Q&A with Jess Scheerhorn, Director of Walmart Omnichannel Acceleration at P&G

Q&A with Jess Scheerhorn, Director of Walmart Omnichannel Acceleration at P&G

Q: Thank you for sitting down with us! Before we start, we would love to hear about your journey at P&G. 

My pleasure! I first joined P&G in Finance within the beauty division. I fell in love with the customer journey and moved into the Brand Management function.  

Over the last decade I have launched brands, led digital media transformation projects, influencer partnerships, you name it. Today, I work in the digital retail space and pilot capabilities that drive trial and loyalty.  Walmart recently launched a membership program, and now I’m leading our efforts for how our Brands can add shopper value.  

Q: What’s wrong with how promotions are done today in CPG?

I believe promotions have lagged behind digital media innovation. A decade ago, traditional media such as print and TV only allowed for one message to reach a large audience—paper coupons were the same way.  But today you have an enormous range of digital media options and targeting available to marketers, while promotion technology remains broad and inefficient. 

Another challenge marketers face is measurement and incrementality.  Redemption rate is not a proxy for effectiveness. Today brands want to optimize their investments based on incrementality, which can be an elusive metric for both media and promotions. 

Q: What happens when brands become dependent on promotions?

In the short-term, promotions can certainly drive trial and immediate sales lift. But if promotions continue to escalate in value and frequency, the relationship with the customer becomes transactional. Brand equity and value share will erode over time, and the situation is nearly impossible to reverse.

Q: So how do Brands run promotions efficiently?

Brands should always consider their holistic strategy for customer loyalty, inclusive of both extrinsic and intrinsic rewards.  Promotion efficiency specifically is an area that is ripe for disruptive innovation and technology.

Q: Can you say more about extrinsic vs. intrinsic rewards?

The idea of ‘extrinsic’ vs. ‘intrinsic’ rewards dimensionlizes how a shopper receives value. Extrinsic rewards are often discounts, loyalty points, or free samples. Today’s shopper is beginning to expect Brands to provide ‘intrinsic rewards’ like: convenience, personalization, and priority access that enhance or simplify their overall experience. 

Q: What’s a brand that does intrinsic rewards well?

I view the Starbucks app as a best-in-class example of technology enabled loyalty. Starbucks is generous with their loyalty points (extrinsic rewards), while app itself lets you bypass the line and saves your order preference (intrinsic rewards). These advantages makes Starbucks the obvious choice, because I know I will have a superior and consistent experience, and my loyalty is rewarded. 

Q: Why is loyalty so important to brands?

For a lot of brands, CPA (cost per acquisition) for a new customer can be very high. Because of this, brands need to nurture customer relationships to drive repeat purchase, and ultimately higher Customer Lifetime Value (to justify the CPA). That's not easy -- customers these days have a lot of choices, so you have to win them again and again.

Q: When it comes to executing promotion strategies, what are challenges for major incumbent brands?

There are three distinct challenges for incumbent brand promotions. The first is fraud protection, which is still a concern in the 50% market share of paper coupons. Counterfeiting will continue to be a challenge until technology intervenes.

The second challenge is finding a scalable method to execute targeted growth strategies. For example, if I’m launching a new regimen item, I may want to use a promotional incentive to nudge existing shoppers to add a complementary item on their next replenishment cycle.  Another example, if I’m launching a new beauty item, I would design a promotion that would appeal to a discovery mindset and incentivize trial.

The third challenge is transparency and measurement of promotion activity. Today, Marketers have the option of running each A/B testing, which takes weeks and costs many thousands of dollars. I know that digital technology could enable a superior promotions solution.     

Q: How do brands address these challenges in the future?

Advancements in digital media have made personalization through CRM possible. Being able to serve relevant, timely, and valuable content to shoppers is possible for brands that invest in customer loyalty.

A universal industry solution would require data to be shared across silos -- between brand, distributor, and media; a model that could take years to solve.  But Brands are figuring out that a thoughtful first-party data strategy will have a big competitive advantage for their impact on loyalty.