The Honest Company taps shopper marketing as digital costs rise

The Honest Company, which makes a range of beauty and baby products, is shifting its focus more towards shopper marketing because of rising costs in the digital space.

Why it matters

Increasing digital costs will require marketers to carefully assess where they can achieve the strongest return on investment. Finding the right mix of brand-building and activation will be a critical task.

The Honest Company’s approach

In its last quarter, The Honey Company’s marketing outlay stood at 20% of sales. During an earnings call, Nick Vlahos, the firm’s CEO, outlined its “commitment to supporting our brand” as follows:

• Rising digital costs, he noted, are “leading us to shift traditional marketing investment more toward shopper marketing and other vehicles to reach consumers in-store.”
• This strategy, Vlahos explained, is a “good example of our return-based approach to directing brand investment to where it will drive growth most cost-effectively.”
• Additionally, efforts to boost in-store demand support “the strong growth we see with key retail partners and aligns with our retail distribution expansion in the second half of the year,” he said.

The role of data

• The Honest Company works with a “limited amount” of retail partners, a list including Kroger, Walgreens, Target and Whole Foods.
• Many retailers selling the brand’s products have one-to-one relationships with shoppers, and the resultant insights can help inform The Honest Company’s strategy.
• “Their card data, their loyalty programs is a precursor to where we invest our shopper marketing dollars,” Vlahos said.
• Shopper marketing is also connected to “marketing that’s being done with those partners on the digital side,” he added, to fuel acquisition, trading up and incremental sales.
• The Honest Company’s communications also seek to encourage shoppers to buy other beauty or baby products, and to become cross-category shoppers for the brand.

Sourced from Motley Fool