It can be difficult to take off the brand blinders and create a customer-first project. To combat this, Kellogg created a team dedicated to working on broader innovation incubation projects within different brands.
Read about what that team produced for their first project, working with the Bear Naked brand, creating an ecommerce customizable granola product to energize millennial consumers.
Chris Tutor’s role as vice president of strategy sits at the intersection of the Kellogg brand and a broader incubation strategy.
The team launched a little over a year ago as an “innovation incubation sort of shop within broader Kellogg's,” Tutor said.
Sometimes the projects the team works on include one of Kellogg’s distinct brands, but they also focus on innovation across the company and “what we want to incubate separately from the brand agendas. That comes to life in a variety of different ways,” he said.
Many companies in the customer packaged goods space are looking at alternative approaches to product innovation, he said.
“This is just an evolution, I think, in how innovation happens. There's no change to our core innovation team that's cranking on all cylinders, but this is like a build to that as we look for things that potentially sit outside specific brand agendas,” he said.
The team’s first effort was with the Bear Naked brand, with a project called Bear Naked Custom.
“This project was born out of a consumer need — like most good innovation should be,” Tutor said. “The consumer need that we identified was what we call a ‘desire for taste exploration.’”
Consumers — particularly millennial consumers — were looking for new and different tastes, including combinations of flavors and unique food experiences.
“It's not once a week or once a month. They're looking for them on a regular basis,” he said.
Given that need and the limitations of a traditional retail environment that could only offer a restricted number of flavor options, the team wanted to deliver a tremendous array of flavor options. Bear Naked Custom had the brand, opportunity and customer-base to accomplish this.
“The idea was what if we could allow consumers to choose from a wide variety of ingredients, but also not just traditional ingredients that you would expect to find in granola, so your strawberries and your almonds and so forth, which we do have, but also ingredients that you wouldn't typically expect to find in granola,” he said.
The team offers ingredients like bourbon, jalapeno, red wine and lavender-flavored granola — “things that are interesting and help sort of satisfy that desire for taste exploration but aren't necessarily common in the granola set in a traditional retail environment,” he said.
The Bear Naked Custom campaign allowed consumers to create and order their own granola combinations from a variety of both traditional and unique flavors.
“There are over 50 ingredients, many of which have already been swapped out. Some of the ingredients, particularly the more traditional ingredients, were already within the Kellogg system,” Tutor said. “But many of these ingredients … were brand new to Kellogg's by way of Bear Naked Custom.”
Customers would start out by picking out a base granola, then move on to choosing three ingredients that were curated (flavors like bourbon flavor, salted edamame and coffee brittle), bare coconut, fruit, sweets and spices, and nuts.
From there, the customer can choose a bear to put on the front of their granola packaging — each comes with its own unique descriptor and visual personality.
Finally, the customer gets to name their own personal blend and inserts their email address before moving on to the cart and completing the purchase.
Tutor and his team are very nimble, he said, and are set up to execute like a startup.
“We went from idea on paper, what we think this thing could be to product in market, shipping product to consumers in six months,” he said.
The startup approach they took was informed by ‘lean startup’ principles, he added.
“Given the timeline to launch and our approach, we wanted to launch with what's called a minimum viable product, which is basically a starting point of the product,” he said. “[It’s] enough to get out there to get into consumers' hands so we can get some feedback on the products — what consumers like, what they don't like, what's working well, what's not working well.”
The team has spent the last year since the initial launch learning what is resonating with customers and what is not, and they have been iterating in the direction of things that are resonating.
“Really the benchmark was about learning. Does this proposition hold water, generally? Then if so, what specific things about the proposition are most resonant with consumers and how quickly can we iterate in that direction?”
Step #1. Move nimbly from the start
There was some initial internal buy-in through leadership and through the Bear Naked brand team, Tutor said, but since their team is specifically set up to be able to move nimbly, they set to work almost immediately after fleshing out the idea.
“There was a lot of work to get done quickly,” he said. “Everything from brand design, how we wanted this to come to life, to food, identifying which ingredients and figuring out how to get those ingredients in time, to building a … direct-to-consumer ecommerce website — the first time that Kellogg's had ever done that — so building all that out and, obviously, all the important details of doing that correctly.”
Many of those efforts kicked off concurrently, he said, and once they were underway, “it was a series of day-to-day operation check-ins, making sure that we were connecting the dots across each of those groups and abiding by key milestones on the timeline.”
Step #2. Continually iterate the website based on data
Around March of 2016, Tutor and his team launched the site. From there, he said, it was about iterating on both the marketing and the product offering.
“On the marketing side, we were spending very small sums of money to learn what channels were working for us, what creative was working, what positioning was working, what targeting was working. So, we'd spend little amounts of money against a bunch of different experiments, learn what things were working, and then start to double down on the tactics that were working,” he said.
