Walmart's Jet inks sampling deal
Walmart e-commerce unit Jet is partnering with product sampling company Brandshare to include some 300,000 premium product samples and other offers each month, sent with Jet’s shipments to customers, according to Brandshare. That extends BrandShare’s existing three-year-old partnership with Jet parent Walmart, which has expanded its own e-commerce sampling effort to 4 million sample packages each month.
A Jet spokesperson told Retail Dive that the point of the e-commerce site's sampling strategy is to "surprise and delight." "Sampling will not be targeted according to past shopping habits," she said. "At Jet.com we’re always looking for innovative ways to enhance the shopping experience, and will announce those shopping experiences directly."
The ongoing shift to e-commerce will drive its own e-commerce-based sampling business to grow some 366% this year from 2013, Brandshare said. Brandshare expects spending on product samples to rise 5% this year to $34.12 billion, and as much as 4.6% to $40.69 billion by 2020.
Product sampling, otherwise known as “try before you buy,” is a tried and true method of getting customers to switch to a new brand. It’s especially true of consumer product retail, of course, where even some of the most brand-loyal consumers could be persuaded to try new things if a freebie arrives at their doorstep.
Consumer products retail is under more pressure than ever these days as Amazon ramps up sales of private label goods. Amazon's consumer product sales in the health and personal care, baby and grocery segments saw double-digit growth in the first quarter of 2017, while the overall global health and personal care markets declined 1% and the grocery market declined 10%, according to a report from e-commerce research firm One Click Retail last month.
The baby products category enjoyed the highest e-commerce consumer products penetration, with Amazon having 43% of the total. Q1 Amazon U.S. sales of diapers rose 30%, baby food rose 15%, and baby formula rose 80%. In both the U.S. and the U.K., Amazon saw triple-digit growth of top brands like Pampers, a 700% increase.
For many consumers, loyalty to any one retailer when buying detergent or boxed cereal isn’t quite as strong as to the brand itself, a vulnerability that Amazon is poised to exploit with promises of fast shipping, same-day delivery in some areas and low (or at least competitive) prices. There’s already evidence that Amazon Prime members in particular use the site to “solve their problem” if their favorite consumer product can’t be found at Target, Walmart or their usual grocery store, according to research from consulting firm Frank N. Magid Associates. As consumers shift toward e-commerce for consumables, the popularity of Amazon's services such as Prime, Pantry and Fresh are gaining ground, according to One Click Retail’s report.
Amazon in particular is winning in this corner of e-commerce thanks to improved delivery times and an increased number of fulfillment options, according to One Click Retail CEO Spencer Millerberg. And Amazon Prime members, whose numbers themselves are growing, are the most likely to try services like Amazon Pantry, he said.
These days, Amazon also has a new sidekick in its efforts — the AI-powered voice assistant Alexa, which remembers what detergent Prime members tend to order, but fills in the Amazon private label version in a pinch. That might be a point of contention for consumer products companies dealing with Amazon, according to Magid VP Matt Sargent. “I was surprised there isn’t more of [an outcry] about that,” Sargent told Retail Dive earlier this year. “If you look at Alexa and how it does ordering — if you haven’t set ‘I always want Tide,’ it’ll make a selection for you. That’s a hugely terrifying proposition for manufacturers.”
Despite Amazon's growth in the space, just 10% of consumers turn to its site for grocery and household items, compared to more than half (51%) buying consumer electronics and small appliances there, and 25% for health and beauty items, Magid found. Amazon has also grappled with positioning its Prime Pantry program by changing up the pricing structure. Subscribe and Save customers have also found Amazon’s prices aren’t always consistent or even the best deal.
- press release Brandshare Fact Sheet
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