As brands and manufacturers continue to organize around and build e-commerce teams, the Consumer Packaged Goods category, or CPG, represents one of the largest areas for growth and innovation. It covers almost everything we’re used to seeing at grocery, convenience, and drug stores, from laundry detergent to breakfast cereal. The race to synchronize convenience, choice, and availability between physical stores and online channels is forcing brands and manufacturers to constantly evaluate their short- and long-term strategies.
At Netrush, John Willkom is leading our efforts in this category. Transitioning from Netrush’s Director of Strategic Partnerships to the newly appointed Director of CPG, John will be zeroing in on building and sustaining partner relationships and strategies within the CPG category. With change all around and Expo East on the horizon, we sat down with John to talk about e-commerce, how the industry is changing, and the exciting CPG initiatives NetRush is pursuing.
Tell us a bit about where you’ve come from professionally — what’s changed industry wide, and how you’ve adjusted to stay ahead of those changes?
I spent nine years at Kellogg’s in a variety of sales roles. I started my career in Salt Lake City, Utah, and covered a four-state territory before moving to Southern California. After a few years there, I accepted a promotion in Chicago where I spent four years working with key accounts in our corporate office and finished my MBA. I moved to Portland last summer. It’s been a whirlwind of great experiences, and I was fortunate to be around great people that taught me a lot along the way.
Coming to Netrush has certainly been a rewarding transition for me because there’s a lot of flexibility to do creative things and bring custom solutions to the marketplace. Especially in the world of CPG. There are a lot of unique challenges out there, and to be in a position to speak openly about challenges and modify a model to meet the needs of a brand is very rewarding.
What is the biggest difference from nine years ago to now?
I look at a category like food; there were a lot fewer brands nine years ago. Large brands controlled the market share. Small brands, particularly in the “better for you” space, have carved away at that market share because they’ve been able to meet the specific needs of a consumer in very specific micro niches. Great examples of that are in categories like granola, beverages, and yogurt.
People resonate with a story now more than ever. It’s not just about ingredients, but being transparent as to where they come from. Consumers want to understand the product journey and the brand’s story, often all the way down to the founders. What is the mission driving them forward, and how does that relate to the target audience? The brands that do it right take advantage of the costs and scale associated with digital, and consumers are willing to pay for it. Brands, more than ever before, are investing in storytelling.
Can you talk about your new role at NetRush? How is it different?
CPG is a multitrillion-dollar industry, and our business has grown to the point where we needed to create our own division. I’m blessed to have a strong team that cares about doing things the right way and is motivated to succeed. We’re going to focus on subcategories that we think are a good fit for e-commerce and are best positioned to take advantage of our services. Vitamins and supplements are a large part of our business now, and will continue to be, but we’d like to expand into other subcategories, such as food and beverage.
What makes a brand a good fit for e-commerce?
The number one thing is storytelling. The ability to take a consumer through a digital story and have them 100% inspired to purchase by the end is the equivalent to hiring the best salesperson in the country. Every brand out there needs to want to “own the aisle” in e-commerce with the same enthusiasm they have for shelf space at brick and mortar retailers.
Our studio team is helping brands increase their speed to market. We have the ability to change how they put their brand out to the world, and that’s huge. Some of the biggest and best companies have traditionally relied on an agency model, in which projects are done, paid for, and then pushed live. We’re finding through research that often content is outdated the day it’s rolled out. You have to be versatile, flexible, and willing to change things in real time. How do you do that if you’re not monitoring your content?
The second part is that it has to make sense logistically. You have to be able to ship something across the country within your margin specifications. Smaller, more expensive items are often better, but that’s not always the case. Making sure your P&L fully reflects all of the costs associated with e-commerce is imperative.
What’s the most critical thing about Amazon that brands aren’t paying attention to or keep missing right now?
In the CPG world, most brands have a very defined strategy for every channel except Amazon — the one that has evolved to a funnel of sorts that captures every product ever produced by a brand and makes it available for sale. Instead of folding the cards and settling for the status quo, brands have an opportunity to take full control of the Amazon Marketplace. Successful brands have a company-wide strategy to maximize success on the platform. Products may cross channels internally, but everyone is aligned that they fit the Amazon strategy. Once the products are identified, they need to be cataloged, tagged, and marketed correctly to push them up in the rankings. Your organization may have a club team, a Walmart team, a Kroger team, a Drug/Dollar team, and an Amazon team, but how often do they talk to each other? What happens is that the Amazon team looks to all the other departments and says, “Can I sell all of your SKUs in my channel?” The end result is a confused consumer. Moving forward, it becomes extremely challenging to plan for a business channel that doesn’t have a defined value.
Expo East is coming up. What’s something you’re looking forward to?
This is a people industry. First and foremost, I’m excited to see our current partners, share some laughs, and learn about their goals heading into 2018. As an organization, we’re continuing to build out new tools and capabilities, and I’m looking forward to sharing these. E-commerce packaging is a major talking point, and we’re making major strides there. Last, being around other passionate people, entrepreneurs, and drivers of social change is so motivating. I always try and take a few things away from the speakers that I can apply to day-to-day work at Netrush.
What’s a brand that’s leading that charge?
We’re confident that a lot of brands will move to more sustainable, e-commerce friendly packaging. Amazon Elements essentially has a scannable barcode that lets you look at everything that goes into your supplement, the day it was made, when the ingredients came in, etc. The goal is 100% transparency on the labels, and lighter, flatter packaging for e-commerce. The amount of people that actually scan the label and look at the information is probably small, but being able to advertise that and make it a focal point in a brand’s marketing efforts is a big deal.
What’s the biggest barrier to people getting on board with new packaging?
People are inherently resistant to change. You’re always going to be nervous about how a consumer is going to react. If they get their vitamins in a flat box, as opposed to a regular bottle, will they react negatively? How will that affect the brand? We’ve talked a lot about keeping the bottles in a standard packaging format, while positioning the “flatter is better” option as FFP (Frustration-Free Packaging). So, if you want to order the sustainable e-commerce packaging, you can, but if you feel comfortable ordering a bottle every month, that’s still an option. In this way, the people who care about sustainability know the company is doing the right thing by offering it, but at the same time, it’s not being forced upon every consumer.
What are the next set of problems to solve, after sustainable packaging?
I think the buying experience will continue to evolve. Amazon is going to do some unique things with Whole Foods. I think they’re going to create several different shopping experiences ranging from pickups, Amazon Go type models, and distribution models (where the majority of the store will be a warehouse). To elaborate, I imagine there will be a small, open storefront for consumers to go in, but only have one of each product on display. You’ll be able to touch the product and get a feel for it, but you won’t be able to actually take it out of the store. You’ll just order it in some way there, and by the time you get home, it’ll be at your doorstep. None of this is that farfetched, as it’s consistent with Amazon’s values of innovation and serving the consumer in the way they want to shop.
Let’s talk about you for a minute. What do you like to do in your spare time?
I love to do things outside, and you’ll find me hiking, skiing, or playing some sort of sport on the weekends. I’m a huge basketball fan and have either played or coached my whole life. My wife is a distance runner, so I’ve tried to get in better distance running shape to keep up with her.
Best book you’ve read in the last six months?
Better Angels of Our Nature by Steven Pinker. It’s about how violence is declining and how societies have evolved over time to solve problems more peacefully. Despite what we read in the news, we are currently living in the safest time period in human history. It’s basically a giant history book. Fascinating.