Bridging Offline and Online Retail: Lessons from Kraft Heinz and Newell Brands

Summary

Bridging Offline and Online Retail: Lessons from Kraft Heinz and Newell Brands

Episode Release Date: December 31, 2024
Podcast: BRAVE COMMERCE
Hosts: Rachel Tippograf (MikMak Founder & CEO) and Sarah Hofstetter (Profitero’s President)
Guests: Ashley Becker (VP of Global E-Commerce Capabilities at Kraft Heinz) and Mike Geller (President of E-Commerce and Digital at Newell Brands)

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Introduction

In this episode of Brave Commerce, hosts Rachel Tippograf and Sarah Hofstetter delve into the intricate dynamics of integrating offline and online retail strategies with insights from industry leaders Ashley Becker of Kraft Heinz and Mike Geller of Newell Brands. The discussion centers around overcoming organizational silos, adopting an omnichannel approach, and tailoring strategies to diverse product portfolios.

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The Omnichannel Imperative

Sarah Hofstetter opens the conversation by emphasizing the necessity of dissolving organizational silos to foster a cohesive omnichannel strategy:

"The consumer is not operating in a silo, so neither should we." (02:02)

Both guests agree that a unified approach across online and offline channels is crucial for modern retail success. They highlight that consumers seamlessly transition between physical stores and digital platforms, necessitating consistent and integrated brand experiences.

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Diverse Portfolios, Distinct Challenges

Ashley Becker and Mike Geller introduce their respective companies and the breadth of their brand portfolios:

• Ashley Becker (Kraft Heinz): Oversees globally recognized brands like Kraft Mac & Cheese, Heinz Ketchup, and Lunchables, achieving a 98% household penetration.
• Mike Geller (Newell Brands): Manages 50 to 80 brands including Sharpie, Graco, Rubbermaid, and Coleman.

Rachel cleverly notes the diverse nature of their portfolios, pointing out how different product categories—such as frozen foods versus durable goods like car seats—pose unique e-commerce challenges.

"Even if it's within food, the way people shop and the way they convert is going to be very different." (04:03)

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Overcoming E-Commerce Constraints in Food Retail

Ashley Becker discusses how Kraft Heinz has leveraged online channels to transcend traditional retail constraints, particularly in the food sector:

"Online has been quite a big unlock from us from a solutions perspective because we don't have the constraints of temperature state." (04:58)

Key strategies include:

• Shoppable Recipes: Combining frozen and shelf-stable items to enhance consumer convenience.
• Third-Party Delivery Optimizations: Expanding product assortment through platforms like Dollar General, enabling higher sales for items like Bagel Bites.

This multifaceted approach allows Kraft Heinz to innovate beyond in-store limitations, offering consumers a seamless online shopping experience.

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High-Consideration Products and the Extended Consumer Journey

Mike Geller elaborates on the complexities of selling high-consideration products such as car seats and tents:

"A lot of our products... tend to be a little bit higher consideration, lower impulse and candidly, not repeat purchases." (05:50)

He emphasizes the importance of a holistic omnichannel journey, where multiple touchpoints—online ads, in-store experiences, reviews—contribute to the consumer's decision-making process over extended periods.

"Omnichannel journey is so diverse. A lot of our products... takes sometimes eight or ten interactions with the product... to make a decision." (05:59)

Mike advocates for minimizing distinctions between e-commerce and brick-and-mortar operations, integrating them to support a unified customer experience.

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Educating and Influencing Within Organizations

Both leaders address the challenges of fostering an omnichannel mindset within their organizations:

Mike Geller highlights the use of familiar retail terminology to bridge understanding:

"Using some of the old language that they understand about a perfect shelf in the store... we've got to interact with them where they are." (07:02)

Ashley Becker shares Kraft Heinz's strategic shift to empower brand teams:

"We've shifted that control back into the brand teams... The channel strategy, the end-to-end path of purchase needs to be in the brief from the beginning." (15:48)

Their approaches focus on enabling local markets and integrating channel strategies from the outset of product development, ensuring that digital considerations are embedded in every stage.

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Structuring Organizations for Omnichannel Success

The conversation delves into organizational restructuring to support omnichannel strategies:

Mike Geller breaks down the consumer interaction into three distinct but interconnected areas:

1. Interaction Points: How consumers engage with the brand (e.g., digital ads, in-store visits).
2. Transaction Points: Where and how purchases are made (e.g., online platforms, physical stores).
3. Delivery Methods: The logistics of product delivery (e.g., in-store pickup, warehouse dispatch).

