How CMOs are grappling with shifts in consumer behaviour

In part two of strategy's MES roundtable, marketers discuss convenience, sustainability and other organizational challenges.

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The roundtable discussion was edited for clarity and space. Click here to read part one. 

Ahead of the last week’s Marketing Evolution: C-Suite Summit, Strategy welcomed several MES advisory board members for a roundtable dinner to discuss and reflect on the changing role of the CMO and how to future-proof their brands.

At the roundtable were advisory board chair Deborah Neff, VP of marketing at Sephora Canada; board members David Bigioni, chief commercial officer at Canopy Growth, and Antoinette Benoit, SVP and CMO at McDonald’s Canada; as well as Axel Schwan, global CMO at Tim Hortons and Judy Davey, VP of media policy and marketing capabilities at the Association of Canadian Advertisers (ACA).

What’s the biggest shift in consumer behaviour that you’re grappling with right now?

Tim Hortons’ Axel Schwan: For us, it’s sustainability across the board. When it comes to food, where does the food come from? If it’s beef, how was the cattle raised? For packaging, what are you doing to reduce your impact on the planet? You really need to have an answer to these questions. You won’t get away with saying, ‘We’ll care about this [issue] in the future.’ We have to do things now. As we speak, we are rolling out a lid for our cold cups that doesn’t use a straw anymore. It sounds so simple, but it will help take 120 million straws out of this world per year.

Canopy Growth’s Dave Bigioni: I’d categorize it as consumers need to see behind the brand. No longer is what you say that’s important, it’s how you act and behave. [Consumers are] looking for that transparency. You have to be able to deliver that. In the cannabis industry, I would say 80% of the brands were invented for legalization a year ago. Brands need to have a face, place and story. They need to have values and elements that sit behind that. Not just in what you say, but in what you do.

The environment and recycling is an area that we tackled head on, because there’s a lot of packaging in cannabis, and it’s a big concern for consumers. A lot of it is mandated [in] the regulatory framework that exists. So we initiated a program with TerraCycle. As part of that program, we’ve now distributed TerraCycle boxes to around 400 dispensaries across the country, depots where consumers can bring back their cannabis packaging for it to be recycled and turned into other products. We’ve had buy-in from government boards, we’ve had buy-in from third-party retailers, and our salesforce is distributing these across the country. I think we’re at over a million units of recycled and returned [packaging] through the first ten months.

Sephora’s Deborah Neff: We see a different shift in consumers, because we’re on the retail side of it. Obviously, Sephora has to play a role. But the pressure is on our brands, and our brands are prestige, so you’re paying a lot of money. The shift for us has been convenience, which has changed the whole landscape of retail. Because you can order online, it’s [about] bringing that experience to your stores for [customers] to want to come shop with you. How do we still make our stores relevant in an age when you can compare or shop online while you’re in the store? How do we meet that demand and still make it a valuable proposition?

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Strategy magazine reviews a lot of consumer research, and when it comes to what influences purchase behaviour, it’s always price, price, price. Is there anything around convenience and pricing that has changed over the last year or two? 

McDonald’s Antoinette Benoit: Food delivery is going to completely change things, and convenience will come before price. The way everybody has Netflix today, tomorrow consumers will have a subscription to get delivery whenever they want. If you think of the competition between Tim Hortons and McDonald’s  Tim Hortons has always a had huge advantage in terms of number of outlets, [with] three times as many stores as McDonald’s. But now, we have an app, so you don’t need your brand to be close to where you are. Food service is growing twice as quickly as QSR, and little brands and restaurants, they are competing with you at the same level now. For us, that’s going to be a huge change in the market. Price is [going to come] second.

Bigioni: For us, there’s a tension between convenience and privacy. Before legalization, [we] assumed that 20 to 30% of consumers would purchase online, because it would be more private. What we’ve seen is online only represents 2% to 4% of Canadian purchases. And I think a lot of that has to do with privacy and people’s concerns around data. At the same time, some consumers are prepared [for] the Uber weed of delivery  can have you have it here in 12 minutes? The majority [of purchases are] in store, but there’s still that tension between consumer convenience and education  it’s a seven to eight minute sales cycle  for those that just want to come in and out.

Are you concerned that the world will turn against shipping and packaging and the costs of convenience, the way it turned against straws? Could things shift again? 

Benoit: People are still selfish, even on sustainability. What we see, for example, is that when people say they’re going to eat less beef, the first reason is my health. It’s not because it’s bad for the planet. They [eventually] come to that point. But the first point is always them. Otherwise, we would not be in this situation. It’s also difficult to get true answers from consumers on these topics.

Bigioni: Their beliefs don’t always follow their actions. They may believe in environmentally friendly brands, but they don’t always act if it’s not convenient.

Axel: That’s a little bit what we’ve observed. You have to give it all. The lid [I mentioned earlier], for example, is A, better for the environment, B, doesn’t cost more, and C, delivers an equal experience. If we had to raise prices because of the lid, acceptance of it would be very different. You have to find [solutions] that are ideally cost-neutral, are better for the environment, and don’t hurt the taste or the experience. Taste is still the number one driver. Taste also means the shape of the lid and [its impact on] the whole sensory experience. When it’s a win on all fronts, that’s what people embrace generally. If you have to raise prices, it’s a very different discussion.

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