactively – content that turned out to be positive? What if they then published this content on their brand site, retailer network sites, and social media sites? What kind of media impact and ROI could that have driven?

Do you agree? Do consumers control today’s brands?

In our recent webinar, two industry thought leaders shared their perspective on social in the CPG industry. Bert DuMars, VP of E-Business & Interactive Marketing at Newell Rubbermaid, and Carole Irgang, President of Red Shoes Marketing & former SVP of Integrated Marketing Communications at Kraft Foods, offered their thoughts on the importance of social media in the industry, and shared examples of brands who have seen success in the space.

Here are three big ways CPG uses social commerce.

Tear down the wall between consumers and your brand.

Manufacturing brands can have a tendency to focus on their immediate customer – the retailers who carry their products – focusing on share of shelf when it comes to reaching consumers. But as more retailers leverage UGC to improve online and offline sales, they’re making active distribution decisions based on product review data. Connecting end users – both with your brand and with each other – to drive demand creates demand among retailers. Capture share of shelf among retailers and share of voice among consumers.

Consumers’ words breathe life into traditional advertising. Carole Irgang spoke to how user-generated content makes marketing more interesting, allowing CPG brands to “become part of the consumer conversation without interrupting it.” Don’t think about user-generated content a “silo” in certain media channels or marketing efforts. If used properly, consumers’ words are impactful everywhere throughout the marketing mix.

Rubbermaid recently ran a print campaign for their Easy Find Lids product. The ad included a coupon and a snippet of real review content, with the products’ star rating featured. Rubbermaid saw a 10% lift in coupon redemption over a similar ad for the same product that didn’t include UGC.

User-generated content is the new focus group. Many brands hesitate to embrace UGC out of a fear of negative reviews, but 1-star reviews offer valuable information brand teams can use to improve products.

Rubbermaid did market research and found that consumers were worried about swine flu and germs. They reformulated a popular sink mat to be bacteria resistant, but the new design gave up some stain-resisting power and started getting negative reviews – including negative feedback from a customer who had been buying the product for more than 45 years!

Rubbermaid reached out to the customers who wrote negative reviews, and found that bacteria resistance was less important  to their customers than stain resistance. They reformulated the mat back to stain resistance, and gave these negative reviewers the first new products off the line.

The customers were thrilled with this level of service. “If you can make a positive person a little more positive, that’s nice but they won’t be very verbose about it,” said Bert. “But if you can take a negative experience and make it positive, it’s a home run. These people were out on Facebook and Twitter talking about how we were responding to them – that’s the best response you can have.”

Have a question that wasn’t answered in the webinar? Share it in our comments section.

Learn how to create your own CPG social strategy.

Our full webinar with Bert and Carole is available for free download.

When I do make it to the counter, the clerk asks me if there is anything wrong. I say no, and am happily on my way with my money back. This system makes it easy for me as a consumer to try products for free to see if I want to keep them. I do this when I can’t find all of the information I need before I purchase.

The manufacturer, however, does not go on their happy way. They are stuck with $25.3 billion in returned product costs, according to Accenture. The even more interesting statistic is that Accenture’s study showed that 60 – 85% of consumer electronic returns were No Trouble Found (NTF), meaning there was nothing wrong with them.

Incomplete product comparison and feature information seems to be a common problem. I came across a stat in Allurent’s 2008 “Holiday Shopping: Online Customer Experience Survey" saying “67% of users who visited a site intending to make a purchase left because there was not enough product information.” Brands could just add more product copy, but with a growing number of SKUs, maintaining this strategy is not scalable.

Because consumers trust each other for comparison, and trust manufacturers for technical answers, brands can work alongside their customers to efficiently provide the right answers. Canadian Tire empowered its customers to create a knowledge base of information that the entire community can benefit from. For products that had at least one question and answer they saw a 28% drop in pre-sales customer service calls. The drop was 81% for products with three or more questions and answers.

When asked about the impact of “Mr. Samsung” answering consumer questions on online retailer sites, the Director of US Marketing for Samsung, Kris Narayanan, said “Through BrandAnswers we can reach consumers at the very last stages of the purchase decision, so they need answers quickly and accurately. Our ability to be there is essential.”