"Splitting that up has been helpful in terms of getting people to think differently." (13:36)

This framework aids in addressing each component systematically, ensuring a seamless consumer experience across all touchpoints.

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Leadership and Organizational Integration

Mike Geller emphasizes the evolving role of leadership in an omnichannel environment:

"What is the overall experience of our product, of our brand, of our go-to-market and start finding the areas where we have defects." (15:48)

He advocates for brand leaders to oversee all functional areas, ensuring that sales, marketing, supply chain, and pricing strategies are cohesively aligned to enhance the consumer experience.

Ashley Becker concurs, noting the importance of integrating functional expertise within brand teams:

"Shifting that back into the brands... is helping in that process." (15:48)

This integration fosters accountability and ensures that channel strategies are integral to brand development from inception.

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Bravery in Leadership: Personal Insights

To conclude the episode, the hosts invite Ashley Becker and Mike Geller to share their personal definitions of bravery in leadership:

• Ashley Becker speaks to living consistently with her values and championing diversity:

  "The bravest thing that I do every day is living in a way that's consistent with my values... daring to do better and championing great people, particularly diverse talent." (16:23)

• Mike Geller recounts his entrepreneurial courage:

  "Right after college... I bought a one-way ticket overseas... started a company and we ended up growing the company and selling the company." (17:00)

These anecdotes underscore the personal courage required to lead transformative changes within large organizations.

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Conclusion

This episode of Brave Commerce offers valuable insights into the strategic integration of online and offline retail channels. Through the experiences of Kraft Heinz and Newell Brands, listeners gain a comprehensive understanding of the challenges and solutions in crafting a unified omnichannel strategy. The discussion highlights the importance of organizational restructuring, leadership bravery, and a consumer-centric approach in navigating the evolving landscape of e-commerce.

For those looking to implement similar strategies, the lessons shared by Ashley Becker and Mike Geller provide actionable frameworks and inspiring examples of successful omnichannel integration.

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Note: Timestamps correspond to the podcast transcript and are provided for contextual reference.

Transcript

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[Ashley Becker]

Most of the team are pretty eager and interested in the digital space because we recognize that this is sort of the future. So we're beyond that kind of huge hill of trying to convince the team that this is an important space. We broke 12% digital sales penetration a couple of years ago and that really started to get folks attention.

[Mike Geller]

Just using some of the old language that they understand about a perfect shelf in the store and understanding that, okay, if you have the car seat or the stroller, whatever it looks like in the store, if that same consumer is going to be looking online, we have to have as good or better experience there. We've got to interact with them where they are.

[Sarah Hofstadter]

Welcome to today's episode of Brave Commerce.

[Rachel Tippograf]

I'm Rachel Tippograf, the founder and CEO of Micmac.

[Sarah Hofstadter]

I'm Sarah Hofstadter, president of Profitero, and.

[Rachel Tippograf]

This is a show that talks about what's relevant in E commerce for the world's biggest brands.

[Sarah Hofstadter]

You know, silos get a bad rap and for good reason. No good organization can be run when people are working in parallel. I think the days of parallel play pretty much end as you become a toddler. So when it comes to growing up and maturing, we have to figure out how to balance the needs for distinct teams and processes, but at the same time figure out how we all play better together. Whether that's online offline sales and marketing, how you take a more omnichannel approach. The consumer is not operating in a silo, so neither should we. The how is the hard Part. So the debate you're going to be listening to today will air out these arguments for various sides to consider and leave you prepared to chart your own territory here. So with us today we have Ashley Becker, the VP of global e commerce capabilities at Kraft Heinz, and Mike Geller, the president of E Comm and Digital at Newell Brands globally. So have a listen to these phenomenal geniuses truly and can't wait to hear what you think.

[Rachel Tippograf]

Ashley and Mike, come on up. You're the next contestant on controversial commerce. Why don't you guys just quickly introduce yourselves, the companies you work for and just a couple of the brands that fall into your portfolios. Perfect.

