Everyday necessities building a niche in online shopping

Consumers are well-accustomed to buying books and electronics online, and more and more are beginning to look to the Web for their everyday essentials like shampoo, diapers, detergent and paper towels. But while buying everyday basics online and having them shipped to your doorstep is a growing trend, the question is whether it’s right for you. According to Gregory Karp’s January 14 article “Home goods click with shoppers” in the Chicago Tribune, here’s what newcomers to the trend need to know about the major players: Soap.com, Alice.com and Drugstore.com.

At all the major sites, shoppers will find the big-name brands in many sizes and varieties, including more selection of green and organic products, as well as small brands and less-popular varieties of popular product lines. Additionally, many sites have product reviews that might help make better buying decisions, and most sites track purchases to make it easy to reorder without rescouting the site.
Soap.com’s main advantage is shipping speed with free overnight shipping to two-thirds of country with $25 purchase. Soap.com also carries about 25,000 different products, compared with a typical drugstore that would carry maybe 5,000 to 10,000. Soap.com will accept clipped paper coupons from manufacturers that are sent in after placing an order, and the dollar amount is applied to the account for future orders.

Alice.com competes on price, allowing manufacturers to sell directly to consumers. The site also offers free shipping with a minimum of six items. Alice.com carries about 10,000 products and automatically applies coupons to your order, some that duplicate newspaper coupons and others that are unique to the site or the customer, based on buying history or demographic information.

Drugstore.com’s main attractor is its product assortment. The site offers more than 60,000 products (SKUs). Drugstore.com also has a loyalty program that will automatically credit an account with 5 percent back on eligible products. Consumers rack up Drugstore.com dollars during a quarter and then have one month to use them.

Shoot the messenger: Celebrity endorsements the kiss of death for most ads

Let it be known: There is empirical proof that ads featuring a celebrity perform no better than ads without, and in many cases perform much worse. Unless, that is, you can get Oprah.

In a study from Los Angeles ad measurement firm Ace Metrix, 2,600 television ads were tested over the course of 2010 and fewer than 12 percent of ads using celebrities exceeded a 10 percent lift versus average industry norms. Nearly 20 percent of celebrity ads yielded negative lift scores in excess of 10 percent.

“This research proves unequivocally that, contrary to popular belief, the investment in a celebrity in TV advertising is very rarely worthwhile,” said Peter Daboll, CEO of Ace Metrix. “It is the advertising message that creates the connection with the viewer in areas such as relevance, information and attention, and this remains the most important driver of ad effectiveness.”

It should come as no surprise that the worst celebrity spokesperson of 2010 was Tiger Woods, led by his endorsement of Nike. Collectively, Woods’ TV ads were 23 percent less effective than average, and Americans in general - regardless of gender or age - were equally unreceptive to his ads. Following in Woods’ footsteps are Lance Armstrong’s “No Emoticons” ad for Radio Shack, with a 28 percent negative lift; Kenny Mayne’s “Good Segment” ad for Gillette, with a 28 percent negative lift; Dale Earnhardt Jr.’s “Coverage at the Right Price” ad for Nationwide Auto Insurance, with 27 percent negative lift; and Donald Trump’s “Making Timmy a Mogul” ad for Macy’s at 24 percent negative lift.

As the star of three of the top five celebrity ads, Oprah Winfrey proved that not all celebrities are created equal. Oprah’s “Think You Can Text and Drive” ad for Liberty Mutual achieved a 34 percent lift; her “Matthew Wilhound Killed by Cell Phone User” ad for Progressive yielded a 24 percent lift; and her “Distracted Driving” ad for Progressive yielded a 22 percent lift. Ed Burns’ “Ed Burns Swallows Camera” ad for iShares came in an No. 2 with a 28 percent lift, and Carl Weathers’ “Bud Light Playbook” ad for Bud Light rounded out the top five with an 18 percent lift.

“What’s important about Oprah’s performance as a spokesperson was that each of her ads delivered a highly relevant message: don’t text and drive. Her ads were not selling or pushing a particular product, but discussing a highly relevant and information-laden topic,” said Daboll.

The uncertain implications of front-of-pack labeling

In an effort to curb the obesity epidemic and help Americans make healthier food choices, the FDA is examining the impact of front-of-pack (FOP) labeling for food and beverage packages. FOP labels, prominently showing the content of nutrients and other ingredients, are currently posted on the front of some - but not all - packaged goods. While FOP labeling has the potential to help shoppers make healthier choices, impact on sales of items with FOP labels is somewhat unpredictable. It might be that the cookie splurge isn’t as bad as some might expect but the spaghetti noodles are a rude surprise. The Institute of Medicine studied the various types of information currently available on front-of-pack and made an October 2010 recommendation to the FDA that calories, saturated fat, trans fat and sodium should be clearly displayed on the front of food and beverage packages. According to a study from HealthFocus International, a St. Petersburg, Fla., research company, 45 percent of shoppers in the U.S. agree. However, as it currently stands, the information varies from product to product, with some packages displaying symbols, while others show the actual levels of nutrients - making comparing one product to another confusing for shoppers.

According to shoppers, their top reason for using label information on food and beverage packages is to decide which products have too much of an ingredient they are trying to avoid. Namely calories, as that is the information most want to see clearly labeled.

Both better-for-you and indulgent categories could be impacted by FOP information. When shown packages with and without FOP labels, fewer shoppers said they would buy products like frozen pizza when it had the FOP label, while the purchase intent for some cookie brands actually went up. Purchase intent for pasta dropped with the FOP information. These unpredictable disparities indicate that impact could only be predicted on a product-by-product basis, not on food item groups as a whole.

Shoppers who are obese do not have a greater interest in FOP labeling than other shoppers. However, 60 percent of all shoppers do say that they believe FOP labeling will help them to eat more healthfully. Obese shoppers actually read labels less often than shoppers of normal weight (36 percent versus 55 percent) and admit to being less likely to pay attention to their diets (66 percent versus 87 percent).