Providing consumers with the right information at the right time is not only essential for driving sales, but for reducing returns and growing your base of brand loyalists. As consumers seek out information from each other, a manufacturer must empower its loyalists to become advocates at the point of purchase. For manufacturers, working with retailers to incorporate their brand advocates’ content across online retailer sites has tremendous benefit.

How is your brand making sure customers have all of the information they need to make a purchase?

Case Study: Samsung answers increase engagement, fill information gaps

Manufacturer Samsung created the public persona, “Mr. Samsung,” to answer customers' product-related questions.

Read the case study for more on these answers' "ripple effect" of value.

Customers shop both within and beyond the purchase funnel.

“Consumers are moving outside the purchasing funnel – changing the way they research and buy your products. If your marketing hasn’t changed in response, it should.” The Consumer Decision Journey – McKinsey Quarterly 2009 Number 3

As marketers, we’ve all been taught to embrace some variation of the “funnel.” But when we leave the office, we take our marketer hats off and we put our everyday consumer hats on. When I’m home watching TV with my wife, I either mute the TV ads or look at her and ask, “What was that commercial trying to sell me? I don’t get it.”

When we marketers put on our consumer hats, we get how to seek out the opinions, knowledge, and experiences of our friends, family, and peers. When most of us shop, the first thing we do is go online and look for product reviews. So why, as marketers, are we still spending billions on creating advertising that research shows as increasingly ineffective?

As stated in McKinsey Quarterly’s “The Customer Decision Journey,” the fundamental assumption of marketing has changed: “Consumer-driven marketing is increasingly important as customers seize control of the [decision] process and actively ‘pull’ information helpful to them.” McKinsey took a stab at building a consumer research model that maps more to reality than to theory. They broke consumer research down into four phases:

1. Initial consideration set. Consumers consider an initial set of brands, based on brand perceptions and exposure to recent touch points.
2. Active evaluation. Consumers add or subtract brands as they evaluate what they want.
3. Moment of Purchase. Consumer select a brand at the moment of purchase.
4. Post-purchase experience. After purchasing, consumers build expectations based on experiences to inform their next decision.

The implications for brands who do not adopt models centered around user-generated content such as product reviews are costly, as brands can waste resources and seem disconnected from the customers.

Rather than build marketing campaigns that tell consumers why you’re great, empower your customers to sell and market for you in their own voice. Build touch points like user reviews, Q&A, and experiential stories to engage your advocates and collect content to place where consumers are looking: Google, Facebook, Twitter, brand sites, retailer sites, etc.

I encourage you to take a few minutes to think about how you and your friends and family shop. Do you look to brand ads to tell you what to ultimately buy? Or do you go online to research products? When you go to sites like Amazon, do you scroll past the marketing copy straight to reviews?

Answer these questions for yourself, then put your marketer hat back on. Do your brand’s marketing efforts align with how you arrive at a purchase decision as a shopper?

Webinar: Time to Get Social: What’s Next for Engaging Your Customers Online

Most manufacturers are missing out on a prime opportunity to get ahead in the game—the digital channel.

Download this free webinar to learn how the web is both a direct response vehicle and a brand builder.

This got me thinking: what are manufacturers missing? How do brands reach consumers with credible content and provide relevant and timely information? The first obvious place would be on brand websites. In 2007, Forrester reported that 58% of consumers started their product search on manufacturer websites.

In that same report, Forrester stated that “Manufacturer sites are critical research vehicles where consumers can learn about products and ultimately complete the transaction at other stores, either online or offline.” But the report also points out that many manufacturer brand sites fall short for consumers with:

1. Buried or omitted product information. Sites were clear to showcase the breadth of their product assortment, but they provided little help in the form of guided navigation tools or comparison charts to assist customers in evaluating the offerings.
2. Missed key selling opportunities. Few manufacturers incorporate up-sells directly into their product pages – missing opportunities to inform consumers about accessories.

What could manufacturers do to make consumer experiences like my wife’s more successful? She ultimately went a user blog to find the right product. Brands should take note, and incorporate user-generated content to fill the information gaps on their sites.

1. Let customers contribute their opinions, knowledge, experiences, photos, videos, and other content to provide higher quantities of more trusted product information. More often than not, consumers will have similar questions and information needs, so why not let them provide content for each other?
2. Empower users to cross-sell for you. Take TVs for example: if I just bought a new 3D TV, I want to make sure I have the right cables, speakers, wall mount, etc. Why not let customers who have bought the TV make recommendations on your site for your accessory products that worked best for them?

