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Dispatches from Snaxpo 2014: Frito-Lay marketing executive insight, part I

Frito-Lay: ‘These days of mass marketing are limited…’

By Kacey Culliney+

03-Mar-2014

'We're going into a world of one-on-one marketing… Welcome to the new world of retail,' says Frito-Lay's chief marketing officer
'We're going into a world of one-on-one marketing… Welcome to the new world of retail,' says Frito-Lay's chief marketing officer

Mass marketing no longer resonates with today's consumer and it must be replaced by one-on-one marketing with dedicated focus on pre-shop behavior, says Frito-Lay’s senior vice president and chief marketing officer.

Speaking to Snaxpo 2014 attendees in Dallas, Texas on Sunday March 2, Anindita Mukherjee painted a picture of extensive change in the US snacks sector; change, she said must be met with a new marketing perspective from industry.

“We’re going into a world of one-on-one marketing. These days of mass marketing are limited, and the days of just putting deals out there to get consumer attention are also nearing an end,” she warned.

She said that this change had been, and would continue to be, defined and shaped by the consumer.

Pre-shop action: ‘Welcome to the new world of retail’

Consumers no longer make decisions in-store, Mukherjee said. In fact, research showed that 76% of purchase decisions were influenced before consumers even started shopping, she explained.

“90% of shoppers use phones for pre-shop. Pre-shop is where the action is, it’s where demand is being created. It’s all the stuff you see online - the social media influences exploding, the posts about the anticipation of the shop. It’s all about the pre-shop.

“So, welcome to the new world of retail. It will be fundamentally different to the one we’re in today,” she said.

Huge supermarkets were out, she said, and e-commerce, specialty stores and value retailers were in. Loyalty cards were a thing of the past and bricks and mortar being the only way to shop was well and truly over.

Snack makers and retailers must unite in adapting to the new consumer landscape, says Mukherjee

Snack makers and retailers must unite in adapting to the new consumer landscape, says Mukherjee

Retailers had started to figure this all out, she said, but they were looking for help in moving forward and overcoming challenges associated with these changes. And that, she said, was where snack manufacturers came in.

Retail partnerships critical for the future

“Mainstream is slowing down, it’s big, but slowing down. It’s the tails that are growing – it’s the value retailers, the premium retailers; most of the retailers we don’t even see on scanned data. They’re the one’s growing double digit. And are we as posed in those places as we are in the mainstream? Probably not,” she said, discussing the snack sector as a whole.

Mukherjee said that securing future growth in snacks would depend on successful relationships between the snack industry and retailers.

She explained that retail partnerships could particularly help secure growth in center store – an area that was missing out to perimeter sales but was brimming with opportunity given it represents the lion’s share of retail sales.

‘Unbelievable room’ to grow

The chief marketing officer said that the snack sector – Frito-Lay included – had “unbelievable room” to grow.

Consumers were snacking on an average of 67 snacks per month, she said, 46 of which were packaged, 21 unpackaged. Within the packaged items, salty snacks accounted for 12, she explained. “There are still inconvenient eatings that our industry can capture and make convenient. There is a lot of headroom for us to grow our industry,” she said.