Earlier this month, Heinz launched their first-ever direct to consumer (D2C) eCommerce offering – “Heinz To Home”. At the time of writing this article, the concept offers just one product for customers to purchase. Yet, it has captured the attention of consumers across the UK and secured a niche in the market within days of coronavirus lockdown taking hold.
Responding to the climate
Availability of staple foodstuffs, as well as travel restrictions, have left the Great British public panic-buying and hoarding ‘essential’ products as they worry about shortages and uncertainty for the future. In response, Heinz are offering help and a little comfort with boxes containing a selection of three of their most popular products – Baked Beans, Spaghetti Hoops and Tomato Soup.
Sometimes, simple is best
In previous articles, I have emphasised the importance of agility and being able to react quickly when an opportunity arises, which is exactly what Heinz have managed to do. By focusing solely on the single most important problem that their solution was looking to address, their new site has been launched fast. And, without the need for complex integrations, bespoke ERP implementations or any of the other bells and whistles many eCommerce sites obsess over in the lead-up to launch.
Will those features appear in the future? Probably. But had Heinz waited until all those features were ready before launching, the window of opportunity would have been missed. More importantly, Heinz now have real-world customer data to help shape their D2C strategy.
By only having one pre-packaged product to pick and distribute, the supply chain is as simple as one could hope for. No need to worry about catering for 100 different sizes of products, or complex multi-faceted orders going overseas, or too many different locations. Whether the site takes one or 1,000 orders, the picking and packing process will scale accordingly. The website has been set up at a time of duress for the end consumer, and Heinz can be fully confident in their ability to fulfil the customer demand almost limitlessly.
The Minimum Viable Product
Expectation has been set, and it has been set low. I have one product, one price point and one delivery option. If I want anything else, I need to go elsewhere. Anything Heinz add as a phase two will be seen as a bonus and each small iteration of the site can be launched, measured and responded to piece by piece. It’s the very definition of a minimum viable product (MVP) and it is now within Heinz’s gift to blaze a digital trail through the ‘brands going direct to consumer’ market to set the benchmark for everyone.
The implications of this simplified approach reach far beyond the practical. Elements such as site search, merchandising, personalisation and even email marketing become simple, or non-existent as there is no need to second-guess the consumer’s intent. As the product catalogue (presumably) grows, analytics can be used to quantifiably identify when these tools are required and the impact they have when they are implemented.
Going it alone
Unsurprisingly, retailers have been quick to express concern at Heinz’s move into D2C. These retailers should, however, have been preparing for this eventuality for over 10 years. Canned goods are ideally situated for selling foodstuffs online, and the fact this has only just happened shows how sensitive Heinz (and other manufacturers) are to their longstanding retail partnerships.
To counter this threat, supermarkets and other retailers need to work more closely with brands who are looking to go online. For example, this could include offering use of their own eCommerce infrastructure in order to reduce costs and improve scalability. Additionally, the ability to offer limited edition cross-brand promotions, up-sells, cross-sells and give brands access to broader consumer insights are all great bargaining chips.
Retail has already been experiencing upheaval over the past 10 years, and current events are likely to have a huge, lasting effect across many aspects of consumer behaviour for years to come. Retailers will need to act, and quickly, if they are to survive as the situation develops.
Food for thought
Another retailer who might be looking enviously at Heinz’s success is likely to be Primark, who have very publicly defended their decision to have no eCommerce channel in the past. The brand has recently announced that their sales figures for the month of April 2020 are £0 – down from £650m in March – due to the temporary closure of their stores.
Online has now become the only option for the majority of brands. While now may not be the time for fast fashion purchases, Primark’s competitors are still operating in the market, able to sell and create revenue through their eCommerce store. We’ve seen retailers from many different sectors quickly setting up online and/or telephone channels to allow customers to keep buying their products while their physical stores are closed. Maybe there is even potential for an eCommerce store to offer a single-box staple of everyday socks for the locked-down consumer? After all, everyone wants to feel their most comfortable during their Zoom video calls.
We’ve worked with a range of businesses including Beer Hawk, Edifice and Osprey Europe to help build their D2C offering. If you want to talk more about this subject and how a D2C offering may be right for your business in the current climate, contact Team Pinpoint today.