For manufacturers, adding user-generated content on sites increases sales by giving shoppers the trusted information they need to make purchase decisions. The more people connect and engage on your site, the more your site becomes the preferred source for authentic information about your products and brand.

You tell us: how has UGC impacted the effectiveness of your brand site?

Webinar: How CPG Brands Win Big with Social Media Marketing

CPGs have the reputation of being legacy marketers. But today some CPG brands are turning this age-old reputation on its head by proving getting “social” is crucial to their success.

Register for this free webinar with Rubbermaid on April 13.

In the interview, Bert discusses Newell’s shift in corporate strategy to be more customer-centric. In the past, retailers were always considered the “customer,” but recently the brand’s focus has moved to their end users, the consumer. This shift has created a need for communication between the brand and consumers, as Newell looks for ways to listen to end users and identify ways to better satisfy their needs and wants.

Bert DuMars, VP E-Business & Interactive Marketing, Rubbermaid

The brand opens this communication on Rubbermaid.com through customer reviews. As we saw in a recent case study, Rubbermaid has successfully leveraged UGC to increase conversion, average order value and revenue. Additionally, the brand uses this real-time feedback to identify issues they can respond to or fix, bringing customer oxygen into their manufacturing processes.

Bert points to Rubbermaid’s “Produce Saver” product as a specific example of how the brand is getting closer to consumers through digital technology. As Jim Deitzel, Manager of e-Marketing for Rubbermaid, shared in an earlier blog interview, Rubbermaid identified an information gap with this flagship product after noticing it was receiving several 1-star reviews. After reading the reviews, it became clear that consumers weren’t using the product properly, and were understandably disappointed with its performance.

Rubbermaid immediately put additional usage information on the product page, and wrote on a blog post on how to use the Produce Saver for best results. Today, the Produce Saver has an average rating of 4.6 stars, and 92% of customers would recommend it to a friend! Bert told Fast Company, “Previous to having online customer reviews, we might not have known about this issue, and negative word-of-mouth buzz could have caused our retailers to return the product. Instead, we quickly identified the issue and created a solution.”

We’re excited to partner with such an innovative and customer-centric manufacturer. Our upcoming webinar with Bert and Carole Irgang, President of Red Shoes Marketing and previous SVP of Integrated Marketing Communications at Kraft Foods, will share real-world insights how CPG brands can capitalize on this digital era.

Tune in to learn:

• Successful social strategies for CPGs
• Real returns and metrics for CPG brands
• How to create your own CPG social strategy
• How to get buy-in for "social" inside your organization

Tuesday, April 13, 2010
1:00pm – 2:00pm

The specialty artisan tea manufacturer is using Ratings & Reviews to connect the authentic opinions of customers with tea lovers everywhere. Reviews on product pages create an engaged community of tea-philes centered around the products, rather than a “cul-de-sac community” disconnected from the ecommerce experience at MightyLeaf.com, says Bliss Dake, VP eCommerce and Operations. You can read more from Bliss in our accompanying press release.

In combination with reviews, Mighty Leaf uses profiles to help shoppers find the most relevant reviews for them. Reviewer profiles contain information on the contributor like “health/activity level,” “favorite flavor of tea,” and “favorite time of day for tea.” Reviews also include pro/con tags for products, like “unique flavor profile” or “high quality.” In combination, shoppers can use tags and profiles to find products with the most desirable attributes and read reviews from the most relevant contributors.

Say, for example, a shopper is looking for a relaxing tea to end her work day. She can select the provided tags like “great aroma” or user-generated tags like “relaxing.” Through these tags she may find Mighty Leaf’s Calming Moon herbal tea, and choose to read reviews.

When one review suggests it’s the perfect tea after a stressful day, she may click to read the reviewer’s profile. There she’d find that the reviewer has written four other reviews, and that his favorite time of day for tea is just before bed.

Trusting the reviewer’s expertise, and noting that his needs match hers, the shopper can be confident in her decision to purchase Calming Moon.

Connecting shoppers with the most relevant reviews for them, especially for products they are passionate about, gives them the confidence they need to make informed purchase decisions. Profiles help Mighty Leaf Tea connect their tea-loving customers to the best teas for their needs.