[Ashley Becker]

Okay, well, first of all, I've got my Mac and cheese shoes on for you all today. I work for Kraft Heinz. My name is Ashley Becker. I lead our global e commerce capabilities team. So we've got 98% household penetration. So I think most people in this room know what our brands are, but Kraft, Mac and Cheese, Heinz Ketchup, Philly, Lunchables, lots of big brands.

[Mike Geller]

I am Mike Geller. I run e commerce and digital for Newell brands. We've got 50 to 80 brands that you do know, everything from Sharpie and Papermate to Graco and Rubbermaid, Coleman and a million other brands. So you know us, you may not know us from the parent.

[Rachel Tippograf]

Yeah, I think if you put these two together and then you started walking around your house, you would trip on.

[Sarah Hofstadter]

All of their stuff. There's a lot there.

[Rachel Tippograf]

But the debate that we're having is online versus offline. Now they shouldn't be versus, but it's a debate. So we had to create some tension here. But one of the interesting things is, Ashley, while the portfolio that you're representing is food, there's a very big difference in selling or ida potatoes that have to stay in a freezer and are therefore harder from a commerce perspective to let's say Mac and cheese or ketchup. So even if it's within food, the way people shop and the way people convert is going to be very different, especially when it comes to new product launches. Mike, the difference between somebody buying a Sharpie versus somebody buying a car seat is a very different consideration. How do you think about the online offline conundrum, if you will, as you integrate into your organizations, knowing the uniqueness of each of your portfolios?

[Ashley Becker]

Yeah, I think from a food perspective, online has been quite a big unlock from us from a solutions perspective because we don't have the constraints of temperature state. So we can come up with full blown shoppable recipes that include both frozen items and shelf stable items. And we can convert consumers in that way. So it's not. People aren't locked into center of store versus aisle, you know, versus the perimeter of the store, et cetera. So it's been a big opportunity for us to move beyond some of those constraints. We also see that channels are different. Channels like third party delivery are opening up new opportunities for us in terms of assortment in store. In a store like Dollar General where maybe Bagel bites is a very low part of our business, third party has enabled it to become one of the second highest items that we sell. So there's a lot of cross opportunity that we've been able to unlock associated with the capability.

[Mike Geller]

Most of our product, not so much Sharpie, but if you think about a Graco car seat or a tent, those tend to be a little bit higher consideration, lower impulse and candidly, not repeat purchases.

[Rachel Tippograf]

So what we're seeing because they're so good. They're so good, you don't need another one.

[Mike Geller]

Exactly. Because of the omnichannel journey is so diverse. A lot of our products, we know it takes sometimes eight or ten interactions with the product or interactions with something in order to make a decision. And some of those might be an online ad, a review, going to the store and seeing what the fabric on a car seat feels like or looks like to digital ad to all kinds of things. And so what we're seeing is that Omnichannel Journal is truly omnichannel and literally will be someone in a store and online and on their phone, et cetera, over the course sometimes of weeks or months. And so it's very important that we think about that holistically. And so we don't actually have as much of a distinction, I'll say between E commerce brick and mortar for us because of that consumer interaction.

[Rachel Tippograf]

And so how do you educate the folks within your organization? Because you are representing digital and commerce in your leadership role, you are on the elt. A big part of that is an influence role. How do you change the mindset and behaviors from within so that that doesn't happen?

[Mike Geller]

Part of it is having them understand what the consumer journey is. And that idea of the consumer being really omnichannel is a big piece of it. And then just using some of the old language that they understand about a perfect shelf in the store and understanding that if you have the car seat or the stroller, whatever it looks like in the store, if that same consumer is going to be looking online we have to have as good or better experience there. We've got to interact with them where they are. So some of it is just using their same language. It's classic influence. I would say we've more moved kind of away from COE to some degree and put like tried to say we are omnichannel. So our sales teams are, let's say a Walmart or a Target team. They own brick and mortar and E commerce. My team will give them the tools to be effective there as opposed to being competitive with them. And so it ends up being, it ends up forcing them to think omnichannel.

[Rachel Tippograf]

There's been a lot of work that you guys have done to try to bridge that gap, specifically a lot of acronyms, but also a lot of action. Let's talk about that for a minute.

[Ashley Becker]

So from a COE perspective, or I.

[Rachel Tippograf]

Think just in terms of the way the COE actually has been enabled and even the move from being in the CGO world to the Omni world, just even the titles you use are very interesting in and of itself.

