Newell Brands back-to-school end caps
Retailers are on pins and needles about how this year’s back-to-school season will turn out. Back-to-school spending is only a fraction of the year-end holiday season, which totaled $964.4 billion last year, but it is an important indicator of how the retail year will end, and it doesn’t look good.
The National Retail Federation predicts back-to-school spending by families with children through high school will total $38.8 billion, down nearly 7% from last year’s $41.5 billion forecast. And the back-to-college spend will be off more, down 8% from $94 billion forecast in 2023 to $86.6 billion this year.
Newell Brands is heavily invested in the back-to-school business and not just for the usual suspects like school supplies, including Sharpie, Paper Mate, Expo, Parker pens and Elmer’s brands.
Its Coleman outdoor camping brand has backpacks and lunch box coolers. Contigo supplies essential carry-along water bottles. Rubbermaid keeps packed lunches fresh and secure. And what’s a dorm room without a coffee maker or candles? Mr. Coffee and Yankee Candle fills those bills.
Yet Newell Brands has been a victim of its own success with 30 brands under its wing and competing across multiple categories and vertical segments worldwide. Last year revenues were off 14%, from $9.5 billion to $8.1 billion and through the first six months of its fiscal 2024 year, revenues dropped 8%, from $4 billion to $3.7 billion.
It’s hard to find synergies between writing instruments, home fragrance, outdoor camping, kitchen products (including Crockpot, Oster, Sunbeam and Ball brands) and baby (Graco and Nuk). That’s why Newell Brands is deploying a new generative AI tool to break through the vertical silos and uncover cross-category insights that can lift all brands.
“A little over a year ago, we announced our new corporate strategy, which focuses on disproportionately investing in innovation, brand building and go-to-market excellence in our largest and most profitable brands and markets, while driving further standardization and scale efficiencies across the supply chain and back-office functions,” CEO Chris Peterson said in the latest earnings call.
With confidence that the new corporate strategy is working, Newell Brands raised year end guidance to a 6% to 7% decline from a high of 8% previously. Still a disappointment, but it sees green shoots coming from its organizational realignment and commitment to sharing consumer insights more widely between brands and across functions.
It’s all part of the “Where to Play/How to Win” strategy announced just over a year ago.
Spreading The Knowledge
A new GenAI tool provided by Stravito is pivotal to the play-to-win strategy. It brings together all Newell Brands strategy and research documents in one place and supports natural language conversational queries to access both qualitative insights and quantitative data to bridge the knowledge gap across functions and brands.
“It allows us to bring our entire body of corporate knowledge together to find threads that bind brands and use cases together across categories and verticals,” shared Maria Sainz, Newell’s vice president of consumer and shopper insights.
“Newell is in so many verticals with so much knowledge about each, but the consumer doesn’t look at their lives as brands do. We needed to embed our corporate thinking into the mindset of the consumer.”
She explained that corporate insights were trapped within departmental silos, which didn’t allow valuable information with application to other brands be shared and used to power innovation around consumer needs and business opportunities on a wider basis.
Finding Synergies
For example, the kitchen and more broadly the entire home is the domain of many Newell brands. Consumer insights collected specific to cooking for the Calphalon cookware division has application for its food storage brands, including Rubbermaid and Foodsaver, and across its small appliance brands, like Crock-Pot, Oster blenders and Mr. Coffee, and vice versa.
Now those insights can be shared across brands to achieve a greater return on investment in market research and to uncover opportunities previously hiding in plain sight.
“This tool helps us realign our thinking to see synergies that we couldn’t find easily before and find opportunities for joint activations that weren’t apparent before, like for back-to-school,” she said, noting the company is deploying end caps this season that collocate Sharpies, Paper Mate, Expo writing instruments with Contigo reusable water bottles and food storage solutions from Rubbermaid and Sistema.
“We have to look across the business more holistically than we did before and bring the entire body of knowledge together to uncover consumers’ underlying needs that we can address,” she continued.
Faster Turnaround
Sainz is quick to explain that the Stravito solution is far more than a typical SharePoint site. It supports search across the entire body of research so that relevant generative summaries can be created that line up with consumer personas.
That stimulates the creation of new concepts in record time, as well as new content for advertising and product labels that will resonate most strongly with personas’ needs.
Previously such an exercise might have taken weeks and involved creative agencies to to partner in research and concept development. Now with Stravito’s assistance, multiple new concepts and content is developed in an instant so that brand managers and their creative teams can review them in minutes.
Pushing Insights Out
And perhaps the greatest benefit is that the system puts relevant information into the hands of employees who will use it instead of just presenting research studies to top decision makers that afterwards are consigned to library shelves or filing cabinets.
“Now we can blend knowledge from different decks that only the top ten people used to get – taking a piece from here, a data point from another – and create new insights that can be put into action fast and shared with the retail teams, shelf management people and others down the line,” she continued.
Bridging The Knowledge Gap
John Naisbitt famously wrote in his 1982 best-seller Megatrends, “We are drowning in information but starved for knowledge.” It was a problem even before the internet but the knowledge gap has grown exponentially since.
Statista reports that the global market research industry reached $84.3 billion in 2023, nearly double the $43 billion it was only a decade ago. And the U.S. accounts for over half of global market research expenditures.
Stravito founder Thor Olof Philogène explained, “We allow employees at some of the world’s largest organizations to store, to discover, to integrate company knowledge with ease. We built a solution that gives employees, no matter where they are, access to insights to enable them to better understand their customers to make real-world business decisions, increase innovation and improve business performance.”
He also mentioned that Burberry, Comcast, McDonald’s, Danone and Heineken are among the clients Stravito serves.
Improved ROI In People And Information
Information and data are a corporate resource, but knowledge resides in the company’s people. It’s their human capital with its inherent limitations but also unparalleled potential. People leave the corporation taking their knowledge with them and innovation can come from any corner of the corporation, not just the R&D department.
The generative AI tool that Stravito has developed can yield greater returns on investment in corporate information and the human knowledge capital of its people.
“Throughout my career, the biggest challenge is how to go from consumer insights into execution super fast,” Newell’s Sainz said. “The bottle neck has always been sharing our results, insights and analytics.
“My team would manage huge budgets for research, then share it with only the ten top people. But there may be 3,000 people that haven’t seen anything we have but need to.
“The hardest part was making sure everybody who had to have the knowledge and the insights got it in the least amount of time. This is the solution that we needed to get the vast amount of information and knowledge we have shared with those who need it,” she concluded.
