In its second-largest acquisition, Amazon buys the company for $970 million.
Consumers can rate products, comment on them and ask questions.
Swiss food giant Nestlé says it is only not only increasing sales, but creating positive buzz about its brand through an e-commerce site it launched in Germany in September that gives consumers—including critics—ample opportunity to comment on the brand’s products.
On the web site, consumers can purchase 1,500 products from 72 Nestlé -owned brands many of which are not available through traditional retail channels such as supermarkets because they are foreign products or not popular in Germany. Consumers also can rate the products, comment on them and ask questions, Alexander Decker, head of consumer relations for Nestlé and the site’s architect, told a global e-commerce summit in Barcelona last week.
“We wanted to create an online community that’s commercial as well as social,” says Decker. “We have never before combined all the products like this together online, or invited consumers to interact with us in such depth and breadth and in such a participative way.”
Decker estimates the site will attract around 3 million unique visits within the first year.
With the site, Nestlé is looking for a piece of the 500 million euros ($623 million) in online food sales forecasted for Germany this year, and the 1.5 billion food-related Google searches which Germans make each year, according to Nestlé. He estimates that online food sales represent less than 2% of total food sales in Germany.
Decker also sees great potential in the platform’s ability to generate sales by connecting with customers.
“Participation means discovering the products we have, and the transparency is very important,” he says. “People can find all the ingredients for the products, as well as recipes and advice. The web site has also helped boost the brand’s image in Germany, Decker added.
As well as winning over consumers, and creating brand ambassadors, the site has even softened the food giant’s critics.
“The social presence has turned Nestlé into human beings,” Decker says. “At the outset, critics visited the site to slam us for all the bad things we had done for the past 15 years—scandals over baby milk, palm oil and animal testing—but because of the chance to interact, even those who hated us the most, now hate us that much less.” The ability to have an outlet to voice concerns raised these consumers’ opinions of the company, Decker adds.
The site has, however, created some challenges for Nestlé. The brand has struggled with handling and shipping costs and ran into other hurdles.
“E-commerce in the food industry is a tricky thing to do, especially with the logistics and shipping—there are lots of problems even to sell chocolate because of temperatures that have to be maintained,” he says. Whenever the temperature is over 76 degrees Fahrenheit, Nestle doesn’t sell chocolate in the country, Decker says.
“I am looking forward to seeing if DHL comes up with ideas to address logistical issues in different ways. Maybe in the future the packing stations will be cool as well, which is not the case now.”
German food regulations have also put limits on products sold online, as the ingredients in some foreign products do not comply with those laws. “There are lots of great products from the U.S.—for example Coffee-Mate—that we cannot sell on the German market,” Decker says.