- The pandemic has inspired consumer packaged goods brands such as General Mills and Cure Hydration to experiment with new ways to introduce their products to customers, such as adding samples to curbside pickup orders or to swag bags handed out at events.
- Major retailers, such as Walmart, see the samples as a way to delight customers and make money as they try to offset the costs of fulfilling e-commerce orders.
- Walmart has also tested welcome boxes of product samples for customers who join its new subscription service Walmart+.
Cure Hydration got picked up by major retailers during the pandemic. Without in-store demos, it had to come up with creative ways to get its fruit-flavored electrolyte drinks into shopping carts.Cure Hydration
Cure Hydration's lucky break came at a strange time.
Walmart, CVS and Amazon-owned Whole Foods began carrying the start-up's fruit-flavored hydration powder during the pandemic. Yet boxes and packets of the electrolyte drink often lingered in the back of stores as busy employees tried to replenish shelves with high-demand items such as hand sanitizer and paper towels.
Its major sales driver — offering free samples at sports events such as triathlons or after class at fitness studios — came to a halt. Customers weren't discovering the brand as they shopped online or didn't see it when they sped through aisles on trips to the store.
So Cure Hydration's founder and CEO, Lauren Picasso, decided to try another strategy to get her products into shoppers' baskets: Free samples tucked into Walmart's curbside pickup orders.
"As an emerging brand, we wanted to find a way to get in front of customers knowing they're not browsing in stores as much as they used to," she said.
She said the samples lifted sales, while costing less than store demonstrations and scaling more easily across about 1,000 stores.
Add sampling to the list of pandemic-related changes that may stick. As more grocery shoppers use curbside pickup and delivery, consumer packaged goods companies have had to experiment with new ways to get their products in front of people. Major retailers are trying to capitalize on the surge in demand by charging brands for access to their shoppers and data they've gathered about their preferences — while also delighting customers with freebies.
The Walmart+ home screen on a laptop computer in Brooklyn, New York on Wednesday, Nov. 18, 2020.Gabby Jones | Bloomberg | Getty Images
A moneymaking opportunity
For years, consumer packaged goods companies have paid retailers for prime real estate in stores that helps them grab a shoppers' attention — such as endcaps, a display of products at the end of an aisle. That equation has changed as more shoppers retrieve their bagged purchases in a stores' parking lot after ordering them online.
Online grocery sales in the U.S. grew 54% in 2020 and are expected to exceed $100 billion for the first time this year, according to eMarketer. The market research firm said those habits will outlast the pandemic because shoppers see it as a more convenient way to shop even after they are vaccinated. By next year, eMarketer expects, more than half of the U.S. population will be online grocery buyers. By 2023, it estimated, online grocery sales will make up 11.2% of total U.S. grocery sales.
Walmart's U.S. e-commerce sales grew 79% last fiscal year compared with the prior one, fueled by grocery orders, but has yet to turn a profit.
Sampling is a moneymaking opportunity for Walmart. The retailer began a pickup and delivery sampling program in 2014, but it is getting more attention as more customer traffic shifts to the parking lot. The retailer charges companies when their product is added to a curbside or delivery order.
Walmart is looking for new revenue streams as it juggles additional costs that come with online orders, like picking grocery orders off shelves and shipping purchases to customers. At a recent investor meeting, Walmart CEO Doug McMillon said it wants to use its reach as the world's largest retailer to grow other businesses, including advertising. He said it wants to monetize the data it collects about shoppers.
A worker delivers groceries to a customer's vehicle outside a Walmart Inc. store in Amsterdam, New York, on Friday, May 15, 2020.Angus Mordant | Bloomberg via Getty Images
Brands of all sizes
Even the big brands are taking note. General Mills has revved up the number of samples that it has paid to place in curbside pickup orders at retailers, including Walmart, Kroger and Target.
Jay Picconatto, director, General Mills commerce marketing, said sampling in grocery pickup "is something we wouldn't have even touched two years ago or 18 months ago." Yet as store traffic plummeted last spring and retailers limited in-store demos, he said, the company leaned in aggressively.
For example, some Walmart shoppers may have received a sample of Old El Paso taco seasoning with recipe cards around Cinco de Mayo. Walmart handed out its Annie's Fruit Snacks and Bunny Grahams at a Walmart drive-in movie event.
"Then, we found, hey, it works and we actually like what is happening," he said. With more shoppers picking up groceries curbside, he said, "It's a place we want to continue to play."
Alvis Washington, Walmart's vice president of marketing, store design, innovation and experience, said its sampling program can help brands connect with the right customers. Personalizing the samples that a customer receives is a key goal.