[Ashley Becker]

Yeah. So we have. Krafteinz has been on a long journey with E commerce. We built an independent E commerce organization and then reintegrated it fully. And I'm just now launching a global CoE. And the intention of that was of course to set the standard and kind of best practice globally for what this could look like with a fully reintegrated E commerce or Omni organization. It has been an interesting journey. We're just at the very beginning of it in defining how we can set expectations of fit to win, but also fit for purpose within the local markets. Not trying to have a tops down strategic approach, but to be an enabler of our local markets and the businesses. So we're still very early on that journey. We felt it was critical given the reintegration of the full E commerce organization and wanting to support those markets and helping them to define globally what good looks like.

[Rachel Tippograf]

So as you're working to define what good looks like, when you think about that path to purchase, how do you educate on the role that digital plays in that journey? How do you get the first share of anybody's attention to the degree that you actually have them change their behaviors?

[Ashley Becker]

Yeah.

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[Ashley Becker]

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[Ashley Becker]

Well the strategy varies by market. So we have emerging markets that we're starting out with the brilliant basics and we have more developed markets where they're really looking for us to crack into the biggest rocks like retail media, fragmented digital data, more advanced content. So we're trying to address both needs, both sets of needs. I would say generally most of the team are pretty eager and interested in the digital space because we recognize that this is sort of the future. So we're beyond that kind of huge hill of trying to convince the team that this is an important space. We broke 12% digital sales penetration a couple of years ago and that really started to get folks attention in terms of the importance and recognizing the influence 8 out of 10 consumers have in the in store experience. So which is still the majority of our business. The growth rates are also quite compelling when we think about traditional grocery growing 2 to 3% and digital being, you know, a much larger growth rate that's also grabbing folks attention. So it's a dual pronged strategy I would say in terms of how we educate and help them to understand the importance of the digital space. So.

[Rachel Tippograf]

So as we move outside of the food world into the newer world, how does that differ if at all?

[Mike Geller]

Well I think you have to think about and echoing on something you said a little bit earlier. But just to put the heuristic in my mind it's we have to split three things now. There's how you Interact with the consumer, where they actually shop, actually where they transact and then how they actually get their delivery or how they actually get the product. Those things can be pretty independent now and you can have. It's almost like one of those books for kids where you can flip the top, the middle and the bottom. You can see these weird interactions where someone is interacting digitally. They go into the store to see something but they're buying online. And then maybe it's delivered from a store or maybe it's delivered from. All these things are just completely mix and match. Now if you think that way, then you can say, okay, we need to focus on each of those areas and separate that and say, okay, let's go backwards and forwards, right? How the consumer is going to get the product, that's one big challenge, right? It has to either be in the store or in a warehouse or a drop ship or whatever. Then there's where the interaction is, where the purchase is. Actually that really doesn't matter, right? I actually don't care if they buy it in their app or they buy it on the phone or they buy it until in a regular store. And then it gets to the hard part, which is the how the consumers interact. But if you break those things up and say it's how the consumers interact with us, that makes it a bigger problem to think about and more holistic and candidly more consumer centric, which is what we need to do. And then you say, well now again back, where are the touch points? We need to make sure the store looks right, we need to make sure our digital ads are right. We need to make sure we're doing social in the places that consumers are going to find us. We got to make sure our digital shelf is right, blah blah blah, et cetera. Splitting that up a little bit has been helpful in terms of getting people to think differently.

[Rachel Tippograf]

So basically what you're saying is the entire organization needs to do that in theory then. Okay, so are we then making a mushkabobble of like all of the capabilities within an organization? Like yeah, so if we're thinking about it from consumer rehearsed and all media, all marketing, all sales, all supply, all RGM has to be all in through the lens of the consumer within that view?

[Mike Geller]

I think the answer is yes. And I think that's very hard, but I think the answer is yes.

[Rachel Tippograf]

Well, that's why you're employed, correct? That's why we're all employed, am I right? I mean, but being able to do that I think just requires a Tremendous amount of courage. Courage in your conviction, but also courage to be able to challenge status quo. Do you have any tips for the people in this audience specifically, like, how do you do that?

