Topics Covered: September 19, 2022

  1. Building a digital vision
  2. Negative sentiment amongst CPG brands continues
  3. Amazon launches 3PL website
  4. Inflation at highest rate in August
  5. Walmart extending ad options to sellers
  6. Amazon enables email marketing
  7. Kroger adds video and CTV to PMP
  8. Marketing analytics investment

Inflation is Monopolizing Consumer Brand Attention, but some Remain Focused on Winning eCommerce

A digital vision goes beyond talking about the share of sales coming from eCommerce.


It’s a compelling narrative that unifies the organization, recruits and retains top talent, and provides useful information to stakeholders.


To help retail leaders like you develop that narrative, I analyzed commentary from 19 consumer brands at the recent Barclay’s Consumer Staples conference to see if they are communicating a digital vision to Wall Street.


The analysis will:

  1. Help you efficiently stay on top of market trends
  2. Deliver unique data you can use when educating internally or with clients
  3. Provide three real-world examples of how big consumer brands are talking about digital


To summarize the three real world examples:

  1. Colgate-Palmolive shed light on why eCommerce is a competitive edge (re: it’s hard!)
  2. Unilever talked about how eCommerce can improve profitability
  3. Church & Dwight shared how eCommerce is changing its corporate development strategy

Conference Background, Methodology & Limitations

The conference involved presentations and Q&A sessions between senior management and investors. 


The methodology used in this analysis is straightforward - I analyzed word counts across common terms like eCommerce, Omni, Analytics, and so on to determine which firms most frequently discussed the examined topics.


Before we get into the results, there are limitations to the analysis.

  1. This is only one conference.
  2. Analyzing word counts is an indirect way to assess a digital vision inside a consumer brand. It is not meant to be a deep dive into the innovative things each is doing from a digital standpoint, nor does it necessarily correlate to a company’s level of investment or focus.
  3. Some sessions were presentation oriented, others Q&A, and others a mix. Thus, a consumer brand didn’t have full control over the topics discussed, thereby impacting word count.


Despite the limitations, the results shed light on what’s on the mind of consumer brands and investors, and it illustrates topics that are crowding out longer-term opportunities like digital.

Inflation Monopolizing Focus

Consumer brands and their investors are intently focused on inflation, pricing, and inventory levels.


These topics accounted for double the amount of discussion related to “technology” language and more than four times the discussion related to digital commerce or analytics.


Further, every company addressed the topic of inflation compared to just over half talking about eCommerce. Investors wanted to know how companies are managing inflation and their outlook. (Stratably+ readers can read that analysis here)


B&G, Nomad Foods and Unilever took the top three spots in terms of talking about inflation, pricing, and inventory.


While inflation was starting to pick up a year ago, the topic was discussed 18% more in 2022 on a Y/Y basis.


Consumer brands spoke less about eCommerce and technology this year compared to last, while increasing discussion around reorganizing or simplifying their organizations.


Data and analytics topics were an outlier, largely driven by P&G talking about it the most from a year-over-year perspective. 

Colgate-Palmolive Takes the Lead (by far) In Talking Digital

53% of consumer brands at the conference talked about eCommerce, Digital, Amazon or Omni-Channel.


Colgate-Palmolive was the clear leader as the chart below illustrates.


Even absent the quantitative analysis, it was clear reading through and comparing transcripts that Colgate-Palmolive was an outlier.


Noel Wallace, Chairman, President and CEO of Colgate-Palmolive had several quotes on eCommerce, which permeated the entire discussion.


These are great for eCommerce leaders looking to share case study examples to their colleagues on how eCommerce is reaching its way to the top of the C-Suite.


  • “This has been a fundamental change for us over the last three years to really accelerate our eCommerce share, which we see as the fastest-growing channel in most of the categories in which we compete.”
  • “The key is we want the entire organization to grasp the importance of this in order to drive the transformation that's required to be a key player in the future.”
  • “We brought in quite a few people into our North American organization over the last couple of years, people that have brought a different mindset to how we want to execute in that business against the core Colgate strategy. A big piece of that turnaround, in my view, is again the capabilities. You don't see a lot of that. You see it obviously in the results of the company, but you don't see it in the day-to-day, and there's a massive amount of sophistication that goes into running a digital enterprise.”
  • “…creating trust with your retailers that you can run their omni-channel business, and that's what our retailers are requiring. It's no longer a brick-and-mortar business. It's an omni-channel. And consumers have myriad of different choices on how they want to shop your categories. And we need to understand that and bring that knowledge to the trade, and more importantly use that as a competitive advantage to drive consumers into our franchises.”
  • I frequently tell our teams, you have to understand the digital world that we live in to connect the dots and effectively do your job.”

Unilever Sees eCommerce as Margin Accretive Growth Driver

Unilever ranked second in terms of talking about digital, ecommerce and omnichannel.


The most interesting commentary from the firm revolved around its viewpoint that eCommerce is a margin-accretive opportunity. This grinds against consensus thinking around Amazon and, more broadly, eCommerce being dilutive efforts.


