Ocean Spray has launched direct-to-consumer (DTC) commerce, the latest sign of venerable U.S. food retail brands trying to gain an edge via online shopping amid shifting consumer behavior.
Ocean Spray’s first-ever DTC effort involves herbal beverage Atoka. Introduced in late 2019, the beverage is designed for consumers who “are looking for ways to expand their holistic and health-and-wellness habits while at home,” according to the Lakeville-Middleborough, Mass.-based company. The ongoing pandemic and resulting stay-at-home mandates and habits moved Ocean Spray to make DTC a bigger part of the overall launch strategy for Atoka, Rizal Hamdallah, global chief innovation officer at the company, told Progressive Grocer.
“While retailers focus on keeping shelves stocked and protecting customers and workers, the go-to-market strategy has shifted much of our focus to digital platforms and allowed us to focus on helping our consumers through this tough time,” Hamdallah said, adding that Ocean Spray will make Atoka beverage donations to frontline health care workers as part of this new direct-to-consumer push.
Food and other retail brands are increasingly entering the DTC world. Earlier in May, for instance, PepsiCo launched two DTC websites, PantryShop.com and Snacks.com, “where shoppers can order an assortment of PepsiCo's trusted and loved food and beverage brands,” the company said. PepsiCo painted its new direct-to-consumer effort as a response to pandemic buying habits, much as Ocean Spray did.
There’s more to the broader story, however. That’s because before the pandemic, DTC sales stood as a growing commerce trend, with shoe and apparel brand Nike among the pioneers. Part of the reason includes wanting to get out from under the shadow of Amazon and take more control over marketing, brand image and consumer relationships. Brands also are taking advantage of better e-commerce and mobile shopping technology —— including personalization tools, as is the case with Nike —— and the willingness of consumers to shop with nearly any company and from any device, assuming the process is efficient and relatively free of friction.
As for the Atoka launch, Ocean Spray’s new DTC offering also seems to play off two other trends that were in play before the COVID-19 lockdowns started: The tendency of more consumers to do more food retail and other shopping from their increasingly connected homes, and the ever-growing demand for food and beverages deemed healthy and natural.
“Consumers understand how important a healthy diet is, especially during times of a health scare, and are looking to invest in their health,” Hamdallah told PG. “Consumers are becoming more proactive towards their health, driving demand for [such] products.”
Demand is one thing; logistics and fulfillment are another, and can make or break any DTC effort. In this world of same-day delivery and other such tools, shipments that take too long, or other lackluster services, can doom a direct-to-consumer launch and send consumers back to retailers.
“We kicked off partnerships with best-in-class service providers to support the e-commerce shop and product fulfillment for Atoka,” Hamdallah said. “We work closely with our partners to ensure a great user experience, from the ease of use of the website to how the products are packed out and shipped in a way that ensures a quality ordering and unboxing experience. Looking forward, we will continue to optimize our user experience.”
That said, DTC commerce involves more than just sales to customers, as this Ocean Spray effort demonstrates. DTC programs provide a new level of consumer and market intelligence. Brands are playing catchup to the likes of Amazon, Walmart and other e-commerce and retail leaders when it comes to understanding shoppers in deeper ways. Brands, in general, simply don’t have the digital and mobile capabilities —— nor have they made the necessary investments —— that can provide precise, nuanced and relatively unfiltered views of consumer behavior, and which can offer early warnings about changes in that behavior. The nature of direct-to-consumer commerce, however, can help brands gain ground as they work to tighten relationships with consumers via digital tools.
“Launching this new DTC channel allows for the opportunity to engage with our consumers directly, to learn from them, and use these learnings to continuously optimize everything from the shopping experience to the products themselves,” Hamdallah said. “This test-and-learn platform will be a valuable tool for us as we continue to bring innovative new products to life.”
Expect more DTC activity from all types of brands, including Ocean Spray. “In the next few weeks, we are also launching another innovation brand and leveraging digital platforms as a test market,” Hamdallah said. “Stay tuned.”