Ackerman used to work as a general manager of Amazon’s Small and Light Program, a program that allows sellers on Amazon to ship items that are under 10 ounces for free to global customers. He was recently invited by Keith Anderson at Profitero to speak for a podcast on the outlook for impulse merchandising in a digital world.
“For me, impulse buying is a verb. You have to impulse the consumer to buy and you have to win the screen,” he said during the podcast. “… Targeted precision leads to the buying decision.”
Three elements of online targeted precision
Companies have to understand how consumers compose their virtue shopping carts, even if those item selections are seemingly random, Ackerman said.
By identifying “what people are buying with your products… you can facilitate an impulse,” he said.
For example, “right on the digital screen when they go to that non-relatable item and you know that item is actually suited with consumers who, let’s say, eat the Oreo.”
Diving into data research on consumer behavior can also help companies trigger a purchase of critical pairings, Ackerman added.
“Let’s say, someone likes chocolate and they’re buying something that’s similar to chocolate or that would go along with chocolate… That critical pairing works and it works almost all the time,” he said.
Mondelēz has been working with several online store analytics platforms, including Clavis Insight, to execute an e-commerce strategy through consumer data. The result is, according to Ackerman, that the company’s power brands, such as Oreo Cookies, BelVita and Trident gums, have seen double-digit growth in e-sales.
Companies can also create the impulse moment, says Ackerman. This idea struck the e-commerce chief when shopping for wood at a Home Depot a few years ago while his iPhone was dying.
“Right next to the [Home Depot] register were little iPhone chargers… they knew I was there… They knew that chances are, batteries are dead because people are searching Home Depot for the items and doing all these types of searches of how to build a shed,” he said during the podcast.
Supply chain: an enabler, not a cost center for revenue
How does targeted precision work with logistics and supply chain, since most online retailers have been implementing this consumer data-driven strategy?
Ackerman pointed out that the supply chain is no longer a cost center, but it is a revenue generator for a company.
“Supply chain is actually only made up of three components: Fixed cost (location of the facility), variable cost (find cheaper labor), and transportation cost,” he said.
When companies can manage to reduce costs on these three components of supply chain, it creates a competitive advantage for them, Ackerman added.
“It is the way to make a margin. It is the way to satisfy consumer demands,” he said.