“…when I first was told there's an opportunity for eCommerce ice cream, I thought someone had lost their mind. But actually, as we're increasingly persuading people who are having their Deliveroo or their Uber Eats delivery to include a pint of ice cream, it's a terrific and high-margin business.

Church & Dwight Using Amazon Strength as Rationale for $630mm Acquisition

Church & Dwight scored below average based on the ranking methodology. However, during the conference in the morning before the event, the company talked a great deal about how it gained conviction to buy Hero based on the brand’s dominance on Amazon.


Management knows that this dominance will make for easy conversations with retailers as they look to expand distribution for the brand:


“When retailers see the success of a product, both on Amazon and in a large retailer like Target, it becomes very appealing to them. As far as the next couple years though, we don't think there will be any difficulty in getting these, particularly the large retailers interested. So that's something once we close, we'll be chasing in just three or four weeks.”


C&D also talked about its big effort creating an in-house analytics team. This team is responsible for analyzing the impact from ad spend and promotional spend.

Digital = Competitive Edge

Hopefully this article left you inspired that even though inflation, pricing and inventory are dominating much of the focus, companies are continuing to shine a light on the growth and profits eCommerce can bring, and the corporate-wide effort needed to make that happen.


While any red-blooded eCommerce leader wishes digital took center stage at conferences like this, the fact that only half talked about it means a competitive edge opportunity persists.


If you can get eCommerce right, you’ll have a chance at capturing 50% of total retail dollar growth expected to come from digital, and possibly gain share from flat-footed competitors.


You’ll also have a great story to tell shareholders.


The share prices for brands that talked about digital-related topics at an above average rate, outperformed their peers by 113% basis points during the week of the conference.


While this relationship is tenuous, and an example of correlation and not necessarily causation (and frankly, I share with a bit of trepidation given the myriad number of factors involved), it does lend even more support to the value-maximizing benefit that comes from casting a compelling digital narrative, even when macroeconomic considerations are front and center.

Negative Sentiment Amongst CPG Brands Continues into September

Last week was a busy one for CPG companies as Barclay’s hosted its annual consumer staples conference, featuring over 20 different company presentations and interviews.


I pulled out the most interesting takeaways from the conference to shed light on consumer behavior, elasticities, supply chain, and management outlooks for the balance of the year.


Read More Here


For the Nerds


Amazon launches its 3PL website: While Amazon has done multi-channel fulfillment for some time, it is making a bigger push with the recent launch of its 3PL website. Analysts believe this business could generate $25-$35 billion in revenue by the end of the decade as Amazon will be able to significantly reduce costs for its clients.


Amazon doesn't need to limit itself to only managing fulfilment of goods on its own marketplace when the same technology can be applied across a broader swath of the economy.


This fundamentally changes the potential ROI of its tens of billions of logistics capex investments since 2020.


Cost advantage and service levels will win over any hesitancy a brand or many retailers might have in partnering with Amazon. (link)


Inflation picks up: IRI published a useful summary with its August 2022 price check analysis which illustrates inflation across food and beverage.


August saw the highest rate of inflation at 13.4% Y/Y with the largest volume declines at -4%. This data is interesting particularly given commentary at the Barclay's consumer conference where several brands like McCormick called out a steep decline in consumer demand in the month of August. (link)

Walmart extending ad options to sellers: Walmart announced it will be opening its Search Brand Amplifier to marketplace sellers through the self-serve ad center.


Marketplaces help extend assortment, which in turn helps drive greater auction density for the all-important high margin retail media business Walmart and its peers are growing.


This update aligns with commentary in our research that Walmart is placing an increased emphasis on smaller 1P brands and marketplace sellers to grow its ad business beyond managed services with the largest advertisers. (link)

Amazon enables email marketing: "For the first time, sellers can now expand beyond brand followers when sending free marketing emails to reach their most loyal customers, such as repeat customers, recent customers, and high-spend customers."


This extends the ability for brands to reach customers as they were recently limited messaging "Brand Followers" through the customer engagement tool. The update also includes email metrics like open rates and click through rates.


This new capability lends urgency to breaking down any silos that may exist between email marketing leads and their Amazon counterparts. (link

Kroger adds video & CTV to PMP: Kroger Precision Marketing announced it is expanding its programmatic marketplace to include video and CTV, enabling advertisers to use its data target households via OpenX, PubMatic, Magnite, and Xandr.


Video is in the cross-hairs for retail media platforms as streaming consumption recently surpassed cable. Kroger's move should be another wake up call to organizations that continue to classify all retail media as trade spend. (link)



Marketing analytics investment: The latest CMO Survey benchmarks an extensive number of marketing topics in-depth across economic sectors. Marketing analytics is seeing a step up in adoption, with spending as a percentage of marketing budget at 8.9% compared to ~6% for the prior decade. CMO's are planning for this to increase tp 14.5% in the next three years (slide 59).


While not the focus of this survey, the positive trend in analytics spend stood out given the growth in analytical tools coming from Amazon (AMC, Attribution, Stream, Stores).


Depending on how your company benchmarks against this amount, the results may be helpful in making the business case to invest more behind the analytics capability. (link)