SKU’d Thoughts 16: Can CPG and retail companies buy customer experience?
Companies typically make acquisitions to gain key business components that they are missing, like analytics, digital, and e-commerce. Upstart brands entering the CPG and retail space have raised the bar on customer experience. As a result, legacy companies in these sectors are figuring out how to keep pace with these new entrants when it comes to customer experience. In SKU’d Thoughts 7, I highlighted that great customer experience means providing “customers with ‘what they want’, ‘how they want it’, ‘when they want it’ all while telling them ‘why they need it’”. To check off all these boxes, some CPG and retail are turning to M&A as the solution.
Here are some examples of 2019 acquisitions across CPG & retail that led to the acquirer strengthening its customer experience.
__________
Walmart: The retail company is positioning itself to surpass Amazon as the e-commerce platform of choice.
Acquisitions:
Polymorph Labs, a cloud-based ad serving platform. This acquisition helps brands selling on Walmart better target and manage ads.
Aspectiva, a startup whose AI-based technology analyses user-generated content like customers’ product reviews, combines it with a shopper’s browsing behavior to make product suggestions to shoppers, both online and in stores.
_________
Procter & Gamble: P&G has been interested in attracting customers their current product offerings don’t resonate with.
Acquisition:
This is L., a feminine care startup that manufactures organic pads and tampons. The acquisition helps P&G meet growing consumer demands for natural and organic products.
________
AB InBev: This alcohol manufacturer gains access to non-beer drinkers by leveraging its distribution network.
Acquisition:
Cutwater Spirits, a maker of distilled spirits, mixers, and ready-to-drink canned cocktails. This acquisition allows AB InBev to expand its product portfolio to other alcohol categories.
__________
M&A activity has long been a part of the consumer and retail space to support long-term strategies. It used to be a lever pulled to strictly gain economies of scale but it’s now used to gain access to a differentiating customer experience. As seen with their respective acquisitions, Walmart aims to provide customer experience on par or better than Amazon through a more robust feature set while Procter & Gamble wants to attract and provide a great experience for a small customer cohort that has in the past turned to indie manufacturers to fill their needs.
Cross posted on Medium