The maker of Oreo cookies and Trident gum is seeking the help of Canadian tech startups to take a bite out of rival retail brands.
Mondelez International of Deerfield, IL recently launched Shopper Futures, an open search for innovative technologies that can disrupt the retail experience for consumers. The program is open to Canadian and American startups less than four years old whose technology “is at a stage where it could be live in the market,” according to Mondelez’s guidelines. (Startups can view the complete list of criteria and apply by the June 27 deadline at shopperfutures.com.)
Nine startups chosen by Monedelez will receive some funding from the company, plus the chance to collaborate with a retail partner and a team of Mondelez marketers for brands such as Oreo, Halls and Cadbury. The tech entrepreneurs will also present their ideas at a pitch event in East Hanover, NJ on August 5 and 6. In keeping with the startup spirit, each team will have just 90 days after their selection to execute a pilot of their idea.
It might seem surprising that a global brand with $34 billion in revenue last year would seek the help of fledgling tech firms. But according to a presenter at the recent Shopper Futures launch event in Toronto, large retail brands are increasingly tapping into startups for their agility and innovation.
“It’s going to happen more and more. We want to behave in a small entrepreneurial way but we’re big,” said Kristi Karens, director of media and consumer engagement at Mondelez Canada.
Karens’ fellow panelist, Pema Hegan, reassured his fellow Canadian startups in the room that the biggest brands in the world actually want to meet with them.
“Don’t walk in there like nobody wants to hear from you. They really do want to hear from you,” said Hegan, co-founder of Checkout 51.
Hegan speaks from experience. His Toronto company makes e-coupons for consumer packaged goods (CPG) giants like Mondelez, Unilever and Kellogg’s. Instead of clipping paper coupons, users sign up on Facebook or Checkout 51’s website, which also lists the e-coupons offered each week. If users buy a listed item, they can take a photo of their grocery receipt and upload it through Checkout 51’s website or mobile app. Once their total savings hit $20, Checkout 51 cuts them a cheque.
Hegan and Karens said retail brands are seeking those types of innovations to help them deal with a slew of new challenges. For example, although the growth of online and mobile shopping gives brands more ways to connect with consumers, Karens said it also makes it tougher to market “impulse” items like gum and chocolate bars that are sold mainly in stores instead of online.
Another challenge facing big retailers today is how to offer personalized mobile marketing while keeping in mind “how many hundreds of (marketing) messages you could be getting bombarded with in a store,” said Karens.
“We’re used to targeting large groups of people. Now we’re figuring out how to speak to an individual and scale it for an audience in a relevant way.”
At the Toronto information session, Karens outlined the kinds of ideas Mondelez is seeking from startups. She listed technology related to geo-targeting, packaging, creating or using shopping lists, building brand loyalty vs. one-off up-selling, and engaging customers in small outlets like convenience and gas stores rather than just huge stores like Walmart.
Karens also noted that retailers see data as “incredibly important.” She said Mondelez analyzes data to see which snack foods sell more just before major sports events, then uses it to refine the timing, content and target audience of its marketing efforts.
This isn’t Mondelez’s first foray into the startup world. In 2013 it chose nine mobile startups for its Mobile Futures program. That resulted in the 2014 beta release of products from two U.S. startups, Pransktr and Betabox.
Prankstr is an online tool to customize prank videos and post them on social media. Betabox pairs consumer packaged goods retailers with e-tailers. (In the Betabox pilot, free samples of Mondelez’s Sour Patch gum were put into boxes of T-shirts shipped to customers of online T-shirt vendor Bustedtees.com. Attached materials directed customers to a website featuring a sweepstakes contest and other Sour Patch offers.)
Mobile Futures was later launched in Brazil and Australia, a timely move considering figures released in February. According to the 2015 Shop.org/Forrester Research State of Retailing Online, mobile is the top priority this year for 71 surveyed retailers, named by 58 per cent of those polled. Eight out of ten plan to increase their mobile budgets by at least 20 per cent in 2015.
Other data from the same report makes it easy to see why retailers are focused on mobile. Purchases made from smartphones represented 12 per cent of all online shopping sales in 2014, a 50 per cent jump from 2013. Purchases via tablets also grew, from 13 per cent of all online sales in 2013 to 16 per cent in 2014.