[Mike Geller]

So kind of the history lesson here. I think if you go back 10 or 20 years, right, sales, marketing, supply chain were completely independent functions within an organization and they could run independently. Because in a brick and mortar world, if you had one or two of those things firing, but not the other ones, you could kind of be okay. And because of data and speed, like it didn't really matter that much. We're in a world now where all three of those things plus more have to really function completely in concert. And to your Mishkababel comment, it's a.

[Rachel Tippograf]

Critical world just added to your lexcom.

[Mike Geller]

We're in a world now where all those things have to be firing on all cylinders, right? And this is not a new thing, but right. If you have the wrong price, doesn't matter how good your marketing is, if you have the product out of stock, it doesn't matter how good your sales or price. All these things have to be together now and working in concert. So the answer is yes. And so I think the challenge is, I think we as leaders have to really elevate ourselves and say, what is the overall experience of our product, of our brand, of our go to market and start finding the areas where we have defects. And the sales were down this week, well, what was the driver? Or you know, the driver might have been, we were out of stock, the driver might have been, our marketing didn't work. Or the driver might have been, we had a price issue. The driver might have been a competitive something or other. But those are not now discreet. That's not just a marketing task or a sales task, it's a business task. And so thinking about getting your business leaders, especially I would say your brand leaders, to think about like being CEO of brands across all those functions is a big difference. And I think not the way traditionally, especially a lot of big companies like.

[Ashley Becker]

Ours have thought completely agree and we've shifted that control back into the brand teams is what I would say. We had kind of functional expertise sitting outside. We're now pulling that back into our brand teams. The channel strategy, the end to end path of purchase needs to be in the brief from the beginning. We can't be thinking about channel strategy after we've already created a brand new innovation and we're launching it, which unfortunately has historically been a pitfall. So shifting that back into the brands, I think and that CEO vision, just as you described, is helping in that process.

[Rachel Tippograf]

Believe it or not, as I warned you, this was gonna fly. And now we're up to the famous last question. What's the bravest thing you've ever done?

[Ashley Becker]

Wow, that was fast. So, bravest thing I've ever done? Well, there were a lot of exciting answers. So I have a really exciting answer, which was I was taking a helicopter up to base camp in Nepal a few months ago. That was brave. But actually what I think is the bravest thing that I do every day is living in a way that's consistent with my values. So that is a very challenging dynamic. And as a leader, it's incredibly important to me. So daring to do better and championing great people, particularly diverse talent is super important to me and holding myself accountable to that daily solid.

[Mike Geller]

Can I use the one from the podcast or not?

[Rachel Tippograf]

No. Everybody already heard your episode.

[Mike Geller]

Okay.

[Rachel Tippograf]

Absolutely not.

[Mike Geller]

Right after college, it's like one of.

[Rachel Tippograf]

The most popular episodes.

[Mike Geller]

My gosh, right after college I kind of was picketed. I was going to start a company and I didn't really know what to do, but I knew that I wanted to do that. I bought a one way ticket overseas to a country where I thought there was an opportunity and there was some political stuff going on at the time, which was chaotic. But I landed and within three months started a company and we ended up growing the company and selling the company. And that was pretty scary at first.

[Rachel Tippograf]

That's pretty incredible. The bravery that the two of you exhibit on a regular basis within your organizations is tremendously admirable. And as individuals as well, you are awesome humans. So thank you so much Ashley and Mike, thank you.

[Sarah Hofstadter]

Lucky for you, if you like what you heard, Mike and Ashley are both repeat brave Commerce alum. So you can listen to Mike on Retail Media and Attribution. Back in January of last year and Ashley was our guest at a different live event, actually our first live podcast recording ever at Adweek's Commerce Summit or more recently, you can listen to Diana Frost, the Global Chief Growth Officer from Kraft Heinz, about leading with Agile. If you like what you heard today or you like prior episodes, please share generously. Leave us a review and let us know what you think. See you next time.

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[Jackie Cooper]

Hi, I'm Jackie Cooper, Global Chief Brand Officer at Edelman and the host of Touch of Truth, a new podcast launching on the Adweek Podcast Network. My dad gave me this incredibly smart piece of advice. Meet everyone once. As a result, I've met some of the most fascinating and inspiring people on the planet. Now on Touch of Truth, we're coming centre stage and sharing the mic to experience stories of truth, insights and visions for the future that will challenge your way of thinking. Touch of Truth is available wherever you listen to podcast. New episodes come out every Tuesday. I do hope to see you there.