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GCI: What are the implications and impact of online retail on brands?
Kevin Kells: Consumer packaged goods (CPG) companies are further behind, in general, regarding online retail when measured against vertical industries such as retail or travel. Meaning that the bulk of CPG sales still go through brick-and-mortar doors. Having said that, there are certain pockets, such as prestige beauty, where that percentage has been increasing dramatically in the past five years. So brand marketers are still keenly aware that their online campaigns need to, for the most part, drive off-line actions. CPG companies are also trying to figure out how to drive more sales online using their existing customers’ Web sites, and I would look to see much more of this in coming years.
Beth Mayall-Traglia: Ultimately, online retail makes it easier for the consumer to pick and choose. She’s no longer limited to brands with a brick-and-mortar presence in her mall. The huge boom in online beauty product reviews at sites like TotalBeauty.com and beauty blogs have made consumers smarter about their spending, too. Our focus groups tell us they read reviews before they purchase, to get endorsements from other women. Products without endorsements from consumer peers raise a flag—Why does no one use this? I wonder if it’s a bad product? That kind of experience only existed among friend groups before the Web.