That testing was a full year process that has continued into this year. The product side was also about learning — but by analyzing the data of where and how consumers were interacting with the website.
“So, where the flow was, where they were spending the most time, where drop-off occurred, where they may be confused or excited about something, trying to discern that, what ingredients they most were clamoring for and those that they weren't,” he said.
The team would take all of those discoveries and prioritize what they learned to evolve the product alongside the website. They changed small things, like the size of the header to bigger things that completely changed the experience the customer has today compared to at launch.
For example, he said, initially to help promote taste exploration with consumers, the website would automatically serve up three potential ingredients.
“I think consumers were a little confused by that,” he said. “Now, we provide an ingredient bar where consumers have visibility to everything, and they can make their own matches, and [the platform] helps validate that the ingredients they've chosen are likely to taste good together.”
They also learned the popularity of certain ingredients, especially within the curated flavors.
“I think it's a surprise in how high on the ingredient preference that coffee ranked. We actually have several coffee flavor options. We have a coffee brittle. We have a chocolate-covered espresso bean … So, given the interest in that flavor space, we've given them more options to choose to deliver coffee into their granola,” he said.
The entire checkout process has changed as well, Tutor added. There used to be several steps, and they saw people falling off in that funnel.
“Now, it's essentially a shopping cart and a checkout page. It's two pages. It's very standard. As a result, our abandon rate has gone down very significantly. The creative on the site looks similar to when we launched, but the overall site design and UX has changed dramatically,” he said.
Some changes were obvious, Tutor said, and just had to be validated based on their performance after the change was made. But many of the smaller changes came about because of A/B testing.
“That's such a great tool with digital commerce, and you can test multiple things a day and optimize always,” he said.
Step #3. Experiment with cross-channel marketing
The team experimented across search, email and paid social media posts. The team initially utilized a marquee and header on the BearNaked.com website to drive people to “Customize Your Granola.”
“We’re reaching out to the same consumer and part of the same brand. So, there's sort of that inherent cross-promotion that's happened through each of our own channels,” Tutor said.
With the social media posts, he continued, it was a matter of figuring out which combinations of image and content saw the most response.
The team worked with “everything the consumer sees and even the things they don't see like targeting. We were experimenting, basically, and making bets on what we thought would perform, and then we were testing those things with small amounts of money,” he said.
The team cast a wide net initially, and then they honed in on the segments that were best performing.
“Lookalike audiences performed tremendously well for us, which I think is not uncommon. So, finding a population of people who have bought and then finding groups of people that look similar to those people performed really well,” he said.
The Bear Naked consumer broadly consists of active millennials, he added, so that group was ripe for targeting. They found a heavy skew towards female millennial consumers, and alongside that, an interest overlay of people who were interested in cooking and new ingredients.
“Those rose to the top of the list. Then consumers who have a bent or propensity to sort of buy food online and in less traditional channels rose to the top as well,” he said.
This effort was also affecting email marketing, as customers were giving over their email addresses — the team wanted to leverage that channel as well.
The general Bear Naked brand email database was utilized early on, but the team focused mostly on the custom list they built for people who had bought this specific product.
“We know what they bought and frequency of buying. So, we built our own database,” he said, adding that focusing on customers who had “already raised their hand and expressed interest … or have already purchased” was the most effective strategy.
“We set out to satisfy this consumer need of taste exploration. I think one of the things that we've learned is that is, indeed, a need that consumers are looking to satisfy,” Tutor said.
He and his team have seen these non-traditional ingredients resonate strongly with consumers, and he feels they have validated the consumer interest in non-traditional flavors and non-traditional combinations of ingredients through a stable food form like granola.
Kellogg's, he said, “broadly speaking, is a company that's great at mass production. So, this was a unique sort of production approach where we're individually making batches of granola specific to customer orders. So, that required innovation in the production process and the fulfillment process. So, we've learned a ton there and made our operation more efficient from day one.”
The biggest education has been throughout the evolution of the website and product, he said. While they moved nimbly at first, the testing and iterations took over a year, and “the product through-and-through just looks very different from what it looked like a year ago.”
From website launch through the end of 2016, the results seen were:
“The conversion rate is the most telling. You want to continue to drive that up, and changes from the marketing to the product all impact that,” he said, adding that the bounce rate went down significantly as well.
The connections made between customer and brand throughout this effort are informing product innovation more broadly across the company, Tudor said.
“As Bear Naked the brand looks at flavor extension, evolutions of some of their products, this platform is helping to power that and inform that,” he said. “The learning and evolution are happening within the discreet, Bear Naked custom bubble but then also helping to inform and educate the Kellogg company more broadly.”
Avionos – BearNaked’s campaign vendor
IBM Watson – BearNaked’s partner and platform “Chef”
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